Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad streets in New York City, you're Inside the ICE House. Our podcast from Intercontinental Exchange on markets, leadership and vision in global business, the dream drivers that have made the NYSE an indispensable institution for global growth for more than 225 years. Each week we feature stories of those who hatch plans, create jobs and harness the engine of capitalism, right here right now at the NYSE and at ICE's 12 exchanges and seven clearing houses around the world. Now here's your host, Josh king, Head of Communications at Intercontinental Exchange.
Josh King:
What are your investing principles? I don't necessarily mean growth or aggressive. I mean the values you put behind the money you invest. That's one of the most important questions anyone looking to put their money to work in the markets needs to ask themselves before you take that plunge. In recent episodes, we've spoken to Accion's Michael Schlein, who's managing investment initiatives aimed at creating global financial inclusion. And we've also talked to ETF issuers offering products that focus on narrow environmental, social, and governance, what we call ESG issues, such as veteran employment, how that company does hiring those who've served in uniform.
Josh King:
Our guest today was working for Ronald Blue & Co, an Atlanta based investment advisor when he set out to find an investment vehicle that fit better with the values of the firm's clients. His solution was to create a brand new company, Vident Financial, to provide a stable, transparent investment process that created bulwarks against market volatility and aligned with investing principles, without sacrificing long term value. Vident launched its first exchange traded fund ETF, Vident Core US bond Strategy in late 2014. And the company just celebrated its fifth anniversary of its founding. We talked to Vince Birley, Vident's co-founder about its philosophy that the company's good values will create good value for investors right after this.
Speaker 3:
Inside the ICE House was brought to you this week by Norwegian Cruise Line, NYSE listed NCLH. Norwegian Cruise Lines 16th ship, Norwegian Bliss will begin cruising Alaska and the Caribbean seasonally in June, 2018. For more information visit www.ncl.com.
Josh King:
Our guest today, Vince Birley, Co-founder and CEO of Vident Financial has over 30 years of experience in the personal and institutional financial services industry. He was Chief Strategy Officer and Chairman of the Investment Policy committee for Ronald Blue & Co, before he teamed up with Ronald Blue Trust and Nick Stonestreet five years ago to implement a philosophy that Vince developed and termed principles based. Welcome to the show, Vince.
Vince Birley:
Thank you.
Josh King:
So good to have you here in the New York Stock Exchange. How's your day been so far?
Vince Birley:
Its been great. This is a great place to be. It's the greatest city in the world and the greatest exchange in the world.
Josh King:
Do you spent a lot of time in New York over the years?
Vince Birley:
I have a lot more since we got into the ETF space. But I love Manhattan, my wife actually went to school here, Columbia. And so she loves to come and show me how to actually get around this place.
Josh King:
Favorite place to go hang out when you're not down here, the New York Stock Exchange?
Vince Birley:
Probably, yeah, Del Frisco’s is probably one of the best places that we like to go have a steak. But yeah, we love Midtown, Times Square, all the things happening down there on Broadway. My wife's big Broadway fan.
Josh King:
See any shows on this trip?
Vince Birley:
Not this one. I'm actually just up for the day, just to see you.
Josh King:
Not bad eating opportunities in Atlanta where you're from either.
Vince Birley:
No, it's kind of becoming a foodsy place. These guys really like to play in Midtown and Buckhead. So Atlanta's really one of those places where a lot of people aren't from there. So you get a lot of diversity in Atlanta.
Josh King:
We share that heritage at Intercontinental Exchange. Jeff Sprecher originally from Wisconsin by way of California decided Atlanta was going to be his home. Same with you, right?
Vince Birley:
Yeah. Actually grew up in Iowa on a farm and kind of just kept on getting bigger and bigger, went to a little school in Iowa called Pella, Central College in Pella, Iowa. Then we went to Raleigh, North Carolina, and then had an RAA in there that Ronald Blue bought in 2000 and has been in Atlanta since 2000.
