Henry Kaestner: Welcome back to the Faith Driven Investor podcast. I’m here with my partner, Luke Roush. Luke, awesome to have you. We got a special guest.

Luke Roush: We sure do. Tom Darden goes all the way back to day one. You and I together almost 10 years ago now.

Henry Kaestner: Yeah, sure, man. And for those of you don’t know, Luke and I are in different places in the country now. He’s in Nashville. I’m in California. Tom is in Raleigh. But Sovereign’s Capital and really our emphasis and calling to the work of Faith Driven Investor and started in Raleigh and Tom came along side us and encouraged us and was there at the beginning and just more than any other person outside of the three of us. Andre, Luke and I just got it. And just like it didn’t need to be sold on it. And that was really refreshing because, you know, as a time at the beginning of sirens, when we really felt a lot of headwinds, right? I took his two and a half years, raised $12 million.

Luke Roush: Oh, my goodness. Oh my goodness. The level of hubris that we exhibited and also the level of rejection that we experienced was

Henry Kaestner: I was just thinking about the rejection part. I don’t know about the hubris, but there’s probably something to do.

Tom Darden: I don’t know about the rejection for it, but the hubris that you had no hubris truly believed from the very beginning that you were on it. This was something that the world needed and you guys were the right guys to do it. So it was just a privilege and an honor to be able to watch you guys build this thing that you built and thank you. Thank you. Thank you.

Henry Kaestner: Thank you. Many of our audience are going to know you. Many are not. And so what we like to do on every podcast episode is to get an autobiographical fly over the person we’re talking to. And you begin your life not so much as a Faith Driven Investor, but as a Faith Driven Entrepreneur. And we don’t need to go all the way back where you’re rebuilding British sports cars, although that would be fascinating to go into. But you know what? They start off the beginning. You grow up in a family. You grew up in North Carolina. Who are you? You can include the British sports car saying if you want.

Tom Darden: Yeah, I was born in Pennsylvania. My dad was in the Navy at the War College, and he was working on the first computer that they had. So I kind of had some technical genes, I think, from the beginning, and we lived in small towns in North Carolina. Morgan son Lenore Highpoint, North Carolina, Petersburg, Virginia. And when my dad was forty one, he quit work and went to law school. He wanted to be a lawyer and he had always wanted to be a lawyer for some strange reason. And I think I was very influenced by that. I then went to law school myself after I went to unceded college and to grad school. I studied urban environmental planning. I was very passionate about environmental issues from high school. It was an early environmental movement. It happened kind of post 60s. So I’m sixty six years old now, born in nineteen fifty five. So, you know, I was thirteen and nineteen sixty eight just to kind of give this some context. And it was a very tumultuous time. And the environment, civil rights, the Vietnam War were the big movements kind of inverted order. But the environment was on a lot of people’s minds. I was very influenced by that, just sort of feeling this sense of abject terror about pending environmental doom, which I know a lot of young people these days feel. Also, it’s kind of a sad thing to have inflicted on you. And I decided I wanted to do something about that. And I went to law school to be an environmental lawyer. I did work as a mechanic and bought a car when I was 13 and was very technical and ended up buying, fixing up and selling 20 cars or motorcycles. By the time I was age 20, that’s kind of how I made money. I was always working, doing some kind of work. Start with the paper route at age 10 and pretty driven to make money. I mean, I’d say somewhere in the vicinity of greedy. I went to law school at Yale. I didn’t like the law that much. I went to work at Bain and Company, and I did statistical analysis of the energy consumption in heavy industry. I kind of used that way of thinking about industry to buy these brick manufacturing companies that use a lot of energy and convert them to using wood waste. So biomass fuel, which saved a lot of money and that worked out well and then sort of bacteria growing company to grow bacteria for cleaning up pollution in the ground that led to creating the contaminated land cleanup business. And then let me

Henry Kaestner: stop there for just one second. We’ve never interviewed somebody who started a bacteria growing company. How did you get started? No, we haven’t. What does that even mean?

Tom Darden: Well, it really came from my background in grad school. When I went to grad school, I studied about waste treatment, different types. But sewage is processed by bacteria like people don’t know that. I mean, obviously lots of people know that if they’re in the business or involved in it, but the job of consuming and breaking down sewage and lots of other kinds of waste, it’s done by bacteria. It’s like, you know, society hires these bacteria to do this work for us. And I was overwhelmed by that. I remember in grad school, I drove my wife crazy, my wife to be crazy because I was just obsessed by this amazing phenomenon. So it’s always in my mind, and I knew that bacteria would. Consume all kinds of contaminants, and it was known that bacteria would consume contaminants in soil since it is an easy step from there. I had some contaminated land that I needed to clean up at these old manufacturing plants and I thought, well, instead of holding it all to a landfill or hiring some third party for it, we could figure out a way to do it ourselves. And I’ve got some professors at Virginia Tech gave us some money. We ended up building a business called Cherokee Biotechnology to grow bacteria. We sold bacteria to others in the remediation world, and we started a remediation company taking dirt, contaminated dirt and cleaning it up with bacteria. And then that led to being able to buy contaminated land, you know, more efficiently or not being so concerned, I guess, about buying contaminated land. We were willing to buy land if you weren’t willing to buy. And that led to creating our private equity funds. We raised $2.2 billion over about a 20 year period to buy clean up and then sell contaminated land. So anyway, that’s a little bit about kind of our background. I continued to invest in, you know, interesting technologies sort of like the bacteria stuff on the side. But then that kind of became our main focus. The thing I was doing on the side really became a primary work way, and I got three kids, four grandchildren.

Henry Kaestner: Well, along the way, you also started one of, if not the largest bread company in America, one of the larger companies in America. So you even mentioned that, you

Tom Darden: know, that was the thing I did when I left Bain and company is is a bought for brick plan sort of all together in a transaction substantially financed by a public company that needed to get out. They were losing a lot of money. And I did that because I had this plan to convert these plants to using biomass instead of natural gas, which is very expensive at the time. Gas prices spiked and it became uneconomic to make bricks, basically. These companies were losing money, but I had a plan to instead of using natural gas to convert them to using wood waste. I knew about that because EPA was beginning to regulate wood sawdust and forcing the sawmills to pay to put it in landfills where it produced methane. So it was a stupid solution. And I thought, Well, we can use that instead of fossil fuels as a fuel for the company for manufactured bricks. And so that led to an enormous cost reduction, plus a great environmental benefit. It was a wonderful thing. And then I just continued, I kept my bread companies ended up with eight brick plants and a number of distribution sites. We had a peak of about a thousand employees, and it’s great business. I really love the brick business and the teamwork and the work of the people in the brick plants.

Luke Roush: Tom, one of the things that you and I talked a fair amount about in the past is this idea of really focusing on long term and being an investor that thinks with a very different time frame than maybe the rest of the world. Can you share just a bit more on that? Why it’s important to you?

Tom Darden: Yeah, I think that it kind of relates to the question of liquidity. It’s not really the same, but I think of it as sort of in the same vein. Like, why do you care about time? You care about time because you want to have some sense that you’re going to fill in the blank? What have some money at some point in the future that you could imagine, right? So I kind of would refer to that as being liquidity. You want some predictability about your future financial state, and those are things that I think generally we should discourage in ourselves, you know, sort of from thinking that way. First of all, predictability about future financial stake. It’s kind of a fool’s errand in many ways, or it’s trying too hard to kind of get everything taken care of. Well, if I do that, then everything will be OK. You know, which obviously is not the case in our lives. I also think it greatly influences the types of investments that we do. We’re not we’re not willing to do certain things if we’re thinking about, well, how am I going to get out of this or how long is this going to last? You know, then that causes you to to have a bias toward investments that have greater liquidity. And then at least you can kind of control the time horizon in that case. You know, if you think about your capital, your investment activity as being part of your mission, part of your philosophy, part of your phase, you know, part of your beliefs, then I just feel like you should use that as the driver of what you do, as opposed to thinking more about the investment attributes or aspects of it themselves. If that that shed some light on that topic,

Luke Roush: well, and so on the topic of liquidity, you know, maybe just speak a bit as to how that has influenced your portfolio allocation between public equities and private equities.

Tom Darden: Yeah, right. Like the zero and 100 early on came to be infatuated by entrepreneurism and the effect that entrepreneurs can have or really businesses can have on people and really came to believe that business was the most important vehicle for almost any kind of social, you know, social or economic change or activity. And along the way, there were people who were nice to me or helped me or. And I just thought, I want to do that. I want to help make that happen. And you know, you could say, well, if you invest in the stock market, you’re doing the same thing, you’re providing capital to companies that end up creating jobs and doing all those great things. I’m not disparaging of that, but I wanted to do it more directly. Also felt like I had some ideas or some thoughts, or it could be helpful in that sense in a denied the premise of sort of diversification. I mean, I felt like diversification was it was sort of like not burning your boats. You know, when you cross the river, you should burn your boats because you’re in, and if you diversify, then you’re kind of not really in. And so what I would do is if I saw an opportunity or Amen in Austin or the film made sense to this, and then I would not invest in it. And the first deal that came along basically took 100 percent of the capital that I had. Well, the company did. I have almost no capital. But then after I ended up selling them, which was a big mistake, I had some liquidity and the first next deal that came along, I put almost 100 percent of it into the deal and just thought, I don’t want to kind of create a portfolio per se. I want to use this specifically productively in terms of some objective. And so that kind of takes you out of the public markets mentality of having a diversified portfolio about I so never buy any public stock, mutual funds or bonds. None of that stuff. And I pretty much kept to that bell. I have bought stock in public companies, so I went on the board of the board for public companies over the years and about stock in those companies while I was on mutual funds, bonds, stocks, any of that stuff. This publicly traded concept, I’ve got a four one K that is allocated that well,

Henry Kaestner: it seems, from having known you for the last decade or so that part of what drives you to is relationships. I think back, you know, we’ve had Pete Oakes on the program before. We’re good friends with a bunch of the folks that you’ve been in relationship with, and it seems that you get a lot of joy. I’m going to go back in a little bit and I’m going to talk more about what you do invest in. But my sense is that there are a lot of relationships that you’ve had the impact on and have had a big impact on you. Can you talk to that personal aspect of private investing?

Tom Darden: Yeah, I think it’s really, really important that for a lot of us, you know, our primary friendships are primary relationships from people that we work with. And I’m not a particularly social person. I tend to be fairly introverted, but I have very close relationships with the people that I work with, either here in my office or in these kind of loose, you know, loose affiliations of relationships where we work together, like so the people that you mentioned and the opportunity to grow and and thrive and learn from these other people that you’re in business relationships with, it’s really important to me, also have chosen very affirmatively to invest in a number of young people to try to think very intentionally about, Well, how can I use capital and business or knowledge relationships to sort of create a continuing rolling on forward into the future virtuous thing? And I think that’s a really important and wonderful, wonderful thing. I’ve had some powerful experiences not doing what you said, in other words, where relationship or values were not sufficiently weighed or taken into account in a business setting. And oh my goodness, you know, you just you pay a heavy price in those situations.

Henry Kaestner: So one of the things I think that I hesitate to say saying this, but that I see some of myself in you, is that both operators came out of an experience that was born out of wanting to solve a problem in the marketplace and for you, as on the environment that you then bridge from being an operator to an investor investing in the same team, the same problem that you want to solve as an entrepreneur, you’re now solving as an investor and doing it a great scale. Two point two billion dollars is a lot of scale looking at big projects. Talk to us a little bit about that, about the impact you see, being an entrepreneur, solving a problem and being an investor and solving a problem.

Tom Darden: Yeah, interesting issue. I think the happiest and in many ways most productive times of my life were when I was in operation. I think a lot of people who ended up started a business but then ended up as kind of an investor would say the same thing and the investment side of my life, it almost became a. I don’t have to say this, but almost sort of a necessity or a mandate like what are you supposed to do? You know, you end up with some resources. Then what are you supposed to do? And I feel very called to use those resources in a way that are consistent with my faith, with my values. And so that became my job, if you will. But it’s very different than the opportunities that you can have as an operator. And I’m always counseling. People don’t sell your business. Everybody as a business ends up, you know, they all want to sell their business and they won’t sell their business because they want liquidity in the market. They have liquidity. They’re going to be trying to figure out how to get back in the same situation. They just got out of it. I may be exaggerating somewhat, but so I’m always saying, no, please don’t do that and I’ll look back. You know, I was twenty eight years old when I applied to separate companies and straight away had five hundred to seven hundred fifty people, depending on the year. We were sort of looking at me every day and say, Well, what I do, boss. And of course, you know, I was clueless. I knew about one thing which was energy kind of energy and engineering, basically how to drive this energy conversion. But I went back and I have such regrets about not having responded to what was a great opportunity to have a real impact on people’s lives and even just simple things that that I knew about. I don’t know, like personal financial management. I think about the message of Crown Ministries and Compass and these organizations that are teaching people how to be responsible with their money. I was kind of born with that knowledge. We later began to teach basic skills, you know, reading, math, et cetera, basic skills. But just some of these things that we could have done with this big, big platform access to people, then I didn’t think about that or thought, Well, you know, they just work here. But that went right. This is an important part of somebody’s life, and I wouldn’t really I didn’t respond to that real mandate. I feel like if you an operating business, you have a much better opportunity to do that. Cure investor, you’re interacting with executives in the company, but you can’t reach down.

Luke Roush: So one of the things that I’ve always found unique in some of our conversations, Tom, is both your focus on not maintaining liquidity, the long haul, but also your willingness to, you know, take dreams and big, hairy and audacious goals and be a part of some real, meaningfully risky companies that are, you know, anything but safe. And usually those two things don’t go hand in hand. Some of the people that are really long term and are highly relational are thinking about stability a bit more, whereas you’re doing that, but you’re also, you know, aggressively taking risks around, you know, crazy ideas. Maybe just share a little bit about how you’ve thought through that during your tenure as an investor.

Henry Kaestner: And give us some examples of those crazy ideas. Sure.

Tom Darden: Well, I mean, you know, I guess the craziest of them would be age, which originally was was named industrial heat, and we now referred to it as h. But that’s our fusion research project, where we set out to try to gather as many leading minds who were working on a particular type of fusion sort of quantum level fusion or, you know, very fusion at a really tiny level as opposed to the big fusion initiatives, just to see if there was a way that we could create energy from nuclear fusion using hydrogen instead of radioactive material as fuels. And you know, this is like a crazy thing to work on and certainly is is an enormous risk. I actually think the risk return relationship is not so bad. If you did a pure financial analysis of it, you’d say the payoff would be vast in relation to the risk. But most people just can’t deal very well with, let’s say, 100 to one or even 10 to one probability of loss. Right? Just it’s just difficult for people’s brains to deal with that. And I just wasn’t born with that gene. That said, you can’t lose money or for fear of losing money. I just didn’t have the fear of losing money. And so again, it’s kind of a burn in the boats when you cross the bridge way of thinking about things like you’re in and now you need to work as hard as you can and try to make it work. But there’s some reasonable probability that that it won’t. And let’s do it anyway. That’s been my mentality about it. After the deals I’ve been in have lost money, and at least half of those have lost all the money. So, you know, to kind of get your attention.

Henry Kaestner: Talk to us about lessons that God’s taught you about himself through your investments. Any aspect times when you felt, you know, this is I’m communing with the living guy through what I’m doing. What does that look like or do you feel that way?

Tom Darden: Yeah, it’s sort of it’s something that I’ve been thinking about increasingly or, you know, really for a long time, but. Increasingly thinking or Bill, something maybe related to that, which is how does our work, how do our acts reflect glory on God or the glory of God, let’s say. And I see that constantly in the others that I work with these relationships that you mentioned, you know, if you see what Darrell Heald is doing, if you see what Jeff’s and what just grill was, period, Pete Hoekstra Leininger, you know, you guys, you know what you’re doing. I just see God’s glory that it’s so obvious that people are responding to a calling by God. They’re not chasing their own desires, or they’re they’re managing their own desires in relation to God’s impact on their lives. And it’s a very compelling thing. I think about the stewardship. Why do I so limit those early years when I was in the bread company? And it is sort of things left undone. And it’s because of a failure to respond to that. And by contrast, I wouldn’t do that again. Now we all could do a better job. But to feel that sense of motivation and the privilege of being able to think that I have an opportunity maybe to reflect God’s glory. Think about how that affects what you do.

Henry Kaestner: We entered into a section of podcasts now that we call lightning oracle to the lightning round is powerful for times. The answer is powerful.

Luke Roush: Very powerful.

Henry Kaestner: Now it was in a way, my big takeaway before we go in the Lightning Round is that your answer wasn’t prescriptive. It was this sense of seeking out the answer and asking the question. And that’s the thing that I hope that all of our listeners are just what is it about God’s glory as manifested in my work? Am I being brought closer to him? Is it about me or is it about him? Where am I experiencing this pleasure? Just open ended questions and just asking those questions basic conscious for all of us. And then, as we mature, allows us to think about the times in our past when maybe those questions weren’t front and center for us, but maybe could have been. So thanks for being vulnerable about that. Well, you

Tom Darden: never get there. You know, you’ll never get where you wish you were or, you know, it’s a it’s a journey and it’s an aspirational journey. It’s not knowing that you’re at the destination, you know?

