Speaker 1:
Welcome to ETF Central, recorded here at the New York Stock Exchange, the home of ETFs. We're diving deep with the people shaping the space, the technologies driving innovation, and the stories behind the tickers. Whether you're an investor, issuer, or industry insider, welcome home.
Bilal Little:
Welcome to another edition of ETF Central. I'm your host, Bilal Little. On today's episode, we actually have Bryon Lake. He's the chief transformation officer for the Client Solutions Group over at Goldman Sachs. His job is designed to accelerate growth across all client channels. And what I'm excited most about this is, we get a unique insight into a gentleman who's covered the ETF landscape for nearly 20 years. Bryon, welcome to the show.
Bryon Lake:
Wow, thanks for having me, man. Great space in here. Fun in a December as the year is wrapping up, to come in here and wrap a little bit with you and talk about the business.
Bilal Little:
Do you get down to the Exchange much?
Bryon Lake:
We do. I love coming to the Exchange. I can't remember how many bells we've run with ETF launches or milestones that we've had. But when I come to the Exchange, one of the things that I always make sure that I point out to people is, oftentimes our teams are all coming together to launch an ETF or make a milestone. I don't know how your family is, but my family most days doesn't know what I do.
Bilal Little:
No clue.
Bryon Lake:
And that's true for everybody on the team as well. And so you come to the Exchange and you ring a bell, you know what? Everybody knows the Exchange. So you're home over Thanksgiving and it was like, "Did you see we rang the bell over this new ETF launch?" or something like that. And everybody around the family, I don't know if it's because they've seen Trading Places-
Bilal Little:
[inaudible 00:01:50]
Bryon Lake:
... or I don't know if it's because there's always the like, "Oh, the markets are down," and somebody with a really panicked look on their face or something like that. But everybody knows the Exchange. And so this is where it all began, and it continues to be the centerpiece of what's happening in our markets. And so whenever I come to the Exchange, it feels a bit nostalgic and people feel really special. And what I tell people is, I say, "Take a selfie. Make sure it's compliant. Don't get a ticker in the background or a product or something. Take a selfie.
Bilal Little:
That's right.
Bryon Lake:
And then text five people that you'd say like, "Hey, I did something cool today."
Bilal Little:
It's still iconic in that sense, where anything related to markets, typically a major headline, it's the New York Stock Exchange.
Bryon Lake:
It's right here. It's this building. It's this building. You got the American flag out front. You guys got one of the best Christmas trees in the city out front. I noticed it's in the planter, so you guys are obviously very environmentally aware that sucker's going to be replanted somewhere.
Bilal Little:
Absolutely.
Bryon Lake:
But it looks great out there with all the decorations.
Bilal Little:
Man, I'm so glad you're here. I'm looking forward to this conversation. But for every guest that comes, I want them to tell their story, and it's important for me to get exactly what you do at Goldman in this particular role as the chief transformational officer and what your key responsibilities are. Look, you've been around the business for nearly 25, 30 years here, but you've seen the evolution of ETFs, so I want you to unpack that for us.
Bryon Lake:
Goldman's an incredible financial institution. Everybody's kind of familiar with Goldman, and I don't need to tell the Goldman story. Goldman Sachs has basically two businesses, global banking and markets, banking and trading, and then asset and wealth management. That's our private wealth business and our asset management business. I sit within the asset management business of Goldman Sachs. As we think about the business, we see that we've got incredible capabilities from an asset management standpoint and the opportunity to bring that more to the forefront of the conversation in the industry that we're in. So just some quick numbers in the background here, Goldman Sachs Asset Management, $3.5 trillion in assets under management. That makes us the eighth-largest asset manager globally. Top five in public active, top six in private alternatives. So we are one of the few asset managers that has scale, global footprint, but then have the ability to do everything from the public side, on over to the private side, and frankly, kind of everything in between.
