Episode 154 - Emerging Opportunities in Emerging Markets with Patrick Fisher
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What does it look like to invest in emerging markets around the world?
Today’s guest, Patrick Fisher has been working to provide profitable solutions to difficult social and environmental challenges since 2007. At that time, he left a successful career at JPMorgan to start Creation Investments, a global impact investing firm focused on developing economies.
He joins us today to talk about the state of emerging markets across the world and to provide a vision for others to get involved. You may recognize Patrick from episode 100, which is linked here: https://www.faithdriveninvestor.org/podcast-inventory/episode-100-patrick-fisher-and-the-big-deal-with-microfinancing
Want to learn more about how Christians can invest in emerging markets? Check out our series “Building Growth with Room to Magnify” here: https://www.faithdriveninvestor.org/video-library#building-growth
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All opinions expressed on this podcast, including the team and guests, are solely their opinions. Host and guests may maintain positions in the companies and securities discussed. This podcast is for informational purposes only and should not be relied upon as specific investment advice for any individual or organization.
Episode Transcript
Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it.
John Coleman: Welcome back to the feature of an Investor podcast. This is John Coleman hosting the podcast today, and this is one that I'm very, very excited about. We are talking about emerging opportunities in emerging markets, and we've got someone who's eminently qualified to talk about this. One of the people I admire most in the space some of my partners had told me about even before I joined Sovereign's Capital and who has just been a legend in the emerging markets and financial inclusion investing space. Patrick Fisher. Patrick left Jp morgan in 2007 and founded Creation Investments with a co-founder. Since then, they've been focused on financial inclusion in emerging markets all over the world, and they've managed to build a remarkable firm and a remarkable presence around the world bringing financial technologies, financial systems, financial institutions to those in far flung places, the world, to the poor and to others. And we know that Patrick not only is an excellent investor, but also has a great heart for the Lord, is a faith driven man himself and is so fired up about doing good for those who need it most everywhere in the world. So, Patrick, thank you for being with us today.
Patrick Fisher: Thanks, John. I really appreciate those words.
John Coleman: Of course. Of course. Well, just to dive in, you know, we are taking a look at emerging markets with a couple of podcasts right now. We've had many people like Richard Okello and Curt Laird on in the past, But orient us right now. You know, it's been a tumultuous couple of years in markets generally. Where do things stand in emerging markets and what's your perspective on emerging markets investing right now?
Patrick Fisher: They're great questions. And yeah, it's easy to focus on the near-term, on interest rate increases and what that means. But let's not forget COVID and then politics and the rise of certain forms of populism in South America to other groups like in Turkey being reelected for their third term when they were only allowed two. So there are a number of different lenses. Obviously, we've seen both the rise and maybe soon to be fall or at least diminishment of China and the BRICS are no longer a phrase with Russia's invasion of Ukraine and essential embargoes and sanctions there. So the idea of emerging markets is about as fractured as it's ever been. It isn't a coherent group, and neither are frontier markets, which for your listeners likely are used to a distinction between emerging markets where there are rule of law and contracts and potentially a democracy, or at least stability with some capital markets. But frontier markets lack a lot of those forms of infrastructure, whether it be political or legal or financial infrastructure. And now it's quite a mixed bag. So how are emerging markets doing? I don't know. Pick a country and I'll tell you. But I will say on some bookends, you've got markets like India where creation has invested a substantial amount of our capital to provide banking services for the poor. But India is obviously the brightest star in this mix. They have become more important geopolitical player just now coming Modi coming to the US to meet with our president. The way that India and China are keeping each other in some form of balance. We get a lot of our pharmaceuticals produced in India. We have a lot of wonderful Indians that have moved here to the US and benefited our society here. But the Indian emerging middle class is one of our big themes is how do we help these billion plus people really grow out of poverty into that emerging middle class, which means access to education and health care, food and protein safety, security. But ultimately, the economics are the key foundation to all of that, which is why we're focused on banking for the poor and helping increase incomes. But India is a bright star where lots of capital is pouring in. And again, that offset of China is really actually benefiting India in a big way. But you have other markets, especially some of the larger ones like Turkey that I mentioned before, which is an utter shambles in my opinion. And the currency is just an easy, easy thing to point to. Argentina would be in that same boat when my wife and I went to Argentina for our honeymoon 15 years ago, it was 3 phases to the dollar and now it's 300. And when people lose that much real wealth, it's just such a sad, sad state because as we know and as Christians, we'd be focused on not just the macro economic factors and figures, but what it really means for life for a person in these countries where they lose their economic power, they lose the actual value of their own currency gets eroded and it pushes people back into poverty, which is why Christians need to be investing in emerging markets. And I know we'll talk about this a little bit later, but the difference between how we donate and where we use our charitable. Capital in these places. But also that there are opportunities to put our investment capital to work all with the same kingdom mentality.
