Earnest Sweat 00:03
Welcome to Swimming with Alligators, the VC podcast from the LP perspective, with your hosts Alexa Binns and Ernest. You ready? Let’s dive in.

Alexa Binns 00:14
In today’s episode, we have Frank Mihael, Chief Investment Officer at North Dakota Trust Lands. He’s the CIO overseeing roughly 9 billion across North Dakota’s sovereign wealth and permanent funds, so you can think of this as a model closer to the Texas permanent and Alaska permanent funds than a traditional pension. We’re so eager to have you. Thank you, Frank, for being here.

Frank Mihail 00:36
Yeah, thanks for having me, Alexa, Ernest. Pleasure to be here.

Alexa Binns 00:40
We have discussed how you ended up in North Dakota. We’ve got a shared alma mater at UCLA, and what it took to convince your family they wanted to become North Dakotans. Can you bring us on this journey of how you have ended up where you are?

Frank Mihail 01:02
Yeah, well, I grew up in Los Angeles and started my career in the oil and gas industry as an engineer. At that time, like 2006 pre GFC, everybody around me was making money in real estate in Los Angeles, and so I started moonlighting as a real estate agent. And my timing was impeccable. By the time I went full time into real estate sales, it was 2008, and so you know I started learning about distressed real estate investing in apartment buildings, and that was sort of my first taste into investing. And I wanted to learn more about investing, so I pivoted from real estate to wealth management when I was 30 years old, and I was hungry to learn, so I got the CFA. I enrolled at the UCLA MBA program, and I used that to pivot into institutional investing, and left Southern California for the first time in my late 30s to take a job with New Mexico Para, the public pension. I was covering the hedge fund portfolio over there, and yeah, I moved up pretty quick and got responsibility over the hedge fund book to build a portable alpha program. And I think that set that experience set me up to then land the opportunity in North Dakota, and my wife is a teacher, so she can get a job anywhere in the nation in like two weeks. That’s true, and so yeah, we moved up to North Dakota in early 2023.

Earnest Sweat 02:54
And for this opportunity in North Dakota, what really drew you to it? I know you want you’re you’re eager to learn, and you’ve shown you know your aspirations throughout your career of like oh there’s something new that seems interesting and you jump right into it. What was it about this opportunity?

Frank Mihail 03:12
Well, it was an opportunity to move from just focusing on hedge funds to having decision making over the entire portfolio, and I love the idea of covering all asset classes as a generalist because it never gets boring. And when I joined in 2023, a lot of the mature endowments and pensions were suffering from the denominator effect. But we have a really young private markets program and a very liquid portfolio, so I essentially inherited a blank canvas, which is like the envy of all allocators,

Alexa Binns 03:50
and a willingness for change. I feel like the combination of the two. Where did that come from? Sort of where was the impetus to start an alt’s strategy?

Frank Mihail 04:02
Well, the history of the plan is it was very fixed income oriented, and I think over time, the board is structured as a five person board with elected officials that are, you know, generally termed out right four-year terms, possible re-election, but there’s turnover. So there’s been you know new board members over you know the last decade that might be younger and and more risk you know seeking or have a willingness to to accept more risk in the portfolio, and and so I think the timing was sort of just aligned there.

Alexa Binns 04:46
I know New Mexico has a more established alternatives program. Was there anything? Have you pulled any learnings from there? Having been on the outside. Managing a different pot of capital is there, you know those are your those are your fellow allocators and your community is there anything that you sort of see looking back building your new program?

Frank Mihail 05:14
Yeah, like you mentioned the New Mexico program was more mature and built out. They had been investing in private equity for 20 years, and so you know the team was bigger. We have three people here, all in, including operations. They have, I think, 10 with dedicated operations staff, and so you know they’re able to manage like 200 a 200 line item book, and you know we have 40 line items, and we try to keep it pretty tight. And so, yeah, I think you know one of the things I I noticed when I joined over there was like there’s a lot of like with the closed end fund investing, especially through the GFC, there was a lot of line items that had just been sitting on the books for like well over a decade, you know, like 15 plus years, and they might have like a an asset that was distressed because of the GFC, but it was just still sitting on the books like with a million dollars, and I think like cleaning up those old line items is is helpful, which you know, you know, is why the secondary markets are are around for

Earnest Sweat 06:34
us. So we’ve had a lot of people come on and talk about having a blank slate, and you know, from some of the allocators who have been on, they’ve expressed some kind of hesitation to venture capital specifically because it’s one that it’s an asset class that typically has an inverse relationship with dollars to time spent in learning. How was your approach when having a blank slate specifically around venture capital, which is a little bit different than you know covering hedge funds.