Luke Roush: I’m going to start off, I’m

Henry Kaestner: going to start off with lightning round. I’m ready. OK. Tom, there’s a

Luke Roush: story that’s going around about you that involves you choosing to stay in a tent at a conference that you attended. I’d like you to speak more about that.

Tom Darden: Yeah. I don’t know. I don’t know if other people do this, but I actually have a lot of these, but just stupid little like calls or mandates or things I’m going to do. And one is that I want to be sleeping outside for a week every year. Like, like, it’s not OK to have a year ago that I sleep on the ground for a week and I say that for all kinds of reasons. And so meanwhile, I go to this conference in Iceland every year and I stay outside. It’s very crowded, by the way. I mean, the lodge itself is very crowded, so rooms are at a real premium. It’s actually kind of convenient to have somebody not in the lodge, but there’s a little place in the woods outside and set up a tent out there. And I’ve seen the tent. I’ve actually stayed in the tenant more than one conference. But anyway, sometimes I travel in work and I’ll take a tent and my little airplane outside while we were playing in more than 80 per cent of airports sleep on ground the. I just think it’s a good thing to sleep on the ground.

Luke Roush: I like it. I like it. How many did

Henry Kaestner: you take on the airport hotel? Do you have that? They take on the airport hotel? I’m like, Oh, there’s one in Dallas, there’s one in Denver. And for Tom Dart and there’s one everywhere.

Luke Roush: Tom, how many times around the country and you hitchhike?

Tom Darden: Well, I mean, I’ve hitchhiked California between Texas and Canada, hitchhike from Canada to Texas to Louisiana, which I calculated I’ve hitchhiked about twenty four twenty thousand miles, just sort of summing up these trips. And I thought it was kind of interesting. I wonder one day I’m retired because I hitchhike like a bandit. I mean, I was just a fiend when I was young. I started when I was 14. My family moved from Lenore, where all my friends were that I love so much to Chapel Hill, where my dad was going to law school and I have any friends as three hour drive. And I was 14 and I’d walk out of the room, hitchhike. It was the time when people did stuff like that. My parents were wonderful parents. I was full grown when I was 13 14, and so they just weren’t that worried about sudden hitchhike up to Lenore. And then I began hitchhiking longer distances and the child to New York all over the place.

Luke Roush: Last question for me, and all of a sudden, you know, a Yale Law School student, you know, one might imagine that you were kind of straight A’s all the way through. Walk us through your early secondary educational experience, please.

Tom Darden: Yeah, it’s pretty rough. So I was begun as an athlete, and all I cared about, probably in order, was girls sports and cars, or maybe cars and sports. I’m not sure which, and I truly thought that I was going to go play basketball at Duke. I went to Duke’s basketball camp when I was a kid, so I wasn’t worried about academics and failed a couple of courses my ninth grade year and then. But I quit growing and I was six two and weighs one hundred eighty pounds when I turned 13 six to eight hundred eighty pounds and I’m six to hundred pounds today. So every year I got shorter and shorter basically as everybody around me got taller. And when I was in the 10th grade, I thought, You know, this is not working out like I got. I literally thought, I need a new plan. And so I thought, I think I’ll study. And so my next year, I was about in the middle of the class. My junior year, I was number 10 in my class and my senior year. I was number one in the class for the first quarter. And then I was. I study like a maniac when I was in college and I just got really serious about academics at that point.

Luke Roush: That’s good. Henry, what do you?

Henry Kaestner: So sold one of mine or a couple of mine, but you did give me some more material. I’m going to go back in. Well, I’ll start off with one that’s off of what you talked about hitchhiking. I mean, you hitchhike that many miles. That’s unbelievable. Thirty seconds to ask you, what’s your favorite hitchhiking story?

Tom Darden: Well, I’m trying to think of the ones that I could tell by now, here’s the thing

Henry Kaestner: do we have like a PG 13 version of the FDE? I guess you can tune in to later to hear the real answers?

Tom Darden: Yeah, I’ll tell you those later. So I get picked up by this guys in a jacked up GTO, Pontiac GTO and discern within just a few minutes of being in this car that this guy is stoned out of his. I mean, he was stoned out of his mind and he’s driving this car and he had a gun and he was not being aggressive to me, but he was kind of waving this gun around it. Just he was he was pretty crazy. And my goal, any talk to anybody who was drunk or who was using drugs which lobular these drugs at the time I wanted to be driving, I thought, I need to get behind that wheel. So how can I contort this into me, helping him out by driving the car? And eventually I told him, of course, I knew a lot about the car and knew a lot about cars, and we’re talking about cars and and all that driving. And eventually I was driving the car. So driving through the night and there’s a car that pulls right up on my bumper and it looks like a police car. You know, I’m look in the rearview mirror, it’s got Iraq, and this guy has a stash of dope in the ashtray of the car. No kidding. And he keeps reaching in and grab his stuff. But but he’s asleep at this point. So I’m thinking, I’m driving this car guy to get these drugs out of this car. And so I start reaching in the ashtray, pulling out marijuana, but also some pills and trickling it out the open window beside me until it was perfectly clean. I got rid of all the drugs that he had stuck in the console. This car? Well, I mean, I realize he’s going to wake up at some point. This guy’s got a gun, something and what am I going to do? But I have plenty of time because he slept for a long time and I finally had to pull in and get some gas. And I told him he reached up to grab his drugs and he said, Where’s my stuff? And I said, You don’t remember. And he said, no, and I said, Well, there was a car behind us. I mean, there was a police car behind pulled up right behind us. And you said, Hey, we got to get these drugs and so we got the drugs. And you know, you were really paranoid about it or whatever. He’s like, Well, how about that? That’s that’s the strangest one of the Stranger Stories.

Luke Roush: Yeah, that’s the first time for the FBI podcast dumping drugs out the car window. That’s a first.

Henry Kaestner: Yeah, it’s awesome. OK? You wrote a paper while at Yale about acid rain, which is something that actually you and I have in common. Not the part of going and getting our J.D. from Yale, by the way, but the part about the fact that we’ve both written papers about acid rain. I wrote mine in high school. So my question to you is 40 years on is acid rain more or less of a problem than it was in 1981.

Tom Darden: Acid rain is a lot less of a problem, certainly in the U.S., probably even in China. At this point, it’s a function of coal, sulfur and coal, and all power plants in the U.S. still have scrubbers. Problem with scrubbers is that they eliminate the acidity, but they increase the CO2 output so they actually cause a coal plant to have more CO2. So it’s a bit of a dilemma like you’re trading one problem for another. But anyway, so many of the specific human health type environmental problems that we were so worried about in the past have been dealt with at this point. The environmental problems are much more systemic questions about how are we affecting the micro organisms through the pollution that we’re putting in the ocean or that’s fallen on the land from air pollution? CO2 global warming Those types of pollution issues are much bigger concern to this point, I think.

Henry Kaestner: OK, I had not known about your dream in high school, but my question is related to that. And that is that knowing Luke Roush, as you’ve come to know him, does that change your perception of Duke University at all or is that just not possible? It’s not

Luke Roush: fair.

Tom Darden: No, I was a fan of Duke. I didn’t have a problem with Duke when I was a kid. I went to basketball camp at Duke, as I said, and I was a big fan of Duke, and I actually had been somewhat involved with Duke. After that, I hired professors at Duke for an engineering project to work on a waste segregation system. I was on the board.

Henry Kaestner: There’s so much they could go with there. Yeah. Given the dirty work to the Duke case, but I won’t go there. Maybe it is good. All right. Well, let me ask you a simpler one. Maybe it’s not so simple. Duke plays Carolina basketball. How do you reform?

Tom Darden: You know, I mean, oh my goodness. Yeah, a lot. No, I would refer to I would refer to a lot of but you know, I just don’t know. I’m kind of holding the thumb. If there’s a

Luke Roush: duke who was our original first connection, Tom and I named the person Henry case, and we’re turning it around.

Henry Kaestner: Oh, my. Who it that they connected you to, Tom. You’re asking me 30 seconds or less. I have. I have no idea.

Luke Roush: That person was Joel Fleischman.

Henry Kaestner: Joel Fischer Oh, yeah.

Tom Darden: Oh, well, Joel Fleischman got me my first summer internship in Washington, D.C., working for a socialist think tank. No kidding. So, I mean, he was doing what he’s doing now. One hundred years ago, approximately when I was in college, he is one of the kindest, most wonderful men.

Henry Kaestner: For those of you don’t know, Joel Fleischman may be better known. Not for I did not know about the socialist part, but he’s really known for being one of the greatest minds around philanthropy in the United States.

Luke Roush: One hundred percent.

Tom Darden: He was the guy behind the billionaire who was the book called The Billionaire, who was the guy who who built duty free shops and was a billionaire. But he gave it all the way through the Atlantic Philanthropies, all anonymously. There was this huge thing going on with all this philanthropic money raining down on the world, and it was all. And Joel Fleisher was in charge of all of that

Luke Roush: in a really serious believer, interestingly.

Tom Darden: Incredible story.

Henry Kaestner: Yeah, Tom, we’re very grateful for you. You may know that the one question that matters most to us that we would ask anybody on a podcast like this is what you’re hearing from God, in his word, in the Bible. And it doesn’t need to be this morning, necessarily. But it could be last week. It could be over the last month. But we believe that this book is alive and that it continues to instruct us. And so hearing how it impacts those who come on the program is a special blessing. What are you hearing?

Tom Darden: I want to. I want to find ways to more precisely align my work, my activities with God’s will. And so my kind of constant prayer is God, show me your will and help me bring into alignment what I do with what you would have me do. And it’s not quite the same, but kind of related, you know, how do I let my works reflect God’s glory? That’s Matthew five 16. I’m just sort of obsessed with that because I feel like I could do a better job in that regard or trying to make that more specifically clear, I guess you’d say.

Henry Kaestner: Thank you. Thank you for being our long term friend and encouragement to Luke, and I thank you for being on the podcast for sharing. Thank you for making what it would even seem to be like a layup question. A difficult one at the end. And now I understand a bit about, you know, I had a conversation recently about rare seagulls, and I shared with you about the fact that my dad’s an ornithologist, is a bird watcher and loves rare birds. And and he would take me to the sewage treatment plant growing up because that’s where the rare seagulls would come. And usually when I tell that story to people as an explanation about why I am also not a bird watcher, you’re like, you picked up on it right away. You weren’t grossed out at all, and I didn’t know why. But now I do that. It’s a big science thing, and it’s the removal of waste. Is this redemptive thing and your life’s work had been about that. It’s about what is wrong. How do we get waste off? And it has something to do with even ornithology and sewage treatment plants. So that’s the first time we’ve ever talked about that on any podcast with FDE or FDE, you went there and I thought it was a beautiful thing. Thank you for sharing with us.

Tom Darden: Hey, thank you so much. It isn’t often that I get the chance to talk about sewage treatment, but I really appreciate the opportunity. I really appreciate you have to talk to you guys because I love what you’re doing and the impact that you guys are having. Thank you. Thank you. Thank you. Bless you, guys.

John Coleman: Welcome to the Faith Driven Investor podcast. I’m John Coleman here with my partner, Luke Roush, and today we have the privilege of welcoming David Ridley to the show. Hi, David.

David Ridley: Hello there, John.

John Coleman: Well, I have to tell you, I’m really excited about this one. So I’ve known David for around a decade now. David was the founder and CEO of Invesco Real Estate, which grew to be a more than $60 billion real estate platform. Global everywhere in the world spanned tons of different products, and he also was just a great advocate for clients at the firm and someone that I considered a close friend and mentor. And so it’s really a privilege to have him on today. And we’re excited to learn how to build a $60 billion real estate platform. David, that should be a pretty easy task for you in the next 30 minutes or so. Is that right?

David Ridley: All right.

John Coleman: Well, talk to us a little bit about how you got started. We’d love to hear more about your life story as we dove in and just how you got into real estate investing.

David Ridley: You know, John, that’s good question. Because when I graduated with my finance degree from the University of Texas, nineteen seventy five, I had no idea what I wanted to do. But the one thing I did know I didn’t want to do is real estate. I wanted to be in stocks and bonds and all those really neat things. And somehow, the Lord has a sense of humor and shoehorned me right in the real estate. So it was kind of by accident. But if you don’t mind, I’ll just give you a little background on myself. I was born in San Antonio and my dad had been a B-17 pilot in the war and everything was new, you know, and he was the first out of eight that had ever gone to college. So we ended up getting transferred around a bit, and it was destiny that we’d moved back to Dallas because my mom died when I was nine and dad wanted to get us back or there was family. So it was just me and dad and my sister moved away to go to college. She might as well. That’s why I ended up down there, I think. And being with my dad all that time, he was pretty hardened guy. You know, he did. There wasn’t a lot of child-bearing books back then. I don’t believe he was a believer when he died as well. I hope he was, but he would tell me over and over. We’d be driving down the road and he’d see someone digging a ditch or working on a telephone pole. And he would say, Son, do you want to do that when you grow up? And he would just start beating into me. I was going to college. And so that was my beginning. So there’s one thing I knew I was going to do if nothing else in life, I was going to one day pass away, but I was going to pass away with college degree. So that’s how I happened, and I went down to UT and got out and came back and was fortunate enough to get into a management training program of a small life insurance company. And I went through this all the different departments, and they liked me enough in the real estate group that they hired me there. And so I started off on our biggest deal I think I ever did was like eight hundred thousand dollars on a warehouse and that it was a good start.

John Coleman: It was faith always important to you, David, or when did that become a part of your life?

David Ridley: You know, growing up without a mother and dad was never at home? OK, so that was good for me. I thought that was fantastic, but I was without any real great leadership and there was this woman down the block who had three of the most beautiful sisters you’ve ever seen, who I really thought were cute and a son that I played in my little football teams with an elementary school right through high school with Danny. And that woman was a godly woman and she prayed for me constantly. And so sophomore year comes around, I was getting in more trouble. Junior year was no better and I finally thought I’ve had it. Friend of mine asked me to read the Bible. I opened it up and it made sense. For the first time in my life, I understood the value of Christ’s sacrifice. And I prayed that night in bed between my junior and senior year that he would come into my life, and it was a remarkable change for me, and I jumped out of bed and drove over to her house the next morning to let her know. And she was a godly woman, and someone I think about constantly changed me forever.

John Coleman: That’s fantastic, David. And as you navigated, you mentioned you didn’t really want to get into real estate. You want to get into anything but real estate. So how did you end up in real estate?

David Ridley: Well, there was a program where you rotated throughout the company, and one of those was a real estate area and there was an Aggie in there and that Aggie decided he wanted to go back to College Station and open some ice cream stores. So I had written a really nice note. My dad had taught me to to do back in the low tech days, telling them how much I enjoyed it and that department. I’d done that earlier. So when he quit, they invited me down.

Speaker 3: And David, you know, maybe just for purposes of just listeners who were trying to get a sense of scope and scale, maybe share a bit about that. In terms of what your work in Invesco became, but maybe also speak to kind of why you went about that work and creation of jobs and sort of other things, it was a clear motivating factor for you.

David Ridley: What happened was that was my start in my career was south of life. I was fortunate enough to be hired by a large insurance company called Metropolitan Life, and they had their top person in the investment area, come to Dallas and made a little speech to us and told us where the world was trending. And it was towards managing other people’s money. OK? He said. The trillions of dollars that are out there, the investable dollars are located in pension funds, endowments, foundations, sovereign wealth funds, et cetera, et cetera. Well, that planted a seed in me that I wanted to be part of that. And so as fate would have it, this company, I was making a little bit of a reputation for myself and Dallas, and this company that had been around a long time in Dallas invited me over to start that kind of group. So I started it from scratch. It was me and a secretary. No clients, no money under management. They had a relationship with Texas teachers. They were impressed enough to give us a chance to be one of the firms that would do that for them. And that’s how it started. You know, they were OK with my qualifications. We got a contract signed and we had a nondiscretionary relationship with one of the toughest staffs I’ve ever had. And that’s how the thing got started. But it was tough. There were 10 years with only one client in. The worst thing about it was we had no idea how to get another one. Okay. And and so that’s how I got started. It was a very humbling experience, to say the least, competing against all the big boys, JP Morgan, Morgan Stanley. Some of these firms, you don’t know, but Reif and some other ones back then. So I don’t know where you want me to go from there, but I’ll tell you it was a it was a rough start.

John Coleman: Well, talk to us a little bit about that journey, David, because I’ve heard this story before and just how you came to Invesco, your interactions with Charlie. And then, you know, as I remember, there was a pivotal point in the history of the business where you decided that you couldn’t do it on your own and I’d love to hear you just tell that story as well.