John Coleman: Could I just pause on one of the topics you brought up, which is China? You mentioned it's such a great point that emerging markets is such a difficult thing to talk about because it's such a diverse array of countries around the world, and we could go country by country. You and I were chatting briefly about Nigeria earlier, but I think it probably worth pausing on China just because of its enormous influence on the world. I remember back in the early 2000 when it was positioned as China and India rising. And then over the course of time, the view was that China had far outpaced India, obviously in its economic development. And now there is a real sense of concern on multiple levels, I would say, about China. You know, one, just with the human rights abuses that have been present there, obviously, of the Uighurs and others. And then also the sense that their influence in the globe, in Africa and some other places has been not positive and a cynicism about further growth because of declining population and things like that, which obviously India does not suffer from. India's population continues to grow, as I understand it. Could you just talk to us about the dynamics with China right now, what you see as the future of that country economically at least, and the ripple effects that will have on the rest of the emerging markets that you deal with?
Patrick Fisher: Yeah. No, it's a great question. And I lived in China for just under two years working there with Jp morgan. And I love China. I have a heart for China, but I've often been called a China bear, meaning economically I would short China rather than be long China. And it's not due to all the opportunity. It's really due to the structure of the government and the control over the economics and the demographics that ripple out. But yeah, I do think China is at its peak economic influence today and that should wane. And to what degree that will wane is up for debate. Some people would match it with the fall of the size of the population that it's at 1.4 billion. And I've seen estimates that it will drop below a billion people within the next 30 years. And what happens when 400 million people disappear from a society, just an internal consumption, their ability to be a manufacturing hub and player for the world. So I think that's part of why the politics and even maybe some of the reach of the Xi presidency is grasping for things now, rather than waiting ten or 20 years to do more. So generally speaking, I think if you're a foreign investor in China, you've always needed to be very cautious because China has a middle kingdom and that is technically what the name Zhong Guo means is Middle Kingdom. It has a they are the center mentality. So if it doesn't benefit the Middle Kingdom, then if you're not aligned with that, then you're going to be at some real peril. But I do think Christians and business should still continue to enter China in different and distinct ways. But I would be at best cautious and at worst absolutely pull away from China in the next 10 to 20 years. I don't think there are a lot of good macro tailwinds there, and the structure just has too much risk for too little return.
John Coleman: And to your earlier point, my personal view is that might have a benefit for some of the countries you're a bit more present in, like India and Mexico, where if you're thinking about diversifying, for example, your manufacturing capabilities or other things Mexico, India, the Philippines, Vietnam suddenly look more attractive if you're flying away from China.