Frank Mihail 07:06
When I joined, yeah, we didn’t have any venture in the book, and it was an area that I wanted to start adding to the portfolio, and so I was trying to figure out like what yeah what’s the best way to go about it, it is one of the areas where you you pretty much have to do close end fund investing, and so my my focus on trying to like reduce line item sprawl and add as few line items as possible, we we thought about well, we’re going to have to you know how do we how do we write a large check like you know a $50 million check to a manager but get access to a suite of or diversified portfolio and so I think the larger platforms made more sense for us there, and and so that’s sort of where we where we started.

Alexa Binns 08:10
It feels like the line item is a helpful shorthand for us as DCs to understand your perspective if you know what you’re prioritizing and why? What does that represent for you? Like when you describe trying to stay below 40 or 50 line items?

Frank Mihail 08:30
Our entire portfolio fits on one page, and like I I can recite it like the back of my hand, and I I guess I don’t know if all CIOs have that convenience, right? Like if you got 1000 line items on the book, and you’re like a $200 billion pension, it becomes hard to I think hard to even like manage in your head, right? And so I think there is. I’ve met a lot of allocators who have like they’re in that place now, and now they want to come back and say, hey, let’s let’s reduce the number of relationships and you know have fewer relationships, higher conviction, write big bigger checks, and so I guess we were lucky in that we didn’t have to go down that path to then come back. We’re sort of already a pretty concentrated book, and I think we want to keep it that way.

Earnest Sweat 09:33
I think another thing that’s really interesting when we were speaking in the prep call is the structure of the North Dakota trust lands, and you know I learned that you know it’s funded by all royalties and pays out 5% to public schools without touching principal. That’s just fascinating. I was curious about that, and it’s you. Have grown about I think about 6 billion to 9 billion in three years, and cover about no big deal, Frank,

Alexa Binns 10:09
our most successful allocator on the show. And you

Earnest Sweat 10:14
and you cover about a quarter of the state’s educational education costs. This is an amazing case study. I’m curious about those numbers in relation to actually being able to benefit the public. How does that influence your risk tolerance?

Frank Mihail 10:33
We’re pretty blessed. We’re because we’re one of the healthiest plans in the nation. The way it’s set up is we receive the revenue from the land owned across the state. That’s both renting to farmers and oil companies. As you can imagine, the oil royalties and taxes are the bulk of the income, and that that is a natural hedge for the portfolio, and so and I’ll use like 20 the year 2022 as an example. In 2022, when stocks were down 20% and bonds were down 10% our portfolio was down 8% We, you know, we use private markets and long short strategies to try to mitigate that downside. And but our NAV actually only went down two and a half percent because of the boon we got from the oil royalties coming in in a year like 2022 when it’s driven by inflation. Our oil was actually our best year on the revenue side of the state-owned lands, and so because we are an endowment and not a pension, we don’t have any liabilities. We do have the ability to take risk, and so even though today I think our asset allocation looks pretty, it looks pretty comparable to more pensions, and so you know one of my goals is to start incrementally taking a little bit more risk. So last summer, we did a strategic asset allocation review and moved a little bit from credit to equity.

Alexa Binns 15:14
Are there any other intricacies or unique elements that you would want managers to know when you know approaching you based on this process that you go through. Like, are there things that are helpful for them to understand, kind of how decisions are made? Or

Frank Mihail 15:33
I think it’s not too different from most other plans. Our board we meet like 10 times a year, which is just a little less than monthly, and then our process, you know, usually, you know, we like to have about like three months to to diligence a manager, and then it usually takes us like a month to get through legal after board approval, and yeah, I actually don’t have investment discretion like some other plans, and so that means I do have to bring every recommendation to our board for approval. And because of the cadence of meeting frequently, like every month, it hasn’t created any issues for me in terms of meeting fund closing deadlines or anything like that?