When I look at that story, I get really excited because, like you, I think about how can investors get better outcomes? How can investors grow their business, whether it's a financial advisor, an institution, an individual? What are the tools that we, as an asset manager, can provide to those investors? And so at Goldman, I have two roles. I'm coming around to answer your question-
Bilal Little:
No, that's fine.
Bryon Lake:
... but I want to give the broader framework for it. My first role is global co-head of our third-party wealth business. I have an amazing co-head that helps lead that business. That's kind of our intermediated business. So if you think of RIAs, broker-dealers, wirehouses, internationally, private banks, anything where it's intermediated business that's serving then the end investor in some way, shape, or form, that's our third-party wealth business. Padi Raphael and I co-head that business. I also wear another hat, which is Chief Transformation Officer. That's kind of a fun role and it shows Goldman's intentionality about what we're trying to do in the asset management space. It sounds like a made up title, but the way that I think about it is, the chief transformation officer needs to wake up every single day thinking about how are we going to serve clients three to five years from now, and what decisions do we need to be making today in order to do that?
I think you've probably observed in the industry that there's a tremendous amount of disruption. We're at an inflection point. There's massive trends that are playing out in our marketplace. And so if you are not intentional about repositioning yourselves to serve clients in the future, you're going to fall behind.
Bilal Little:
Absolutely.
Bryon Lake:
And so part of my role is to coordinate with the team to think about what are the things that we need to be doing to serve clients three to five years from now? I'll just give you one example, is increasingly we're going to serve clients in a digital ecosystem.
Bilal Little:
100%.
Bryon Lake:
And so we're always going to be a relationship business. It's always going to be a trust business. We're always going to have human beings that are working with clients, investors, to help them understand what they're doing in their portfolios. But the surround sound required of, I'm going to also do some of my due diligence online. I'm going to attend a webinar. I'm going to think about the tools that are available on websites as part of my overall investment decision-making process. If I'm a CIO at a big RIA or a CIO at a pension or endowment, all of those things need to come into the mix a little bit. And the firms that are going to do a good job serving clients are going to be intentional about their digital strategy. And so that's an example of how we, Goldman Sachs Asset Management, are thinking about transforming our business to tie together some of the tools, some of the digital footprint that we have in order to serve clients.
Bilal Little:
Curveball coming for you.
Bryon Lake:
Okay.
Bilal Little:
Why you for this particular role for Goldman?
Bryon Lake:
Okay. That's a fair question. Thanks for the warning on the curveball. One of the blessings that's been on my career is I started at a place called PowerShares, which was a startup ETF provider. And then that business was acquired by Invesco. Invesco is now one of the largest ETF businesses in the world, successful asset manager. Then I went from there to another firm now at Goldman. And having come from the ETF side of things, ETFs cut diagonally across asset managers, and a lot of different functions across asset managers, you're in a role. I'm a portfolio manager, I'm a salesperson, I'm a marketer. When you think about an ETF business, it cuts diagonally across all of those things. And so I've had the good fortune of thinking holistically across the asset manager, everything from the infrastructure required to launch a new ETF, to the product design process of launching the ETF, working with the investors that manage the ETF, the launch process, the product development process, the marketing campaign around it, the distribution approach, and then the servicing of clients.
That entire value chain that makes an asset manager successful in its highest order, I've had the good fortune of being part of each of those steps along the way and have found over ... I've learned a couple of things over my career, still got a lot to learn, but the more those things interact with each other, and I know it's kind of cliche these days, but to call it the flywheel, the more they reinforce each other and the more it propels it forward. And so me, along with our teams collectively around Goldman thinking about these different areas and then being intentional around building a strategy that comes together and creates the Goldman Sachs Asset Management flywheel to serve clients, that's the role. And so I've had some experience in doing that. I've been part of great teams. I'm part of a great team right now. And so I think that's a little bit why I've ended up in the seat that I'm in right now.