David Ridley: Yeah. So I remember sitting on the kitchen counter trying to decide if I was going to make this move and start this firm. And Candy’s 80 year old grandmother was sitting there in the kitchen and she goes, David, in 30 years, it will take a bit of difference. So that was she really started this, I guess. So I jumped off the counter and drove my little purple opal down to downtown Dallas and joined the firm. And I had been into it for about two years. And when sort of this pivotal moment came, I’d been asked to come down to Houston by maybe one of their leading brokers. And I went down there and I looked at warehouses all day long in with her staff, and we were looking for investment opportunities all the time. And that night, at dinner, after dinner, I was trying to bond with these folks. So they bring me product and not others. The leader in that group, this powerful broker, kind of took his spoon and dinged the glass and he he sort of stopped the meeting and I thought he was going to say something nice. But he looked at us and looked specifically at me. And he says, David, what makes you think you have any chance to build this firm? Look, you’re competing against. And he started naming firms. And I was a bit in shock. And I remember chills run down my spine because I realized he was really right. I didn’t have much of a chance. If I’d really studied it harder, done a little more due diligence, I probably would have never tried it. And honestly, I don’t even remember the rest of that dinner. I just remember getting back to the hotel room and opening the door. I walked back to it. It was near the Galleria and there was this little wooden desk in the corner and I sat at that desk and I just wanted to cry about me and to ruin my career. I had a leadership position where I was. Maybe I can get my job back, but that’s not going to happen. So I took a pad of paper and I wrote down and I filled up every line with my weaknesses. Why this was impossible. I wasn’t smart enough. I didn’t know how to sell myself, you know, just on and on, and I took that sheet of paper and I put it on the floor and I got down on my hands and knees and put my forehead on it. I remember that, and I just prayed Lord, first, would you just take me out of this job and move me? But if you don’t want to move me, then you be CEO and I’ll be doorman or whatever else you want me to do here. But I’m done. And that went on for a while, and I stood up from that floor and I’ve never had this feeling in my life, just like someone took a thousand pounds and lifted it off, my back flew back to Dallas the next morning, creativity returned and just optimism. I had no fear of failure. I wanted to do well for all these senior people at this company, but I literally had no fear of failure any more. It wasn’t mine to lose. And that changed everything in the way God showed up was. He started introducing me to these people, John, that you know, that three of me retired with me and we went all the way together. And you know, finding people is almost impossible. The right people. And I couldn’t do it. Up to that point. So he tangibly showed up with these folks that we were able to team up with and do some great things. So I would say that we’re in the middle of writing a book and there’s three pillars in that book and in the first one has to do with being securely centered, and I will tell you that securely centered me for the next thirty two years. So it was a pivotal moment for me, John.

Luke Roush: When you talk about being securely centered, maybe just speak a little bit to what that looks like in the context of thirty two years at a big company like Invesco. What does it look like to be securely centered and kind of salt and light where you’re planted?

David Ridley: You know, tangibly, you can see it because. You don’t have the warning signs would be anxiety, insecurity, you know, comparing yourself to others. All those things. And when I speak to college students, I call those the big sins in business for a believer. And even when I’m speaking secularly, so all those went away, I immediately hired two people. One of them, I paid twice as much as me. And the other was David Farmer. Johnny, you remember I paid him like a quarter more than me, and it was about finding the right talent that could produce the right results for these clients and for our people that we were going to work for and have worked with us. And so that’s what it looked like. And to be secure in myself, you know? Yeah. And that helped move us into building a culture that was somewhat maybe unparalleled in our sector.

John Coleman: Yeah, talk about that a little bit more, David, because I’ve heard you talk about just the importance of your partners, the people, the culture that you built in. I’ve also even seen you tell this story, this story about that hotel room and really handing things over to God and in the workplace that you were really authentic about the way in which that transformed you. I’d love to hear how you started to build that culture, how you found those people and how your partnership evolved in a way that was so powerful.

David Ridley: You know, it was all experiential. John, I didn’t have any textbooks that talked about this. So. So first of all, let me say, I’m probably the least likely CEO you’ll ever meet. OK. My favorite verse talks about where Paul asked for his thorn to be removed or whatever that was, and God said, No, my grace is made strong in your weakness, and I’ve always known that I’ve always kept that promise close to my heart. So I didn’t go into this thinking I was the smartest guy in the room by any stretch of the imagination. So once I was centered, it was easy for me to realize that I needed to gather the best athletes around me, but also we needed to build great teams. We had to have great. We call it extreme team engagement. You know, as God has created us to do life with others, we call that other ring. And so I knew that was going to be key to us being able to win and have a healthy business. And so, you know, I happened to read, in fact, I’d left Invesco when I read this. I wish I’d known it when I was there, but it was St. Augustine in the fourth century, had a quote. It said humility is the foundation of all the other virtues. Hence the soul for that virtue does not exist. There can be no others except in mere appearance. And so when we would go out to build these teams, we would look for true humility. It was easy to find talent. It was hard to find humility in someone who could fit in. So we’d look for humility. We’d look for a team orientation as opposed to a star system. Then we try to find folks with a fire in their belly so that, you know, they get things done. And like you, John, you always walk around fast and get things done, and that’s what we needed. So from being centered, I was able to go find those kind of people who I thought were better than I was and I was able to empower them. That’s the biggest gift you can give. Anyone is empowerment. I learned that from a billionaire real estate guy in Dallas. I’m sure he’s a Christian, but he would get his key leaders in the room and he would ask them questions that I knew he knew the answers to. So I started doing that. I would let them be the experts. I just became the bandleader, the coordinator. And that enabled some folks to really grow and thrive. And we ended up with some great team play there, which resulted in a great culture which becomes your character in the marketplace. People know you for that. In the business case, for it is you end up with high stability. We never lost a partner. We never lost a client. Knock on wood, high stability of people and clients. That’s hard to replicate. You know when you’re competing.

Luke Roush: So David, as you kind of went from building the team kind of world class, humble individuals that had both fire in the belly, but also a servant’s mentality? And it wasn’t about them. It was about the mission that you guys were on together. Maybe just talk a little bit about moving from building the team to building the portfolio of investments, a lot of capital to work over time and then maybe just extend off of kind of what that look like BAM to the market today and what’s changed, maybe since you were running that group at Invesco?

David Ridley: Well, that’s a great question. Basically, one of the pivotal moments was a trip I made to Atlanta. We had just orchestrated a sale of our firm to Invesco. This was 1990. I flew over to Atlanta as a Saturday morning. I remembered and opened my book up the show. Charlie Brady, the founder of Invesco, What we were going to do to be successful. And it was this strategic multifamily investment program in the South. You know, it was all this. And we’re sitting there, his myself and a fellow named David Farmer, and he reached over right in the middle of my pitch. He just closed the book and I kind of looked at him with, Oh my god. That can’t be a good sign in any culture. And he says, David, listen to me. He goes, This is all great. I’ve been very impressed with your diligence in how you run your business. And, you know, he went on about things that he likes. But he said, You do understand if you can’t win, none of this makes any difference. None of this matters. And I began to realize at that moment my life, he’s right. We have to learn to win. So once you build great teams, it’s about having a healthy environment. We just talked about that. If you’re not winning as part of those factors, if one of them in winning, then you’re done. So that taught us the importance of this elite client engagement that we had to get really great at which we did. And I’ve got to tell you the way that happened. We were armed with great people. We developed something called the war room. We have the culture to do it. When we found out who our competitors were, we’d go in that war room and we would literally we had a structure where we knew more about those competitors, maybe, than they knew about themselves. And we juxtapose those strengths and weaknesses against our own. We would figure out ways to be more competitive. Part of having a great firm is the ability to have great meetings, and we had great meetings. We had rules of the room. You had to check your ego at the door. There was no rank in the room. If you’re at the table, we had an obligation to disagree. You know when you needed to, then when you left the room, your friends and those are the rules, and we had the most robust group meetings around winning. And they worked. And so we started. Once we got this together, it was all about having a value proposition that made sense, etc. Just absolutely amazing preparation. And once we got all that together, we just started winning clients. It was amazing. We went from one client to the first one was state of Nevada and went on and went to Los Angeles County, then Colorado. I remember almost crying on the phone. I had to hide my tears from the guy there in Colorado because I never thought we’d get a second client, much less a third one. So, yeah, that’s how we started winning. And it was around having a healthy environment where people could be empowered and grow. And it’s just a more holistic approach, and it’s not a secret anymore. McKinsey has studied this thousands of companies, and they determine firms that focus on their culture, meaning their health in factors that cause great cultures are four times more successful than firms that focus more on their acquisition or their ability to execute and operate. They’re just more important if they’re focusing on those things equally with those operational executional things. So we just happen to really get that.

John Coleman: David, that was one of the more fascinating things about the culture that you built. I remember and I’ve told the story elsewhere. You know, when you’d walk into your offices in Dallas right behind the reception desk, there was a big painting that had firefighters and teachers and police officers on it because those were your clients. Those were the beneficiaries of these public funds that were investing with y’all. And there was a real sense in your group at Invesco Real Estate that the clients really mattered and that that’s why you were there and that’s the purpose of what you were doing. It wasn’t just winning with clients, it was winning for clients and making sure that you were guardians of the capital that they were entrusting you with. Where did that come from for you and how did you instill that in everybody at the company?

David Ridley: You know everything. And you know this, everything comes down from leadership. So as a leader, it’s all going to reflect you. And that was a little bit of it, to be honest, was my natural personality. But what really honed this was having one non-discretionary client for 10 years that shaped us, man. There were many, many of our competitors that had commingled funds. They had hundreds of clients. They did not understand the servant’s heart that it took to satisfy one high demanding client for 10 years. So the only way to quickly exit our firm would be to not get that in. If you didn’t have that characteristic about you, you would win yourself out really quickly. So that came down to this humble heart that we had with these clients, and we just couldn’t be wrong. You know, in the way we executed that. So we did have a servant heart and they got to know that they felt it and we developed accountability. So we called it the Invesco Report card. So it was all about building trust. It wasn’t about investing money, it was having trust built and then it was about investing money in high levels of accountability. And one thing that really helped us to continue winning back to that topic was we developed the postmortem process so that when we lost, we don’t get in that room within five. Days in, find out why we lost and no fingers could be pointed because we’re all very potential to lay down a stinker here and there, which I’m probably doing right now, John. But what was definitely very disciplined in the culture of clients or everything just sort of permeated that picture you talk about. We talked about that all the time in quarterly meetings that we would have and I would be speaking. We’d refer to that picture. And I’d ask everybody in the room, if you’re involved in sales and client engagement, raise your hand and everybody in the room had to raise their hand before we could go on with the meeting. Because, you know, the smart investment, people don’t want to be known as marketing people or client necessarily client people, and they had to be in our culture.

John Coleman: I have seen David stop many a meeting until every executive raise their hand for the who’s in sales question, so absolutely authentic. Any good stories about what that look like? David, I remember one that you told me about the Boy Scouts coming to Dallas, for example, but any great examples of how that looked in action?

David Ridley: Oh gosh, you know? Yeah, that Boy Scout one, I went around. I actually did a survey of all of our Dallas team anyway, and we have like 20 Eagle Scouts. I had no idea. I never made it past the Cub Scouts, so I was so happy to use that statistic. But it was the one of the toughest presentations we’ve ever had. And they were tough. They loved to ask the toughest questions in this time. They asked my colleague, who’s now our CEO and Invesco, the address of a property that we invested in his city and we didn’t know that address. We knew the basic block it was on. I remember leaving that thing and pounding my steering wheel. I was so mad that we blew it. You know, we didn’t make it, and there were always that tough, but we won the account, Praise Lord, and we ended up having them as a client. They were very tough and we would have to remind ourselves it doesn’t matter how tough they are, we’re here to serve them. And we would just break our back to do it. And you know, that’s the way it was. Clients never wrong, although sometimes they have to be steered around investment ideas that they were never wrong. You know,

Luke Roush: maybe just taking a moment to look out the front windshield of where you think the market is going. David Witter, just a couple of pieces of counsel that you would give to aspiring investors who were looking at current uncertainty in the market in the next 10 years. Just a couple of pieces of counsel that you would offer from your own experience.

David Ridley: Well, what I would say is I know I’ve lived in my business life. I’ve lived through seven recessions. Every everyone had a black swan event to it. None of them. Did anybody guess you can never forecast what that black swan is going to be the best ones? The GFC, you know, we suffered through the Great Recession in some way, and it’s been almost 11 years since we’ve had one. So I know it’s coming. The Black Swan is out there and it’s probably happening right now with this new war we’re engaged in. And every one of them is scary. But in my humble opinion, they all pass. And you have to look at it that way. You can’t change the gravitational things that you’re doing. And like everything, these three pillars we’re talking about, you have to stay consistent with those disciplines that you have. So anyway, it’s important to recognize they’re going to happen and how you’re prepared for them in our business. There’s lots of things that have changed, and I’m maybe not the expert anymore since I’ve been gone almost seven years. But but we all know what’s happened to office buildings. Obviously, a black swan was COVID, and that was a big hit when that hit us. Office buildings are not nearly occupied like they were Amazon and others came along and changed. Retailing that’s left us primarily with industrial and multifamily is the darlings of the investment space these days that’s taken our camp rights, which are the first. That’s how you measure returns at your first year’s return in real estate. It’s taken out to historic lows in my earlier career. In fact, a friend of mine even wrote a paper. The answer is nine. OK, you bought real estate on a nine. And I remember seeing somebody took an eight and seven return on something, and I thought they were crazy. They were not correlated to treasuries. It was incredible. So now you’ve got the most expensive apartments in industrial properties you’ve ever seen out there. So people are having to lean into different things to satisfy clients. And some of those things are like medical office buildings look better than they’ve ever looked self-storage even residential mortgages or being, you know, all this, but through various conduits. The problem with those was bite size. But now invest goes into joint venture of some kind that they’re able to buy the bigger tranches of that loans now making lots of loans. It’s not your traditional money center bank anymore, your insurance company, there’s a lot of loans that our guys are making a private rate they formed to get to the retail markets. So all that’s new since I left. So every year, you know, it’s change and they laugh at me now they say, you couldn’t even work over here anymore, Dave. You wouldn’t know what’s going on. And I say, you’re probably right. You’re always having to change and be flexible.

Luke Roush: Well, the funny thing is that on the one hand, some of the facts and circumstances change. But part of what I take away from your commentary is that the most important thing? Rings around team, why you do what you do, how you care for clients. Those are more timeless principles than they are. Timely facts and circumstances are timely that core things are usually timeless.

David Ridley: I call them gravitational there things that have never changed in my career. I remember getting in before the Sun came up and talking about how we’re going to win clients and who we were going to be. And I remember making decisions that are still good decisions today, but one was we were not going to focus on any one property type. We were going to be the four main food groups which I won’t bore you with. We were not going to be a southwestern exposure. We were going to be national and that turned into global. We were not going to be one risk level. We were going to be up the scale from poor real estate to value added to opportunistic. And we didn’t want any clients having more than like five or 10 percent of our business, and we got that done eventually. When I started, we had one client who 100 percent so all those things are good business disciplines, but we got there, in my opinion, more predictably because of the disciplines around the three pillars. It’s building that kind of culture, and it’s the soft stuff that some people don’t understand that keeps them in marginalizes them towards not being able to be a really great, larger competitor.

John Coleman: And David, I know you’ve been up to some really interesting stuff lately, you’ve been kind of retired, I guess, although you’ve transitioned to some other things before we do that. You know, there are a lot of folks listening to this podcast who like you exist in larger, diverse organizations with all different types of people, and you led a large, diverse organization where people of different faiths or no faith at all. What advice would you have to those in those organizations about living their faith authentically in those types of diverse environments that aren’t necessarily faith based or faith driven?

David Ridley: You know, that’s a great question. I was convinced, you know, I mentioned that godly woman. Her name is Nelda Hassall. You know, when I first found the Lord in was saying I had my four spiritual laws book and I went to airports, I went all over the place in witnessing, and that’s not wrong. You know, that was a very rewarding thing. But as a CEO in a multi-faith company and so forth, you obviously can’t do that. So what Nelda had told me even back then, she says, you need to pray that God will bring people into your life that he wants you talking to. You need to just relax and pray that the Lord will open those doors. And so I’ve always had that feeling that that’s what I needed to do, and God has been good about doing that. So we didn’t go out to find just Christians. We went out to find the best talent we could in the lower stamp. As they interview people, they could see they’re really talented. Our job in the upper management was to figure out who they were, really personally, who their culture was and how were they humble as we talked about it and all those things? And it didn’t matter if they’re Christians. We ended up with a lot of Christians. But my feeling was it was to be salt light. And people knew who we were in our hearts. We wouldn’t hide it, but we didn’t put it on our sleeve and try to push it. There was a woman out in California, I was told the other day by our new CEO. He said she almost didn’t join us because she thought we were a Christian organization. And I thought, Well, that’s funny because we’ve never advertised ourselves as being a Christian organization, but people can see your values and who you are, and maybe sometimes it seeps through. But our job is to our people, first in our clients, then the stockholders benefit in our obligation is to have great people in that we can get great clients with who will then benefit our stockholders. And I was fortunate to lead one of my bosses to Christ, once you know, I mean, it does happen, but it’s not something that was on the front end.