Alexa Binns 16:27
No, that seems remarkably fast. Actually, there are some public record constraints, I believe. What should managers know about a public plan in that case.

Frank Mihail 16:43
Yeah, yes, because we are a public plan, we are subject to FOIA public records requests, and so you know most most of our managers who work with us are aware of that, and you know there are there are state laws that protect managers who are sensitive, like to certain information, confidentiality about their underlying deals. We do have, you know, the ability to protect that information for them.

Earnest Sweat 17:13
So one thing I was enamored by. There were a lot of things I was enamored by when we first spoke. But you run a $9 billion plan with a three person team, and so what? tell us how we’ve heard the 40 line items on one page. That’s one, but is the efficiency you just have some stellar? I know you have some stellar people. Is it AI too? What’s going on?

Frank Mihail 17:48
You know what? Yeah, I got a stellar team. I wish we were like more on the front lines of AI than we are, but we’re we’re you know we’re we’re getting up to speed. You know, one of the first things I did when I joined, and just to simplify my life, was we like for our for the pub public stocks and bonds, they can be set up where you’re in a commingled fund externally, or a lot of allocators have internal SMAs where they’re custodied internally at their custody bank. There’s pros and cons to both. You know, when they’re when they’re custodied internally, you get the liquidity as soon as you sell. It’s already in your hands, in your possession, and so like you get I guess a day quicker liquidity. But from an operations standpoint and like accounting standpoint, like closing the books every month and doing your annual audit, if you have a bond portfolio, you literally have to reconcile like 1000 bonds, and I just like you know what I can’t spend my time doing that. Like I I need to outsource that, and so we had a few few of those internally custody SMAs, and I converted those to external commingled funds, and it makes makes my life a lot easier having to spend less time thinking about operations and accounting, and and that way I can focus more on investing.

Earnest Sweat 19:31
I believe you also lean on some consultants and fund of funds to extend reach. How did you decide not only when to add layers of fees versus going direct, but like who to do that for you?

Frank Mihail 19:49
To keep a concentrated book, we have to write a large check, right? And so, write like our minimum check size has grown as our portfolio. I mean, a lot has

Earnest Sweat 19:59
grown. So yeah, that makes sense directionally.

Frank Mihail 20:03
I think you know, like 50 million right now is sort of our minimum check size, and so where it made sense to hire a fund of funds manager as an example is we hired a seat, like a venture seed fund of funds manager, where we could write them a $50 million check, and then they could go out and write $5 million checks on our behalf to like smaller seed seed funds, and so that that was one area where where it made sense.

Earnest Sweat 20:36
Now we’re going to take a quick break to speak with our sponsor

Alexa Binns 20:39
on the show today. We have our stellar partner and industry expert Shane Goudie, leader of Sidley’s venture funds practice, and now host of the podcast Talk VC. We highly recommend you listen. Your practice is concentrated on the fund formation and representation of venture capital and private equity funds, focusing on the fundraising side for a bit, has anything changed about how you’re forming funds today versus a couple years ago?

