Henry Kaestner: Welcome back to the Faith Driven Entrepreneur podcast special edition, kind of halfway in between last year’s 20 20 Faith Driven Entrepreneur conference, which I thought was awesome. We can talk about that and maybe share some favorite moments with my co-host and great friends, Rusty Rueff and William Norvall. And then halfway between then, of course, and the one that’s upcoming. So a good chance to reflect on the things that we were learned last year, the things that we’ve been reflecting on over the course of the last six months, and then the things that were kind of anticipating and hopeful for over the course of the next six months leading into, of course, this conference. So Rusty, William, welcome.

Rusty Rueff: Always good to be together.

Henry Kaestner: So fascinating. You know, Justin and Sue, Alice and Jonny have come to us to ask us to talk about the conference. And there’s so much to talk about because this year we’re going to be rolling out a new watch party. We’re going to have much more of a local implementation. We’ve got an incredible lineup of speakers again, which is kind of hard because we had so many great ones last year. The thought is you go back to the same great people like Phil said, you say the same thing or not. But we’ll talk about how we’ve been able to avoid that and why we’re so excited about this actually being a new slate of topics and speakers. But before we get there, let’s reflect a little bit. It’s been six months since we did the last conference, and there have been some presentations that have continued to really make an impact in my life. And some I knew it at the time and then some have just been kind of creeping back up. Upon reflection. I don’t know if you guys have experienced the same.

Rusty Rueff: Yeah, I actually think it’s worth even before we dove into that, just let’s remind everybody that, you know, the conference that was the conference was not the conference that was going to be the conference. Right. I mean, we went into this planning for a couple of days of fellowship in Dallas and, you know, being together and shaking hands and giving hugs from people from all over the country and all over the world who’ve been our listeners and participants and guests and everything got turned upside down by covid. But yet we persevered through and we tried something that, you know, we didn’t know would work or didn’t work. And it did work by God’s grace. It’s actually now leading us as we talk about what we’re going to do this year, you know, into a hybrid of that. But, you know, it was pretty special given the fact that we were all doing it from our homes and our offices and, you know, sitting there on Zoome nonstop for a couple of days. But, you know, hats off to, you know, the team who pulled it all off, you know, and coordinated that. That’s not easy.

Henry Kaestner: No, it’s not easy. William, you probably had some favorites. I know you had some favorites. I know you’re a huge fan. I know you’re a fan much of all the speakers. And that’s one of the things the team was nice enough to allow us to get some input and last year’s speaker list in this upcoming one as well. But tell us about some of the speakers. And by the way, as we talk about that, know that we’re about to launch and maybe by the time this is released, we’ll have released the Faith Driven Athlete, all of these speakers, all these talks that we’re going to be talking about, you’re going to be able to see on your mobile device, on your computer, and really we’re just really fired up about that. But OK, William, would you like.

William Norvell: Yeah, it’s exciting. I’m excited to be up to another team and working hard on it and to be able to take a five hour conference, you know, that we did with, I think, close to 40 speakers and sort of distill that down into different topics and different areas. So you have to watch all of it right now. If you if you try to find it, you’ll probably find the five hour link or some some things. But it’s going to be amazing. And as I do hope, people will find that if they haven’t found it already once this releases and. Yeah, I mean, reflecting back, yeah, I’m a big fan and he just always is just amazing. I think Andy has a unique ability. You know, all of our speakers have some unique super power. And I think Andy’s is to just like get to the soul of what is going on. And he can speak to the soul of an entrepreneur better than anybody I’ve encountered. And so just as you know, 30 seconds of his talk, I think it was 12 minutes. I would encourage you to go find it and watch it. And we can and we can link to that in the app. But his main point was he talked about how. How to flourish as an entrepreneur and what he talked about was he believes that flourishing happens when authority meets vulnerability and the way he defined authority was the capacity for meaningful action. And the way he does, he defined vulnerability, was taking meaningful risk. And he said when you have the capacity to take meaningful action and you choose to take meaningful risk, that is where an entrepreneur flourishes and he teases that out over over 12 minutes and just walked through. And just to buy two guys, you’ll see some great two by twos and and just how Jesus fits into that paradox of of creating that flourishing moment for an entrepreneur. And I just just it just hits me. I’ve watched it five, six, seven times. I’ve sent it to numerous people that are thinking about being entrepreneurs that have maybe I put myself in this category, always been on the edge of maybe going out and trying something. And he just beautifully lays out the encouragement for that and says, yes, like God did design us this way. If you’re feeling that maybe he designed you that way to

Henry Kaestner: Rusty, what did you like? What is your impression?

Rusty Rueff: Well, you know, I got two instances with your former co-founder, Dave Morgan. Right. So not only his his discussion on why excellence matters, but also a little breakout session that we did together. And, you know, I just am always so impressed with the amount of humility he brings to the success that he’s had and just the way he can be. You know, I can imagine I’ve only interacted with him here on the podcast a couple of times, you know, watching it on the conference there and then having that panel together with him. But I can imagine that, Dave, you know, he’s pretty driven guy, right? I mean, there’s you know, there’s no you know, hey, I think we’re not going to make this goal kind of guy. He’s you know, we’re we’re going to take this hill. But at the same time, there’s a purity to him and there’s a gentleness, even with that ability to push that comes through in his humility that I thought was just awesome in both sessions. And, you know, I just admire and felt really challenged to step up my game, you know, and whatever I do to make sure that I’m being excellent.

Henry Kaestner: You know, it’s interesting that if I were going to talk about how he gets that, it’s interesting. It’s not a focus on excellence is part a function of the fact that he is being given by some really unique gift things and is making the most of them. But pragmatically, I think that the blend of excellence with humility that I really do think that he gets and is wonderful to continue to experience that through a 20 year friendship and partnership is the fact that he prays one hundred times a day. Plus he’s constantly in prayer and he’s got it. This is one of the podcast interviews we did with them. He’s always praying, God, thank you. God forgive me, God, please, all day. And if you spend that much time walking right next to God when your thought is that any time you have a thought. Delayed at God’s feet, then you can’t get to under yourself. You can’t, and I think that that’s kind of the secret there. And I think it’s interesting you pointed that out, of course, from my perspective. I love David talk. It was great having Victor Ho talk about Sabbath, some of the earlier podcast we did. There’s a part one, part two that we did with Victor. One hundred and sixty podcasts ago or something like that where he unpacks Sabbath. And a couple of things that I like Victor about. And actually coming back to our very first blog we ever put up on the podcast was Andy Crouch talking about Sabbath as a very first century we ever had. The second one was I think it was John Drexler’s essay on the Silicon Valley episode where they talked about you can be anything in Silicon Valley, but you can’t be a Christian. And the satire, the brilliant satire that that was. And John did such a great job. And I think we’ve had thousands and thousands of blogs since then. But Sabbath is so important. Victor Ho did a great job pointing that out. And what I’m talking about, Victor. Of course, we’ve got to go back to one of the favorite lessons I’ve ever learned from Victor is the emphasis on delighting our customer and the work he did at McKinsey, at Harvard Business School, and then now through five stars about what does it look like to delight a customer understanding that it is significantly more cost effective to retain a customer that was otherwise going to churn than to go out and buy a new one? Just the way he talks about that, I think is really good. But I think that my favorite interplay from the Faith Driven Entrepreneur conference is Phil Fisher and Casey Crawford, these two guys who are passionate about their faith and the interplay fills a little, maybe more bookish, very creative. And Casey’s Super Bowl, when a six foot six is completely chiseled, they’re different in some ways. They’re very, very similar in some ways in that they’re both students of entrepreneurship as it relates to knowing God. And the interplay that Casey had with Phil I thought was really cool. Now, they weren’t on the stage at the same time, but it really started off as a continuation of something that happened here on the podcast. Right. We had been talking about Phil’s podcast on identity. And if you go back to Phil Fisher podcast, I think it’s minute 16 to minute 20 or so. Phil talks about the identity of a Khristine entrepreneur. That is really, really good. And as we’re getting ready to interview Casey for his podcast, we were reflecting on it. And Casey was talking about, gosh, I know that we’re called the not have anxiety, but yet I still feel anxiety and I feel that Jesus was in the garden. He’s sweating blood. And I see David having some real stress and anxiety. And so how do I think about that? And Katie’s talk was on are we called to comfort as Christians? And that made a real impression. But it just I just love the interplay between the two of them. I love the fact that they’re both so thoughtful about being a Faith Driven Entrepreneur. They had such incredible experiences. And I love just the highlighting of the tension that comes about with the Faith Driven Entrepreneur. What’s the tension? How do we deal with things like balancing work and family? How do we integrate our faith? How do we think about financing? How do we think about our issues? And there can be a tension there. And it was fun just to see them both unpack that a little bit.