Patrick Fisher: Yeah, no, I think that's right. And I think that's a wonderful thing to look at across the world where the idea of near shoring is absolutely benefiting Mexico. Again, currency is just a proxy for a lot of things, but the Mexican currency has surged about 25% this year, start of the year, around 20 to the dollar. Now it's at 17. It's pretty amazing to see. And all of that is because Tesla is building manufacturing there and other groups that want to diversify their supply chain will be doing so. They'll continue to source from China, but also to diversify. And again, I'm hopeful that that kind of diversification will lead to all sorts of positive things and spread the economic benefits to a world while also sort of limiting some of the supply chain risks. But yeah, India, Vietnam, Philippines, we think Indonesia has a lot of opportunity to grow Again, not so much in the export side of things, but just the population itself and the desire to have a better life. And and so how do we as Christians get to be a part of that? And again, we've done on their creation, financial services for the poor is really our lane. That's where we feel like we add the most value. It's what we know. It's our domain expertise, but we need people just like us focusing on health care and others, just like us focusing on education. And there's obviously infrastructure and. And the list goes on. But those industry experts that have a lot to bring to the table, but their bigger why because they see this as a part of Jesus is calling and what the kingdom of God really means. But I think these markets are prime and the populations I mean, I know a lot of people do focus on the demographics, but to see, you know, in banking terms, there's 5% of the U.S. population is unbanked. And we can argue about how many more of those are not well banked. But 5% is our basic unbanked number, where the number 65% are unbanked in Mexico and they're not far away and 130 million people. So 65% of that, just tens of millions of people in our neighbor to the south, that could just use basic banking services to improve their lives, access to credit savings, insurance risk management tools, making a return on their cash. Just all the benefits that we get from that as a starting point for increasing income and livelihood and just gets exciting. And India has got it. You know, 400 million people that are unbanked or underbanked and they're in India and thinking about the demographics, the urbanization in India hasn't even really begun yet. You have 1.4 billion people. Only a third of people live in cities. So that means two thirds of people are still in villages and pretty remote areas. So the average is anywhere from 60 to 80% of a population will urbanize once a development threshold is reached. So we still have another, I can call it 400 million people that need to move into urban areas to increase trade and access to all sorts of ideas and sharing and resource collection. So it's an exciting thing, but that's going to need a lot of investment and a lot of great fundamental returns will be generated from that.
John Coleman: Yeah, and I want to pivot now to talk a bit about your model. This financial inclusion point is such a strong one. I spent a few months working in Afghanistan, for example, about a decade ago, and one of the most challenging aspects of that was you had to do so much in cash, right? Because there was really no financial system to speak up, which had ripple effects for the ability to do business there, for the quality of suppliers, etc.. I'm going to read now. Your goal is at a firm Creation. Investments has a goal of reducing poverty and its ill effects in the developing world by increasing access to capital and other financial services to those at the bottom of the economic pyramid. And you briefly mentioned kind of the tension between business and philanthropy in the way that Christians think about that. I think a lot of Christians sit here and think poverty alleviation is really a philanthropic thing, right? That really this is my charitable dollars, which are so important in their own respect. But you've chosen a for profit way to do that. You've chosen business and investment as a way to do that. Talk to us about the role that business and investment can play in poverty alleviation and financial inclusion.
Patrick Fisher: Great question. And that's what I've spent my life thinking about, and I know other people have, too. But I guess it starts from two basic premises. One is that if it's all God's, it doesn't matter if we give it away or if we invest it. The business has a wonderful kingdom use and purpose to it in and of itself. And if it's all God's, it can be used for something great. The other is to one side is to elevate business. And it's power in the kingdom. The other side is maybe to make sure we're thinking very clearly about charity and philanthropy. And this is what it looks like when helping hurts toxic charity. Other things have just shown how large charity can really distort markets. Small charity, Wonderful. You know, aiding the person on the street, obviously backing the church. The large charity has been seen to wipe out agriculture markets and local production and causes populations to boom when there is no undergirding of economic apparatus to keep that bigger population alive. So those are the things that you've got to really be careful of how much charity is used. And then we step back and reflect on our own market. And you say actually a general economy where people have access to work, education, livelihood and productive activity should take care of the bell curve of people. So call it 90% of a society should be able to be taken care of by market forces. And why should Christians not be the ones to lead the way, giving people access to that? Of course, there'll always be these tales where we'll need charity. People are at different strata of poverty, where market solutions aren't the best or the only means to make that work. So we've been focused on financial inclusion, which is how do you bring women the working poor? How do you get them access to capital so they can take that cash, whether it be the $200 microloan or now we're doing, you know, $20,000 affordable housing lending, we're doing 100,000 200,000 equipment leasing. For a larger businesses that have employees. I give these companies and individuals access to capital and they're able to earn such returns on that capital to increase the individual income or business income, hire more employees. And again, the ripple effects of this increased economic activity are really powerful. People put that extra profit directly into protein, education, health care, children, better housing. And all of these outcomes that really the foundation again, economics as the core to lift people out of poverty. So we do that in financial services. And currently, you know, we've got just over $12 billion in loans outstanding in our organizations. We've got 32 million customers. We have an average return on equity of around 15% in our businesses. I mean, so to be generating a 15% financial return and doing that by helping 32 million people access formal financial services to me is just such a win win and everything that just fits exactly how God designed us to be working in this world.