Bilal Little:
No, so I'm glad you answered that, because where I sit, and me and my team as a relationship manager to the ETF issuers, we typically see there's disparate communication amongst that flywheel, and typically that's when you're going to have challenges. And so this actually is a nice pivot to my next question. Goldman has had a lot of success on the ETF side of things, $50-plus billion in assets, and now obviously some strategic decisions being made to continue to expand that. Talk a little bit about the success that you guys have had on the ETF side, maybe a product or two that's trending, and/or why you see you guys add a lot of value in the market today.
Bryon Lake:
Yeah. If you think about who Goldman Sachs Asset Management is and what our identity as an asset manager is ... I think asset managers have identities. I'm not going to name any names right now, but if you think about a couple, it's like, "Oh, I know who they are. They focus on bonds. I know who they are. They focus on low cost." You got two brands in your head the second I just said that, right?
Bilal Little:
Absolutely.
Bryon Lake:
When you think about Goldman Sachs, what we think about is sophisticated solutions delivered at scale to our clients. So we have a leading direct indexing capability. That's something that we've developed in-house and are now taking to the marketplace. That's a leading capability that is solving real client problems around taxes, around how investors want to build portfolios. We have an evergreen alternatives capability, where we've been in the alternative space for three decades.
Bilal Little:
Absolutely.
Bryon Lake:
And now we're developing those capabilities, putting them in evergreen wrappers, and making sure that investors can benefit from having alternative capabilities in their portfolios and all the benefits that that can bring to a portfolio. On the ETF side, there's two things that are going on there. One is investors increasingly are telling us they want to get exposure to public markets through the ETF technology.
Bilal Little:
Absolutely.
Bryon Lake:
It's convenient. It trades throughout the day. It's liquid. It's tax efficient. It's transparent. The benefits of the ETF wrapper are well-documented. But what we've now seen is that you can take leading active capabilities and deliver those through the ETF technology. I've done this before, but we talk about the disruption of the MP3 player to the music industry. It was kind of funny. We showed the kids Social Network on Sunday night and they were watching that. And of course, Sean Parker from Napster is in the movie, and they're like, "Wait, what?"
Bilal Little:
"Who's that?"
Bryon Lake:
We're describing how, "Look, we used to listen to CDs and then this technology came along and you could deliver music through this digital format." And now we take it for granted, but we have every single song that's ever been written in our pocket. We have the convenience of walking to the subway here in Lower Manhattan and picking whatever song we want to play, boom, listen to that and go from there. That's the how. I didn't talk at all about what type of music we're listening to. And that's how the ETF wrapper ... That's the how are we getting exposure to public markets. And so that was the real inflection point. Investors are telling us that they like getting exposure to the markets through the ETF wrapper. Trillion dollars in net flows year-to-date.
But now we're also seeing that active is playing a big role in that. Active ETFs are taking up about a third of those net flows, even though they're only about 10% of the overall assets. So it's growing at a faster rate than the overall ETF ecosystem. And so I mentioned this earlier, but we're top five public active at Goldman Sachs. We have incredible investment capabilities. We've got leading fixed income capabilities, leaning muni capabilities, leading quantitative capabilities, and the like. And so our strategy, quite simply, has been to take our best investment capabilities and make sure that they're available in the ETF effort.
Bilal Little:
100%.
Bryon Lake:
We're just taking the hits and we're digitizing them and putting them on the MP3. And so that's our broader strategy. More specifically, we've obviously launched a suite of active municipal bond capabilities. Goldman has been in that space for quite some time dealing with ultra-high-net-worth. That muni capability we have, we can deliver it through the ETF wrapper. We've got premium income strategies, GPIQ and GPIX, covered call strategies, popular category in the overall marketplace. Those have been really fast-growing products for us because of the design that's gone into those and what we've been able to deliver there. Our active ETF capabilities have actually tripled over the last 12 months, so our assets ... Now, you mentioned we're at $53 billion. We're not really focused on how ... We want to grow. Growth is really just a reinforcement mechanism from clients saying, "You guys are doing something right."