William Norvell: Yeah. You know, the last one I mentioned as reflecting on this is because you made me think of a delighting your customer. One of the most interesting talks I remember is, is Lacroix’s talk about being an artist. And I was really fascinated when he went on the riff of really trying to understand his his customer and design music for them because I just blew me away. I just always think of artists as, no, I’m just going to go in a box and create whatever I create because God told me to. And if people like it, people like it. But, you know, he’s like, no, I definitely see myself as a product and I have a product to sell and I have an audience and I need to understand my audience. And I thought it was kind of a really brilliant riff on an area that I’m not very accustomed to. And I think that’s what the government is grateful to. If you can come see different variations of people coming from different walks of life and how those things can be applied to your universe, even though you may not think they can be applied to your universe. And that’s what we we’ve tried to line up here this year to.

Henry Kaestner: Yeah. What are you talking about? Lecrae That’s one of my most gratifying and hopefully it’s not a prideful moment because it will always be something I’ll struggle with to some extent. But when Lecrae really leaned into the ministry and really got excited about it through the podcast and then his participation in the conference and understanding that he as a creator is very much an entrepreneur and felt that we are his people in his tribe, so to speak, so much so that he has, of course, written the forward to the Faith Driven Entrepreneur book and just really great for us to be able to be, I think, in one way culturally relevant to a new generation. I think about my kids. I mean, I can talk about the 20 different presenters that we had on and the conference and and the one that they’ll get really fired up about as Lecrae. And that’s really important to me as a dad, because I’ve got three teenage boys who want to be able to have heroes that are thoughtful. About how to delight their customer, how to find their identity in Christ and then how to get out there and create and flourish, and so that was also a really cool moment.

William Norvell: You know what I said last time? But on that, too, talking about, you know, we talk about identity so much here, I thought Gelberg Solomon just did a wonderful job of talking about how the day she sold her company was the worst day of her life and how she woke up the next day and didn’t think she had anything to live for and how she had to fight to recover her identity, not as a CEO, but as a child of God. And we talk about that a lot. But her story of how she felt it and and when she felt it and how she had to recover it, I just thought was it was really fascinating.

Rusty Rueff: You know, if we were if we were given out courage awards, I think you’ve got to give it to Rob Thomas. Jeff Parker. Right. And that that segment is the one that I heard most from other people about. Right. Who said, hey, I tuned into this. I watch this. Wow. You know that. I mean, the idea that there could be that level of authenticity, that level of vulnerability, that level of sharing and walking through something as they did, you know, talk about courage, you know, just amazing, amazing.

Henry Kaestner: And it come on and tell the story again and again. And they, of course, were alive with us in the studio. And that was remarkably powerful. I think that

William Norvell: was it live in the studio

Henry Kaestner: was that everybody was live in Syria. That’s right.

William Norvell: Henry, Secrets, Secrets of the Calvert’s here. Slow down.

Henry Kaestner: Know some of the people clearly were calling in from other places, but they’re actually in physical proximity. With us is, of course, what I mean, I thought that was really good. Neither of them interestingly, we’ve had some incredible guests on the podcast. Everybody knows Phil Fisher with Trey Tim Keller, Chip Ingram, a lot of really bigger names. And yet those two guys, I think, are still in the top three. Most listened to episodes on our podcast, Carson and 60. And neither of them would nobody would know their name outside of that context. But the substance was so rich that people keep on downloading and forwarding it to people

William Norvell: because the title is 99 percent confession equals zero percent freedom. Was that right?

Rusty Rueff: About that last one percent? That last one percent, yeah.

Henry Kaestner: How about on the Faith Driven Investor side I go first. Yeah, I Phinney Kerviel is talk about the role of an investor I thought was really seminal for me. This is a guy guys in my PhD is one of the smartest guys on the planet and really, really smart people can oftentimes just lose you. And he could have lost me. I mean, because you remember this guy is an M.D., Ph.D. who ended up getting his MBA, I think, on the side while he’s getting his Ph.D.. I mean, is that smart? So he’s clearly capable of writing white papers and treatises and things like that. But he has a special gift of taking that and distill it into a simple concept, which was for me was as follows. He talks about Christopher Columbus and says, look, Christopher Columbus was an Italian. He had an idea for adventure. He went around to all his buddies in Italy to talk about this new venture. He’s going to go on and they all said no. So it’s OK. I’ll try my luck in Portugal. And they also said no. He went to Spain and worked out and said, you know what, they should be speaking Italian in Argentina and Chile today, but they don’t. And the cultural impact that that venture investment made and then fast for that and the relevancy for us now for hundred years on in Africa, there is going to be more entrants into the job market over the course of next 20 years than India and China combined. What language are they going to be speaking in Kinshasa? Are they going to be speaking secular or are they going to be speaking Christian? And what I mean by that is, are they going to be speaking Chinese? Are they can be speaking Arabic or are they going to be speaking? Where are they going to be speaking? Or is the marketplace going to be inhabited by entrepreneurs that are driven by their faith, who are able to speak the language of looking to create and do it for the glory of God? And what are their identities in Christ, where they’re able to love their neighbor and be able to have a redemptive frame as they think about creativity in the marketplace. And that was really impactful for me, just the deepness of number one. It was the importance of investing. All of our investments have impact and means something. Capital has influence. I think that there’s some deep theological truth in what he’s talking about. And then he just made it really applicable. I can get it. I think that people in Argentina and Chile should be speaking Italian, and I think that people in Kinshasa should be loving their neighbor and inventing products and services that bring about God’s kingdom.

William Norvell: You know, speaking of cultural impact, one of the ones I loved was John Irwin. You know, John Amen, the filmmaker, which is maybe like a little bit of esoteric asset. You know, if you’re thinking about investing his riff on, you know, in his opinion that, you know, there’s so many Christians that are upset about where Hollywood’s go and all these things. And he just had this. And he said, you know, Hollywood didn’t leave Christians, Christians left Hollywood, and he had this push to engage in places, just as Jesus did, and said, you know, that is our fault, not anyone else’s. We decided to revert back into our bubble and not fight the good fight anymore. And he said, you know, I’m I’m living proof. I signed a deal with the big movie studio after some Faith Driven Investor said helped him get to a point where that was an option. And beautiful story.

Rusty Rueff: You know, I was struck by something you said there, Henry, about, you know, we overlook a lot of times the impact that can happen here, right, by Faith Driven Investor and sort of thinking down the river, if you will. And you know what Pete Kelly shares or what he does with apartment life on the surface, you look at it go, oh, that’s you know, that’s amazing. That’s amazing. And the integration of the spiritual side of that and then how that turns out to be really great for apartment owners, I take that one step further. I say if he’s saving money for apartment owners, then they are able to pass back that savings in a way that creates more affordable housing. Right. Which is, you know, loving on our neighbors. Right. Figuring out how to be able to extend those things that we’ve been given from God to make it better for others. And I think what Pete’s doing there is really, really impressive.

Henry Kaestner: Now, we’ve got another conference coming up, and while the final guest list hasn’t been announced yet and I can tell you one thing, I can tell you that we will by far and away have our most famous guest that is committed. And we’ve had some famous Gammie, again, Phil Fisher. We’ve had Tim Keller. We’ve had some really, really outstanding presenters. This one, I think that when we announced this and we just don’t have clearance yet from the agent, but we nonetheless have a commitment. I think that this one will be one that everybody be really fired up about. It’ll be fun. And I think, again, super culturally relevant, much in the way that the crew has been.

William Norvell: I’m excited about it. We’re really we’re not faking this. We actually can’t say anything, but I can’t wait to celebrate it. It’s not just like, oh, they’re names big. It’s like, gosh, they’re it’s a fun group. And they’re going to bring some excitement, energy to the conference that I just think is going to be phenomenal.

Henry Kaestner: Yeah, I just I love Gene Simmons. I really don’t know. That’s not the fun group. It’s not I promise you, it is not fun group. But would that be something that they talked about? Faith driven entrepreneurs. Yeah, Rusty. As you look at the list of the speakers come up, any that stand out for you.