Josh King:
You were telling me earlier that you grew up on the farm, raising pigs and growing corn and soybeans. Those values about being the son of farmers, is that imbued in your investment philosophy?
Vince Birley:
I think there's some of that. One of the things about farmers is a lot of common sense. And they figure out how to get stuff done. High utility, you put a little effort in, you better get a result because you only have so many calories a day to burn. So I think there was that and then just the hard work and staying persistent. But I think the farming experience was one that taught me one, hard work is hard. And they really do work hard. And that if you're going to spend your time working, that you better get a result because again, you only have so much time in the day to get it done.
Josh King:
Do you miss actually having your hands on soil?
Vince Birley:
I don't. My dad learned pretty quickly that I was not a farmer. He actually paid for my college and he told me one day after I thanked him, he said, "It was a lot cheaper sending you to college than ruining the family farm." I did not have a green thumb, I did not fit into the farm, but it was good for dad to recognize that his son needed to go do something else.
Josh King:
So what you did as something else was create over-time at Vident a principles-based philosophy, how did that develop?
Vince Birley:
Yeah. So '08, 09' was really one of those seasons where you start really looking at everything you're doing wondering. We had 6,000 clients at Ronald Blue that were asking a lot of questions, and frankly I wasn't that satisfied with our answers. And the way the industry really works is a lot of times looking in the rear view mirror, as far as how things have done in the past, kind of assuming that's going to continue going forward, even though we're told past performance is no indication of future results. But we spend our time looking at past performance a lot or we start looking sideways, looking at how we're doing relative to others.
Josh King:
You said in the past that's not a good way to go through life.
Vince Birley:
It's not a good way to go through life. I mean, the comparison is the thief of all joy. And I think that this industry suffers from a lot of that and that passes on to investors. So when we started looking at it and say, "What does really investors need?" Investors need to make sure their future liability are funded. And it's not relative returns that we're looking to accomplish. It's absolute real returns. They need growth in their assets to fund their future expenses. So that led us then to thinking, what are those things that create wealth and what are the things that are at risk if we don't have? What are the things that are going to risk wealth being destroyed potentially like it did in '08, '09? And that's where some of these principles really started.
Josh King:
So Vince, without wanting to introduce post-traumatic stress to what happened 10 years ago, if you think back to '08, '09, what were the answers that you were seeing that you weren't happy with?
Vince Birley:
I think what I was trying to figure out is, over a 10 year period of time, we should be able to grow people's assets and we hadn't. And so savings and investing for 10 years. And when I started looking at what one of our fund companies were doing that we were using, they were always focused on quarterly returns and short term returns and cheap beta's kind of everywhere. And then we started looking at what things they're trying to do to beat beta? And they take little bets here and there. And it's like I want to know what actually creates wealth and destroys wealth over a 10 year period of time. And I started talking about some things like, doesn't true diversification matter? That we have not too much concentration risk, because do you really of the future? Who's going to actually be the best company 10 years from now?
Vince Birley:
And then are we going to pay attention to price that we're paying for things? And that's probably some of that farming experience too, is if you're going to invest something, you better get a return. And that was the question as to, if we're going to overpay for something and hope it goes up in value. But then the thing that we really stumbled on, which I think is really cool is that leadership and governance really matters, and that human productivity is a source of wealth creation. So where people can produce more than what they can consume, that's where you get capital formation and that's where you can get growth. I really started looking at that time everyone's looking around the world saying, "Who's resilient currencies? Who's are the country that are surviving?" Kind of everyone went down, but how fast did they come back?
Vince Birley:
We always try to show a kind of extreme example of, if you're going to invest in Korea, do you choose North Korea or South Korea as your investment choice? And obvious when you look at the satellite view at night, one's dark and one's light. And we said, "Well, there's a reason why? And if it's the same race, it's the same language, it's the same natural resources, then obviously there's something different. What is it? It's leadership." And the one leadership looks at people with dignity and says, "We think you can become everything that you can be. We're going to support you and encourage you to do that, so all the boats rise." The other group is looking at, "How do I use those people to satisfy my needs?" And we're trying to find countries and companies that are always leaning towards really respecting people, respecting the fact that they're stewards of those people and respecting shareholders the same way.