Bilal Little:
100%.
Bryon Lake:
So we don't have a, "Oh, we need to be," blah, blah, blah, "AUM." What we want to do is do the best for our clients. And if they are seeing that and agreeing that we're doing the best thing for them, they'll trust us with their money and their investments. And that's where that growth will come from. And so we think we're doing an okay job with seeing that our active ETF assets have tripled over the last 12 months. But we've also been really focused on building out that platform. So we've globally launched 24 ETFs year-to-date, all in the active space. Again, just aggressively moving to serve clients by bringing in these new capabilities.
Bilal Little:
I got two questions on this. I've had 15, 16 guests. You might be the first guest that actually call the ETF wrapper technology.
Bryon Lake:
Okay.
Bilal Little:
So I want to applaud you for that, because I agree with you.
Bryon Lake:
[inaudible 00:15:15] Cheers.
Bilal Little:
The second thing that I want to point out is, innovation happens over these small cyclical sectors, but there's secular shifts that take place, and what we're realizing right now is this growth in active. Nine out of 10 products that are launched are on the active side. You indexed out as much as you possibly could. I want you to go into the active side a little further as far as, obviously this is a proactive solution and attempt for you guys to service clients given market dynamics. What do you see as on the horizon for Goldman on the active side, and what are you most excited about there?
Bryon Lake:
Yeah, so step back, if we just use big, round numbers in the US here, there's $40 trillion in the 40 Act space, mutual fund plus ETF. ETF is about $12 trillion of that, so a little bit more than a quarter of that. Now, ETFs were launched in 1993, so in a way, a relatively new technology. But as I talk to investors, it's like, "Well, do you like tax efficiency or not tax efficiency?" "I like tax efficiency." "Do you like transparency or non-transparency?" "I like transparency." "Do you like intraday liquidity or not?" "I like intraday." So there's this notion that the ETF wrapper is really a beneficial thing to investors.
Now, in our industry, switching costs are really high. If you've bought a mutual fund five years ago, 10 years ago, 20 years ago, and you've got incredible gains in that thing, and maybe you do see another ETF that's attractive to you, but you don't want to experience that capital gain right now, hold on to that mutual fund. It's a fine investment and everybody's making their individual decisions. But what you're seeing is ETFs are gaining about 2% market share to mutual funds every single year, and that's both new money and then that's money being either converted over or repositioned from mutual fund to ETF. Why do I frame it like that? That means there's $30 trillion right now that is in some form of active mutual fund proposition. And so investors want active.
I think there's been this whole thing of like, "Well, active versus passive." It's like, "Time out. The best portfolios use passive capabilities and active capabilities." And so we've got this marketplace that is developing, you've got $30 trillion in active mutual funds that are doing a good job for investors, but over time we could see that transitioning in the same way that maybe we don't listen to as many CDs anymore, we're listening to more MP3s. We're starting to see that transition happen as well." It just happens at a slightly different pace in our industry because the switching costs ... Again, going back to the switching costs are high. So the addressable market is unbelievable. By the way, that $40 trillion is growing at something like 5% to 10% a year, so the overall pie is growing pretty substantially as well.
And so I know I'm throwing out a lot of numbers here, but so ETFs 12 trillion, active ETFs, 1.2 trillion, give or take, so about 10%, but growing at a faster rate than that, I think we're just going to continue to see active ETFs grow at an incredibly, incredibly fast pace. And so our role at Goldman quite simply is to just continue to take our active capabilities and feed them into that opportunity to solve real client problems. And maybe this bridges us into the next conversation, which is one of the fastest categories within active that we see is the defined outcome-
Bilal Little:
Yeah, 100%
Bryon Lake:
... category. And defined outcome, I see as a relatively broad category, everything from income to targeted buffer, to growth strategies and beyond-
Bilal Little:
And risk management, right?