John Coleman: Man, that's an awesome thesis. Patrick And talk to us a little bit about the power of private equity specifically, because obviously you could have done lending, for example, as a firm. You could have done public equities in many of these markets, not all of these markets. Why is private equity a powerful tool?
Patrick Fisher: Yeah, well, I think most impact investing is private investing, and that's because a lot of the markets that we're working in don't have very large public markets or the companies that are public are the top 20 conglomerates that are owned and operated by families that have kind of gobbled up various industries and rolled up into a public listing. So the vast majority of companies in India and Mexico are private companies, but these in our space are regulated licensed banks or non-bank finance companies or insurance companies. So they're regulated, they're profitable that are audited by Ernst and Young or PWC or KPMG. They've got all sorts of internal audit functions and other forms of governance. But through private equity, you're ultimately able to get the most enhanced form of governance you could want. You know, I sit on the board, my team sit on the board, the management teams report to us or bring in other independent board members to help us add more value. But we're able to have a direct conversation with a management team who then in an hour are already implementing what we've talked about versus having a shareholder resolution to a public company and hoping that it gets heard at the next meeting and working through that advocacy layer, while that's something in the governance space is severely lacking. So in my mind, there's no better way to have direct impact on the management teams as a Christian and as a professional to help and bless these management teams and to influence business operations and to ensure that the mission is really being followed top to bottom, up and down in organization. And that DNA is deeply embedded so that every time one of our customers, for example, of a woman in rural India who's borrowing from us for her small business, that she's being treated the way that we would want her to be as a value client. And so private equity has all those features. Private equity has some other amazing economic features as well. We're able to invest in a company at seven times earnings. That's an exciting business proposition. We put new money into these companies to help them grow and accelerate. Several of our companies, especially our Asian companies, grew on average 100% last year. Our Latin American companies grew on average 45% last year. Profitable growth. The money we're pouring in is going in to fill the balance sheet. So we're able to do that as a private company and be nimble. And that capital has a great return on it, a financial return and a social return with the governance overlay. And you couldn't do that in public markets at all. However, we did just take one of our companies public in India in November called Fusion Microfinance. We started with Fusion about five years ago. It had about $40 million of loan portfolio. It lends exclusively to women in microlending, 200 $300 loans to groups of women. We just passed $1.2 billion of loan portfolio in five years. We took it public. Since going public, the stock's up 50% and we just passed 4 million customers. So 4 million women now have access. And now we're able to transition from again what might have started out as charity or friends and family or venture philanthropy. Then our investment dollars came in. We brought in Warburg Pincus as a partner. So. More commercial investment capital came in and now taking it public and handing the shareholding off to the public and having each group sort of play its role as that institution will go on for decades and decades ahead to continue to serve women in India.
John Coleman: Man, what a cool story. And you know, as a US investor, we do a little bit abroad as well. But you know, for us investors, banking hasn't exactly been the most stable area, especially regional banking, over the last year. And so to hear about such a thriving financial institution that's emerging and growing is encouraging and fascinating. This is not a hard question for a private equity investor, because I know this is what we like live to talk about. That was an awesome story. Give us one more story of a company that you work with that you think is just doing exciting things that people that listen to our podcast should know about.