Josh King:
But sometimes the atmospheric scan that you have isn't as clear as the satellite image of which country with a neighboring border has the most wattage creating the most light and the most darkness. What are the ways in which you really peel the layers of that onion off and find where value is either being created or value is being destroyed?
Vince Birley:
Well, so those are the principles. And then you start looking at the factors and that's where a lot of the research work did. It took three years really to do the research as what things really do matter. So if you look at a country. So in our international fund, we have country exposure. You have what we call country resiliencies and country opportunities. So each one gets a 50% weight. So we look at each country and score, each country of the world that you can invest in. And those country resiliency factors are things like, how much debt do they have? What are their demographics? Are they actually being productive as a country? So those things are more resilient. Are they taking care of their currency? Do they have reserves? So we start looking at countries kind of like you look at a household or look at a company and say, "Hey, this is a more resilient country, that gets a weighty."
Vince Birley:
Then you look at the opportunity and say, "Okay, how's this country trending? Are they actually incenting productivity? And are they actually priced in a way that makes it an attractive investment?" So we look at those two things and that research showed that if you invest in countries that way you're going to find more South Koreas than North Koreas in your portfolio, and we're going to overweight there.
Josh King:
What are the all star countries over the last five years?
Vince Birley:
Yeah, well, interesting last year, Austria and Poland. We had big waitings in Austria and Poland, who thinks about, "I better make sure I get some polish stock exposure," but that's really where it was. In prior years, you're looking at Hong Kong, Singapore, Australia. Some of these countries that are not that well known are the places that you would've want to have your capital invested. And that's more of where our indexes are invested rather than just looking at the biggest, because if you're going to own the biggest, you're primarily going to own Japan and Western Europe. And there's nothing wrong with those countries, but are those that necessarily the growth engines over the next 10, 15 years.
Josh King:
So as we said in the introduction, Vince, over 30 years in the field, how do you become involved in the world of finance in the first place?
Vince Birley:
Yeah. I'm going to college and I'm really not doing well in college. My uncle who was a financial planner in Raleigh saw that and said, "What are you going to do?" And I said, "I really don't know I'm going to graduate with a business degree." And he said, "Well, I'm doing this financial planning practice." He was actually a doctor in economics, and teaching at Nancy State in Raleigh. And he draw me in and he said, "This is what we do for people." And really caught my interest. And that was what, partially because no one would hire me I had to go out and work on my own and create a financial planning practice. From there really recognized that the future was going to be around helping people accumulating assets because pensions were going away and everybody has a kind of their mini pension, and they're going to need advisors to help them manage their pensions in the future. And that's all this wealth has come into the households discretion and there's a huge need for quality advisors I think focusing on the right goals for their clients.
Josh King:
You really owe a lot to your uncle.
Vince Birley:
I do owe a lot to my uncle. I owe a lot to a lot of people because I was not that guy that could go out and win business. I was the guy that knew how to give the advisors the tools to be successful. So my uncle, Scott Trees, John Poland, Nick Stonestreet, Russ Cross, and Ron Blue, I mean all these people really are the people that help me along. So I stand on some pretty big shoulders.
Josh King:
We were talking earlier about, if you're looking at the all stars of the last five years, you picked out Austria and Poland as two. When your career began, the first ETF was still years away from launching. You couldn't buy a Poland bucket or an Austria bucket ETF. What was your introduction to this product? And when did you first realize it could be the vehicle for your investment strategy?
Vince Birley:
That's a good question. Most people I think are in the ETF business because they think that's the business and that's the trends. And we really backed our way into it because we took the principles, then we got to figure out how we're going to make it investible. So we looked at the factors and then we said, "Well, should we be having a committee decide the factors or should we create some rules?" And so we created a rules-based index that then weighted those indexes. And then what we did we said, "Okay, now we're going to make it investible because an index is an investible."