John Coleman: And David, you’ve kind of taken a lot of the lessons you learned building a company over the course of a few decades, and you’re now talking to others about those. And I hear you even have a book coming together. Do you mind talking about kind of what’s happened after Invesco Real Estate and what you’re up to today?

David Ridley: Well, we traveled. We had a lot of fun. We went to. I’ve never been to Italy, believe it or not, we even had an office there and I’d never been there. But we just had a ball and one day candy and I looked at each other and we said, we’re so done with traveling. You know, I and 10 million miles on just American, you know, during my business life. So we settled down and my prayer was, I’m not going to go look for presentations, but I’m going to be open to do it. So Lord appeal, please open the right doors. And he did that through a couple of organizations. I started speaking the college students and I love doing that. I love. For twenty five years or more, I’ve been mentoring young business people. Now it’s college students and young business people, and that’s where I really find satisfaction now. Have I consulted? Yeah, I’m affiliated with, I should say. I guess I collaborate with Dr. Chip Roper, a brilliant man out of New York who is called out of the pastor who’s business in 20 years as a pastor, then called back to New York City from Philadelphia to minister to Christian executives. And we met each other, and together we’re putting a book together. It’s called resilient leadership. At this point, who knows what it will be called building winning teams in the face of constant disruption. I kind of like to think about it is leading without regrets. I kind of like that title because what I wanted to do, I’d always watch Southwest Airlines and Herb Kelleher, and I would see how he led without regrets. I don’t know that he was a Christian, but he really loved his people. And I can tell you when you retire, your legacy that you leave behind is about 100 times more important to you than you know it is or will be now. And so you want to leave behind people who knew that you love them and really feel great about the way you treated them and where there later. And so that’s what drives me and I want to write. I spoke with Chip, not necessarily for me, John, as I said earlier to you, it’s really, I think, going to give him legs as he builds his consulting business, which I participate some of those consulting assignments, but he’s got more to play for here than I do. So, hey, John, I think you’ll recognize my bio. You clean that up, buddy.

John Coleman: David was good at living the right life, and I was good at editing.

David Ridley: Yeah, I sent John my bio, and I think after he got up off the floor laughing, he rewrote it. I’m still using it over here.

Luke Roush: David, I think maybe the reverse that you were looking for earlier was, is it Second Corinthians 12 nine? Yeah, he said to me, my grace is sufficient for you, for my power is made perfect in weakness. Therefore, I will boost all the more gladly about my weaknesses so that Christ Power may rest on me. And just as you shared some about your career and just the humility that you do that with, it’s clear and where you find power from. So I’m grateful for you taking some time, and I’ll turn it over to John to wrap this up.

John Coleman: Yes, Sir David will have to ask one question as we close out and then any parting thoughts from you. And that’s just what is God been teaching you recently? And how has he been speaking to you?

David Ridley: You know, re impressing upon me the importance of habits that you need to stay with, and that means meeting with a coach before the game. And that’s getting up every day and spending my first 30 minutes with Christ and how importance obedience is in the fruits of obedience. To walk in life with a spirit filled mine takes obedience. It takes being obedient to God and listening to the Holy Spirit and staying with those disciplines. And so I’ve really had to work. You know, it was easier when I was working, frankly, to have those routines than now. So he’s been teaching me a lot about that and about being available, you know, and not stopping the mentoring and being available for consulting when someone calls on me, etc. So it’s a great life to be able to have time to actually do that and not have to punch a clock. You know that the powerful

John Coleman: that’s powerful, David. That’s awesome. And look, we are really grateful to have been able to talk to you today. I know I personally am really grateful for the example you set in the real estate industry and at the firm I used to work at and just the friendship that we’ve had over the years. And I know that this will be a great benefit to all those out there who are thinking about starting their own firms, folks like my partner who went through their own decade long process of building businesses just like you. So thank you for taking the time to spend with us today.

David Ridley: Yeah, it’s been a pleasure. I’m highly flattered. You reach out to me.

Luke Roush: No brainer. Grateful for you, David. Blessings to you and appreciate your time.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast, Luke. Great to be doing this with you.

Luke Roush: It is great to be on. It’s good to be on with Robert again.

Henry Kaestner: It is. It is, is great. In the last episode we had done. I recall that I talked about my very limited economics, background and capability at the University of Delaware. I just kind of stumbling through micro and macro as I was spending more of my time selling T-shirts. But I didn’t ask you about your background, and I don’t know that anybody knows on the podcast that you actually study public policy at Duke. You must have had economics at some point in time. Right?

Luke Roush: Me, absolutely. Yeah, there’s a lot of it more than I’d like to remember, but I really enjoyed it, particularly the micro, because you can kind of get your arms around it and you get to see it every day.

Henry Kaestner: Yeah, yeah. OK, so speaking of economics, we have a guy that we’ve had on. This may be their first repeat customer on the Faith Driven Investor podcast, and we’ve got Robert Nazli in the house. And Robert has been a great friend of the movement and has been an inspiration to us and that he’s gone out and launched a firm against all odds, finding a need in the market and really just really launching something really special. We’ve had you on before, Robert, and where you gave a little bit of a longer biographical sketch, but I want to revisit some of that too. Who are you? Where do you come from? What is inspire?

Robert Netzly: Yeah, it is good to be back. And if I am the first be customer, wow, what an honor. I think unless you just can’t find another guest to be on here. And then so, you know, it’s absolutely one of those things. Yeah, no. My economic background consists of learning how to grow up on food stamps with a single mother with a younger brother who is autistic. And, you know, parents, you know, went through the 70 drug scene and everything and just not, you know, a typical background that you might think of as a business leader went to community college and dropped out my junior year, you know, done all kinds of different things along the way. A lot of ministry, you know, at our local church that we kind of helped start up back in the day and somehow by God’s grace ended up in the investment industry and really took to it, you know, so that’s my background, you know, in a nutshell, but I’m certainly not the guy you would have picked in high school or junior high or anything else is like, Hey, this is this is the guy who is going to start an investment firm. I got D’s in math, hated public speaking, and here I am, talking to lots of people about money. So there you go.

Luke Roush: Well, you know, the concept of biblically responsible investing is really something that you helped really to initiate, maybe to share a bit more about that and then maybe how the movement has evolved over time.

Robert Netzly: Yeah. And I certainly didn’t invent the idea, for sure. You know, my professional background was at Wells Fargo Private Client Service. Working out in Carmel, California really is happy as a clam there and then of learning how to do math and learning how to talk to people again by God’s grace. But then I stumbled across this whole concept of biblically responsible investing online one day. This idea that you’re not just looking at the financial returns of a portfolio, but you know, God probably cares about the kinds of companies we’re investing in. Are these companies manufacturing abortion drugs or selling pornography or violating human rights in their supply chains? What are these companies doing? What are you doing as an owner to profit from these things? And what does the Bible have to say about that? So that’s that’s typically responsible investing. When I first looked into that, I honestly the Holy Spirit has gripped my heart because here I was president of our local pro-life pregnancy center at the time, and I discovered I owned stocks in three companies that manufacture abortion drugs and got hit me upside the head with the fact that every time that young lady goes across the street has an abortion. Planned Parenthood. I just made money in that transaction. I literally profited, recommending all my clients to do the same thing, and that was my intro to biblically responsible investing.

Luke Roush: It was there. Was there a moment in time where all of a sudden or maybe an experience where you realized, like, I need to leave wells, I need to start a firm? You know, oftentimes in that formation story of a company, there’s some sort of injustice or something that’s, you know, just broken in the world that you feel called to fix. Let me speak a little bit to kind of that catalytic zero to one moment.

Robert Netzly: Yep, and it came really quick. Once I again stumbled across this realization, I just I could not do my job with a clean conscience anymore. In two weeks time, I was just dead in the water, which was, you know, troubling because I didn’t know if I could even stay in the business. I’ve never met anybody doing what we do now. I have no conception that there is even something else going on in the industry, you know, in other places, in a Christian sense. So I went home, told my wife, Hey, honey, I think the God’s call somewhere else, and I need to work somewhere else in a different industry. And here’s what I found. And she’s like, Well, we got two babies in the mortgage. So what’s the plan? Right? And ended up just was this close to going to seminary? I was honestly in conversations with multiple seminaries, and like that was I was just going to do a pastor thing. And the only way I could think of staying in the business was, well, I suppose I could, you know, leave the bank start an independent firm that only did some sort of. Look, gold type, you know, investing, but that’s crazy, because I don’t have the experience or money or connections or, you know, all the things that you’re supposed to have before you do something like that. But as we prayed as God does, he just made it unmistakably clear through a number of ways. But the compulsion was just undeniable that that’s exactly what I was supposed to do. So two months later made the incredibly frightening decision to leave the bank left my clients there with a team I’d been with previously started over or just need a laptop. Less than two months of savings, the bank fully prepared never to pay my mortgage ever again in my life and fully convicted. This is exactly what God is calling me to do. It doesn’t mean it’s going to be financially successful, so maybe I’ll go broke in six months and move on to the family with my mom and whatever and then go to seminary. But whatever God like this is your plan. I know this is your call in my life and I’ve got to obey. So that was, you know, a little over 10 years ago. So while the think

Henry Kaestner: Robert, one of the things that you’ve talked about a bunch is what does it look like to engage with companies and be kind of an activist shareholder? Having some skin in the game? Being a shareholder affords you a different opportunities to be able to witness and be heard. Talk to us a little bit about what that looks like in the investing you all do.

Robert Netzly: Yeah, and this is again, I mean, it was accidental almost that this whole business started. I got into this industry and then really sort of fell into this idea of shareholder engagement wasn’t something that was on our, you know, business plan to do. But as we, you know, as guidance really grew this business from those early days and started opening our eyes to there’s more Christians in this industry that God is doing the same sort of work in their hearts. It wasn’t mine and looking for ways to do this. It just became evident that there is a larger voice that needs to be shared with corporate America. And these companies were investing in, you know, occasionally a quote good company will sort of get off the rails or something. And now we got to dump some out of our portfolio or think of, you know, do something there. And I think the first time that we had a conversation around this idea was a friend of ours in the industry. Another Christian financial advisor was working with Chevron, kind of engaging with them to stop giving money to Planned Parenthood. They’ve been donating money to Planned Parenthood, and we live near the Chevron headquarters in the Silicon Valley area. And so he asked, You know, can we attend this meeting and stuff like, sure. And so you end up going to this meeting and happy story. Chevron stopped donating money to Planned Parenthood and, you know, the short version of that story. And that led us to sort of think of, well, what other companies might we engage with? And so over this time, when we’ve seen things at a business that we’re invested in or we like to invest in a business that needs a little help, we just pick up the phone and call investor relations, send an e-mail. Investor Relations and we’ve had amazing success that we never thought we would with many companies, huge companies that are actually interested in hearing from all of their investors, including faith based investors. And oftentimes are very receptive to integrating the feedback they hear from us into their business practices. So it’s been really encouraging and it’s become a bigger part of our business and kind of day to day here it inspire.

Luke Roush: So you’re kind of describing, you know, and this concept of kind of negative screening, positive screening, active engagement, which you’re kind of describing, is that third bucket. Maybe you speak a little bit to kind of how you’ve seen bride evolve over time along all three dimensions of how people might think about their faith being reflected in how they shepherd capital.

Robert Netzly: Yeah, I think historically the exclude part of that equation has been the starting point, going back decades and decades, and it’s absolutely essential. I mean, I do believe strongly converted from the word of God that it’s just like I should not, as a Christian, be making money from abortions, right? And a number of other things. So we have to be looking at the exclusionary criteria in our portfolios. But then we go beyond that. And really, the nexus of inspire and Inspire was this idea that well, in addition to excluding where the most glorifying companies, I mean, there’s companies out there that they’re not necessarily Christian or run explicitly by Christians or Christian values, but they’re operating in line with God’s principles like fairness and morality and ethics and things like that, right? Surprise, surprise. And I wonder if we could measure the relative biblical alignment of companies and then invest in those most biblically aligned companies. You know, the most inspiring, positive companies that are creating products that are blessings of people that use them, that have policies and practices that just bless their employees, that bless the communities they operate in a lot of different specific ways. And so we created what we call our Inspire Impact Score methodology, which is just our rules based approach to scoring companies from a negative hundreds of positive 100. We invest in anything above zero, anything below zero we exclude. But really, we’re looking for those highest scoring companies as a real, faith based approach to environmental, social and governance investing ESG. And that’s been a big trend as we’re seeing more investors. Is sort of ride the coattails of a broadly secular, you know, progressively secular, oftentimes ESG movement in the industry and say, Hey, you know, the Bible talks about environment, the Bible talks about social, the Bible talks about governance. What about a biblical worldview on those issues from a positive perspective? So we invest in those highest rated companies from a biblical lens in those categories? And then the third is that engagement where we have this, you know, as investors, we have an opportunity to call the companies that we invest in. We can file shareholder resolutions and get involved in proxies. If you want to or just very casually just off the books to have conversations, say, Hey, you know, I’m an investor, I’m a Christian, I care about certain things and you know, x y z like, please don’t give money to Planned Parenthood. That’s something that I don’t really want my company doing. Here’s why. In a number of other issues. So that’s that exclude, endorse, engage sort of framework that we use here to inspire. And we’re seeing a lot of other faith based asset managers and wealth managers get more involved in that, which is really exciting to think. You know, as Christians, as the industry, there’s a lot of money 20 trillion dollars plus that are controlled by Protestants, evangelicals and Catholics in this country alone. Stocks, bonds, mutual funds. That’s a lot of capital that can have a lot of influence if we just are intentional with those conversations.

Henry Kaestner: One of the things I want to do is just go off script just a little bit. We’ve got a great carryover audience with Faith Driven Entrepreneur and you are a Faith Driven Entrepreneur. You’ve seen an opportunity, a problem to be solved. You’ve leaned into it, you’ve created a business around it, a business that has grown very rapidly. What’s it like just to navigate through all that? As you know, your interview by The Wall Street Journal or The New York Times, all of a sudden the spotlights on you and the more influence you have, the more critics you have. What’s that ride been like for the last five years?

Robert Netzly: Unexpected as everything else, and to flesh that out a little bit. Yeah, I mean, from the moment I left Wells Fargo and started talking to clients about this concept, it was obviously God was at work, people’s jaws at the floor, their eyes opened like, Wow, I’ve never thought about this before. How do I invest this way? I had to bring other advisors into the practice, not my plan. The influence and business just started growing, and I have no business training background, as I alluded to, and it’s been failing forward fast and trying to keep up with what God is doing. So there’s a whole lot of learning on the fly. A whole lot of build the airplane before you hit the ground, FDE jump off the cliff and all of those analogies that entrepreneurs are aware of. Our particular story around 2015 is when we started aspire as a standalone company and realize that there’s more of an industry and we need to create some products like our exchange traded funds and other asset manager products to really serve the financial advisors that we’re trying to go all in for God’s glory in the practice. But there was a dearth of, you know, product availability. And so in 2017, we ended up launching the first two ETFs in the New York Stock Exchange on a wing, a prayer hole, up top ramen beans and rice, you know, months without salary. Small, committed team that just knew that. We knew that. We knew that God was calling us to do this, and we had to bring this to market because God’s people need to be empowered to invest for us, and they weren’t empowered to do that. And so by God’s grace, we lost this to its 10 year goal ended up being like a one year goal somehow. And the next day, we’re yeah in the New York Times, on the front page of the business section in The Wall Street Journal. All these other hundreds of articles and interviews later, just trial by fire and what we’ve really learned from that process. Obviously, what we’re standing for is not really well embraced by many people in our world these days, and we’ve been called lots of names, you know, for believing things about the Bible. But we’ve just been encouraged also that there’s such an outpouring of support from people who do love God and do believe the Bible and are just so thankful that first week I got a Twitter message from a gentleman in Zambia and he was just gushing and saying how he’s been praying for us ever since he heard the news of the New York Times and that he bought shares in our ETFs in Zambia. You know that very first week we were trading, you know this hundreds, literally hundreds of other stories like that. So we’ve been incredibly encouraged that this is a work that God is doing. He is opening the eyes of his people all over the world, literally that he cares about how we manage his money and that when you step out in faith to follow God and something he’s calling you to do, he’s not going to let you get just get run over by the bus, right and say, Oh, sorry, you thought you were following my instructions, but you made a wrong turn? Sorry. Now he either protects us by correcting us when we do make those missteps or encourages on those correct steps that correct direction. But if you’re stepping out in faith, you can’t make a wrong step is the point. You’re not always going to have success when actually you’re not always going to, you know, avoid problems, but God will be with you, and he will take you through those things and faithfully follow his leading through prayer to the world through intensive to the Holy Spirit. Direction your life. Without a doubt, we would not be here if it was us trying to figure out a business plan. This has been trying to follow God’s leading in our life as a business. A lot of times as counterintuitive. A lot of times it flies against the business convention. We got a lot of advice from a lot of smart people who got decades of industry experience that our idea was terrible and we were going to be miserable failures. Some of them were Christians, but we just knew God was calling us to do it. And it’s not bad and thankfully miserable failure. You know, we were managing about $2 billion of assets right now or the third fastest growing registered investment advisory firm in the nation, two years running in 5000 top quartile. Like all glory to God because this was not our plan. And he is just doing a work and we’re trying to keep up and be faithful. That’s the calling is to be faithful. And that’s what we’ve learned.