Patrick Fisher: Yeah, no, I mean, and I appreciate you coming up thinking I am in was a Silicon Valley bank customer in our firms whereas many many other investment chaps or so we had several sleepless nights and it all worked out. But you know, all of that came back to really just basic, you know, banking knowledge and understanding, asset liability mismatch. And so it's something that we focus on pretty heavily in our institutions that we work with. But, you know, maybe a good example, especially in contrast to the US, but over the past two or three years, we've really gotten into affordable housing lending. How do you help people get access to own their own home? And obviously there's a huge history here in the US of the exclusion, in particular of African-American families who are excluded from accessing the Federal Home Association loan program and getting FHA loans and redlining excluded all sorts of people from getting access to the main wealth building tool that Americans have enjoyed over the last 80-90 years. And so how do we help that same category of people but in Mexico and India? So we've really gotten into the affordable housing space. And just as a banker, forget the mission, just as a banker. The kinds of loans we're making in both India and Mexico. But our focus on a company in India called [.....] make 10000 to $20000 home mortgages. We lend so people can build on land they already own. So we distribute $1,000 through the foundation to get poured and another thousand dollars for the architect. And the documents are registered with the local and city governments. But to build the walls and the roof and at the end of this home building project, a single family can move in to their own home, substantially reducing their cost of living because the rent burdens in India are quite high. If there isn't enough housing supply, just like we have in certain places in the US. But as a banker, the loan to value is 40% on average for our portfolio. Most people, as you know in the US, borrow 80% against the value of their home and they put in the other 20 or they borrow 80 and another ten. So to be lending 40% loan to value is unbelievable. Just the amount of security you have, these are six year mortgages, not 30 years, but six. And people fully repay their loan on their own home outright. And we just crossed $800 million of loans outstanding on our balance sheet. There at [....] we've grown, again, approximately 100% per year. We have a 5% return on assets, a 15% return on equity and that kind of growth. So as a banker, you'd want to be involved in affordable housing lending. As a Christian and a missional investor, you absolutely want to be involved in giving people access to own a home, and in particular in these markets. It's not about redlining. It's about essentially the kind of income that you have here in the US. If you have a W-2, when you have salaried work and a tax form W-2, you can probably get a loan from a bank that verifies your income. Well, that's the same thing in India. The problem is only 10% of the population has a W-2. The other 90% have informal work. They have their own small business. They don't have salaried income that can be counted upon for a big bank to lend against. That's our specialty, is understanding this poor and emerging middle class of low income category and knowing how to underwrite them. And because of that, knowing that customer base has grown rapidly and we have a point 4% delinquency rate. So again, back to how you can tie the mission of giving people that can't borrow any other way their own home, which improves health and substantially. It lowers their cost of living and gives them access to a wealth creation tool with some of the best banking metrics I've ever seen. So this is the stuff that I love, and to be doing it at scale is the next thing that I really care about. And that's where investment capital comes in and that has the ability to take things to scale that donor capital just can't keep up with.
John Coleman: That's an awesome articulation. I love hearing the stories of companies. This is the world we live in. We look at companies all the time. We love hearing the stories. Clearly, Patrick, you're a person of deep personal faith and that seems to be a motivation for you professionally. Talk to us about, if you would, how faith played a role in you starting this. I mean, you were at JPMorgan before a big, successful institution. You kind of took a leap of faith, so to speak, and started your own thing. And then secondly, maybe how does that faith shape your work today? How does that play into the way that you do business today?
Patrick Fisher: Well, I'd say a few things. My own personal story, and I think anybody who's ever really done anything of value for the kingdom always needs to begin with humility and submitting yourself to God and his will. And with that, when you submit yourself, you be willing to do things that maybe don't make a lot of sense to others or that you may not be fully equipped for at the time, but you feel called to do it. And I felt called to start this, you know, and I've heard a number of people say, well, look how successful this has been. You know, you now managed billions of dollars and you've been doing it 16 years and you've had these great returns. They say it's obvious God's in it. And I think we all need to push against that narrative. And what I've tried to say is I could have gotten involved in this. We could have gotten a going through a couple of years and it could have failed and God would have been in it. So this whole attachment to the success of it all and and so I think that's ultimately that got to be the initial posture of heart of just I am willing to follow God, whether it works out in this way or that way. It's his calling on my life that I'm going to follow and be faithful to do the work that he's put in front of me. So that's still the case that unless the Lord builds the house we labor in vain and so that this is the work we have to do, of course I see the connections completely between what we do and what the Kingdom of God is about and and having first and foremost a heart for the poor and giving them the dignity of choice, of treating people as a customer and not as a donor recipient. It just in my mind, connects with everything what it means to be a brother or sister in Christ. So, you know, and also just a way to extend the leadership of Christians in these industries and markets. It's been something I've been delighted to have the privilege to do, but we get to sit down with bank regulators. I know that sounds really boring for some of your listeners, but, you know, I got to sit down with the regulators in Cambodia that were thinking about offering insurance, basically FDIC insurance to savers. And I got to talk with them about our, you know, the different programs that exist all over the world and how that gets paid for and went, you know, 18 months later, they roll out their version of FDIC insurance and more and more of the population saves and saves and saves and gets all the benefit from that in their economic activity. So it's a really wonderful position to be in and to have a voice and have a bigger reason why of why we do this. But I do think a lot these days about just what Jesus said in the Sermon on the Mount, which is just let your light shine before men, that they see your good works and glorify your father in heaven. So the good works that are happening all throughout the organization, it just needs to get back to glorifying our God in heaven. So. So yeah, my faith comes through in how I lead and what we do and why we do it, and we're excited to see what's next.