Vince Birley:
And we looked and said, the ETF is the obvious tool, because ETF is one that's going to track that index. It's going to be transparent. We can rebalance this index without taking into consideration the tax pass through. And so we're always thinking about investments. And then we can trade it all throughout the day. So the liquidity, the transparency, the cost is again back to being really what I would say, we are shareholder advocates. I think that became the obvious tool for us to make available to our clients.
Josh King:
Vident wasn't the first company Vince that you started. You were also the founder of Atlantic Capital Management and was its managing partner until it merged with Ronald Blue. But with Vident you're now fully transitioned from being a financial advisor to a business entrepreneur. Was that natural for you?
Vince Birley:
In some ways it was, because since I got out of college having to kind of kill to eat everywhere I went. So there was nobody that ever paid me a salary. So I'm used to that. This industry is very different than the wealth management industry. And the way we're structured really helps me focus on the fact that my true shareholders are still my only ETF shareholders. I don't have shareholders above me.
Josh King:
So how are you structured?
Vince Birley:
Yeah. So we're owned by the Vident Investors Oversight Trust. And one of the things we do at wealth management businesses is that, we want to work with fund companies that are truly focused on the shareholders of the funds. And it's one of the unusual aspects of being a company that works with our customers as shareholders. And usually you have shareholders that own your company. So John Bogle actually was the one and reading his materials that kind of taught us that, can only serve one of two masters. So which shareholder are you going to serve? And by taking away the shareholders that own the company, you're only focusing on the shareholders that are your customers. And so all of the profits that are in Vident Financial stay in Vident Financial, they don't roll up to any ownership. And they're used for either reduction of fees or reinvestment in the business. That gives a real clear conscience waking up every day knowing what I'm doing.
Josh King:
Did you always think that would be the way in which your conscience would be cleared? I mean who did you look for guidance and network of support as you built Vident? Who are those key people that were your touchstones?
Vince Birley:
Well, my co-founder Nick Stonestreet really is the entrepreneurial person that put Vident together. So I was over at Ronald Blue & Co helping get them into the principles and articulating the principles with clients and why this was important. And Nick really built Vident Financial and handed it off to me right at the time that it was really starting to take off. So Nick should be given most the credit for building it.
Josh King:
He, he built it but now it has to continue and continue to grow. So how do you stay on track, build the support network and continually evaluate what success is for Vident, and the progress of how the funds are doing and how the investors are faring?
Vince Birley:
I think one of the things you want to do as a company is making sure that you're focused on your customers and the customer are ETF shareholders. And so when we really think about running all of our business around that, we think about how we can contain our expenses, use our capital really wisely and making sure that our ETF shareholders we're thinking about them every time we make a financial decision.
Josh King:
And so when you look at your track record, what are the metrics that you point to that you hang on the hook with particular pride?
Vince Birley:
I think that the fact that we're at 2 billion in assets in five years is a big deal. We launch funds, not hoping people will buy them. We actually talk wealth management firm like a Ronald Blue and say, "Is this a something that you can use?" So every time we design something there's a buyer in mind. And I would say that's one of the things we've never closed the fund. All of our funds have been successful. And the other thing is that when you look at how our funds are allocated and what they're trying to do, they're accomplishing everything that we want them to do. Now again, the harder thing is that we're looking out 5, 10, 20 years and this industry is like every day.
Vince Birley:
So the hardest thing is when something looks better than you on a daily basis and not getting caught into the trap of saying, "Oh, I got to start looking like them now to be successful." So that's one of the things that when everybody invests with us, they know we're long term, we're based and we're going to stay with that over a long period of time and they'll be rewarded over the long period of time.
Josh King:
So you say never look sideways at how the person's doing. So if you're looking straight ahead, forward into the future, what are the things that excite you?