Bryon Lake:
And risk management. These are tools, to torture the music analogy, the way I'm thinking about defined outcome is you take a reference asset, and then using some options you can magnify it in a different way. It's a little bit like taking an acoustic guitar, an instrument that we're all familiar with, and then plugging it into an amp, right?
Bilal Little:
Absolutely.
Bryon Lake:
And all of a sudden you can really rock out with these things.
Bilal Little:
Yeah, for sure.
Bryon Lake:
And investors are responding because they are thinking about the outcomes that they can drive. And as we know, when you use options in a transparent, exchange-traded vehicle, you can start to drive and think about building portfolios in a very different way, and then building your investors' outcomes in a very different way. And so we're excited about that space. So obviously we acquired the Innovator ... Or we announced last week that we've entered into an agreement to acquire the Innovator ETF business. It's a now $30 billion ETF business. They invented this defined outcome space back in 2018, 150 products spread across all of those different things. And this industry is amazing and the Exchange here is amazing at continually innovating and coming up with new ways, better ways to solve investors' challenges or drive those outcomes.
And so in line with our organic strategy of delivering the best of Goldman Sachs' active capabilities through the ETF wrapper, we saw this exciting new space of defined outcomes in the Innovator business as a way to augment that as well, and push us into this new space. And so the whole industry was playing acoustic records and we're putting this thing into the amp to really take it to the next level.
Bilal Little:
So let's talk about that if you could, because this is actually a substantial acquisition for you guys, pushing you over $75-plus billion dollars in assets, making you effectively a top 10 ETF issuer on the Street. Talk about, if you could, some of the strategic decisioning behind, "Let's go out and let's acquire this particular manager because we see the synergies and aligning with our business development opportunities."
Bryon Lake:
Yeah. So it's an extremely high bar to do an acquisition. It is just a really high bar. If I had to narrow it down to three areas that we tick, tick, ticked on with this one, it was, one, from a cultural standpoint, Innovator is very aligned with Goldman Sachs. Goldman Sachs wakes up client obsessed every single day. So does Innovator. We just wake up and we think about, "How can we serve clients today? What are the different problems that we can solve for our clients? What can we do?" Not everybody, I feel like has that, and so that was a strong alignment with this.
The innovation around the products that they had developed and the way that we think about solving ... So we talked about the identity of Goldman Sachs Asset Management earlier where it was. We solve these big challenging problems through sophisticated solutions, whether that's direct indexing, SMA, evergreen alternatives, active ETFs. We saw that the Innovator business was doing that as well. And so it lived in that neighborhood and it reinforced who we are as an asset manager to our clients. And so it aligned there.
And then thirdly, we had an existing relationship. The team at Innovator, we've known for quite some time. In fact, maybe you've put this together, but Bruce Bond, John Southard, Graham Day, Trevor Terrell and some of the other crew worked at PowerShares. Well, Bruce and John founded PowerShares. I was their 12th employee at PowerShares.
Bilal Little:
I didn't know that early.
Bryon Lake:
And so, had grown up with them in a way and we'd always kind of been in touch there. And so, as you know, when you have an existing relationship with someone, there's an ability to get close on that. And so it's a really high bar, client obsessed, cultural-aligned, innovative solutions for clients, and an existing relationship. Ultimately, we got to the point where we said, "We do think this is a really good thing that we can bring into our business. They're great partners on this." They bring an incredible team of 70 individuals that'll be staying along, that we're really excited about working with as well.
Bilal Little:
That's really good.
Bryon Lake:
And off to the races from that one.
Bilal Little:
Let's talk about something briefly, because I think they ... When I say they, I mean Innovator. They touched on, I'll call it the blue ocean opportunity with it, which is retail. Legacy ETF issuers have dominated the market because of brand, to your point, about who's associated with what. This defined outcome space is really developing faster and faster, and I'd say post-COVID you have access to markets that you didn't have before. So you actually have market innovation and infrastructure development, so the Robinhoods of the world, the Webulls, all of these different investment platforms. But also you have demand from a new audience base that you typically didn't have in legacy positions or mutual fund wrappers. Talk a little bit about that and what you're seeing as far as the development in retail, if you can, and how maybe Innovator capitalized on some of that, because I think this is important.