John Coleman: One. I'll also say what a unique model for you all. You know, in the investing space, often we are dealing with people with a lot of money or with companies with a lot of money, and you get a bit detached from our mission to serve the poor, right? Which Jesus was very clear about. The Bible is very clear about. I just listen to the CEO of World Vision, Edgar Sandoval, who's a wonderful guy, speak about this last week. And, you know, in the day to day trenches of most people's investment firms, it's easy to lose touch of serving the poor just because you're not as directly exposed to them. And so I love the fact that intrinsic in your model is not just an exposure to the poor and our calling there, but the ability to really directly impact their lives. And to me, that's just another level of impact. It's extraordinary. I mean, probably from a faith perspective for you seeing the change that that can make, but also just in terms of alignment with the commands that we get from Jesus. So just a wonderful way to integrate.
Patrick Fisher: No, I couldn't have said it better, and we see that and. A couple of our investors just went out to visit some clients in both Mexico and in India. You sit down with these clients and you hear their story and it is it's empowering and you get excited. And for them to call me back and say the best philanthropy I've ever done is through my investment portfolio. That feels great. That means we really hit on the core of why we're here and what we're doing. And, you know, of course, we're taking all sorts of risk. We're investing in emerging markets maybe to try to dovetail back to the bigger theme here. There are risks in these markets, but in the right markets, the returns are attractive enough to compensate for the risk. But we wouldn't just take the risk for no other reason. There's a deeper reason for why we're using our capital in this way. And that's always been my push for impact investors or kingdom investors or faith driven investors or entrepreneurs. The returns will be what they are. They'll either be stellar or the world will be me and we'll lose half of our money or whatever. But we should be willing to take more risk because of our faith and not in a childish way, but in a a thoughtful, analytical way where we're able to understand the risks that we're getting into. But we should take more risk because we're people of faith.
John Coleman: It's an awesome message. And as people are thinking about that sitting at home today. Obviously, most people probably can't get into emerging markets by starting their own private equity firm. It can be confusing just how to, as you said, not take risks in a childish way, but in a smart way. So for folks who have a passion to get engaged in emerging markets as investors, what's the advice that you would have for them on taking a first or second step?
Patrick Fisher: Yeah, it's a great question. I mean, the first step is obviously education and learning. You know, it's what you John and your teams and sovereigns teams and beyond have done. You just got to meet a lot of people and begin learning. I mean, you mentioned that I left JPMorgan in 2007, but I first started to learn about micro-lending, microcredit, financial services for the poor. I started learning about it in 2003. So I'd spent four years reading books, going to conferences, meeting people before I decided to make the plunge. And I think investors should do the same. They should really take their time to understand who's doing what where, because it's easy when you hear your first, you know, description of a great mission or business or an investment opportunity just to jump and lunge at the bright, shiny object because it connects to something you believe in and what you really want to do. But like all investors, you should really step back, evaluate the market, understand the risks and the opportunities. I'd also say that I know the African continent, which is very diverse continent. There are all sorts of opportunities and and other much more difficult countries within it, but that often is the only thing that people are presented with within this kind of impact investing space. And again, I'd be an advocate to say that, you know, the charitable dollars that are available for business use would have a really good role to play in frontier markets. But your real investment dollars should be found in emerging markets again, where those structures, the ecosystem is supportive of investment. And so markets like in India and Mexico and beyond really have a lot of great opportunities to themselves, educate, work with people. I think a lot of folks do start with a fund of funds kind of approach rather than picking one company where you have a, you know, it's pretty binary, either succeed or fail. Being in a fund is a great way to get some diversification. Generally, you get a partner who's actively involved in each of those and that's again another part of the education process. But I'm a big believer in people starting to allocate toward this space, in particular in emerging markets. But doing research, getting in a fund, getting diversified, understand the risks and take a long view.