Rusty Rueff: Yeah, I’m excited, Henry. I’m a huge fan of Sue Warnke and what Sue has done at Salesforce. And you know for sure. Yes. And she and I had our own little moment of overlap at work and ministry thing at our church back in twenty nineteen. That was really exciting. She happened to be there while we were doing a thing called the Tightrope Talks, and I called her out. I didn’t know she was in the audience because I had read in the Trailblazer book by Marc Benioff where he talks about faith force and he talks about Sue Warnke and about how such an impact that that has had on the culture of Salesforce. I mean, stop for a second and think about that. You know, Marc Benioff talking about a woman and a group of who are sharing their Christian faith with each other inside of the workplace, inside of a company, inside of a public company. And I just happened to mention that. And I asked if anybody who worked at Salesforce, this hand goes up. And I said, really? You know, you work at Salesforce, what do you do? It she goes, I’m Sue Warnke. I’m like, you got to be kidding me. You’ve got to be kidding me. So she’s a rock star in my mind. And I think that’s going to be really exciting for us.

Henry Kaestner: I travel around, I’ve been asking people, where do you think is the Center for the Faith and Work Movement in the United States? And if I’m in Atlanta, they say national. If I’m in Nashville, they say Dallas. If I’m in Dallas, of course they say Dallas. Right. People think about, I think in Texas. But I say to them, I will submit to you that I think that the Center for the Faith and Work Movement in the United States is in the Bay Area. And yes, I’m a little biased because I live out here. But I say this out here in the Bay Area where there are new are resurgent faith driven employee resource groups at Google and Apple at Facebook there. Before COVA, they were doing prayer walks on campus at Dropbox. They’re doing praise and worship music. We’ve heard in the lunch room. That’s right. And then, of course, at Salesforce, where it’s called faith for us. I think more than a thousand members up there.

Rusty Rueff: Oh, I think it’s double that now. Wow.

Henry Kaestner: Amazing. And, you know, and it’s and yes, of course, you know, if you’re a force, there are other faiths that are represented. But of course, we as Christians believe that truth stands out in the marketplace of ideas. And so guys doing something amazing out here in the Bay Area, which we hope is an encouragement. If you’re a Faith Driven Entrepreneur, you’re listening to this right now. Thing I don’t know, Faith Driven Athlete Resource Group, that sounds like a little bit of a far fetched bunch of people getting together and praying together. It might be too much. And gosh, chaplaincy maybe. I don’t know. But I mean, if Facebook and Google and Apple, you know, what I thought of is like the epitome of this secular organization have come to understand that having Faith Driven Athlete resource groups are good for their bottom line and good for their culture. I think that that gives us great reference. So as our employees come out and say, you know, you’ve got a group of people to get together, pray for each other and that feel a little uncomfortable about it, I think a lot of them will be able to see the fact that it’s happened in some of the very best and forward thinking technology companies will help give some cover there. So I also I’m a huge fan of Sue William. As you look through the list, what’s what strikes out for.

William Norvell: Yes, a couple of things I’m excited about. So guest wise, super quick ones. Andy Stanley needs no introduction. He just if you listen to that podcast, his church had a big part in my coming to know the Lord in a deep way. And so I just always think he has just like hard won wisdom. And and then on the other side, Seth Dillon, the CEO Babylon Bee. And not just because he’s hilarious, but he is hilarious, but his theology of satire and why it’s important to the church. I was surprised by that. I was kind of blown away when we did that podcast where he had this really thoughtful framework for why he does his job. It’s not simply that he’s funny and he thinks he can be funny and he can make money on it. It’s I don’t know what he’s going to share there, but the Babylon Bee is getting more notoriety. And so I’m excited for that. And that’s an interesting one. I’m excited for that to be shared in community. So. I don’t think we’ve talked about yet, we’re rolling this out as a hybrid event this year, and so we want local host cities, right? We want people in their cities to host and kind of raise their hand and say, I want to have 10 people over to my house or I want to have two hundred people at my church, whatever that may look like. We’ve already got over one hundred cities signed up to date. And I just think we talk about local communities so much here, and it’s just as such an opportunity to come around, watch these things together. And, you know, we’ve got a great guest to come on and talk about that. So Sue Alice has been on the podcast before, is the director of community at Faith Driven Entrepreneur and investor Sue Alice. Tell us a little more about your vision for the watch party format.

Speaker 4: You know, this has been a really hard year. Entrepreneurship is already a lonely journey. But throughout covid, it’s been extraordinarily lonely in many ways. And as things are starting to open up more, we know that a lot of people aren’t ready to jump on a plane and cross the globe to come and join us in person. But we can certainly cross the city and join together with other entrepreneurs, investors that live in our area and come together. And so we’re going to be live streaming the conference all over the world. Wherever you are, we are coming to you. And we want you to gather together in community host to watch party. All you need is a screen and a space will even help you with food. We want to make this as simple as possible for everybody to try and come together and watch this experience sit together, be able to wrestle with hard topics together and remember that God did not create us to be alone.

Henry Kaestner: Did indeed sue Alice, as you look ahead and want to put you on the spot and something to a question that you probably didn’t expect coming your way. By the way, I’m just so excited about the leadership that you provide to the ministry in the way that you’re able to oversee small groups. And we’re just getting started with the small group curriculum there. Three hundred faith driven entrepreneurs going through the class together. Twenty three different facilitators, entrepreneurs from all over the world. And that happens through the magic of us. Who else does, in addition to looking at the conference, but to Alice, as you look ahead to the speakers that we have coming up, are there any of that jump out to you, anybody that you’re particularly fired up about listening to?

Sue Alice Sauthoff: Yeah, you know, I have seen on the list Laura Casey is on there and we hosted her recently at one of our other events. And I feel like just being able to hear from these entrepreneurs, all of these speakers have such authenticity and what they’re sharing. And I just got to meet Laura recently and see that in her. So I’m really excited to hear from her again. I just connect with her a lot as a mom as well. And so it’s really exciting to hear from her on that list.

Henry Kaestner: Well, thank you. Thank you for coming over and joining the team and providing so much leadership for leading the Faith Driven Entrepreneur group practice and the conference. For me, I’ve got a new favorite speaker and he’s kind of a cross between Francis Chan and BAM Phelps. If you remember BAM Phelps, you remember bum Phelps, who’s the Texan cowboy that always wore his ten gallon hat. It was

Rusty Rueff: a cousin. It was a coach, right?

Henry Kaestner: Yeah. Fantastic coach. There’s a guy named Jimmy Song and Jimmy

William Norvell: Jimmy Jimmy the other day. Oh really?

Henry Kaestner: Yeah. He is really, really good. He’s very thoughtful. He’s got great energy and charisma and he is really focused on what cryptocurrency means and grounding in theology and in scripture in a way that I didn’t think could happen. I didn’t think it could happen. And so he’ll unpack for us. What does that mean and how can a Christ follower think about the ramifications for cryptocurrency? Is it bad? Is it good? Is it neutral? And he has a firm opinion on it. And I tell you, you spend enough time with Jimmy song, you find yourself kind of coming along with his way of thinking because he’s just so thoughtful

William Norvell: in his book, thank God for Bitcoin and working through it so good. And he’s just so thoughtful about how God works through Bitcoin specifically. And he also has a famous story of buying maybe what could be called the world’s most expensive beef jerky. That’s Raichlen adopter. He buy bitcoins worth of beef jerky, which as of current day is a sixty thousand dollar thing of beef jerky, which I don’t think it was worth that to him. He said it was good beef jerky, but probably not that

Henry Kaestner: probably not dead

Rusty Rueff: yet. I’m I’m excited, as you guys are, about what we’re going to do in the fall. And I think one of the things we’ve got to remember, too, is that in our faith journey, there are these disciplines that we each are striving to bring forward in our lives and to internalize in our life. And, you know, this conference can be one of those it’s a part of the journey, because while we won’t be together face to face with our speakers, we’ll be through technology. We are creating community there and we are sharing and fellowship. But these watch parties that we’re talking about, the small groups that we have with FDE, you know, those are community. Those are people coming together and having the opportunity to fellowship and to strengthen each other. And as we know, iron sharpens iron. And we recently had an FDE podcast with our favorite entrepreneurial pastor, Chip Ingram, and he talks about how important it is that we have people in our lives that we can have strong relationships and friendships with and who we can be totally vulnerable and held totally accountable together. And, you know, what we don’t know is we walk into one of these conferences, we go to a watch party, we invite someone to our home to do this together. There in May be that person, right? That person. You know, God will deliver that person for us if we don’t already have them or if, you know, God will deliver more than one person to us. But we have to be willing to open the door. We have to be willing to share of ourselves and share of our time. And that’s part of what’s so exciting about what we’re doing here, is we are continuing to walk through that faith journey.