Bryon Lake:
Yeah. I think there's two major trends that have happened here. One is increasingly the democratization of our industry has, and I know we often use that word, but the narrowing of what used to only be available to the biggest institutions in the world. And Mr. And Mrs. Smith has narrowed massively, in the sense that the ETF industry has taken these strategies that used to only be available to the biggest institutions, put them into the ETF, into a structured 40 Act-regulated vehicle that you can do your due diligence on. You can see what your holdings are on a daily basis on the issuer's website or the Exchange's website, and you can move in and you can do that.
And so that's been a trend that's been ongoing now for quite some time. By the way, we're seeing that a little bit in the alternatives space. We're seeing that a little bit in some of these other areas as well. What we're now seeing is, what I'll call the next expression of that, where it's some of these slightly more sophisticated strategies. And it might have just been pricing at first. The S&P 500, now you can get this for an attractive price point.
Bilal Little:
Great point.
Bryon Lake:
And it used to just be a big institution if they could show up with big amounts of money and they would get lower prices for scale. Now what we've seen is through technology, frankly, the technology, the ETF wrapper, you've been able to bring those costs down a little bit. And I think that's what's happening with the defined outcome space and some of these other spaces, of these are strategies that have existed for decades. Institutions have been doing these strategies-
Bilal Little:
Couldn't agree more.
Bryon Lake:
... for decades. But now they've been put into a very user-friendly, convenient wrapper and people are able to get the exposures to these at, frankly, pretty attractive price points vis-a-vis what you might get in another wrapper. And so all those things I think are ... We were even talking about the dissemination of information before we started chatting here a little bit. And the example I always give, so here we are in Lower Manhattan, and if we were going to go out and grab a cheeseburger tonight for dinner, what would we do? We would go onto our phone, we would type in Cheeseburger. And then we're in Manhattan, so if it doesn't have at least a thousand five-star reviews, we eliminate it from the list. Consumers have more information at their hands than ever. You can buy something on Amazon and you can go and you can see that, and then you read all the reviews and be like, "Yeah, okay, I'm going to go buy that thing."
Whereas it used to be buyer beware. It used to be the issuer had more information and the risk was to the consumer. That's been inverted. The asset manager needs to step up and put their best stuff out there because the investors have more information and more access to that information than ever, and they can make informed decisions on their portfolios. And so we now are providing all of that information for investors to make it. So the consumer has more information than ever, which allows them to build a more precise portfolio for what they're trying to achieve. And so that's all part of this technology unlock and what's happening more broadly in the world, but also specifically happening in the asset management space.
Bilal Little:
Bryon, I think you nailed that. That's actually solid. I love the burger analogy. Look, Goldman is known on the entire Street for their capabilities on the private side, and you just talked about the investor having more tools at their toolkit than almost the asset manager at this case. Let's talk a little bit about what you're seeing on the development in the private side, because access and everyone wants to access the retail and wealth management spaces to raise capital for these private opportunities. Talk a little bit about that and what you're seeing from Goldman's perspective.
Bryon Lake:
There's a lot going on there. I kind of smile. It's like, Goldman's been doing what we call private investing now since before they called it private investing.
Bilal Little:
Exactly.
Bryon Lake:
We were lending money to private companies before they called it private credit. We were investing in companies before they called it private equity. That was just kind of the foundational business that we were in many ways. And so, one of the strengths of Goldman is the convening power, the access to these relationships and the flow that's happening on the private side. And I think it's one of the big value propositions that we bring to the table. As we think about the private investing or alternative investing, that's also a kind of overarching umbrella, and I want to be a little bit more specific around that. It could be private equity, where companies are staying private for longer.
Bilal Little:
Absolutely.