John Coleman: One I do admire. I like what you said about, you know, the average investor being thoughtful about how they approach it, getting into emerging markets for their for profit dollars or their dollars where they need return before going to frontier markets. I will say for people who have the resources and can afford the risk, the ability to engage in frontier markets is particularly impactful. I would highlight don't tell them I said this. You know, I don't want to be caught saying such nice things about him offline, You know, Henry Kaser, my partner with his personal capital, has been extremely engaged in frontier markets and his philosophy is what you articulated earlier, which is with his personal capital, which is very different than the investor capital that we steward. He feels called to take greater risks. Right? And it may work out. It may not, as you said, with that personal capital. But he does believe in the power of investments in private markets to transform people's lives and has been on a personal journey to do that. And so I think to echo you, that advice for the average investor is totally appropriate. I would encourage those who either have philanthropic dollars to invest or have the resources to diversify. Let's say that frontier markets are such a needed area for private investment as well, alongside charitable investment. Patrick One of the things I've been so impressed with, as you've spoken today, is your ability to kind of go around the world and talk about currencies. I'm going to ask you what you read that we can start reading. You know, you've mentioned Argentina and the peso rate. You've talked about Mexico and currency movements there and India. I mean, you're keeping track of an enormous number of political and economic environments around the world. Are there any publications, resources, other things that you'd point people towards if they want to get more up to speed on these things?
Patrick Fisher: Yeah, great question. I do love to read and I think, you know, it's a really important thing. I'll just tell you what I read The Wall Street Journal and The New York Times to try to stay a little balanced. I read The Economist. We get a lot of data on banking systems from a variety of sources, both local sources in the countries where we operate, plus the Goldman Sachs reports and the Jp morgan reports and the Morgan Stanley analyst reports. They give a lot of really good macro data. So I have access to a lot of good research that gets sent to me and and filtered out through my team. But yeah, I do think it's something that I also really enjoy. I just love learning. So I just try to drink it all and constantly and I do listen to podcasts quite a bit, including this one. But I just finished a book called The End of the World Is Just the Beginning, which is kind of a doomsday.
The Zeihan
Exactly. Exactly. I'm glad you read that too, John. So I try to read anything I can get my hands on. I think there are a lot of great thinkers out there and and I've never been much of the futurist. There are other people that are much better at seeing, you know, ten years and 20 years down the line. But I have been pretty good at implementing what these people have suggested and making some real, you know, concrete steps to advance on the data that's out there.
John Coleman: That's awesome. That's awesome. That's super helpful Zeihan is such a fascinating writer. He's a bit more cynical than I am. I think about the future of the world. But I do think he you know, he marshals a lot of data and it forces you to think about some of the dynamics he's describing for those not familiar with him. I think Peter Zeihan right there, his latest book, I believe, is called The End of the World is Just the Beginning. And he talks about one of the central theses of the book is actually how well positioned the United States is versus much of the world in terms of its natural resources, in terms of its geography, etc., for what the future brings. And he talks about things like population decline. But I think Patrick and I are both shaking our heads. It's a fascinating book. I'm a little more optimistic than Peter is, which isn't saying much because he's not terribly optimistic.
Patrick Fisher: But I'm with you on that.
John Coleman: I want to touch on two more things before we leave. We're going to end by just asking you what you're learning through scripture that you might want to share with the audience, which we ask everyone before we do that. You know, we talk all about emerging markets, but you're quite involved in Chicago as well, which is the town in which you live. And I think we're all called to kind of invest in the places we live. Talk to us about how you try and engage with Chicago and how your faith plays into that.