William Norvell: Amen grateful for all of you as part of my community and grateful for so many people that I’ve met through the conference and after the conference and became friends with because of some of the people that share their time with us so graciously did.

Henry Kaestner: We’re excited for you to come be a part. And again, as Alison said, if you have a screen and you have a passion and you want to share this community and encourage other Faith Driven Athlete. Noises, you yourself are encouraged. We really do hope that you become a watch party host, it’s easy. You can find it on the website. And thank you, Sue Alice. You know, you’ve been around the ministry not forever, but long enough to know that on our podcast, we ask every guest to share with us a bit about what they’re hearing from God and his word. And if you’ve also been listening to podcasts, you know that I’m not the one to ask that question. It’s William.

William Norvell: I thought you were just going to steal it from me.

Henry Kaestner: I thought for a second. And I was like I was

William Norvell: like, he’s going for it, tag. I’m going to have to have that truth and love talk after this episode. But, you know, no, we love figuring out where God’s story is. And and I know, you know, that’s where it’s coming. But just yeah. If you wouldn’t mind, share with our audience. We’re just glad to have you today in his word. And where is he taking you in his scripture and how is that impacting how you see the world today?

Sue Alice Sauthoff: Yeah, I have been spending a lot of time in Psalm thirty four and verse one says I will praise the Lord in every moment, in every situation. And I have to spend meditating on that a lot that whatever comes, the joys, the struggles, whatever, that I’m still looking to the Lord, I’m still praising him and that and I could go on with more, but I’m going to turn the tables around because our audience wants to hear from you three guys. And so I’m turning the tables. William, you always ask the question. So I think you should go first and then Henry Rusty up next.

William Norvell: Oh, goodness, I didn’t see that coming. I didn’t see that coming. Oh, gosh. Where would I go? Oh, gosh. Two to two verses come to mind that I’ve been meditating on. I’ll try both. One Old Testament, one New Testament I’m going to go to and I’ll do it quick. It’s not my strong suit. But first, Peter, five, six and seven, where God says that some version of the paraphrase is that, you know, we need to humble ourselves before God and it’s his job to exalt us. And that has just been meditating hard on my heart lately that my job is to is to serve him and to walk with him and it says that he chooses the time to exalt us if he wants to. And just what I’ve been frustrated when I found times that I thought maybe I should have gotten credit for something or something should have been viewed differently. I’ve tried not that I’m doing it well. Going to God’s. I got. If you want that to happen, you find the time. It’s out of my hands. And it’s not it’s not up to me, right? And that’s really hard and it’s really hard, but I think it’s truth in the second one is a piece of that. These are both sides of humility. Deuteronomy eight, where God says pretty clearly that he took the Israelites through the desert for 40 years so that they would learn humility and just to think at rest there, too, that God does not require anything of me or want me to think of me other than to recognize who he is and to love him for that and to humble myself at his feet and to walk with him every day. Amen.

Rusty Rueff: That’s beautiful. You know, as I reflect back over this year, one of the things that I’ve maybe I was actually projecting when I was talking about how important it is for the conference for us to get together, because one of the things that I miss the most is I’ve missed the intimacy of friendship, like not being able to hang physically with, you know, my most personal friends and have those sort of conversations and things that pop up because, you know, you’re just you’re out working in the garden together or you’re taking a run together, you know, and conversations that come up. And so it really has had me thinking about the importance of reminding myself that Jesus is to be my best friend. And the verse that’s been on my heart is Matthew, six eight for your father knows the things you have need of before you ask him. And, you know, that’s what best friends do, they know the things that you have needs before you ever talk to them about it. And they bring it up to you. And, you know, I I’m I’m such an emotional guy. I mean, I cry at American Idol auditions, so you just need to know that. I mean,

William Norvell: hey, wait, who’s who doesn’t.

Rusty Rueff: So but, you know, I’m just reminded that Jesus is my best friend and that he knows the things that I need before I need them and that he’s gone, you know, in front of me for those things and is has taken care of me. So that’s what’s been on my heart most recently.

William Norvell: Amen.

Henry Kaestner: Well, I really should have gone first because you can’t top either of them two things that have impacted me from scripture recently. One is just the lesson of the good kings of Judah and second Chronicles, where these are the good kings. They’re not the bad kings of good kings. And yet each of them made a really, really bad mistake and not seeking God before making a major decision. For one, it was a trade deal. For others, it was about whether they go off in a war or not. And I think, oh, so God put that second chronicles. So I’ll I’ll be able to make sure that I don’t do the same thing. And because I’ve got the benefit of this type of teaching that they didn’t have at the time. And yet I still find myself not going to God with all my important decisions. And maybe I get the majority. But the good kings are due to have the majority of them. And they just one time, one time didn’t see God and it went really poorly for them. And I just I need to see more of God. We talked about at the beginning of this episode about how David Morgan does that so well and so regularly, habitually, if you will. And I need to do a better job of that. That speaks to me. And the other thing that speaks to me and I shared this with a larger Faith Driven Entrepreneur group that gets together in the area. We’ve been kind of inklings and I shared with them yesterday that as I go through the Bible with my boys and devotions, I love it when you kind of get a summary of the Bible, when somebody says, OK, what really matters is this. There isn’t a moment like that. The other day, as my family and I were going through Galatians five, and it was because we were going to look at the fruits of the spirit together. And of course, if you look at the fruits of the spirit, if you just focus on the fruits of spirit, you won’t find them. If you just focus on love, joy, peace, forbearance, kindness, goodness, faithfulness, gentleness and self-control, you can’t find it. You find the fruit of the spirit comes from our relationship with Jesus and the fact that we have this relationship with Jesus. Well, what how do we know that we’re really in line with Jesus Christ in us? Is this fruit? So I was going to talk about that with them, but I didn’t. Instead, we just got hung up on verse six and is the second part of verse six. So the first part is for increased Jesus is neither circumcision nor UN circumcision have any value. The only thing they can’t. There’s a second part. The only thing that counts and like, oh my goodness, here we have in the second part of a verse, Galatians five, six, be the summation of the entire Bible. Three thousand pages of it. The only thing that counts is faith expressing itself through love. And what I was able to process with them and, you know, just partially, which is, oh, my goodness, if that’s the only thing that matters, how are we as a family, how are we as individuals thinking about how our faith expresses itself through love and how does it even happen? But I just love that just a simple thing to kind of just continue to meditate on. So, Sue. Thanks for turning the tables on the fair turnabout is fair play. That’s never happened. And we’ve probably recorded one hundred and seventy five different podcast episodes. And I’m glad that you did it. I’m glad because I was blessed by William and Rusty. Sharon, thank you.

William Norvell: Need to keep your head on a swivel here on the FDE podcast. Never, never know what’s coming at you.

Henry Kaestner: Head on a swivel and Kleenex next to the computer.

William Norvell: Hey, man, that’s a that could be our first brand Kleenex swag for the conference.

Ross Baird: Topophilia is the Greek word for patriotism, and if you think of Greece, you have the city state like Athens means something. Sparta means something very different. It’s the warrior city like love of place. Patriotism is love of your specific place for specific reasons. And so if you think of Colorado, Colorado Springs, Boulder, Denver, Fort Collins, all wonderful cities, all very different. But if you live in Boulder, you live there for a specific reason. And if you live in Colorado Springs, there specific reason. And they’re very different cultures and neither is better or worse. They’re just they’re very different. And what Governor Hickenlooper said is like we have so many places in Colorado that have such a good sense of themselves that people are just very into getting involved in their place because they love it and they come here for a reason. And if you are a place with a sense of yourself, you’re going to have a dynamic entrepreneurial culture.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. I’m here, as always, are mostly with one of my very best friends in the world, business partner, ministry partner, life partner, Luke Roush in the house from Durham, North Carolina. Today, I see

Luke Roush: it is going to be on. Going to be on.

Henry Kaestner: It’s great to have you. So we’ve got a special guest. Speaking of Durham, North Carolina, I got to know Ross’s brother Henry when he was a student at Duke and I was a Sunday school teacher for Duke students, which is ironic. Many of you will know some of my story that I’m a huge road Carolina Tar Heels fan. But God loves Duke students, too. And I get to know Henry and also a little bit Henry’s twin brother, but they have an older brother, Rothbard, that has blazed the trail and has been super intentional about his faith in the marketplace for a long time. And I know at least Henry’s follow in your footsteps is he is a manager at Cloud Factory, which is this awesome, awesome organization. We’ve had Marc Sears on the Faith Driven Entrepreneur podcast in the past, but I’ve been looking for this podcast, Luke, because of Ross’s intentionality of modeling out a different way of local community investment, bringing in real estate, bringing a community. He’s done it all over. But there are a couple of cities where he’s done it that have really made an impression on me. And one of them is New Orleans. And then the other one is Baltimore, because I grew up in Baltimore and that’s a big deal for me. So, Ross, welcome to the program. Luke and I are really happy to have you on.