Shane Goudey 21:07
Yeah, that’s a great question. Yes and no. I think the the main element, you know, when I when I look at a brand new fund formation, I think is how can I be impactful, not just from the blocking and tackling of the you know the work, the drafting of the fund agreement, and looking at a PPM or a deck, and you know doing all that great stuff, but it’s just the value add impact of it. And so I think it’s just being purpose driven about being proactive with the advice, and I, you know, I don’t know if that’s just you know more gray hairs on my face and on my head, or it’s just you know the more practical approach that I think a lot of ACs want and need, in particular emerging managers. A they’re cost sensitive, of course, and so I think what we really try to tailor our ability to do is meet that from an expectation and pricing standpoint, but just how we move in the project itself. It’s trying to answer questions like, do we need a PPM? Nope, you don’t need a PPM, and here’s what it would cost you in hours for you and legal fees, and so I think it’s really just trying to be incredibly helpful for, and again, proactive to help VCs understand what the choices they make during the fundraising, and that’s not only just kind of what do the terms of the fund look like, and what does the structure of the fund look like, and kind of where are the offices, and you know what is the fundraising strategy? Are you an anchor investor, and are they going to prostitute? So it’s being just super involved in more of the business elements, in the decision, and the strategy. Now that’s always been something that I think has been present in every fund formation, but I would say that I have found that more water from the well is drawn by emerging managers on those just practical McKinsey-like business consulting, you know, type of relationship and helping them steer the boat a lot with respect to that. Now, much larger managers, you know, they’ve just been around the block longer, and they usually have their own IR teams and their own ideas about how things you know will need to be constructed, and we want to be receptive and open. But it’s also still having a very active voice in those rooms as well. And it’s just you know it’s a different game we play a lot in those kinds of funds because you know now we’re dealing with you know government sovereigns and pension plans, and university endowments, and you know foundations, and it’s being more prescient about as how how do they move through the world, and you know the angular, their atmosphere, and how it hits you, as opposed to more just venture 101, just kind of hand holding, making sure that we go through the world because you’re just not going to get the same kind of investor impact on the documents and everything else for, you know, maybe an emerging manager who’s primarily high net worth and family office as opposed to, you know, a much you know a fundraising 500 million or a billion or 2 billion or whatever it looks like. Your job is just different in that context, and you know it’s being mindful and being ready to do kind of, but also transmigrate lessons learned in both avenues. To hey, look, you know maybe have a little bit more of an emerging manager approach on some of this. Here, the way in which you’re talking to this LP really is, you know, even though you may have leverage, they’re going to remember that the next fund. And so I think it’s just you know again being incredibly prescient about being a business partner for me is what it really is. You know what has changed in the last three, four or five years and I’ve seen VC’s receptive to it because they’re being educated there. About like really good lawyers who do this work all the time. Like they’re, you could again draw so much water more from the well, from just then just hey, how do I put that in the partnership agreement and what does that subscription agreement look like? And help me draft this. You know, no.

Shane Goudey 25:18
Let’s. What do you think? What’s your perspective? And that’s how I choose what funds I want to work with is because they will want to have that dialog and they will take that feedback and they will at least you know have a have a great amount of respect and self reflection and understand where their own needs are and and and like look it’s nice one stop shopping and we also are very adamant about like introducing our emerging manager and other clients to LPs that we know are investing in the industry and that we’ve seen across. And so, some of that is also like business development help for them. And so, it’s just become this holistic thing, and again, these elements have always been there. But I think it’s more now than ever before being proactive about that approach and not being as reactive.

Alexa Binns 26:13
Yeah, and what would you tell a fund one manager who might think they can’t afford Sid Lake?

Shane Goudey 26:18
Yeah, I would say don’t ever think that because we and and because there are a ton of managers just say they’re going to do an angel list or you know sidecar or so you know whatever whatever they’re going to do because they just you know they think it’s just prohibitive cost the right legal partner for you will make the right economic accommodations so but they will also tell you, like, if they think you’re bad as crazy for your expectations, that you know you want somebody who’s going to tell you, I think you’re bad as crazy. But I think that don’t be afraid to ask for it, and don’t sell yourself short because having the right counsel in your deals says a lot about you and your relative level of sophistication. Like if Sidley is taking you on as a client, that means something to a lot of LPs and you know family office or whether it’s high net worth or frankly institutions. The more and more you get into the institutional waters, you’re just going to need a firm like us because we know what the playbook looks like, and just from a cost efficiency standpoint, you know there are many parts of Sidley which they have clients that are cost agnostic. Venture ain’t one of those categories, and so you know my business is also about being very price accommodating. It’s you know having the collection of any invoices is going to happen only on a first closing, and you know probably giving some pricing accommodations as we ramp up through some closings, and so it’s doing things that are very venturey, and because the way we look at these relationships is like we want them to be very big, juicy pieces of fruit for the entirety of our firm. We want not only to do the fund formation work, but we want to do your deal work. And if you have a credit line that you need established, we can help you with that. And if you got employment stuff going on, we can help you with that, or litigation. And God forbid you get in some tax trouble, or litigators, or you need some regulatory right. So we’re just very mindful about the holistic nature of the relationships we have with our clients, and probably pricing according to this very first intersection point that we’re going to have with them, just so we could become a trusted partner for them. And it’s also being open to honest discussion about well, you guys charge way too much for that side letter you negotiated, or right, and knocking off some amount of it, right? Because this is a partnership that we have with our clients, and if you don’t view it that way, then you need to not be kind of responsible for any billing relationship with any client. So that for me, that for me is kind of some of the kit and caboodle of the secrets of success in this client relationship management stuff.