Vince Birley:
I just think the world's changing so much with the transparency that's going on in the world with the internet and everything. So it's kind of hard to hide now where you're really abusing people. I think that what's really exciting to me is that you just don't have to have a social value that you want to respect people, but everyone wins. I mean, if leaders would just understand that they're stewards and not owners. Stewards are the people that they lead stewards of the shareholders that they serve. If you have that approach, not only do the people and the shareholders get rewarded, but you also have good returns. And so you don't have to sacrifice for that. I just think this transparency and the way we're able to go into and harvest out of those companies metrics, what we're looking for in the country's metrics and have capital start investing that way, that the world's going to be a better place and capital can do that.
Josh King:
The same year that Vident started its first ETF, the company also started Vident Investment Advisory, people know it as VIA to serve as the subadvisor for its ETFs. And today VIA subadvises on 34 ETFs with about 6 billion in assets under management. Why'd you feel that your ETFs would require a brand new subadvisor?
Vince Birley:
We had launched an international or international equity fund and it was in a lot of smaller countries. And what we figured out was that it was much more complicated situation than what our subadvisor we were using, could accomplish. We met Denise Crisco in interviewing other subadvisors and she happened to be just leaving this firm. And we said, "Would you be interested in managing our funds?" And she said, "Yes, I would be actually." She was wanting to start a business. So what we did was we set it up. We never really recognized that there was going to be that much demand, but I didn't know that we were kind of getting an ETF rockstar with Denise. And all we've ever done is pick up the phone because once it was known that she was out there doing subadvisory business, people just keep on calling.
Vince Birley:
And all of a sudden we're 6 billion three years later. It's a great business because really executing on an ETF is a unique skill. It's not the same as just trading a stock every once in a while that an analyst tells you to buy or sell. You trying to attract that index with a great deal of precision and then be able to be really tax efficient and cost efficient. And she's just the best there is out there, and we are fortunate to have her be part of the Vident family.
Josh King:
After the break, we continue our conversation with Vince to find out what the future of Vident is and how the company has moved into of all things, the coffee business.
Speaker 3:
Norwegian Cruise Lines, Norwegian Bliss will feature the largest race track at sea incredible entertainment, including the Tony award-winning musical Jersey Boys, as well as two, 180 degree observation lapses, perfect for whale watching in Alaska or taking in sunsets in the Caribbean. To learn more visit www.ncl.com.
Josh King:
Back now with Vince Birley, co-founder and CO of Vident Financial. Vident just celebrated its fifth anniversary by of all things, lowering its management fees of several of its ETFs, made possible by the unique ownership structure of the company where the so owner of the company is Vident investors, the oversight trust that we talked about before the break. What is the oversight trust and who is on the board of it?
Vince Birley:
Yeah, so the Vident Investors Oversight Trust have three trustees because it is a trust. The trustees are myself, our CEO, Deborah Kimery, and then Andrew Schmal is an independent trustee. The three of us are responsible for making sure we look at the profits and make sure that they are used appropriately in Vident Financial.
Josh King:
And what are some of the other benefits of the trust and why don't more investment firms take on a similar management structure?
Vince Birley:
Well, I would say the real benefits is that we're really focused on one, the shareholder, the ETF shareholder. We don't have the conflicts of wondering what amount of profit should be going up to owners versus going back to shareholders in the form of reduction in fees. We got the idea from Vanguard, which is it's a little different structure where the funds actually own Vanguard, which isn't really available anymore. We also looked at mutual insurance companies, the shareholders are the policy holders and we looked at credit unions. Same kind of concept. I'm not sure exactly why that's the case other than there's a lot of money to be made in the asset management business. If you're managing 200 million in assets, it's no different than managing 2 billion, your expenses are the same.
Vince Birley:
So the leverage is really amazing. So it's a good investment to own, but again, Vident was built by advisors for advisors. And so if you think about for advisors, I think that advisors should expect their fund companies to be focused on their shareholders, and that's why we did it.
Josh King:
And what allows you to lower those management fees?
Vince Birley:
Scale. So the more money that comes in, just like I said, when we moved to, we were at 2 billion in assets, it's the same expense structure I had at a billion. And so what are we going to do with the profits? And so again, I'm here to attract talent because we want to have talent to make sure those indexes are really well run. We want to make sure they're well managed through VIA. And then we want to make sure if we have some leftover that we can give it back to our shareholders. We do that in the form of dividends and insurance. We do it in the form of lower fees.