Ross Baird: Thank you. Henry and Luke and Justin. The work you do, all of you do, and the ministry you are really practicing every day here is remarkable. And I’m a longtime listener. First-Time Caller, I would say great to be on the bike.

Henry Kaestner: That’s awesome. All right. That’s a great encouragement. I’ve told more and more people recently that when they say nice things about our podcast, because, you know, I have some amount of insecurity about it because I’ve been told that I have a face made for radio, but I’ve also been told that I have a voice made for print journalism. And so whenever anybody says something nice about podcasts, it just encourages me. So thank you for that. One of the things, as a frequent listener to the podcast, you’ll know, is that we always like to get started by asking somebody their background, who you are, where you come from, maybe a little bit about your faith journey. But what brought you right up to Village Capital?

Ross Baird: Yeah. So I guess starting at your question and working backwards to Village Capital is an organization I co-founded over a decade ago, really seeking to invest in entrepreneurs that are building great businesses, building successful businesses, but also having an intentional impact on the communities where they are and going. The first investment we made was in a couple of entrepreneurs in New Orleans. As you mentioned, Henry, post-Katrina, where there was an amazing all of the big companies had left New Orleans after Katrina and there were all these forecasts the city was dead. People will never come back. But there was this amazing community of entrepreneurs doing their best to rebuild the city from education to food to different types of industries. And what brought me to New Orleans as an anchor of this company I was starting going through the journey really was shaped by my faith and really was shaped by people who walked and guided me and walked along with me. A mentor of mine at university, I went to University of Virginia. So we have Duke and Carolina and basketball

Henry Kaestner: number in football for like 20 years.

Luke Roush: A rare opportunity, Henry, for you and I to tag team and just beat up on a guest together. Yes, it’s a shared a rare shared

Henry Kaestner: history very few times that we had that opportunity. And so let’s not let’s not miss it. Yeah.

Ross Baird: Keep it coming. You can make fun of me at the pace of play in Virginia. Basketball you have.

Henry Kaestner: Well, yes, so there’s that. But you do have the national championship. We’re going to leave out the fact that you had lost to my hometown, you MBC Retriever’s. But that’s clearly not important. But if you listen to the podcast before you know that I love the sport of lacrosse and there is a reigning national champion in lacrosse and unfortunately, it’s not Carolina.

Ross Baird: That’s right. But we’ll take it. So I was at the University Virginia, and one of my mentors is a woman. She was a religious studies professor named Nicole, heard very deeply committed Christian. She’d done her PhD work on Saint Katharine Drexel. And I was very interested in education policy and kind of education is the theme. And Saint Katharine Drexel had gone all across the country and set up these Catholic schools serving the poor and cities like Philadelphia and New Orleans. And after Katrina hit, this was 2005, right after the storm, Nicole had had a very strong relationship still with these nuns who ran essentially schools for poor black kids in New Orleans. And she contacted these nuns that she had built these lifelong relationships with and said, well, how can we help? And there were three schools. There were St. Augustine, Saint Xavier and St. Mary’s and St. Xavier Prep is right off Magazine Street. It was on high ground and it didn’t flooded St. Augustine and St. Mary’s had. And the nun who ran the school’s sister, Eileen, said, we are. Trying to do whatever we can to keep the doors open because not every kid is left and they need to go to school and they literally need to, Nicole organized students from UVA to go down. And we slept in the gym of Xavier Prep, which didn’t have power or hot water. And we did what we could. We cleaned out teachers homes. We worked on moving student records from trying and trying to get these schools back open. And I really was amazed and inspired by these nuns working to keep the school open and the teachers going back. Just the resiliency of everybody flashing forward a few years later. I have always been an entrepreneur, always been working on different ideas. And as I think about my journey, I think we’re really shaped by the people who come before us and the people who are examples to us. There is a guy who was a mentor of mine from church growing up. He saw around him might be listing name is Bob Patiala. He was a very successful real estate entrepreneur in Atlanta, and he got very into angel investing in startup investing, particularly in mission driven companies. And I started an education idea coming out of college at UVA. And I originally went and asked Bob for a grant to support my company, I think setting up as a nonprofit. But we had actually gotten a couple of contracts for sponsorship and we had some revenue coming in. And we need a little bit of money. And Bob, because you don’t need a grant, you need a loan. And I said that’s like you need a bridge loan. I would do that. I guess that sounds great, Bob. I’ll take it. What’s a Bridgland? And Bob said, let me take you waste when you have cash coming in, but you don’t have it today and someone makes a loan to you, you can pay them back. The Bob, explain to me the relationship. If I’m your grant maker, then you’ll just come back to me anytime you need money. But if I’m your investor, then we’re partners, then we’re in it together. And that was a real insight of and this is something you talk about on the Faith Driven Investor, Faith Driven Entrepreneur community all the time. The spiritual relationship of an investment relationship is two way. It’s a very different power. Dynamic partnership. I have money. You are someone who wants my money. You will do what I say because I’m the person with money. And so Bob really showed me why investing just was a valuable and resonant thing to begin with. And Nicole had introduced me this amazing community in New Orleans. And so make a long story short with Bob, I started what became village capital, which was one of the first impact investment funds, investing in entrepreneurs that had a core mission driving the company. And we were really looking for people who were overlooked and undervalued and off the beaten track. And so what I did, I called up Sister Eileen and went down to New Orleans and spent a few days down there with Sister Eileen, who still ran the school. And we met a number of New Orleans. And I think the insight of why start in New Orleans? And I think we’re going to talk about this podcast of investing locally. If you build a great business in New York City, you’re one of a million people who are making money in New York City. If you build a great business in New Orleans, there’s a greater civic and public and community good. And just seeing how people building, whether it’s a charter school or an agricultural company or something, how people in New Orleans were committed to the greater project of rebuilding New Orleans in addition to their own business success was I mean, it was a moment in time that was incredibly inspiring. So that’s a long answer to your question. That’s I guess that’s

Henry Kaestner: a great answer. I mean, you’ve got your origination story in there and a lot comes out. There’s the part about mentors. So I’ve heard about connecting with Bob a couple of times and I know how formative he’s been in a lot of people’s stories. I didn’t know that he had been formative in years. I think that’s super cool. I want to get back in to and just explore this a little bit more, because you’re right, we tend to be drawn to financial capitals. I live in Silicon Valley. People tend to think that companies that are started in Silicon Valley, at least in some sectors like tech enabled consumer goods and general technology, are better here. And yet there’s something different about investing in your backyard. And there’s even a name for that. And I tell you, this University of Delaware grad, I’m always grateful for a new word to be added to my vocabulary. I’ve got a long way to go, but top Ophelia. What is top aphelion mean and why does it animate so much of your work?

Ross Baird: So I studied Greek in college mainly for a number of different motivations. One is I wanted to read the New Testament and the original, which was. Wow.

Henry Kaestner: So my so my story on Greek is that I had to say the Greek alphabet three times before the match burned my finger. So we had different experiences learning the Greek language.

Ross Baird: I am Greek life and a number of ways, but so village capital we.

Henry Kaestner: But seriously, I’m sorry I’m running all over you on this, but that’s fascinating. As a college student, you wanted to take Greek so that you could read God’s word in its original language. I mean, that’s not bad.

Ross Baird: And the interesting stories in the ancient Pallot, I mean, I think we live with truths that are enduring. And so, you know, if you can read Plato and Socrates and Jesus in the original written tongue, that’s pretty enduring wisdom. And so the idea of these stories, insurance that have persisted for a long time and understanding what human rights are, is just that resonates with me a lot. So I took Latin in high school and loved it for a lot of the same reasons. And being able to study Greek, to be able to read Homer and Plato and the New Testament was really meaningful. I didn’t think we would get into that. But you asked to Ophelia. So long story short, I got to become obsessed with the word to Ophelia, which is now maybe my favorite word, because it’s a village capital. We built a portfolio of one hundred different enterprises, ninety five percent of which are outside of New York, Boston, San Francisco. We have a broad range of entrepreneurs. About 40 percent of our CEOs are women. About 30 percent are people of color. We have we have some amazing, amazing people in this portfolio. And I was in Colorado a few years ago and I was fortunate enough to have breakfast with John Hickenlooper, who was then the governor and now the US senator and Colorado. That year there had just been a study that came out that said Colorado had four of the ten most dynamic entrepreneurial cities in the country. And I said, Governor, what is it about Colorado? And he goes, I can tell you in one word, top Ophelia is, you know, it took a few years and I wasn’t like, oh, yes, I studied. I was like, no, tell tell me.