Alexa Binns 29:02
Thank you for joining us on the show, Shane. If you’re a GP or LP looking for expert guidance on fund formation and venture capital legal matters, you can visit Sidley’s website s i d l e y.com. And now back to our L P interview.

Earnest Sweat 29:18
Is there any for friend other allocators who are leading plans, maybe they’re new to venture as well. Is there any advice you have for them on how to diligence which fund to fund or consultant to use? The

Frank Mihail 29:36
consultant world’s pretty small space. There’s probably like yeah a dozen of them, and there’s a lot of them that are all really good. I think you know maybe one area where we focused on in our selection was there are a lot of consultants nowadays that sell. Their own products, proprietary products, and so that could create a bit of a conflict. But I mean, I understand why they do it. Like you know, it draws most of the revenue for them. And then on like diligencing fund managers. You know, we sort of just take the approach of we like to see a track record. So I think doing emerging managers is a little tougher for us, unless where we’ve done new new products or strategies is where maybe it’s a firm we’ve worked with, and are you know have built a relationship or know their track record, and they’re launching a new product is one area, but but yeah we we need some kind of track record due diligence quantitatively, and then we’d like to see a stable team and skin in the game. GP commit. So,

Alexa Binns 31:06
As a past wealth manager, Frank, I see these parallels where people say, sort of, the more you have, the more complexity that invites. And you are a very fascinating example of this, you know, sort of comparing your average dentist’s portfolio to this portfolio that you’ve inherited, where you are in the process of adding these alts, and I think that’s sort of happening to high net worths in droves right now. But they are also sort of thinking strategically about how to do this, given that you have both worked as a wealth manager and now are managing 9 billion, what can folks take for their own personal wealth management from this strategy? Like, what is the point of alternatives? Does this belong in the dentist’s portfolio, or is there a reason you’re adding it and they shouldn’t?

Frank Mihail 32:07
Yeah, that’s a great question. I think one of the best, first of all, one of the biggest differences between high net worth investing and institutional investing is in high net worth investing. I think your primary focus is tax awareness, whereas we’re tax exempt, so we don’t think about that. We’re more like benchmark awareness. When I was in private wealth, nobody really cared about benchmarks. They just cared about mitigating taxes, right? And so that’s I think the first step to like to understand that different lens. But then also time horizon is really important because when you’re you know, when you’re talking about personal net worth or family money, like there is always going to be liquidity vent events, whether that’s you know birth of a child, death of a family member, marriage, and you’re always going to need liquidity, and so there are a lot of these like private funds moving into raising retail money, and even if you’re like ultra high net worth, I would say locking up capital for a decade it should probably be a very small part of your portfolio.

Earnest Sweat 33:43
You spoke about when you first jumped into investing overall, or sorry, you jumped into the real estate space and things kind of went down. Is there anything in similarities, and just now that you’re a real macroeconomic person that you’re seeing the similarities from that GFC to now, and how that’s impacting your decisions on which asset classes to invest in.

Frank Mihail 34:15
You know what? Obviously, like hindsight’s 2020, and none of us have the crystal ball, but I think maybe the one way I think about it is like as there’s this saying, bull markets climb the wall of worry. So as long as there’s healthy skepticism, we could probably just keep marching higher, and it’s really when that skep like because you still see like there’s thought pieces and articles that come out every day that are like is this an AI bubble? As long as the articles are coming out, I think we’re safe. Like. When those articles stop coming out, that’s when you should start worrying.

Alexa Binns 35:07
No one saw it coming. Interesting.

Frank Mihail 35:09
Yeah. So, but yeah, and and for us, it’s just so impossible to do market time. So we just have to just stay invested and figure out ways to use a lot of long short strategies, so we could at least pick up some PNL on the short side during bear markets. And you

Alexa Binns 35:34
probably are paying a lot of attention to the energy markets as well. Is there anything else? I don’t. I don’t think we’ve had anybody who’s quite so close to the energy world as you on the show. Anything sort of that you see from your seat that you know other folks don’t recognize?