Josh King:
But here's where it gets interesting because you're not just giving all the profits back to shareholders. I mean, in addition to reinvesting the profits back into the company and providing lower fees to the clients, the oversight trust markets and distributes Hannah's Blend Coffee to support an Ethiopian orphanage. What is Hannah's home and how does selling coffee fit into your philanthropic mission?
Vince Birley:
Well, the coffee is a means to the end of supporting Hannah. So Nick and I met Hannah about 10 years ago in Ethiopia.
Josh King:
What were you doing in Ethiopia?
Vince Birley:
Well, we were introduced to Hannah through a mutual friend of ours who had gone over to Ethiopia to figure out how he could help people in Ethiopia. And this guy just walked around and found Hannah in Addis, Ethiopia. And he comes back and says, "I think I met an angel and she's taking care of all these kids." And we started calling her the mother Teresa of Addis, Ethiopia. And I said, "Well, how can we help?" And he said, "I don't know. I kept asking her how I can help and she said, "Well, I don't really need help. God will provide me everything I need." And it's like kind of hard to replace God. But we said, "Can we be an instrument somehow of being able to help?"
Vince Birley:
And so Nick and I went over there separate times and we met her and we saw her and she was taking kids off the street and the government was giving her kids and she was putting them in school. She was taking care of them in houses with mothers that she had recruited to take care of them in a family setting. And these kids were just turning into doctors and pilots. And we said, "Is there ever a better example of our principles of human productivity and leadership?"
Josh King:
What was Hannah's secret sauce to be able to do that versus the terrible outcomes that face kids all over the world?
Vince Birley:
Yeah. I think first of all, when she comes in the room, they just swarm her and she just is full of love and she cares for these kids. And she also put them I think in houses rather than in orphanages. So they were like six to seven people in a house and they acted like a family. And so that traditional family setting where there was like one on six, rather than one on 60, and just giving them really a room and a bed and food that this was something that she was just investing heavily into them. I think that was the key to it. But that's back to leadership and governance. She was not looking just to get it, to have a job.
Vince Birley:
She was investing in these kids and that leadership was like, wow, if that isn't an example of being able to take people and make them more productive by just investing in them and thinking about them rather than using them or having a job to have them in an orphanage. That was just really special to us. So we said, "We're going to not just give her some money. We're going to actually put name of coffee after her to get her story out."
Josh King:
Is this something she's been able to scale?
Vince Birley:
Yeah. The orphanage is absolutely scaling. And again, we don't provide hardly that much. It doesn't seem like that much, but somehow she keeps on getting funds to do it. But we have, every time you buy some coffee from Vident, we match that price and send it down to her. We sent her, I think $10,000 last year, so we sold $10,000 worth of coffee.
Josh King:
For those of us who were looking to replace our Chock Full o' Nuts tin on our shelf, where do I get some of this kind of Vident Hannah's coffee?
Vince Birley:
Well, you have to go to the Vident Financial website of course to get to the Hannah's Coffee. But one of the cool things about that is it's an Ethiopian American blend. So you're actually mixing US dollars with Ethiopian money and Ethiopian mission over there. So it's a great investment and it's a great coffee.
Josh King:
How much do I get a pound for?
Vince Birley:
For you we might be able to send it for five bucks, but I think it's like 10 bucks a pound.
Josh King:
I was going to order some more Chock Full o' Nuts today. I'm going to go to Videntfinancial.com and order some coffee.
Vince Birley:
I hope you do.
Josh King:
Your most recent ETF, Vince was launched in March, 2018 this year. The US diversified real estate ETF, ticker symbol PPTY. The product's a smart beta index of real estate securities. How's the index created for it? And how will the new fund compete with the larger players in the space?