Henry Kaestner: And it was just a moment of real mischief. Did you know it? But you didn’t want to say it.

Ross Baird: I did know it. Friend of mine named Erik in high school one time told me, like Ross, you’re such a know it all. Like you try and finish everyone sentences and stories and it’s really annoying. Even if you knew the answer, just keep your mouth shut and let people tell their stories. And I mean, I don’t always like that is a good lesson. So, you know, I was into my high school friend and let him finish his story, which was great. And he said to Ophelia is the Greek word for patriotism. And if you think of Greece, you have the city state like Athens means something. Sparta means something very different. It’s the warrior city. And like love of place, patriotism is love of your specific place for specific reasons. And so if you think of Colorado, Colorado Springs, Boulder, Denver, Fort Collins, all wonderful cities, all very different. But if you live in Boulder, you live there for a specific reason. If you live in Colorado Springs, are there specific reason? And they’re very different cultures and neither is better or worse. They’re just they’re very different. And what Governor Hickenlooper said is like we have so many places in Colorado that have such a good sense of themselves that people are just very into getting involved in their place because they love it and they come here for a reason. And if you are a place with a sense of yourself, you’re going to have a dynamic entrepreneurial culture. And that one word tip, Ophelia summed up probably ten years of observations from New Orleans in two thousand nine. If you move to New Orleans in two thousand nine, you’re going there for a reason. If you’ve lived in New Orleans for fifty years, you have history and tradition and things that matter. And so I think to Ophelia, for all of us, the place we live, the city we live, and how our family gets involved, the church we go to. I mean, my wife and I got married at a church in Atlanta as a church plant called Chiros. That is still, you know, we don’t live in Atlanta. It was still one of the most vibrant communities. I mean, when you’re in a place that has to feel it, you know, you just do.

Luke Roush: Well, the other thing but that just raises for me is this idea that as people are more mobile, there’s more and more self selection into different places in different communities and different environments. And there’s both opportunity in that. There’s also risk in that. Right, because you can find yourself in an echo chamber because you self select into a community that’s naturally more comfortable. And so it’s interesting. I want to get just tactical for a moment. And just if you wouldn’t mind sharing on to meaningful ways that you’ve discovered better invest in communities. So common threads that tend to correlate with more impact, maybe even more effective value creation financially. What are some common threads there?

Ross Baird: One thing that I think about all the time when we think about investing locally, I think in in the entrepreneurial world, in the San Francisco Silicon Valley, where people are so obsessed with scale, scale, scale, scale, scale, scale, how do you invest in Greenville, South Carolina, or Colorado Springs, Colorado, and a quote on quote, scalable way. And if you look at Jesus’s understanding of power, when he sends out the disciples, he thinks about scale in a very different way. Jesus never leaves about a 30 mile radius in his entire life, because I think part of the lesson that I draw from that is active engagement and ministry is, by its nature, not scalable. And Jesus is fighting against the Roman Empire in a very profound philosophical way, where Jesus is asked to be the king that controls everything. And that’s the understanding of power through the eyes of the Roman Empire. And he says no. Instead, I am going to have a number of disciples and we’re going to be in a community together and we are going to minister to each other. But we are going to send you to Thessalonika or wherever you’re going, and you’re going to have your own 30 mile radius where you’re going to do your ministry. And that is what it looks like. And so I mentioned people like Sister Eileen in New Orleans or Bob Patillo in Atlanta, or he was on the podcast recently, my very dear friend and co-founder of Blue Print Local Brice Butler. Brice Butler is a great influence on me and a very close friend. Bryce has been a huge influence on my thinking of community investment with and he talked about this on the podcast. But his investment in one street corner and one neighborhood has had both really good financial outcomes and really strong ripple effects into projects we’re working on in places like Baltimore. It’s like, oh, we did this in Louisville. Here’s what we do in Baltimore. So the way the way to think about starting is if you are an investor allocating capital and you say, I care about Durham, I want to invest in Durham, figure out who is on the ground doing the work already, who has a very well thought out point of view and its values aligned with you. Or if you say I’m from Baltimore and I haven’t been back to Baltimore and think about who is on the ground locally, because I think the most effective people that we invest in and with have been doing the work for years, if not decades, and will be doing the work for years, if not decades.

Luke Roush: Yeah, yeah. Well, we’ve seen this too. And just, you know, communities here in the US and also communities internationally, people who are really committed to present steady direction, long period of time tend to have the biggest impact because they really understand sort of the local context. So as you think about kind of wading in in that manner, how do you think about identifying who the right partners are? Kind of on the ground? We’re huge fans of Bryce. His knowledge of Louisville is a great example of just kind of understanding the local context. How do you how do you find that you do that as you work in different parts of the country?

Ross Baird: I think the embrace of this on a prior podcast, I think the idea of one pocket investing or one pocket thinking is a critical precondition. And when I was raising those capital’s first fund early on, I pitched a very successful Atlanta entrepreneur who actually was very strong Christian, very moral guy, very big philanthropist on investing and mission driven companies to get a young man. I got two pockets with one. I make as much money as I can with my other. And his wife were extremely generous. He is with the other. We give it all the way. And so he goes, boy, which pocket are you asking me for here? And turns out I tried to explain what I meant and he didn’t get it. And it was just that was not my most success. He had a couple of those conversations. Yeah. Yeah. That was not my most successful new relationship conversation, but it did. The two pocket. One pocket has resonated with me. I mean, we for example, so we are doing a project in Richmond where we’re backing a local group who are from there. They’ve been there for thirty years. They’ve acquired an entire city block in a historically distressed black neighborhood. They’ve organized project four years. It’s going to open this summer. There will be mixed income workforce, affordable housing. Richmond’s fastest growing startup is relocating its headquarters, the neighborhood, which will be great for economic development. And then there’s a ground floor. There will be a food hall for local food entrepreneurs, nine men and women from the neighborhood who have always wanted to start a restaurant or a food truck. They’ll have space to do it. The financial engineering to do a food hall for local entrepreneurs, a headquarters for a great local company, and affordable housing is way more complicated. Even more complicated than if we just wanted to build a nice cookie cutter apartments that didn’t have any kind of affordability or community, but the person leading the project is from their lives. They’re so deeply committed making. And for him, all of these things flow together. To have a healthy community, you need to have a mix of rents. If the place is going to be worth living, it’s much better to have the local guy making barbecue than Dunkin Donuts or some kind of commodity. And I think when you get into business and impact, there is a false sense of trade off that if you are more intentional about your values and what you want to show up with your leaving something on the table, I think if you’re more intentional about your values, what you’re going to do is better. And I think this is why investing locally is so important in the abstract. You don’t see it, but when you put money into something locally, you have to live with the outcome every day for good or for bad. And a lot of the problems with our economy is people are short term thinkers and don’t see long term externalities and the long term externalities of a really bad project, if it’s in your neighborhood, like you’re going to feel that much more, you’re going to work harder to make it an awesome and redemptive project, because living with it every day will be a joy. Yes.

Luke Roush: Yeah. Well, I’m from Richmond, so I love the fact that you’re doing something there is in Churchill or what part of the

Ross Baird: Manchester south side of the river. So, yeah. And that’s be not a lot of investment has gone there, but it’s a very cool project

Henry Kaestner: and it’s like this emphasis a lot on local investments. And it’s amazing that you’ve got a project going on in Baltimore where I’m from, and Richmond where it looks from. It makes me think about for whatever reason over the last half hour as we’ve been talking, it makes me think about first to Jerusalem, then to some area and then to the ends of the earth. And so there’s some sense of locality like right behind, you know, this comes out of Jerusalem. So first here, then summer. And there’s a progression that includes this kind of a both in both local and then overseas. But there’s a sequence there. And I think that that’s really key. Also touch on something that Louis and I both have seen in our investment careers, which is the importance of local capital. Now, there’s a little bit different application here because you’re doing things in America. Look, of course, has much more experience overseas. He started the sovereigns in cofounding Sovereign’s Capital. He moved his family over to Indonesia. And one of the things that we found that was most successful was being able to invest with local partners. And without that, we would have been completely sunk. But with it, we’ve been able to have extraordinary returns to the fund, which we’re very grateful for. But if I was going to go back to something other than divine providence as to why that has been successful, it’s finding local partners, local skin in the game, if you will. So you are not living in Richmond, you’re not living in Baltimore, you’re not living in Louisville or New Orleans. US a little bit about that. For somebody listening to the podcast saying, how do I go about that? I think I get that intellectually. But how do you do it?