Frank Mihail 35:54
You know what? Like I don’t like having my fingers on the pulse of the oil and gas market day to day, but I, you know what? From here we have been moving more, shifting our real assets book like from real estate to infrastructure. So we’re you know we’re building out our infrastructure portfolio, which includes things like energy, transportation, data centers, and and so you know what I think with the continued build out of data centers, there is going to be just a huge demand for energy going forward, and so you know, and and those those types of trends are secular, like they’re they’re not something that, like you know, like when you’re investing in public stocks, small caps could be in favor this month and out of favor next month. These kinds of trends are like decades long. So if you think like, oh, you know, we’re late to the game, like I’m pretty sure you’re not.

Alexa Binns 37:00
How do you tell the difference, Frank? Between what’s a what’s a way to diagnose what if you’re in a 10 year 10 year investment cycle versus a psycho media driven investment cycle? How, what , and what are the dishes for you?

Frank Mihail 37:24
Well, I guess you know what I was referring to is real assets. Like, even if you think about real estate, like the Amazon effect of industrial real estate dominating retail real estate, like that has gone on for a decade, and it’s still happening, right? And so that’s sort of like a secular trend that’s not going away, and I think this data center built out with energy demand is going to be very similar.

Alexa Binns 37:55
Yeah, our use of Chat GPT and Cloud is not going anywhere. Interestingly, a cool fact: half of token usage is consumer. So, despite Anthropic being sort of heralded as like the very clever part player to go enterprise first, consumers are using just as many queries.

Frank Mihail 38:24
Wow! Yeah, that is interesting. It’d be interesting to see where the like geography is coming from, like if like if half of that is coming out of Silicon Valley.

Alexa Binns 38:35
Yeah, we all have our personal accounts and our work accounts. It is my guess.

Earnest Sweat 38:41
It’s probably yeah we’re probably doing work from our computers on our personal computers and then copy and pasting. I know we don’t have the crystal balls, but where do you see public plans going? Because not all are moving in the same direction. Where do you see that hat? What’s you know about what are going to be some of the results and outcomes for the different public plans because a lot of states have different situations going on.

Frank Mihail 39:10
Yeah, you know their private markets have been around a while at least like private equity and real estate. Public plans move slowly, so I know there’s a lot of public plans that still haven’t even started a private credit book or an infrastructure book, like, and they were because we all think about things in the strategic asset allocation buckets. You know what they, you know they haven’t approved. If you haven’t approved like a private credit bucket, then you’re kind of just like, well, where do we put this? And so I talk to a lot of other allocators who they have like an opportunistic bucket, and they kind of just throw hedge funds and private credit in that same bucket. So I think maybe. Going forward, some plans will start to sort of set up those dedicated allocation buckets to, and start leaning into private credit and infrastructure, and you know there are some plans that don’t do anything private. Still, they take the you know 60/40 liquid approach, and that’s fine too. I think a lot of those plans are sort of similar, like us, where they’re like really lean staff, and that’s why they stick to the liquid 60/40 approach. I’ve been trying to, I guess, challenge that and say like, how do I move into private markets,

Alexa Binns 41:51
I have many follow ups to that because it starts to unpack for those who have never approached or pitched pension funds, and that you know this unique animal. Like most emerging managers who are listening to this show, they are more familiar with, you know, institutional investors who are not tax and not not sorry tax neutral. Except thank you very much. The history is very fascinating. Would you mind giving me some other examples of the historical role of alternatives that you can give us because I think it just helps give more context as these managers are sort of going upstream, speaking to bigger institutions.

Frank Mihail 42:51
You know, a lot of pensions historically, like they weren’t really. It was like one accountant that was managing the pension fund, and it was all like bonds. That was how almost all these pensions started back, you know, back like in the glory days of when interest rates were like 20% in the late 70s, early 80s. But but yeah, they as I mentioned, they had to start taking more risk to hit their hurdle rate, so they started like building out these investment offices and pursuing equities and pursuing alts, and so the yeah the industry has evolved where a lot, yeah, a lot of plans are now alts have become a main part of the portfolio, and I guess the the other part of your question was around like how the GPs should think about it when they’re approaching them.

Alexa Binns 44:02
Yeah, if you realize that you are part of a potentially very new, like that this is sort of something that everybody’s just getting rolling on. I’m curious if you even can share which are some of the pensions that are just dipping a toe versus are more like old have have a long standing history in venture.