Henry Kaestner: We started a new program with the Faith Driven Investor podcast. We’re kind of doing a pilot on it. It’s called Lightning Round, where we go through, and we asked our guests a series of questions maybe proceeding from easy to hard. But we want to try that with your new game.

Robert Netzly: I’m game. I mean, do I win a prize or something? And I do? Well, that’s big

Luke Roush: prize for those. We’re in and out burgers and the children’s prize?

Henry Kaestner: Yes. All right. Number one, there’s been much talk about the fact that the next generation, the next generation is just much more conscious about what matters to them. And I’m thinking about this as a father of a 17 year old and 16 year old and a 20 year old. Big name and teen fashion is Hollister, you move the company to Hollister, California. Is that the pander to this next generation of new investors

Robert Netzly: and move the company away from Hollister, California? To be clear, so we started the company in Hollywood, California, which has no relation to the clothing brand other than enterprising high school students selling their Hollister phys ed. You know the thing about $15 for $75 on eBay? So that’s the limit of the connection there. OK.

Henry Kaestner: So I was hoping it was more so for us. It was just brilliant marketing. You’re a fourth grade teacher. Give us one quick story 30 seconds or less about your favorite interaction with a fourth grader.

Robert Netzly: Yeah, I was almost the fourth grade teacher. Again, not to correct the host of the show twice in a row, but I went to school with the fourth grade teacher and I was this close. I did guest teaching during college before I dropped out. But an interaction that sticks with making those sort of student teaching things was clear. Today there is this little fourth grader named Paul in California, whereas doing my student teaching and there’s a little school garden. We went out there and we were pulling weeds in the school garden and this little kid, you could tell he just didn’t come for the best family. He had behavior issues. I was sort of assigned to sit with him like in the class because, you know, the teachers like, you just deal with this and that’s, you know, if you can deal with this kid like, great, thank you. So I can teach the other ones. But me and Paul just like, hit it off and I like I started saying, Do look at that, we you just that’s a huge weed. You are like a championship weed puller, Paul. And he just his eyes got big and he was pulling more weeds faster with more enthusiasm. Many other kids in that playground would bring every single one of them show me so I could like, give him an attaboy, Paul. And it just was so great. Is it a delight to me to see you when you encourage people?

Henry Kaestner: I imagine that translates into role as being a manager. Yeah, right? Because I’m not going to let the hostage thing go. I visited you in your office. It was on Main Street in Hollister, right?

Robert Netzly: No, we moved it from there. We started it there and we moved it. Now we’re in Boise, Idaho, so.

Henry Kaestner: Oh my goodness, I didn’t. Yeah.

Robert Netzly: Yeah, we moved. We escape California and are here. So we moved here in 2020. Super happy. We still have an office in California. I just we love our people there and it is a great community and

Henry Kaestner: you did teach fourth graders OK and I did. Yeah. Aside from your interaction with Chevron, what’s your favorite interaction you’ve had with a company in your role at Inspire?

Robert Netzly: That’s a hard one. I had some good ones. One company that will remain nameless, so I don’t throw them under the bus, but it was a different sort of conversation. It’s a major military contractor, major military contractor, and we called them because they had seemingly started moving towards endorsing, like LGBT activists, sort of legislations and policies that were also discriminatory against people of faith and things of that nature. And so we were just ERG. So I ended up having a conversation with the CFO. And after a few minutes of sort of getting to know each other, he’s feeling me on the phone. He realizes this is a safe space. He opens up and says, You know, I just got to be honest. I go to the Calvary Chapel in the next town over on a Christian. I love Jesus. I resonate with the things that you’re telling me right now and your concerns. But here’s my problem. I’m the CFO of this major military contractor, Fortune 500 company. I sit on the board, obviously, and we are just getting hammered by this really militant group that wants to push this particular agenda and push us in this direction. And I don’t know what to say, but I can’t just say, you know, I’m a Christian. I don’t believe in this stuff. I don’t want to support it. Like that would be suicide and wouldn’t be effective anyway. But he said, Thank you for calling and sharing your perspective because now what I can say in the boardroom is, you know, actually, I just had a conversation with this. Group of investors represent faith based investors all over the globe who see this issue in a different way. And so now I have some counter pressure that I can just say, Hey, you know, we need to serve all of our shareholders. Let’s just do our business and let’s stay out of the social politics arena and just do a good job for our shareholders and make good products that help our troops and everything else stick to the plan. And so it gave him something to, you know, to bring to the meeting. So I thought that was really cool, that we could have that effect.

Luke Roush: All right. I’ve got my three verses. You’re an early adopter in biblically responsible investing, and yet, you know, 10 years in or 15 or 20 years and you look at sort of the percentage of assets within kind of faith driven institutions that are managed in kind of a traditional British manner. And it’s still it’s really early. How do you walk alongside, you know, other investors that maybe kind of either on a different glide path towards a different way of doing what they do or maybe have different views? You know, I’ll always remember this time when Henry and I were in Texas talking about, you know, we kind of avoid alcohol, firearms, adult entertainment, all these things. I said, let’s go back to those firearms for a moment. And so there’s different. People who kind of see things differently, a couple that issues that we should all be able to agree on as believers. But then there’s also some kind of different perspectives, maybe just kind of walk us through and it’s maybe more than a 30 second answer, but walk us through how you have engaged with others in your own journey and then translated that to the journey that there are.

Robert Netzly: It’s a good question. And for us, as an asset manager who you know, you buy one of our funds, we can’t customize this fund for people, right? And so what we found is that having a standard approach to how we’re screening on the screens, we just screen out the same things for everybody. And we don’t do the whole custom screening thing. What we found is if you ask a client what’s important to you, I’m going to customize your screens. Usually it wraps around an . They don’t know how to think about that. And it just kind of it’s not a really positive conversation and it sort of stands out. So instead, we’re just like, what? Here’s the screens and we take the approach where we want to defer to our brothers and sisters who, you know, don’t have a problem with alcohol. I’ll drink a beer with you, right? But I understand I’ve got brothers and sisters who have alcoholism in their personal history. Maybe they’re had an abusive parent or something, and they don’t want to have anything to do with that. So we keep alcohol out of the portfolio. I’m a gun owner. I live in Idaho, you know? But I understand the other side of those issues. And so we add deference to our brothers and sisters. We screen out more than just sort of what, you know, our own personal conscience or whatever else may lead us onto. And what we found is a sort of counterintuitive that the people who care about those issues are absolutely grateful. It allows them to invest with a good conscience in your product. The people that were like, well, alcohol and I don’t really care about it. Well, it’s not like they want to invest in Budweiser specifically, and they’re not going to invest with you because you don’t own Budweiser. It’s just not really important to them. So as long as you can deliver a good product, the more you screen out, the more people you will actually attract and be able to serve is what we have found, and we see people having challenges and they try to water that down or sort of find a middle road. You end up not appealing to anybody.

Luke Roush: What’s something that you see differently than the rest of the world, but they would disagree with you?

Robert Netzly: Yeah. Well, I mean, as far as like the world in general, secular terms of the world, obviously lots of things we see differently. The whole approach to the ESG conversation, you could start with that. You know, we see that differently, both within the faith community and within the secular community. We’re a little bit of a pariah in both of those categories, sometimes because in very conservative Christian circles, ESG is, you know, synonymous with, well, progressive liberal. And they think, well, you know, ESG is evil. On the other side of the equation, you know, ESG does mean, well, the liberal progressive. And we’re not that. And so like, who are you guys to say that you’re is ERG like, you’re not like us, you can’t believe the Bible of Jesus and also see your ESG. So that’s a big differentiator. I think it just makes sense. The Bible tells us to take care of the planet. It doesn’t mean that we can’t pump out of oil out of the ground, but we should do it in a responsible way. Right. We shouldn’t just rape the planet, you know, indiscriminately. We should care for the stewardship of the planet does say how we should care for society people. You know, abortion is wrong. We shouldn’t do that. Those are social issues that are not, you know, the progressive ESG style and governance, corporate governance. Yeah, if the executives are stealing from the company, that’s wrong. If they’re bribing politicians, they shouldn’t do that. So having a truly faith based biblical worldview on ESG and using that terminology, I think is important for a number of reasons, but sometimes causes us to need to explain, you know, on both sides of the equation, you know what that actually means.

Luke Roush: What’s the new discovery? Since you remove the Boycie, you appreciate the most? And what’s the thing that you miss the most about Hollister

Robert Netzly: new discoveries in Idaho, Ben? Just freedom and just leave it at that in a lot of ways. I do miss. There’s just so much in California in general. I mean, you can drive to the beach and then later you can be in the mountains and you can be in the redwoods and it’s all around there, right? And it really is a special place. Just the diverse topography here. Here you’ve got mountains, you’ve got sagebrush, you’ve got topography, but it’s not quite the same. So I’d say I miss that. I was also, I’ll say I’ve been surprised to find that there’s phenomenal coffee shops and exquisite cuisine, including sushi. I had the best sushi in Boise, Idaho. We’re going to have anywhere else in the world. Come on, come on. There is some really good restaurants here and the coffee shops are like and is better in San Francisco or Santa Cruz or any of those other places. I challenge you to that test. That is absolutely true.

Henry Kaestner: All right. So I think you did well. I think you’re around 30 seconds, maybe forty five. But I thought the answers were awesome. We’re going to go back to a tried and true question that we’ve asked every guest across the Faith Driven Entrepreneur podcast and Faith Driven Investor podcast, and that’s something that you’re hearing. From God’s word, maybe it’s today, maybe it’s over the course of last week, but how is God speaking to you through the Bible?

Robert Netzly: Well, just recently, and this is related to the business where Jesus is really criticizing the Pharisees about use of the analogy that it’s like a cup this washed on the outside, but inside it’s all filthy and they’re just caring about the outside. But the inside is dirty. You know, there’s a lot of applications in our personal lives. We don’t want to look nice and shiny, but that our personal life is a wreck in our thought. Life is a wreck. And I’ve just been convicted that as the Supreme Court is looking at, you know, potentially rolling back Roe v. Wade and broadly expected, you know, ruling that just recently, I was given a statement from one of the most outspoken advocates for pro-life issues huge ministry, $200 million or some endowment. They own five stocks and companies that are manufacturing abortion drugs. Obviously some intentional, but it’s there and it’s across the Christian landscape. And so, you know, as we’re praying for an end to abortion, how can we not also be investing for an end to an abortion? So we really need to, you know, not just have a nice looking portfolio in terms of returns, risk adjusted or anything, but inside we’ve got to clean that up and things like abortion drugs do not belong, you know, in a portfolio like that. So that’s the stuff that’s been on my heart and God’s grace will we’ll get there?

Henry Kaestner: So you have been called the best dressed man in the world of faith driven investing. So that has nothing. So that passage in Matthew that you refer to presumably has nothing to do with you.

Robert Netzly: I hope not. But yes, in some sense, of course, my cup inside needs to be washed daily so that you’re

Henry Kaestner: not refuting the fact that you’re the best dressed man in Faith Driven

Robert Netzly: Investor. Well, I’m not saying that either. I don’t know anything.

Henry Kaestner: It’s awesome seeing you again. I’m sorry to have not known that you believed. I mourn the loss of another great, committed Christ follower that’s serious about faith and investing in this fine city, California. We’ve lost two great ones over the last two years, Luke and now Robert nicely. But I’m grateful for you. Spend the time and in via Zoom and and share with us.

Robert Netzly: It is my honor. Thank you guys for having me.

Henry Kaestner: Welcome back to Faith Driven Investor, it is awesome to be back here with Luke, my great friend who has abandoned me, has moved to Nashville and some really great guests that we’ve got today, Luke. It’s good to be back in the saddle has been a little while since we recorded a podcast and it’s good to be back with you, brother. It is good

Luke Roush: to be back and it’s good to be here with old friends.

Henry Kaestner: So indeed. And so today is another one of those special editions. You know, I talk about this all the time as we meet this great special edition. And indeed, today is just that. I love you one for many reasons. Just got a great heart for the Lord. But I also love the way that we’ve been able to challenge and encourage each other over the course of the last four or five years as we’ve gotten to know each other better. I can’t remember when I originally met Johan, but when I did meet Johan, I really felt like I met this kindred soul, a guy who had been an operator who is now an investor who was really just leaning into his faith and trying to understand how he might honor God. But he was doing it, not in Silicon Valley, where I live, or Nashville, where Luke is or some of the other locations he was joining in South Africa. And I was just fascinated by that. And as Luke and I were talking about expanding the work of Faith Driven Investor to highlight fund managers people that were serious about their faith and who wanted to have spiritual integration and how they invested with excellence, I could think of no better story than Johan. And so as we get ready shortly to launch the African version of Faith Driven Entrepreneur and investor, we’re going to do Faith Driven Entrepreneur Africa. We want to spend a lot more time focusing on the continent of Africa. We want to change the narrative a bit to help people understand the opportunities that are there. I don’t know what your preconceived notion might be of Africa. Maybe it is one of great opportunity in a marketplace that is thriving and it’s young and it’s vibrant. But we’re going to try to scope that out over the course of this year periodically by visiting Africa like we are today to understand what’s going on in the marketplace in a way that hopefully you, the listener, might feel encouraged to participate, or at least pray about how you might be involved. So without further ado, Johan, thank you very much for being with us.

Johan du Preez: Great to be here. Thanks. And they always encouraged by this information.

Henry Kaestner: Thank you. So we’d like to do this, of course, with all of our guests. And we actually this is a special edition because not only do we have Johan, our great friend and fund manager, but we’ve actually asked one of his portfolio companies Job Jack Christian, to come on board as well, to talk a little bit about what it looks like to have a fund that invest and the relationship that a fund manager can have with a portfolio company. And ultimately, what happens on the ground? What is it the job Jack does? And then what does that relationship look like between the entrepreneur and the investor? So, Christian, welcome to we’re looking forward to hear more from you at the end of the program, but glad you’re here. Welcome.

Christian van den Berg: Thanks so much, Jan. Super blessed to be a part of this conversation.

Henry Kaestner: Awesome. Thank you, brother. OK, Johan. Who are you? Where do you come from?

Johan du Preez: Hey. So I was born in rural South Africa. Very small, actually on a farm closes town, probably 10 miles away. Great place to have an upbringing, I must say. My first recollection from my family were that they were glad to see me, that they liked me, and they probably believed I was going to do something good in life. So I never actually realized how big a blessing that was until later in my life. Yeah, so I grew up there, dad. Good business guy. One word for him would be integrity. You always wanted to do the right thing. Always did the right thing. Passed away about 20 years ago, but my mother is still alive and she’s a woman of prayer, so she prayed for us as children. She’s praying for us today. She’s praying for this business today and for our investee companies. So that’s just a brilliant privilege to have.

Henry Kaestner: Christian, did you know that we’re going off script here? Did you know that Johan’s mother is praying for you?

Christian van den Berg: John, as mentioned it every now and and I just feel it in my spirit. So, you know, when you get that deal, it’s all right.

Henry Kaestner: So when we’re finished with this podcast, I’m calling my mom, OK. Let’s go back to the story, Johan, please. By the way, when you’re growing up on a farm in South Africa, is this one where you might be visited by wild animals?

Johan du Preez: No, not quite. So I can claim that one. But yeah, it was pretty rural, also the primary school. So we don’t have middle school road. We have primary school high school in South Africa. The primary school that I was in, grade one to seven would have one hundred and eighty pupils in total, so we were like seven boys in a grade. So needless to say, you were pretty good at everything, right? You were an athlete, you were a leader, you were whatnot. So that’s good for your self-esteem. So, yeah, that was rural and that was good. And then I went to Pretoria, which is a city in South Africa, to study pharmacy. Don’t quite know why I studied pharmacy, probably in the town that I live. That was the only professional guy I saw. You know, we did some business on the side as well, so pharmacy was good for me, though no one. I met my wife in pharmacy school, which was still, to this day, the best transaction of my life. I’ve done a few, but that was the best one. I guess I’ll do another few years of organic chemistry to get that privilege. But it also paved the way for me to get to the US, ultimately, which I didn’t foresee because I developed a shortage of pharmacists in the US at some point and they were recruiting internationally. So that would pave that way for us there.