Ross Baird: Yeah, I mean, I think a huge part of investing is translation. And so the name blueprint is very intentional. We do not show up. I’ll give you an example. We’ve made an investment in Houston, which is workforce affordable housing, right by the Texas Medical Center, Texas Medical Center, a huge driver, biggest economic success story going on in Houston. The average employee think of a nurse or a frontline staffer has more than an hour commute. It’s not affordable for the young people who work there to live nearby there. So workforce housing right next door to Texas Medical Center, huge economic development priority for Houston. You go to Baltimore, there’s plenty of affordable housing. There’s a lot of Baltimore. The first investment we made was in the redevelopment of Penn Station, the Amtrak station, which is one hundred years old, historic landmark connected to DC, connected to New York, and connectivity to the economy and commercial activity is a much bigger priority in Baltimore. That’s kind of going pretty well in Houston. And so we didn’t show up to Baltimore or Houston and say, hey, everybody, we read a book about Baltimore. Here’s our idea for how to help Baltimore. We did a lot of sitting and listening and waiting for projects. And in both the cases in the Houston project and the Baltimore project, there are local people from there who have been working on those projects for a while, who led and where the investment capital behind it. The biggest challenge that the entrepreneur or the developer or the visionary in Louisville or Fort Collins, however, has often is translating what they’re doing to the capital markets. And I think a good investor is a translator of value. So if you are investing in mission driven businesses in Indonesia, the average person with money in the US would be like, why would you ever do that? How will I make money? Whereas if you’ve been on the ground in Indonesia and village capital, about half of our portfolio is in emerging markets. I’ve been to Indonesia in many places like it for many years. It’s obvious on the ground that there’s a ton of value, so. Translating value from where the capital markets are to where Main Street, literally or figuratively, is, is hugely broken, I think being a good investor means doing that. And so what we do and I think to give you a how does someone get started? I guess the question to ask is, what are your goals? Are your goals hyper local? If you live in Greenville, South Carolina, and you want to make an immediate difference on Greenville, figuring out who in Greenville is working on a compelling, mission driven project to bring a premium, because there’s an interesting project called The Chapel by a guy named Matt McFeely, who you should have on the podcast. He’s a wonderful guy. He’s building affordable housing event, space, commercial corridor in a distressed neighborhood in Greenville. Even if you don’t have a million dollars to invest in Matt’s project, maybe you could, as part of building an intentional community, locate your business or your nonprofit with the communities trying to build. Maybe you could send him referrals of people who could go there. There are ways that you can tangibly help with projects. That’s one way to I think the other than to say Henry is taking a step back outside of what you do in your day to day life, finding random people and figuring out how to help them look at what your money is already doing in the world and see if it reflects your values. So I would bet, for instance, the average resident of Greenville, South Carolina, spends more than 30 percent of their income on housing. It’s one of the most unaffordable cities in the country, per capita income. And also I know this from trying to invest in Greenville. There’s a lack of investment capital interested in Greenville, even though it’s a thriving city, mainly because the real estate funds of Wall Street view Greenville as a third tier kind of podunk southern town. And why would we ever invest there? Now, I would bet that the pension funds of the teachers who live in Greenville are invested in Wall Street firms that are investing in loft apartments in Brooklyn, in Miami. And so the people of Greenville, whether or not you’re rich, your money is in some ways making the problem worse because it’s being run through Wall Street without a values lens. So looking at if you’re wealthy, good for you. You have a lot of say over where your money goes, even if you’re not wealthy, asking questions around what is your money doing in the world and what are the problems you see in your community and how can you make different decisions with your money no matter the size of your pocketbook? Those are really important questions to ask.

Luke Roush: So I just want to double click on that, because I think it’s such a good point about the dislocation between Greenville pensioners and their capital going to New York and then somehow just kind of never finding a way back to kind of round trip back into the community where they operate and maybe just speak. Is that part of kind of one pocket versus two pocket kind of gospel of abundance versus scarcity like?

Ross Baird: Oh, yeah, I think I think about this all the time. I mean, I think about 30 to 40 years ago, this started happening. But Wall Street figuratively went to places like Greenville and Durham and Tulsa and said, we know how to run money. You keep doing your thing, send us your money and we’ll send you seven percent a year and don’t ask any questions. And then those firms started doing things like buying and merging the major employers of Tulsa and Greenville and laying people off. I mean, you could say if Ford or GM, six ships, seven thousand jobs overseas, that’s great for Ford and GM stockholders who might live in Dearborn, Michigan. But if you’re a Dearborn, Michigan, would you rather have seven thousand more jobs in your community or would you rather have 12 cents rise in your stock holdings, which has a lot less? So this detachment and I think this goes back to real spiritual questions around power and agency, this detachment of your own money and your own agency and who’s making decisions has been has been harmfully destructive, I think, for well, in

Luke Roush: somewhat amazingly, you know, in part borne out of a desire to protect consumers. A lot of the Consumer Financial Protection Act actually eliminates the ability for people to invest within their own community because it all has to go into publicly held stocks, which then pushes you in that direction. So it’s actually over the last 20 or 30 years, I think it’s become more difficult for the mass affluent or even to sort of the mass of humanity to be able to direct their capital into their own community.

Ross Baird: Yeah, I mean, it’s really it’s really interesting that Indiegogo, the crowdfunding site, the founder, tells this story all the time about how the Statue of Liberty was actually originally crowd funded by citizens of New York. I mean, this great American icon, there was a movement in New York to say, we want to say we’re welcoming. We want to you know, this is the first thing people see when they come to America. And the people of New York passed the hat and put in a couple of dollars and built the Statue of Liberty. And so if you are a pensioner or a schoolteacher or a twenty two year old recent college graduate. And you have some vision of what you want to invest in in Greenville or New York. It’s extremely difficult.

Henry Kaestner: I thought it was the French, I thought the French, out of their benevolence and open heart and love for all things American, just gave it to us.

Ross Baird: Well, there was some compensation for it.

Henry Kaestner: Oh, we pay them. Yeah. Oh, that story’s getting twisted. I’m not going to eat French fries anymore. OK, I want to ask you a question that we’re starting to ask all the guests that are coming on this show now, sometimes live on air and sometimes not. But it’s something that’s a big topic for both Luke and I and the team here, which is the biblical message of generosity. And in my story, I had my born again again moment when I came to understand how giving might really change my life by bringing me into the work that God was doing in the world. Talk to us a little bit about the way that you give and how you think about it, because I know you’ve thought this out and it’s consistent with how you invest. But how do you and your wife think about giving?

Ross Baird: First of all, the benefit of Google is I just Googled the Statue of Liberty story so our listeners have the right facts. The French gave us the statue. The crowdfunding was for the pedestal and oh, which was extremely expensive because it’s a big statue. So we didn’t sorry. The people of New York built a pedestal for the statue.

Henry Kaestner: It’s a very nice pedestal. It’s the best pedestal I’ve ever seen. So that is interesting. So I can still eat my French fries.

Ross Baird: You can sell your French fries and feel good about local investing when you see. Good job. So how do we get I mean, I think that the invention of the spreadsheet is one of the most seriously harmful things that has ever happened, because I think there are spiritual and non-financial benefits or harms to everything that we do. And I think that to say I give X and it does. Well, I think one thing that my wife and I have started doing in the last few years is turned our giving into a conversation and a practice within our marriage. We actually have a tradition of doing our annual giving in like a date night on New Year’s Eve. But we talk through what do we value, what do we care about? Last night of the year, a couple of years ago, our kid was up late. We didn’t get around to 11, 11. So start earlier in the night if you’re going to do this. But, you know, we thought over the last year about all the pain is happy in the world and how grateful we are for our family. And also all of us living across the US have spent a lot more time closer to home in our family. And so as part of our giving, we thought, what are things happening close to home for our family members that we value and they value? And if we make a donation to that, it will be a way to honor my brother, my sister, and also speak to our values of being in your community is something that’s fundamentally productive. So, for example, my sister lives in Austin, Texas. We gave to the Austin Food Bank because Austin’s a city with a lot of growth and a lot of inequality and a lot of food security. My brother Henry, who you mentioned, lives in Durham, and he was involved in starting a bail fund that’s been a hugely important driver of criminal justice reform in North Carolina, started a nonprofit bail fund and we gave to the nonprofit bail fund in honor of Hindry. And I think, you know, the conversations around why are we doing this and not that. One of our biggest donations was the city of Alexandria, Virginia, where we live. This nonprofit just built a really, really nice, very large homeless shelter about ten blocks from our house. And we walk and drive by it all the time. And we didn’t know anything about it, but we for not ever having visited, we gave them a large sum of money for us because being able to contribute to something down the street that was extremely meaningful meant meant a lot.