Bryon Lake:
And some of the more exciting companies are staying private for longer. And for investors to get those into the portfolio, you might want to do private equity. The portfolio enhancement that you have there is it could increase your returns. Private credit, these are thematic things that are playing out in the marketplace, whether it's the AI data centers or the clean energy things. These are different themes that we're all aware of that we're living within now. Private credit, the role in the portfolio is it can enhance your yield. You can get custom terms around how private credit works and it can compliment, or in some instances replace your public credit exposure.
Real estate, diversification aspects, yield aspects. The bigger point being, infrastructure, another good one, alternatives is this overarching word, but there's these specific things that live in the alternatives space that can play really important roles within an investor's portfolio. And so appropriate disclaimers apply, do your due diligence, make sure you understand what you're doing, use a financial advisor. But these investments are now becoming available through evergreen wrappers that do allow people to incorporate them into their portfolios and benefit from what these things can do within their portfolios. Similar to the theme we were talking about earlier, big institutions have been able to do this for years. And now because of technology and continued education, these are starting to work their way into individuals' portfolios. I think we'll continue to see this convergence of public and private and portfolios, because that entire opportunity set of risk and reward can pull through.
Bilal Little:
Let me ask you a question on that. Do you think it's the asset manager's responsibility to provide the education to these two vehicles? Because there's the convergence of privates and the ETF wrappers themselves converging at the same time, but also just access to these two virtually still new investment areas.
Bryon Lake:
Well, I'll tell you, we take that very seriously. We've got what we call GSIU, Goldman Sachs Investment University, where it's providing education around this thing. We train our people to be really thoughtful about how they're communicating to investors around these things. Again, in our business, we're working with intermediaries, other financial professionals. And so we're working very closely with them to make sure that they understand how these things can work in their portfolios and educating them in those ways. But that could be true about anything in this industry, and so I think that's just on this necessary journey as we do see more alternatives in investor portfolios, making sure that we're providing the education there with anything that was new. We were providing education on ETFs 25 years ago, how they worked, and we continue to do that and that's an important part of this. It's probably fair of me to say there should be more education around financial literacy to begin with. And so all of these things, the answer is yes, yes, and more yes, we need to continue to educate.
Bilal Little:
All right, good. So I want you to put your objective hat on now, thinking about the entire industry. What's maybe two or three themes that you see playing out over the next, call it five years? And it could be technology based on the wealth tech, it can be investment driven, or it can be market driven. Just anything thematic on your mind.
Bryon Lake:
One of the interesting things is, it's a great time to be an investor. There are more tools for people to be building the perfect portfolio for the outcomes that they're trying to achieve than ever. I always talk about our industry. I feel called to this industry. I love this industry, because ultimately the focus of the asset management industry is to wake up every day helping people achieve their financial goals.
Bilal Little:
That's it.
Bryon Lake:
Fundamentally, that's what to do.
Bilal Little:
That's it.
Bryon Lake:
We do a lot of stuff around this, but all of it should be oriented around helping people achieve their financial goals. And so we've spent a lot of time talking about, quote-unquote, "product," different things that we're bringing. There's something in me that tells me that the combination of that product allows people to build their perfect portfolio based on what their investment objectives are, "I want to retire, I want to pay for healthcare, I want to give to my favorite charity." These are very worthy aspirations for people to have, and these tools come along for them to help achieve those in a more precise way. It used to be that you just had this blunt object. Now you have all these tools that you can do it in a more precise way. And so I think that's a really cool trend. It's back to our music analogy, used to have to listen to what was on the radio and it was like-
Bilal Little:
Choice.
Bryon Lake:
And now you can put your perfect playlist together.
Bilal Little:
Absolutely.