Frank Mihail 44:24
I think actually more university endowments have been in venture the longest, right? Like the, you know, with Dave Dave Swenson and and the Yale model kind of kicking it off in the 80s, and and I think that’s

Alexa Binns 44:39
they kind of popularized it, sure.

Frank Mihail 44:42
Yeah, but I think a lot of pensions have adopted it as well, and maybe you know it’s more about the amount of allocation. Like I like, I know some endowments they’re like 50% Private equity and venture capital, whereas most pensions, they kind of, I would say they’re more like 20-20% private. The way we think about it is, we call when we say private equity, venture capital lives under that bucket, and so it’s like buyout and venture, and I think a lot of allocators maybe think about it as like a two thirds 1/3 split. I guess it could be different from shop to shop, but so yeah, if you’ve got you know so maybe like most pensions are probably only like 555, percent venture capital.

Earnest Sweat 46:30
My last question is around, and you can go anywhere. We’ve had a few CIOs who remind us, venture capitalists, that there are other asset classes out there. I can’t believe it, but apparently there are. Curious, what strategies do you wish you saw more of? It doesn’t have to be in venture; it can be in any. Like which strategies, as far as fund managers, do you wish you saw more of that? You think some real opportunity is being missed.

Frank Mihail 47:03
What I’m seeing a lot of right now in terms of like you know I do get a lot of inbounds. I would say right like right now I feel like 75% of the inbounds I get are private credit.

Earnest Sweat 47:18
DAG,

Frank Mihail 47:19
yeah, and we’re at a point in our private credit book where we’re overweight and trimming, and so you know, I you know I’m basically not even thinking about private credit I guess maybe like sports, private equity is sort of becoming popularized now, and you know I’m curious to see how that evolves. Where some of the leagues are very exclusive with who they invite in to allow as investors, and I like. I wonder, you know, there. Everyone I talk to says like these sports teams are like the valuations are too high. It doesn’t make sense. But then you think about like, well, the TAM the TAM is barely tapped. Where now leagues are talking about marketing globally, like beyond the U.S. But then also like what happens if and I don’t know if this will ever happen, but like what happens if the leagues do like lower the gate and say hey, all private equity is welcome to invest. I don’t know if that’ll ever happen, but imagine the flood of capital that would go into sports. I don’t know if that’ll ever happen, but that could be a catalyst for driving values higher.

Alexa Binns 49:37
That you have these sovereign wealth funds and these public equity groups that are limited to what 10 or 20% depending on the league, of single team ownership, and who wouldn’t like that could easily be the equivalent of a meme stock, where everybody would be very excited to own Lakers or Dodgers.

Frank Mihail 49:58
Yeah, because there’s all like if you think there’s. There’s only like 36 teams or whatever in any major league. It’s kind of like having an NFT collection when there’s only 36 NFTs. There’s a lot of demand.

Alexa Binns 50:11
Yeah. No, the scarcity argument. Talk

Earnest Sweat 50:15
about an industry that didn’t have any skeptics for a while. The

Alexa Binns 50:20
The scarcity thing is real. I think we, I, I do I do quite a bit of sports investing with Connect Ventures, and the idea that content is going to be very easy to generate because of AI. So the things that are actually like live, scarce, unique community moments are that there’s a lot of reasons why sports have a really unique quality to it. When I truly feel like we’re going to be inundated, like otherwise the amount of basically like entertainment options is going to be abundant and personalized, but sports is going to be one thing that we all actually come together with, and there’s still, you know, there’s still a Super Bowl. We all still get together to watch that live. Yeah,

Frank Mihail 51:17
yeah, or Taylor Swift concerts.

Alexa Binns 51:20
Yes, exactly. Frank’s going to add a 41st line item specifically for Tee Tee. If you have an opportunity to invest in Taylor Swift, Frank would like an email. I’ll hunt that down for you, Frank. It’s been such a pleasure. What a cool story to North Dakota Brink and to go from six to 9 billion in the past three years. Thanks for sharing with us how you’ve been doing it. We really appreciate it.

Frank Mihail 51:58
Yeah. Thanks, Alexa. Thanks, Ernest.

Earnest Sweat 52:01
Thanks, Frank. Legendary. See

Alexa Binns 52:03
you later, allocator.

Earnest Sweat 52:06
After portfolio tile, investing with a smile.