Patrick Fisher: Yeah, no, I think you hit it. You know, we live here. My wife and I, we both met here in the city at a church. We're not from here. I'm from California. She's from Oklahoma. But we live in the city. We've raised our three kids here. There's still a little young, but, you know, 13, 11 and eight. We have a dog, but we we know our neighbors and we invite them over. I think we're the only people that go to church in many blocks around us. But you. Yeah, very active. And just knowing the people around us, whether it be the owners of the little pub that's just three doors up from our house or the Mexican grocery store that's just around the corner. And a power of just living in a community and caring for people and knowing their name. We had a new couple just move in across the street and have a baby, so we invited them over and took care of their kid. And so it's just there's a wonderful way to live. But but yeah, in the city, you know, Chicago's got a number of issues, as we all know, from violence and segregation and race and the history of all those things as they come together is very complex and complicated. And we've been very active in a number of things, including I just took my two younger children. We made we made breakfast at a woman's homeless shelter just last Saturday. So trying to get our kids to sit down and have a meal with women that have been on the street or are victims of domestic abuse. And to hear their story and to talk about what kind of dog they had growing up and just to really be close to the poor. We've been involved in all sorts of things with education and a mentor and a program called Link Unlimited, which we both sponsor and mentor African-American students and pay for them to go to a private high school. And through that mentoring and through that access to better education. 100% graduation rate, 100% go to college. And while you might not be able to fix big systems overnight, you can really spend your time and attention on one person and help them succeed and get a glimpse of what Jesus would want us to do. So active in the city in all sorts of ways through our church and indirectly. And as a donor, you know, in a lot of different organizations. So yeah, but we care about Chicago and good people need to stay and fight for the city and be salt and light here. So. Yeah.
John Coleman: Well, Patrick, you are clearly a thoughtful guy. We like to in the podcast the same question for everybody, which is what are you learning through scripture that you would share with people today? What's on your heart right now in your study of scripture?
Patrick Fisher: Yeah, I mean, we've been talking a lot about salt at home, and so that's one of the reasons why that phrase comes up and and wrestling through. You know, you look at sadly, the city of Chicago and a lot of the data on poverty rates, education, success rates, literacy, economic mobility, they're essentially unchanged from 40 years ago. And that's fairly depressing when you think about all the resources and that's human and financial capital and political capital. I think generally well intentioned folks. And you know, to some that's very depressing. But to me, I've been learning the other side of what it really means to be a preservative, essentially a salt, which means you might not be ringing the bell or popping the proverbial champagne because of all the successes. But if you removed all those efforts, if you removed all those Christians, just think about what the city would be and what those lives would be like without that preservative. So even though those numbers and statistics are the same or essentially unchanged, if you removed all the Christians here from our work, wow, how much worse? Would the city be? So we've just been learning maybe one the other side of that coin, which is how good it is to be salt light. And again, back to not looking at the sort of the outputs and the outcomes, but just being faithful in the world and trusting that God is doing something big and and you just live in the time you do and he's really in control of the bigger picture, the bigger narrative. And, and so it's been wonderful, actually. But yeah, that's what we've been sitting in. So as I know I quoted already let your light there showing before men. But salt and light comes not far from that passage in the Sermon on the Mount to really thinking about these very obvious but important the next layers of depth meeting to what Jesus had taught us so long ago.
John Coleman: Well, Patrick Fisher Creation Investments. I think it's safe to say that you are faithfully living as salt and light from Chicago to India to Indonesia to Mexico. And I'm really encouraged by the work that you all are doing. I do think it's it's such an important set of work and the fact that you do it out of a faith motivation and that you're so focused on the redemptive nature of that investing, I think is all the more inspiring and a reason to be motivated about that work. Thank you for sharing with us today on the Faith Driven Investor podcast.
Patrick Fisher: Thanks John and I really appreciate all you guys do. You promoted in so many ways and inspired so many new people. And that's what this is about as well, is just to have not just one person but the multitudes that will come out of all of this work. And as we share stories and in all the glory goes to God.