Bryon Lake:
And it can match the vibes, whether it's your workout or your holiday or whatever playlist you're going with, and I think it parallels with investment objectives and what people are trying to achieve with their money. And so I think the major trend is I really hope that investors are getting better outcomes, because these tools are coming along for them to achieve those. The second thing with that, and maybe that's the overarching comment is, I do think that we are going to continue to move on that spectrum from very simple, plain vanilla to products that can do other things for investors' portfolios. What the industry continues to do is, it innovates. And what we're always trying to find is that tension along the innovation of we're finding those adjacent strategies where people understand what it's trying to do, but it's slightly innovating what we currently have to help solve that problem a little bit better. What we don't want to do is leap way too far ahead of people and dream up some crazy thing that does this thing, that it doesn't really actually solve any investor challenges.
And then the other one, and sorry to repeat myself here, but I do think this convergence of public and private is a real theme, where increasingly investors are more and more aware of exciting companies that are out there that might not be in their portfolios because they're not yet public. And how do I bring those into my portfolio? How do I benefit from the yield, the diversification aspects of that? And so being thoughtful about building models. We've got a models business, we've got work that we've done with T. Rowe Price on that work, and developing models that incorporate both public and private capabilities.
Bilal Little:
Can you talk a little bit about that-
Bryon Lake:
Yeah, so we obviously have this partnership with T. Rowe Price. They're a leading asset manager. They're leading in the retirement space, the multi-asset space. We've talked a little bit about Goldman's leadership on the alternatives side. Now there's new regulation where you can use alternatives in 401(k) and retirement accounts.
Bilal Little:
Absolutely.
Bryon Lake:
Which makes a ton of sense. It's long-term money. Retirees can benefit from these things. Again, we talked about big institutions have been able to, so why not individuals? And so we've got these models that will be launching with T. Rowe Price where they're incorporating some of our alternative capabilities, some of their best public capabilities, ours, and delivering these solutions for investors. And I think that's pretty cool.
Bilal Little:
It's really exciting.
Bryon Lake:
You now have these new capabilities that are solving real-life problems for investors.
Bilal Little:
That's really exciting. All right, so the most important question. You talked about music several times here.
Bryon Lake:
Okay.
Bilal Little:
I'll tell you mine first. What's a song on your playlist that no one knows is arguably one of your most played songs? And I'm going to tell you mine first.
Bryon Lake:
Okay.
Bilal Little:
There's a song called No Time for Caution, which is a part of the soundtrack from my favorite movie, which is Interstellar. It's Hans Zimmer.
Bryon Lake:
Yeah, yeah, yeah.
Bilal Little:
And I play it on repeat. So what is your song?
Bryon Lake:
Oh man, that's a good one. Well, so first of all, I was telling my wife the other day that Spotify should have a button that just says, "High school hits," and it just takes you back and plays the 10 jams. There's been two things that have been going pretty steady rotation on my Spotify recently. One is Kid Cudi. And oh, I'm missing the name of it, Electromagnetic or something like that is that, and Cudi Zone are the two that have been going on a pretty big loop there. And then on the other one, the Beastie Boys.
Bilal Little:
Okay. Yeah.
Bryon Lake:
So Back to Brooklyn.
Bilal Little:
Oh, absolutely.
Bryon Lake:
You got it.
Bilal Little:
Absolutely.
Bryon Lake:
Although, one of them's Upper West Side, not a lot of people know that because they talk about, "No Sleep Till Brooklyn," but one of them, he lived on the Upper West Side.
Bilal Little:
Yeah, for sure.
Bryon Lake:
So, Sure Shot from the Beastie Boys is one that comes up pretty regularly if you're trying to get into that rock and roll mode.
Bilal Little:
Bryon, thank you so much for joining ETF Central.
Bryon Lake:
Bilal, thanks for doing it. Making sure that we're having a conversation, the transparency, we got to put ourselves out there in the way. And so I really appreciate the work that you're doing and keep going, and great studios here.
Bilal Little:
Thank you.
Speaker 1:
That's a wrap for today's conversation, but the ETF discussion doesn't stop here. For more insights, deep dives, and voices shaping the market, stay connected on etfcentral.com. From the New York Stock Exchange, we'll see you next time. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.