Henry Kaestner: Okay, so Johan, you’re based in South Africa. And in the intro, I talked a little bit about how unique that is. And there are folks who are having a mental picture here of what South Africa is like, but you not only know it well, you also know the United States really well. So you’ve spent enough time in America and being an operator to have a perspective of what business looks like in America and what it looks like in South Africa. What are some misconceptions that people might have about what commerce looks like in the marketplace looks like in South Africa and does share a little bit about the landscape you’re seeing?

Johan du Preez: OK? South Africa is an incredible country, as you well know, having visited here and before I get into the investing side just to say the people, I just love the people of Africa. I mean, people have real servant hearts. That’s probably our number one asset. You know, you think about different countries like Israel being well known for inventing stuff like the US being having that gift of commercialization. And you think of Africa and people really have a heart to serve, which of course, have been misused over the years as well. But it’s a great asset. I think from a misconception perception, you know, you have a first world infrastructure in South Africa, you have an excellent banking system. From a technology perspective, I would say superior to the US because we started later. So it’s more mobile friendly and just advanced. The regulatory framework is excellent. Good central bank, good markets, very liquid markets. That’s why our currency tends to fluctuate quite a bit because it trades so well. That’s on the one hand. But then on the other hand, you still have a bit of a regulatory arbitrage in terms of not, you know, it’s not that difficult. You don’t have to have five licenses to operate, one business type of thing. You know, you still have a bit of room to move in. You can still do a lot with a little bit of capital. So that’s the beauty of it in terms of significance on the African continent. Number three, in terms of GDP after Nigeria and Egypt, and number four in terms of GDP per capita. So it has huge influence on the continent, although it’s only 5.5 million people. But we have a fair amount of challenges. We sitting with an unemployment rate of about 30 percent with the GDP of it, was just forty six percent a few years ago. Now we’re sitting at 70 and heading for 19 three years from now. And that is a consequence of really a period where we had a corrupt president between 2009 and 2018. So great country all together. People probably underestimate the infrastructure, but if they think about Africa and they have a mental picture about South Africa,

Henry Kaestner: OK, that’s good. OK, so before we go on, I just want to make sure that we share with our audience these two funds you run. Can you just describe what Saad is and what Tree of Life is, please?

Johan du Preez: Yes. So coming out of the first half of my career, which was as an operator and a turnaround CEO, then when God stopped and called me out run about 2006, I wasn’t exactly sure what I should do. But I understood that it was about capital and I understood that it was about not owning it and just hitting it. So essentially created two entities a not-for-profit entity called the Tree of Life Foundation, which is a classic nonprofit. But that entity owns 100 per cent of a cutting edge investment company called Solid Investment Holdings, where we do investments, where we had a fund manager with a vision to actually be like an investment bank one day a significant player in South Africa in the financial services field. We call it the Hobby Lobby or the Chick-Fil-A of financial services. That’s the way we’re going. Although at the moment we are focusing primarily on private equity.

Luke Roush: So one of the things that was really clear on from the first time that you and I met and I believe we originally met through Christian Economic Forum, but you are a relational person, and it’s true, I think globally that relationships matter in terms of how we invest. But as you just think about your own work as an investor and some of the relationships that you’ve cultivated over. Years, you know, maybe just give us some observations in terms of what you look for in those kind of partnerships, in those relationships.

Johan du Preez: Right? So look, I mean, that’s spot on. I think we all deal with relationships all the time, but you can never over emphasize the importance of that. In fact, I didn’t actually have a clue. You know what Tree of Life meant when I named the foundation Tree of Life? And then because God just gave me that name, and then years later, I said to the pastor friend, and he explained to me the difference between the three of knowledge of good and evil and the tree of Life being a relationship with God rather than a contractual and transactional one, rather than a knowledge of good and evil being a father son relationship. So it’s the foundation of what we do in terms of business first. All of the investee companies, but then also with co-investors, with ministries locally that we fund. I over the years have learned, you know, if someone doesn’t have an ego, if they are willing to objectively look at themselves, if they don’t see others as role players in their movie, but they have an outward mindset of seeing the bigger picture, then you know, you can go a long way with people like that. And it’s one of the main criteria we look at when we invest is not only whether this would be successful or not, whether this would be a partner, that we can walk along the road we have that we can learn from. But then we can also sometimes share some knowledge with and they will objectively consider that.

Luke Roush: So that’s helpful. And you know, I love the Paul Christian in here as well just to get his take. But you know, different ways to think about relationships and kind of building community. Some people do it, you know, based on proximity. Some people do it based on, you know, similar interests or different causes that you’re drawn to together. Others do it in a way that’s very tied into their church or to their faith. Any observations Christian from you in terms of what you’ve seen work well, what you want to do more of maybe what you want to do less of?

Christian van den Berg: Yes. So thanks for the question. I mean, you know, speaking of the father son relationship, you know, outlook and we’ve really come to appreciate that in English, it’s not, you know, not coming to us for the country. You know, I’ll take that really coming for the relationship behind it, for the discipleship behind it. And I think once you can put away those monetary politics, it’s so beautiful to be able to move freely in a space where, you know, going for mentorship, where you’re receiving feedback, choosing to accept that feedback or not. And so it’s really been super liberating space to operate in. Does that make sense?

Luke Roush: Yeah, it’s great. And maybe speak just a little bit on the on the length of time that you know, folks before you choose to partner with them.

Johan du Preez: So I think they also Praxis of could shorten their time. So I mean, oftentimes it would be great to know them for three years or so. But like, for instance, with Christian, I think our relationship via Traeger, which is the South African version of Praxis, you know, that’s just shortcuts, because by the time someone has decided to take a year and enroll in a tree, pay good money to do that, but also that they want that in their lives. You know, if you meet someone in that type of forum, I think, you know, you don’t need the same amount of time elapsed before you actually know them really well.

Henry Kaestner: So I want to go back to Christian for a second and Christian. You’ve got a company called Job Jack. So what is Job Jack? And then you also mentioned Trigger two, and maybe you can explain to us what triggers an organization that I’ve gotten to know well and admire a lot. But I’d love to hear about it through your lens. So why don’t you give us like a little bit of a flyover about how you got into trigger, what trigger did and then what job Jack does?

Christian van den Berg: Yeah, cool. Awesome trigger. I mean, I was a little reluctant when I heard of another accelerator. It’s the buzzword for tech startups. But so what triggered is it’s this amazing organization with the heart behind redemptive business to call entrepreneurs, to cool business people that have received the vision, whether they know it from the Lord or not, and to realign them into seeing what is the redemptive purpose behind why God is giving them that vision for that specific business. And so it’s just accelerated. That takes a group of 18 to 20 entrepreneurs for profit and nonprofit and leads them in a space of a year with a few gatherings. That includes, I think, 40 mentors that have dedicated their time to really come and showcase life’s lessons and what God’s taught them as well. And so it’s just incredible space where relationship is both in building business together, but also respecting what God’s called each individual to do. And so that was an amazing blessing for us to be really opened our eyes into the differentiating factors between what we believe is your typical sort of pop and reasoning for growth as opposed to, you know, why God’s called us to do something. Yeah, it’s just it opened our eyes as founders, microfinance myself, but also we could relate that to our employees and to why we’re doing what we’re doing. To have that his base behind each decision and drug, Jack, as you go, Jack is a sort of tech start up company that focuses on automating entry level recruitment. So our hardest to see the world, the employed, we’ve noticed that there’s a massive gap between your lower skilled type of jobs, jobs that don’t require qualifications above high school, where there’s a load of money being spent and wasted for job seekers that have to print out paper CVS and take public transport to try and find jobs. John alluded to it earlier, so unemployment rate in South Africa is bordering between 30 and 40 per cent. And if you include people that are despondent that on issue, even looking for work, it’s close to 50 per cent. And so with this, this massive disconnect and loss of hope, we’ve come to see how we can remove those areas to access for opportunities for a market that has been overlooked from a technology perspective and to see how we can facilitate the marriage between employers, large employers in South Africa or small and large and the very living jobseekers that are looking for those opportunities. So we’ve made it legal for any data free for these types of jobseekers to get profiles and to get connected to a relevant job opportunities. And on your company’s site to automate the entire process for them so that they’re not struggling to find someone relevant. And you can place someone in a sustainable opportunity so that they can then look after their families and kind of the economy can grow from that point on.

Henry Kaestner: So my life as an investor, I like to look at deals from both the bottom up and top down if I can. And you spoke a lot to the bottom up. And Johan, I think I chose you very, very well for the program. And I love the trigger conference. When you get a young man or young woman who’s so captivated by this sense of being able to make a redemptive product or service and just having faith be such a part of their life and their work. But there’s also a top down element. This really intrigued me too, is, as I’ve heard, there are going to be more entrants into the job market in Africa over the course of next 20 years. And I think India and China. I mean, so it’s a it’s a big opportunity that’s really growing. And so you’ve got this redemptive service aspect of what you’re doing, but you’re also in this massively growing market. Johan, I’m wondering if you could speak and just give us some more illustrations of some of the opportunities you see for, say, Western investors or non-African investors that are looking to participate in Africa and have thought their, gosh, you know, African investments. It’s just it’s another fair trade coffee deal, right, that I’m going to go ahead and we get bags of and I’m going to sell at church. There’s something completely different that you’re looking at. Give us a flyover about how you look at Africa, how you look at opportunities. What are the top down opportunities you see?

Johan du Preez: I think capital is scarce in Africa, specifically capital in certain pockets. So if we just talk about the investment landscape in South Africa for a moment and again, you know, the equity markets are really well structured and operate well. The big private equity funds operate well, listings, mergers, the listings, all of that stuff. But as soon as you get to a market capitalization of 20 million U.S. dollars and below, there’s just a scarcity of capital. And the reason for that is also because you need some non-financial investment to unlock the financial capital. You know, these are typical entrepreneurs that have done something right and they are building a great business, but now they’re running into those type of things that they’ve never seen before. You know, they’ve never put together an executive leadership team. They’ve never registered a patent. They’ve never had to think about how to structure the balance sheet for growth. They don’t know a corporate banker. They haven’t made a good merger lawyer. So I think you know where we see the great opportunities that actually come alongside those entrepreneurs and help them before you get to is different industries just generically in terms of size of the company. That’s where the jobs are being created. That’s what could change the country as well. But it is from a pure commercial investment management business perspective. It is messy. It’s not as scalable as just investing capital and getting some reports. Every quarter of how the company is doing. It means seeing companies on a monthly basis, being there for them, rolling up your sleeves a bit. So I think that probably is a little bit different from the first world because we don’t have the same level of social capital. Many of the entrepreneurs didn’t grow up in a family where the dad was speaking about business at the dinner table, and that is where I see the biggest void.

Luke Roush: Mm hmm. So maybe just in terms of that context, recognizing that you have capital that you’re providing to folks who kind of have a dream or a vision of how they’re going to change society, how do you try to get to the answer of your ability to bring value beyond stroking a check, which is something that you know, makes a ton of sense to me? So we don’t just want to be seen as a capital source, we want to be seen as. Someone who can really pour into other aspects of the business beyond just financial needs. And yet sometimes it’s hard to unpack that when you are the one that’s actually writing the check. Maybe just speak a little bit to how you approach that in terms of process in an African context.

Johan du Preez: I think, look, the first common sense thing to do is to not invest where you cannot add value beyond capital, right? So really, to be honest with yourself as well, when you look at a company and realize, do we have what it takes to make a difference in this company? That’s the first thing. The second thing is that you guys do so well at Faith Driven Athlete mean, you think about it as a movement and not an organization, right? And if you have the mindset of a movement rather than an organization, then don’t try and just find everything in your company. We just did a retail investment enough last year. Go look and see that none of us have deep retail experience. Look for someone that she is your values. We found the ex financial director of a listed retail group have him co-invest with us and bring that benefit to the company that you’re investing in. So looking then we as a country want to help you, not just we as a company and help those entrepreneurs find people in the economy that they wouldn’t normally have access to to come and help with that.

Henry Kaestner: Are you on you talk about this concept of co-investing with people who are experts in an industry and look at my investment experience that’s been really successful as we’ve looked in investing in foreign markets. I think especially in Indonesia, having local co-investors was really important. But then having people who have specific industry knowledge in on the deal with you seems to make a lot of sense. Is that something you look for in most of your investments? Just talk us through that a little bit.

Johan du Preez: Yeah, for sure. I think we have as we have a wide experience in the financial services industry. So for most of that, we have it within our closed network in terms of board members, in terms of employees and all of that. But as soon as we go outside of that, our default mindset is actually to look for people that’s going to help. And I’ve just been amazed at how willing people are, especially people that may be retired, have sold the business and they are very keen to give back, but also at another level, sometimes just with a due diligence. You know, I’ve had asset managers just give me and analysts. The bank analysts had a company to give me their bank analyst for a week or two just to help us on the due diligence. People actually want to make a difference. And you must just create the opportunity for them to make a difference. So I think to answer your question, that’s our default mindset is that we actually expect someone out there that’s going to be able to help us and that we’ll do a better job than we can and we must find him or her.

Luke Roush: You have to understand just your basic philosophy of investing and how you approach capital markets in putting capital to work.

Johan du Preez: So we think about capital a lot. You may have heard that we say capital always has an agenda. It’s we like to make things simple for ourselves and for us. Capital always has an agenda, and our biggest job is to make sure that that agenda is Christ. So if you think about capital in the application, that all of it facilitates a lot of things. And if you think about capital markets or financial services markets, it really helps you to achieve something with your capital that you wouldn’t have really been able to do on your own. But by coming along with other people that have the same agenda, you can achieve that. And that could be as simple as you want the 20 per cent IRR, but it may be as complicated as you want to change the world, and you may not be able to build an airport on your own. But if you join an infrastructure funds, just sure enough you can build an airport. You cannot insure your own health risk. But if enough people can join the pool, then between you, you can ensure each other. So for us, the notion of collective capital leaving behind a common purpose is just so attractive and such a no brainer for the Christian community as well to come along and say, Let’s pool our like minded capital. For us, the sweet spot is really donor advised fund capital for that reason, because someone has already decided that they want to set aside this capital, that this capital is not going to be for them in their family. This capital needs to make a difference of some sort. And then you find that about 80 percent of what we manage is donor advised fund capital. The expectation for excellence is no less. The competence requirement is nothing less than what you would expect in a cutting edge private capital business. But the outcome is somehow different because whatever we can generate in returns, whatever impact we can have on an investment is in that realm of the like minded. Set aside capital and maybe briefly, if I may, you know, we see a few themes emerging as we thought experiment. With this type of capital, you find this thought up like Christiane, this is this is a business. This is a great idea, but I know the author of this idea is God, and I want to honor him in this business and I need access to capital. But I don’t want capital with another agenda, someone that’s just going to set the speed of my treadmill and, you know, doesn’t want to hear about our purpose. So start ups, you see that early stage companies, you see it often in replacement capital to Christian brothers sort of business. It’s all guns blazing and no one wants to retire now he or she wants to get fair commercial reward for what they’ve built. At the same time, they don’t want to compromise, you know, on what they allow into the business. So, you know, that is really important. And I think to step into the shoes of that exiting shareholder, the most recent transaction we’ve done is a 74 year old gentleman who wants to go on and run this business until he’s 90, but just in case something happens, which he sees as very unlikely. You know, he needs some other shareholders that can step in to that shareholders shoes of his. He’s got the succession planning in the business, but he doesn’t have the shareholder succession. But he’s all about culture, all about Christian ethos. And it was so just so great to do a transaction with him where we buy 30 per cent, but we can also take up the risk over time. And he has peace of mind, but he can continue to run with it.

Luke Roush: So, yeah, as powerful, you know, I love that. And you know, we talk sometimes about the capital markets and the cycles that businesses go through are oftentimes more of a relay race than they are an individual race. And so there’s times when you know individuals need to be able to pass the baton to someone else who hopefully has alignment, not just in terms of the potential for the business, but also in alignment around the values and the culture that underpins much of the business of success. So I really appreciate you sharing that powerful Christian.

Henry Kaestner: Did you have any save rounds?

Christian van den Berg: Yes. So I think something that I’d really like to emphasize the value. And John spoke about capital having an agenda, the value of having your first large investors having a kingdom mindset has been so crucial because it’s the first time you have possibly someone else sitting on your board, you know, another director that’s already a tough transition for anyone. And now you’ve got someone that shares that like mindedness that can keep you accountable to why you’re doing what you’re doing because things get sticky on a good month on a bad month. The first thing we have a discussion about when we walk into a board meeting is not how’s the business going? I’m proud of you because you’ve made money or I’m disappointed because you’ve lost my money. How’s it going with your family? Are you putting them first? How’s it going with your relationship with the Lord or you’re putting him first? And I think moving into a growing business, it’s so key to have someone from the outside that if walked the hard yards, really be able to keep you accountable in that. And as we start taking on new investors, that’s formed our base. And so it’s immovable, established in God’s ways as a do.