Vince Birley:
Yeah, so this was a fund guided, Fred Stoops, who's now the head of our real estate and investments at Vident came to me about a year ago. He was working with Goldman and buying real estate in Europe. And he had wanted to invest some of his own money and started looking at ETFs and real estate ETFs, and was kind of a little surprised at what was not there, which was a real estate ETF that was focused on real estate. They were focused on REITs, the securities and the attributes of the securities, either the cap size or the waiting of it or maybe a dividend waiting. And he said, "Well, don't you actually want to know where your real estate is located and what kind of real estate you're going to own and the leverage amounts." And he said, "So why don't we just build the index that way?" So he called me and said, "You guys are pretty innovative."
Vince Birley:
And he came over and I said, "This is a great idea." So he reverse engineered the index. He started with what kind of property he wanted to own. He started with targeting where he wants to own it and then getting a targeted leverage amount. And so rather than starting with the actual REIT security, he starts with real estate and then buys accordingly the REITs that gives him that allocation. And that's what our index does now.
Josh King:
So it's early days, but how is PPTY doing?
Vince Birley:
Yeah, I think we're getting close to 40 million in the first month in assets. The performance has been a little bit better than maybe the normal ETFs out there, but it's really early. I think the story is catching on. We are doing a lot of interviews, people are really interested in this. And in it's really the way institutional money that buys private real estate, that's where you'd start. I mean, where would you start when you going to buy a house? I mean, first of all, you'd want to buy a house, not an office building. So that would be important to know what kind and then where are you going to own it. And so the old adage location, location, location. I mean, that's the key.
Josh King:
And so where are the geographies that are the focus of this fund?
Vince Birley:
Depends on the property type. So if you're looking at office, again, one of the things we found is that most ETFs have about 50% of their waiting in New York and Boston two cities. So there we thought that more diversification was necessary. Residential, again, you get a lot of waiting towards the cities with a high prices. So San Francisco is one of the high weighted cities, 1.6 million median average home price. I'm not sure I'm going to keep on buying property there. So again, we diversified. We actually, in that case, we just went down to Orange County, which has a lot less cost per house, lot faster growth. So we like that. If you look at industrial, pretty well diversified. Retail was something that we also found. So retail was the largest holding and private property type. We were thinking, is that really the future with e-commerce? Is that we want to own a bunch of malls in rural America? Is that the future? And we decided that where retail works.
Josh King:
It's like buying ghost towns right now.
Vince Birley:
Yeah, it is. So we said we're about half the waiting of retail, the most ETFs, but where we do own retail is like in New York city. People shop in New York city and San Francisco, dense population areas is where they can walk and do things. So that's where we have our retail exposure.
Josh King:
Are there any other indices beginning to take shape right now in your workshop that we should be keeping an eye on in the coming months from years?
Vince Birley:
Not really close. I would say the things that interest us right now probably are more in the hard assets, the Cryptos, the blockchain. We're spending some time looking at that to see what impact that's going to have, and is there any smart way to actually think about those exposures rather than just buying it? That's probably really the only thing that is got our interest, but it may be just kind of almost a hobby interest as much as an investment interest. But we'd be willing to do it if there's a buyer out there that wants it.
Josh King:
Aren't we interested in that, Vince?
Vince Birley:
Yeah, we are all. Well, we ought to be interested in that because it is pretty crazy stuff.
Josh King:
Thanks so much for joining us in the ICE House.
Vince Birley:
Yeah. You're welcome.
Josh King:
That's our conversation for today. Our guest was Vince Birley, co-founder and CEO of Vident Financial. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a question or a comment, you'd like one of our experts to tackle on a future show, email us at [email protected] or tweeted us @NYSE. Our show is produced by Pete Ash and Ian Wolf with production assistance from Ken Abel and Steven Poertner. I'm Josh king, your host, signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
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 express or implied as to the accuracy or completeness of this information, and do not sponsor approve or endorse any of the content hearing all of which is presented solely for informational and educational purposes. Nothing here in constitutes an offer to sell or a solicitation of an offer to buy any security or recommendation of any security or trading practice.