Henry Kaestner: That was really good. That’s really good. I’m really glad we asked. I’m really glad you answered.

Luke Roush: You know, one of the things we like to do on Christian is just cause each episode by hearing what God is teaching you right now. So what are you found in God’s word that has stuck out to you recently? And how does that maybe impact the work that you’re doing day to day so above for both of you to take a cut at that one?

Johan du Preez: So I’m in business and otherwise I go narrow and deep rather than wide. So, you know, that is helping business with focus. It has its downsides as well. So I’m stuck in the Book of James this year so far, and I think I’m going to be there for probably a few months more. And what just strikes me and challenges me about James and that book is about the conversion of a belief system into real practical deeds, the outward mindset, again, that we spoke about earlier and the dependency on the wisdom that we receive from God and the humility that we need in order to unlock that flow of wisdom. So there’s a bunch more in that book, but those are probably the highlights this fall for me, and I’ll have a few more in a couple of months.

Luke Roush: That’s good. Christian, how about for you?

Christian van den Berg: Yes. So I think something that’s hit me quite hard in the past few months is that the tough decision making when it comes to business, I’m still quite young. Twenty eight, and you get faced with quite a few tough decisions, whether it be having to let someone go or having to make the tough financial decision. And what really struck me, especially with the wisdom and the discipleship that we’ve received, is that because God’s given us this mission, it’s ours to steward and it’s our steward excellently. And so if I can approach every day with that mindset as to this is not mine to mess up or mine to again, for myself, it’s mine. Just do it for the Lord. It just makes this decision so much easier to operate in freedom and in wisdom instead of guilt and frustration. And so still practicing with the application of it, but it’s been super liberating to. Richard, that mindset as well.

Luke Roush: Well, I love that and you know, there’s a narrative at times kind of within this intersection of faith and work that that somehow kind of alleviates or makes it too that you don’t have to make difficult choices. But you know, the reality is when you’re leading an organization, as you said, stewarding an organization, you’ve got to be able to make difficult decisions for the health of the organization in the mission. And so what really comes first is not necessarily individual people, but the mission. And sometimes that means hard conversation. So I appreciate you sharing on that.

Henry Kaestner: Christian, Johann, Christian, it’s great to have you guys on board. Thank you for helping us to understand your investment philosophy, what it’s like to invest in South Africa. Hopefully, our listeners have a little bit of a different perspective. Hopefully they’ve heard some things, whether it’s about thinking about co-investors or just top down versus bottom up. And then just just a vision into what it looks like to have this relationship between the entrepreneur and the investor, which I think is really, really key. And what I heard from Christian and picked up from him is that he’s grateful that you’re involved in his company. And I’m grateful you’re both involved in our podcast. So thank you.

Johan du Preez: Thank you very much.

Christian van den Berg: Thanks so much.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast, as always, I’m here with Luke. Luke, you’re calling in from Tucson, Arizona, so you’ve taken the show on the road.

Luke Roush: We haven’t been out here with Kyle Pratt and Vermeer Southwest, but it’s great to be on the show.

Henry Kaestner: That’s awesome. That’s another great Faith Driven Entrepreneur leading the business, creating making it happen. Lebanon employs Lebanon customers in a way that points to a God that loves them and loves big machines. And I’ll tell you, I love the tour that Carl is taking us on. There’s something about the little kid in me that just loves these kind of ditch digger type of big machinery. I got in the cockpit of one of those front end loaders. I felt like at five years old again, it was time. Travel was awesome.

Luke Roush: That’s why I’m here basically for that feeling yet again.

Henry Kaestner: Yeah, yeah, that’s super cool. So today is a special edition of the podcast because we are introducing the world to our great friend and partner John Coleman and John is such an encouragement to us personally. And then, of course, professionally. And John is joining the podcasting team, and he’s going to be taking over as co-host. And many times he’s going to be the lead host. And one of the things that you always want to do whenever you’re involved in a project is to bring other people on board that are better than you are at whatever the task is that you’re accomplishing. And this sounds like false modesty. And maybe you thinking, maybe it’s not. Maybe you think it’s actually a really low bar, and it probably is that, but John is a guy who really gets the space around and understands it at heart level. He, of course, is a committed follower of Christ. And it’s just really encouraging for me. And maybe, Luke, you’re speaking this a little bit too. But you know, when you have had your hand at the plow for a long time, as we have with sovereigns and then Faith Driven Investor, when somebody that has John’s type of background and has been doing investments at such scale but says, you know, gosh, what you’re doing is really important and kind of the zenith of his career, he comes over into what you’re doing. That’s amazingly encouraging.

Luke Roush: It is, indeed. You know, and I think the movement that we’re all part of that all of our listeners are a part of is increasingly able to recruit, retain and excite some really world class folks from secular asset management firms that I think feel a sense of calling and purpose in mission to do something more. And there’s certainly, I think, a lot of asset managers, a lot of advisors, a lot of other players in this space that are increasingly developing products that are interesting and sort of worthy of pulling a broader group of folks over. And like you, Jon also has a face made for radio and voice made for print journalism, so we’re excited about that.

Henry Kaestner: Well, yes, true about me, very much not true about Typekit. We’ve already established that going to need to do some sort of a video release you get, I think, the best beard in the feature of an investment labar LaVar. Maybe also a low bar, I don’t know. But you know, the other thing that gets me excited about Jon is that there are some number of national champions in the mix of what’s going on in the Faith Driven Investor ecosystem. I immediately am thinking about Geoff Johns, who went to Duke University, where he was a national champion skydiver. Most people don’t know about that.

Luke Roush: Yeah, I mean, that’s a good bar bet. What was Geoff Johns, national champion at No. One, when the bar would guess sky diving? I don’t think

Henry Kaestner: I mean, I think, well, it’s going to be a good test of whether people are listening to Faith Driven Investor Praxis. Yeah. So he was a national champion skydiver, which I think is just crazy, crazy, cool. He, of course, for those of our listeners who do not know, co-founded the Impact Foundation with Amy Minnick, which is an incredible organization that helps people to invest their philanthropic capital. So I think if you’re donor advised, fund money, your foundation money supporting ERG money, that money might do an incredible amount of good for God through investing. In some cases, the causes that have got is put on your heart to give money to. In some cases, you may go pretty far by investing, and most people don’t know you can do that with your philanthropic capital as what Jeff does or what you mean and they’re expanding can do remarkably well. It impact foundation and he, as you now know, is a national champion. But John Coleman, also a national champion and something that’s a little bit more germane to what we’re talking about right now, and that is he was a national champion in debate. Am I getting this right, John? By the way, China is, we’re putting you on the spot with this kind of awkward question. Maybe it’s not that awkward, dude. You’re a national champion. That’s incredibly cool. Welcome to the show. Welcome to the program. Welcome to the ministry. You’ve always been a part of it, but we’re this is your coming out party.

Speaker 3: Oh, I’ll thank you all. Look, I was going to say thanks for the kind words until Luke jumped in with the face made for radio comment partner, so on. But you guys know I’m just so humbled and honored and grateful to be working with folks like you and the rest of the team at sovereigns and the folks at Faith Driven Investor and just really excited about the mission that we’re on together. So I feel remarkably privileged to be in this position and working with the all. So. Thank you for having me on the show today as well.

Henry Kaestner: Yes, yes, OK, pleasantries aside, national champion yes or no? Tell us about it.

John Coleman: Wasn’t debate actually. So debate is more for people who are willing to respond to others. I was a speech national champion, which meant I just got to monologue for ten minutes without anyone responding, which is, as Luke knows how I prefer it these days as well.

Henry Kaestner: Oh, that’s awesome.

Luke Roush: That’s all that sounds like a good podcast host.

John Coleman: As long as you don’t challenge anything. I say Luke. Yes.

Henry Kaestner: And so as Luke and I like to do with every one of our guests, we try to get an autobiographical flyover. So who are you where you come from? What motivates you? We’ve got a whole bunch of different questions. You are a investor. You’re a family man, you’re an author. We’re going to get to all of these things. But tell us about where you come from.

John Coleman: Yeah, gosh. So I grew up in Georgia and Florida. I was actually born in Florida while my dad was at the University of Florida, getting his college degree. He was a rodeo cowboy at the time, although my mom made him retire from that profession when I was born and had a great upbringing, lived in the Panhandle for a little while, which is where my dad’s family is from. Grew up mostly in Columbus, Georgia, which is about two hours south of Atlanta, and my mom’s family’s from all over Georgia and most exciting Vidalia, Georgia, known for its sweet onions, which hopefully people have had and, you know, had a great upbringing. There grew up in a Christian family and so was always raised around Christian principles. Like a lot of kids, I had my own ups and downs in my faith, you know, as I went away to college and those sorts of things, but never really found myself very far from it. You know, there were points in time where it differed a bit, but I got to go to a Christian high school. You know, it was really brought up around the habits of the Christian faith. And so a wonderful foundation there that I can thank my family for and my community for. After school, I really had no idea what I was going to do. I should have a better story about my lifelong calling to be an ambassador here, but I actually thought I might be a journalist or a think tank person or a professor and stumbled into my first real job after college. I was desperate for a job. I was ending a summer job and needed an apartment in like two weeks. I was losing the apartment they had provided. And so I took the first job that was offered to me as I interviewed, which was as a quantitative energy trader at a little hedge fund up in the D.C. area. It took me about a week to learn that I was the world’s worst quantitative energy trader. It fortunately took my firm a little bit longer than that, so I had some time to prepare. But, you know, I was then able to know to explore a bunch of different stuff for my career. I spent some time at McKinsey and Company. I did some graduate studies in both public policy and business and then spent about nine years at a firm called Invesco that did diversified money management globally before coming to sovereigns. In the midst of all that, I managed to meet a lovely woman who became my wife, Jackie Coleman. She has traditionally been in education and counseling. She was actually a marriage counselor when we were dating, which led to the most stressful application process of my life, which was to be Jackie’s husband as she was grading all my, all my tests that she put me through as we were thinking about getting engaged. And and yeah, we’ve had four kids over the last nine years, so we have four little kids. We love to write. We love the outdoors. We love to travel. We actually just got back from Israel yesterday, my first trip to Israel, which was really life changing, and we have a great life. And then I was fortunate enough to run into Luke a few years ago, and he didn’t scare me off before I met you, Henry, which is the good news. And reconnected with you guys a couple of years ago and was just really, really fortunate that you all invited me to join the sovereign’s team about 13 months ago, now last February. And I am just so grateful for that and have had a blast so far

Henry Kaestner: was a no brainer. And I’ll speak for Luke. Absolutely some number of people that listeners may not be familiar with Invesco big institutional player. Tell us a little bit about what Invesco does and then the role that you played there.

John Coleman: Yeah, I had a few different jobs there, so Invesco is about a one point three or four trillion dollar asset manager globally. They manage about that much in assets, and they do basically everything from kind of ETF and index provision on one side, as the S&P 500, they have the QQQ. So if you’ve been watching the NCAA tournament, you know the Nasdaq QQQ all the way over to actively managed mutual funds, fixed income and then into private markets. So things like direct real estate and private equity and fund of funds and venture and those sorts of things. So really, a full spectrum investment manager, I have. A few jobs over the course of time while I was there, I was our head of strategy for a while globally. Worked a little bit on our digital businesses, things like robo advice, et cetera. And some of the acquisitions that we did as a firm and then really ended my time there working in two areas. One was our global institutional client business where I was a member of that kind of operating committee there. We managed about $360 billion for institutions around the world, things like sovereign wealth funds or insurance companies. And then on the other side of the house simultaneously held a job in private markets, helping build out our capability in real estate, private equity, private credit, etc., including running our fund of funds in secondary capability there for a while. So I had a great, diverse experience. There is a big global firm, so I learned about all elements of the business, which was incredibly helpful and it was a great platform. I think for the work we’re doing now, just giving me a good understanding of that marketplace.

Luke Roush: So John, on the one hand, you know, having a job like that with a firm like that would seem to be, that’s kind of what everybody aspires to, right? That’s kind of the goal. That’s the end game. What led you to feel as though you really wanted to be doing something different? Maybe share a bit about that.

John Coleman: Yeah, yeah, absolutely. So it was a great firm and really appreciated my colleagues there, you know, at this stage of my career. There are a few things driving my professional decisions. One was will come to it in a little bit. In 2019, I actually started writing a book on purpose for Harvard Business Review. And in the midst of writing that COVID hit and was thinking about career things, and it really convicted me about just making sure that at this point in my career, I was really aligning my personal values and my sense of mission and my purpose with an organization in a deeper way. To be honest, before I started talking to you all, I didn’t know that I could have the kind of integration that I have now with my faith and with investing, you know, that seemed like a pipe dream. I thought I might have to go to a nonprofit or something like that, and at the intersection of those two wasn’t. I wasn’t able to do that right until I found y’all. And I also had this belief that I wanted to go out and help build something to join a smaller firm where I could be a part of the team that was really helping to grow and build it. And again, you know, the path to sovereigns was even greater than I expected because we’re not just building a firm, I think we’re trying to build an entire type of investing in and we have a mission that’s broader than us in a movement. And so, you know, those two things coming together with the idea, you know, I’m a little bit further along in my career now. I know how important it is to just love the people you work with every day and to be excited every morning to get up and work with the people you want to work with. And you know, the mission alongside the opportunity to build along with working with the best people that I could possibly hope for, really created just the perfect situation for me to want to come over.

Luke Roush: One of the things that I think you’ve pushed us on and stepping back actually from sovereigns, I think you’re starting to push a broader dialog around. Is this idea that as investors, we aren’t in a kind of values neutral arena, that’s not the space that the world pushes us into. Would you mind just sharing a bit on this construct that all investing is impact investing, which I’ve heard you give that talk? Others who are listening to the show probably heard you give that talk, but maybe just unpack that a bit.

John Coleman: Yeah. You know, I think in popular language right now, a lot of people think of the term impact investing as concessionary investing, right? It’s where you have a mission and you’re trying to accomplish that mission with your money, but you might be willing to sacrifice return in pursuit of that mission. My belief if you look at the mainstream world of ESG investing, environmental social governance investing, which is now sweeping the world, is in fact that all of your investment dollars already have an impact. There’s really no neutral portfolio, right? And this has been true throughout history, but I think people are becoming more aware of it. Every dollar you put to work has an impact for good or for bad. And the only question is whether you’re going to direct that impact or you’re going to leave it to chance or you’re going to allow another institution to have that impact on your behalf. You know, what’s interesting is I think the mainstream investment management world has realized this in really dramatic fashion recently, and it’s actually the faith aligned investment ecosystem, particularly the Christian investment ecosystem that has been a little slow to come around to this. So some of the statistics I like to throw out there, Luke, you know, if you look at managed assets in the world in 2020, there were about one hundred and three trillion dollars in managed assets around the world. Now that’s probably north of there. I guess it’s somewhere around 120 trillion or something like that. Fully a third of those assets. So thirty five trillion were in explicitly ESG, environmental social governance investment strategies in 2020. So fully a third of the managed assets in the world. We’re explicitly targeting impact of some sort. And I would argue that even outside of that, that other 60 trillion in assets was similarly having an impact. So if you dig into what makes an explicit environmental, social and governance strategy that can be things like carbon neutrality, it can be negative screening like keeping fossil fuels out of your portfolio or positive screening, like supporting renewable energies on the environmental side. On the social side, it can be things like pursuing diversity and inclusion in your company or diverse boards of directors, or it can be excluding companies based on human rights issues in the mainstream ESG world. And then on the governance side, it can be diversity in the executive suite. It can be incentive systems, et cetera. But those are explicit strategies that has really blown up, and there are a number of approaches to that now around the world. And so you get this $35 billion, everything from basic negative screening to positive screening for the types of companies you want to invest in somatic investing where you say this is a renewable energy fund or this is a fund that focuses on carbon neutral companies all the way up, then to activism right or control like you would see in private equity. And so this ESG ecosystem in the mainstream world has really flourished. And as you dig into that, you know, a lot of your institutions on the Christian side, they would agree with some of those things, right? I think very few of us don’t want a great environment, right? We may have different approaches to that, but that’s what we want. But be there may be unaware actually of how they’re having an impact. And I won’t drone on about this too much. But if you look even at the rest of managed assets, you know, think about passive investing like your ETF or index exposure. A lot of people view that as neutral. I’m in the S&P 500. But if you dig under that and look at what constitutes that, you know, the top 10 investment managers in the world control 30 percent of the S&P 500. So there are 10 investment managers that control a third of the biggest publicly traded companies in the world. And if you look at the big three, which are BlackRock, Vanguard and State Street, which control most of the big passive holdings, they’re around eight point eight percent of each S&P 500 company in the country, and they’re the largest shareholder, taken together of 88 percent of the S&P 500. And if you look even beyond their ESG, what they’re doing with that is they’re using their proxies to vote, they’re issuing corporate resolutions, they’re pressuring companies to do things. And so I encourage people to unpack their portfolios and they’ll see even if they think they’re not really doing anything. For the most part, all of us are having some impact with our portfolio now, an explicit ESG strategies or other strategies. We often just don’t realize it.

Luke Roush: So one follow up on that, John, a lot of our listeners and I would put myself in this camp up until, you know, only a few years ago would think that whether it’s a public company or whether it’s a privately held company of really any size it, what can I do right? Like how much am I really going to hold? Am I really able to kind of have my voice be heard? Maybe just kind of unpack, because there are a couple of noteworthy examples recently of relatively small stakes swinging a big stick within large companies. Any comments you’d make on that?

John Coleman: Yeah, you know, I do think it’s overwhelming to kind of look at BlackRock, State Street, Vanguard, these multitrillion dollar companies, Invesco and say, of course, they can have influence, but like, what influence can I have? But I think one of the most remarkable things about public and private markets is that with a relatively small pool of capital, you can have a massive impact to sort of the public company side because that’s the hardest to get your mind around. When you buy a company in private markets, you kind of get that you can have influence on that company. But public markets, it seems like I’ve got to move billions and billions of dollars to have an impact. There was a great example recently of a group called Engine Number One, which is a hedge fund effectively located on the West Coast. That hedge fund is around the size of Sovereign’s Capital, the firm that you two founded, and that I’m happy to join today and with a $58 million investment point zero two percent of its shares. They invested in ExxonMobil and were effectively able to get three board seats at Exxon to try and push a more radically pro-environmental policy within that group. So 0.02 percent of shares if memory serves. And yet, because they were able to lobby a number of passive holders to vote with them, they issued a series of corporate resolutions. They were able to lobby for board seats and they were able to effectively take over not majority control of the board, but a substantial plurality of the board to try and enact this new, more radically pro-environmental set of policies at Exxon. And so that’s an example of what in the grand scheme of things is a very small asset manager and activist hedge fund that was able through a pro-environmental activist hedge fund that was able to take over one of the. Largest energy companies in history and really dramatically change its policies. And then on the private side, look, I think it’s something you and I see every day, right, which is when you own 10 or 20 percent of a company which Elon Musk now does of Twitter, which we could get into, I guess, at some point. But in the private sphere, or if you’ve taken a majority, you get a board seat, you may even have control of the board. You’ve got a close relationship with the CEO of that company or the founder, and you really have an opportunity to shape it. And, you know, in the context of the sovereign’s portfolio, what that means is we want to demonstrate love of God and love of neighbor through everything that we do to lead to human flourishing. And so that’s hopefully employee friendly policies is building an inspirational company with a real vision for the world, and it can be different from a culture perspective. And so I think it’s easier to look at the big numbers and get a little pessimistic about your ability to have an impact. But once you unpack those both in private and public companies, there’s just a remarkable opportunity to have an impact.

Henry Kaestner: So I want to impact that a little bit more with sovereigns. So if people are following along right now, they may or may not know a lot about. One of the things that there probably are pretty sure of is that it doesn’t have one point three or one point four trillion dollars of assets under management. So you’re going from running strategy and one firm with a lot to something that has something much less. And yet there must be some sort of working theory of change and impact that you see at sovereigns. You hinted at it there in just a little bit ago. But just unpack it more. What do you see as the future of Christian led companies and the ability for investors to come alongside them? Why is this something whose time has come?

John Coleman: Yeah. Henry, you’re great about reminding us that the two greatest commandments are love god and love your neighbor. Right? And Jesus reminded us, Well, Jesus first reminded us of that. I guess in the new you provide, it’s somewhat, Jesus said. But you know, and then he elaborates that everyone’s your neighbor, right? There is no one who’s left out of that. And I think that is actually a really inspirational vision for the impact that investment dollars can have. Because ultimately, what are you investing in? You’re investing in people and leaders, in the employees of companies and the customers that they serve and the vendors that they serve. And I think we live in an environment now where too often those relationships are transactional or they’re not founded on any sort of values or morals. And so they lead to environments like we’re seeing now with the great resignation where, you know, I write a lot on purpose, which will come to you. Some surveys indicate that only around 15 percent of people one five percent of people globally are engaged in their work. And that’s because companies and employees have chartered a mission or a culture that they feel is compelling. That’s bigger than them. I think his Christian investors, you know, the message of the gospel is good news. It’s good news. And I think our responsibility is to try and translate that good news into the way that companies work right in the way that companies live out their mission and values. They had the good fortune of sitting down recently with a guy named Michael Eisenberg, who I know has been on the podcast before an extraordinary investor in Israel, a person of Jewish faith, a really sincere Jewish faith. And you know, he was postulating that capitalism, which I think we all believe in here really was difficult to have exists in a flourishing way outside of the context of a deeply value centered society. And some might even say something like a Judeo-Christian society, although there are other sources values that those values really anchor society so that capitalism can flourish within it, and capitalism without those aspects can actually become a very transactional thing and can become something that takes advantage of people if you’re not careful. And I think what we would hope to chart is a philosophy of investing at sovereigns, whether through public markets or fund of funds. Invest in your private equity or venture where we can partner with founders who are sincere in their faith and companies that are sincere in their faith to create better environments for employees and companies that charter a bigger vision for the world.

Henry Kaestner: Indeed, bringing about God’s kingdom on Earth as it is in heaven while bearing witness to the king and just fired up to have you on board and running the firm with Luke on that. One of the other things that, of course, Solomon’s gets his opportunity to do is to come alongside men and women who are running in leading companies and helping them to borrow a term craft their purpose. And when I think about somebody who might know something about that, I go back to see if somebody might have written a book on it. Indeed, as it turns out, you have talked to us about the concept of helping somebody to craft their purpose. And this book that you’ve brought out with the Harvard Business Review.

John Coleman: Well, this all dates back. You know, you and Luke are athletic guys, Henry. I know your your family’s got a great one of

Henry Kaestner: us, more so than the other. Like, like the audience. Try to figure that out by Googling Luke Roush is 40 time.

John Coleman: Yeah, it was, you know, I think he said it was like a four. One or three, nine or something, Henry, these

Luke Roush: stories, it’s like it’s like fish stories, they just get better over time. I’m going to let Henry be my publicist. I might get drafted this year of Henry, where my agent

Henry Kaestner: yelled, I saw Terrell Owens this morning. Terrell Owens, at age 48, is going to come back at us as if Tom Brady can do it. I can do it. That means that, Luke, I think Terrell Owens is older than Luke.

John Coleman: Luke, you got your chance here.

Luke Roush: Most people, I can’t remember how old I am.

John Coleman: I heard he might be signing a contract with the Dolphins, so we’ll keep an eye on that. You know, when, when instead of sports, he were good at speech in college, you have to find nerdy hobbies. And so my hobby since I was a kid is writing. I love to write, I love to communicate. And so it’s been something I do in my spare time. My first book was actually a Christian book that I wrote in my early 20s.

Luke Roush: Well, tell us about that book before you get into the other book. Tell us about that book.

John Coleman: Well, again, the intersection of Chip Ingram.

Henry Kaestner: I think about it right now.

John Coleman: I wish, I wish. It is a book called How to Argue Like Jesus from crossword books and a friend and I, Joe Carter, who I had actually met online. This is the golden age of the blog and I had met online. We’re both really interested in this idea of rhetoric and Jesus in the New Testament. And so we we talked about the intersection of kind of an Aristotelian model of rhetoric in the New Testament. The way that Jesus communicated is you might know just from the fact that probably no one listening to this has actually read the book. It did not sound like a purpose-driven life. And so that set me off on my career journey. I had to keep my day job. But, you know, it kept me writing in about 10 years ago. I developed a relationship with a publisher called Harvard Business Review, and I was in school at the time at HBS in 2009. Actually, when we wrote our first book with them, we published a book on next generation leadership called Passion and Purpose. And that started me on this topic of purpose first as an investigation. And then secondly, writing with HPR. And they were really kind to kind of let me partner with an editor there. I’d write maybe five or six articles a year for NPR online, all about leadership and personal development, professional development. They’re extraordinary at those topics. And in 2015 or so, I started writing about what I thought of as kind of a new way of thinking about purpose. Right? The idea that you don’t find your purpose, you build it or you craft it, that it’s not some pot of gold at the end of the rainbow that you wait for, but it’s something that exists in all parts of your life that you need to take responsibility for. Those articles became really popular. And so as I was talking to my editors about writing another book, they asked if I’d flesh those out into what became a book called the HPR Guide to Crafting Your Purpose. So if you’ve been through the airport and you’ve seen the little guides that HPR puts out, it’s one of those in the whole book is kind of a practical approach to how people who aren’t getting a great enough sense of meaning in their personal and professional lives can rethink the way that they view purpose and begin to craft it more in their lives and live more fulfilling lives, both both at work and away from work.

Luke Roush: What I love about the book I love a lot of things about the book, but I love the fact that it moves from being sort of this like passive. While I hope I find it someday to being an active kind of shaping, reshaping and a continual discovery. We talk a little bit about it being actively faithful versus willful in that movement to more of kind of an activity that individuals and leaders are engaging in. I think was really impactful for me as I went through the book.

John Coleman: You know, that’s at the core of it, Luke, is to help people restore a sense of agency. You know, I think it is easy these days, especially you work in a big corporation or you’re in a country where you don’t feel in control and you can lose a sense of agency. The idea that you actually do have some say in the way that your life turns out that you do have some control over it. Not in a negative, prideful sense, but in the sense that you can take actions that can improve your life in the way that you experience life. And obviously, as a Christian, I believe that every single life has extraordinary value. Right? We are all created in God’s image. We’re endowed with this dignity as a result that everyone has, that they have a purpose and a mission for their life. And I think unfortunately, through popular culture, we have been induced to believe that purpose is a thing that you find that it’s passive. Right? It’s I think of it as like the Hollywood version of purpose, which is actually kind of romantic when you see it in a movie, the kind of destructive when you’re trying to incorporate it in your life. And what I mean by that is there’s this great Mark Twain quote that’s attributed to him. I don’t think it’s actually his quote that the two greatest days in your life are the day you’re born. In the day you find out why. Right? And you’re like, Oh, that’s really romantic. But on the other side, it induces a ton of angst, right? Because you’re just waiting for that one day to find out why you were born. Right? We can talk about there’s a faith interpretation of that. That’s different, but that’s not what Twain is talking about, I think. And you see the movies, right? It’s Luke Skywalker kind of live in a boring life until he finds out he’s a Jedi or neo living in The Matrix in. It’s disrupted and, you know, a purpose falls in his lap. And so there are all these people out there looking for that one thing to fall in their lap to change their lives. But in doing so, they’re getting a lot of angst about finding that one thing. And so instead, you know, the core of my message is threefold. One is purpose isn’t a thing that you find. It’s something you built, right, that you have agents and you have control. Purpose exists all around you. It’s up to us to take control of that and build a life that’s meaningful. The second is that purpose isn’t singular that one thing you’re waiting for, but plural. Right? Most of the people have a lot of angst about their purpose, already have a lot of purpose in their lives. They’re just not seeing it right. It’s your kids. It’s your family, it’s your wife, it’s your friends, it’s your community. It’s the homeless shelter down the street that you serve soup in. It’s your hobbies. It’s all this beautiful stuff in your life that if you’re too anxious about your professional purpose, you can lose sight of and even in your profession, it can be multiple things like relationships with colleagues, etc. So it’s plural. And in the final myth I deconstruct is this idea that purpose is a single thing, you know the two greatest days in your life for the day you’re born. In the day, you find out why. It’s like one thing that will change your life forever. And instead, I think that purpose changes over time. Right? Our purpose is a high schooler or as a college student. It’s different than when we’re young professional. It’s different than when we have a family. It’s different than when you retire and move into our second mountain, as David Brooks describes it. And then instead of feeling anxious about that or like, we’ve wasted time that we would just embrace those shifts of purpose. And so really, in those three ways, I encourage people to fundamentally rethink the way that they view meaning and to embrace their agency in terms of how to achieve that.

Henry Kaestner: John talked to us about the role that we, as investors, can play in helping entrepreneurs craft their purpose and just in different leaders in the marketplace. What’s that dynamic so that we can get involved earlier on in a Luke Skywalker career and earlier on and working with Keanu Reeves? Just refine it a bit more.

John Coleman: Oh gosh, I’m the new kid on the block, so I hope you too will chime in. You’ve been at this even longer than I have, and you’re extraordinary at it. Henry, you might even say that you wrote the book on this, so I hope you’ll all weigh in as well.

Henry Kaestner: You know, I would look for riding the Ford. No, but we collectively wrote the book. And by collectively, I mean, there are lots and lots of people in this movement that and I think about Chip Ingram, I think about Tim Keller, I think about Andy Crouch, Dave Blanchard there. A whole bunch of different people who are really fired up about this concept of what is cultural change look like in our entrepreneurs. Indeed, the tipping point the point end of cultural transformation in the marketplace was that look like and I may be one of very many authors in that collaborative book, but this is a movement. Aslan is on the move. A whole bunch of people are waking up to this. You did so much so that you left this incredible job in Invesco. But what role does an investor and whether they invest in a firm like a faith driven investment fund or they do individual angel investing? What is the call to working with these entrepreneurs and leaders?

John Coleman: Yeah, I see it a couple of ways. And look, I’d actually love to hear you riff on this a little bit, too. One is, as you said, to help encourage an entrepreneur, you know, be an entrepreneur or a CEO is a remarkably stressful job. It is a remarkably stressful job. There are a ton of constraints on your time. You’re responsible for a lot. The world moves quickly, you’re working very hard, and it is easy to get sucked in to this idea that your identity is your job and that you either fail or succeed as a person based on the success of your job. You know, in the book, I talk about this in the context of one reason it’s important not to have your purpose be a single thing is because when that single thing falls apart, your company fails. You lose your job, you lose even a relationship. Your whole identity fails if it’s not anchored in something broader. And I think in the Christian context, what you articulated, Henry, you know, the one thing we can be certain of is that the thing that won’t fail is our identity in Christ. And so that is probably the one thing that you can anchor to that can be certain won’t fail. And then that can exhibit itself in multiple ways. And so I think helping entrepreneurs to anchor themselves in that identity and the dignity that they have in Christ. And then is an outflowing of that in this idea that they are whole people, right, that they have families, that they should have families, that they have a faith, that they have communities that they’re investing in and that their entire identity doesn’t rise and fall based on the company. The second is that they can shape the values of the company in a way that they know to be true aligned with their values. I think many people feel very shy about that, bringing their personal values and morals to work. And I think instead, it can be the good news of shaping a company. And then third is encouraging those folks then to take that seriously enough to help the individuals within that company also craft their own purposes, also find their own identities. And also live more full lives, just as the investors are encouraging the entrepreneurs or CEOs, and so it had this ripple effect where if the CEO or the founder of the entrepreneur is that way and can help everyone within the company live that way, you know, they’re then a witness to everyone else that they come into contact with and you can impact thousands of lives.

Henry Kaestner: So, John, one of the things that we do in all of our podcasts, of course, is to point people back, just as you are doing with these entrepreneurs to God’s work, believing that the Bible is alive, God speaks to us through it, and it doesn’t necessarily need to be something this morning, but maybe something recently about something you’ve read through God’s word that has really impacted you and that you might offer up as an encouragement to others that might also continue to seek out God through time and scripture as well.

John Coleman: Yeah. So one of my favorite verses that I encountered again the other day is quite a popular one, so I won’t claim points for originality. But it’s Micah six eight where God commands us to do justice, to love mercy and to walk humbly with God. And I think what’s convicting about that for me is there are so many ways to overcomplicate our faith and our Christian walk, right? And it’s such a simple command which is just to do the right thing to love mercy, not just practice mercy, but love mercy, to feel joy in giving mercy to others and to receiving mercy and to walk humbly with God, right, which is to submit yourself to him and follow him. I felt that acutely when we were visiting the garden to get Simone, where Jesus submitted himself to God’s plan and humility and to think, Oh my gosh, how much easier for me to see myself in humility than it was for him the burden that he was taking on. And so that verse has really resonated with me lately just because of its simplicity in kind of giving a command for how I should live my life. That can be incredibly practical. It’s the way that I deal with myself and others.

Henry Kaestner: Yes, no points for originality. I’m glad you didn’t go with John 3:16, although John three six. Amazing, but you did a great job. You did a great job of unpacking Michael six eight. And that is really cool, and I’ll jump on your bandwagon. There is something really special about going on to the Holy Land, and it shouldn’t be a requirement because I know their faith traditions might have is a requirement. And yet you kind of understand and appreciate why they might. There’s something really special about being where these different stories that we read about goes by will actually happen, and I think that God speak to us through his word. I’ll never forget reading the Beatitudes with my father overlooking the Sea of Galilee from this sermon on the Mount from the Mount. Yes, thank you for sharing. It’s awesome to have you with us. I’m so excited about your leadership and hosting on FDE. I am grateful that we gave our audience a chance to learn a bit about you. And God bless you, brother.

John Coleman: Thank you all very much. Great to see all today.