Luke Roush: That’s wonderful. I love the idea of what that demonstrates to your family also is that you’re plugged in to what matters to them. And it’s a great way to demonstrate that, you know, how you’re getting. We always like to close out each episode just by hearing a little bit of what God is teaching you right now. So what have you found in God’s word that has stuck with you recently?

Ross Baird: I think more than a year into the pandemic, I think I am just hearing from friends. Family for everyone is just so exhausted. And it is everyone’s in kind of a malaise and it’s a really challenging time. About a month ago, our very, very beloved family dog died and it was just like the worst thing to happen in a really difficult year. Her name was Greg. She was the best dog that will ever live. And I think I was way more broken up about it than I anticipated. I mean, I like crying like a baby. And she was seven and she had aggressive cancer. It was really, really, really sad. And I was talking with one of my best friends from grad school who his father died unexpectedly in the last month. And he was very close to his father and obviously very broken up about it. And I didn’t even I wasn’t even like, yeah, that’s nothing. My dog, just that I was like, I hear you’re suffering and I understand a lot and I pray for you every morning. And I was like, it is no comparison, but I’m really sad about my dog, too. And he said something that he’s a very religious guy. And he said, all of life is suffering. And it actually, you know, I actually feel like I can process what I’m going through with you because you’re suffering with something, too. And that matters a lot. And the verse that resonates with me. This is Second Corinthians one three. Praise be to God, the father of our Lord Jesus Christ, the father of compassion and the God of all comfort who comforts us in all our troubles so that we can comfort those in any trouble with the comfort we ourselves receive from God. There are probably very few people who have had an amazing and stress free year. I think that we are all suffering in big and little ways with a really massive disruption to our lives. But I think God is speaking to me a lot about kind of processing my own suffering and figuring out how to find comfort with. The Lord and also I am feeling called to try and identify suffering and others probably more proactively than I would just because of what’s going on. And I think the idea of this in some ways goes back to the local theme. I mean, we’re meant to worship in community. We’re meant to suffer in community. We’re meant to rejoice in community. One of the most deadly effects of the covid pandemic, I think, has been chronic loneliness. So it God is really speaking to me to to identify and call out what I am struggling with and what I need comfort with and also what other people in my life might be struggling with. It might be comfort with, too. And it’s been an amazing spiritual conversation.

Dave Beatty: It’s just common, you know, have you ever disagreed with someone about what’s allowable behavior and, you know, the chapter really encourages us to come at it with love, and I’m both convicted by that. And also doesn’t say, though it doesn’t deny Paul is really one who ate meat and thought it was fine. So he wasn’t saying both positions were right. He was talking about how we love one another. So I’ve just been thinking about how that applies and the work we’re trying to do together and Faith Driven Investor and.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. I’m here with Luke, my partner, Sovereign’s Capital

Dave Beatty: Luke, welcome.

Luke Roush: Wonderful to be here.

Henry Kaestner: It’s great to have you back. And we’ve got Dave Bayti in the house all the way from Boston, Massachusetts. Dave, thanks for being with us.

Dave Beatty: Thank you for having me, Henry.

Henry Kaestner: So today’s a big deal. We’re going to get into an asset class and investment strategy that is doubly new. Number one, we rarely talk about public equity investing and then as a subset that we’ve never talked about, direct index investing. And so we’re going to do both of those. And the reason why I think that this is super important is that while we all do get excited about private equity investments because of the ability to work with the company owner and being able to really talk about chaplaincy and faith driven employee resource groups and just the individual discipleship of the entrepreneur that we’re working with, most private equity investments are not accessible to 90 percent plus people that would want to get into faith driven investments. The minimums are too high. The lockups are too long. A whole list of reasons why a lot of times private equity investments aren’t successful. And yet where we’re coming to understand through the leadership of people like Dave and others is that we can get a lot of the spiritual integration we’re looking for in our portfolio from public equities as well. And that’s because public equities are run by Christ followers. Many of them are where there is somebody like a Pat Gelsinger from VMware is really serious about his faith and really serious about excellence in the work that he does. And there’s just great spiritual integration in play. And to help us to understand the world of public equity investments and then in particular, as I said before, direct index investments. We’ve got Dave Beedi with us on the program. So, Dave, thank you very much for joining us.

Dave Beatty: I love the topic. Love you, Henry, and look forward to the discussion.

Henry Kaestner: Thank you, brother. So before we get into what you do right now, Varity Daintree, some of your companies start at the beginning. Who are you? Where do you come from? You found yourself on the Faith Driven Investor podcast. So presumably your Christian faith is a part of your life. When did it start? Help us understand who Dave Barry is.

Dave Beatty: Well, you know, I’m an old guy, so I should think what’s really relevant here, maybe I’ll organize it by some places that were turning points for me and faith that connected with values or place kind of the nexus of faith and vocation kind of around that. I’m remembering when I was I was probably like 13. You know, I’m in middle school, which means it’s already difficult. Right. And my family was one of those that provided meals, but never any other time, really. And I only prayed when I needed something. And I remember this distinct realization like this probably isn’t how it’s supposed to work, either I need to be all in or I’m not in on this thing, you know, kind of a matter of my conscience. Right. And so actually, soon after that, I really went deeper with God. So that’s one turning point I remember. And then another one would be in college. And I was good at science and I chose to do the humanities and history and government and that kind of thing. This isn’t the way you should think about things. I’m just confessing how I I was thinking, gee, you know, if you’re a scientist, you just get stuck in a lab and you’re not really where decisions are made and where you have those choices about what matters and have influence for God. So I studied history and so forth. I thought process. Right. And then I think and grad school kind of a similar thought process. And I studied not for profit management, or at least that’s what I started at business school. And it was very conscious, like, how can I make a difference for God? I’m not saying that was a good choice. In fact, I found out it wasn’t later because later in my 20s, I was working for a not for profit and I was a controller and I just had the distinct impression, you know, I’m really not making a difference here and this doesn’t really suit me. So I quit my job and just did consulting. Well, I kind of took a semi sabbatical and thought God and read books. And I mean, I’m an action guy. So doing this is actually kind of hard, you know, like take time to think about it and talk to people and pray, you know. And I kind of realize I think I want to go into finance. It’s where I have talents is where I have interest. And there’s all sorts of moral ambiguity and ways to influence things for God. So that’s when I got engaged. I could tell kind of how that path went. But eventually it ended up I started a company, multifamily office,

Henry Kaestner: say that last part again, I’m just in front of myself, just kind of gravitated towards that statement. I’m drawn into finance because I’m good at it. I’m interested in it. And there’s all this moral ambiguity. Say more about that.

Dave Beatty: Well, it was the sense I was thinking of going into personal financial advice for. And I saw how, you know, the typical advisor was somebody at Goldman Sachs or Merrill Lynch, and I kind of comprehended the conflicts involved and how could it be done differently? And I just like there are unending questions of what it means to follow God in those circumstances. I’m interested in that.

Henry Kaestner: So if you’re at Goldman Sachs, maybe I’m being presumptuous or prescriptive here, but if you’re one of the traditional Waterhouses and you get paid on assets under management is probably morally ambiguous for you to think about suggesting that your client lean into their heart and give away 20 million dollars to their favorite African orphanage,

Dave Beatty: they can be giving the money away. And of course, you know, I’m an old guy. So this is back when commissions were dominant. So just the fact of you got paid on whatever you recommended and that was a conflict. And I actually started out wanting to study taxes because a lot of taxes permeated issues and they were often ignored. And that’s kind of the backdrop for how I happened to be a very doing direct indexing to get you. You know, it’s a matter of conscience, you know, and that’s part of what we’re dealing with in Faith Driven Investor.

Luke Roush: So direct indexing is something that’s probably a new concept for some of the listeners of the podcast. Could you give them just a brief overview of what it is, how it works and how you use it as sort of a screen or filter for some of your clients?

Dave Beatty: Sure. First of all, know that it’s just hot right now. The two biggest companies in the space are being sold and that’s just got announced in the last couple of months. And it’s that Parametric and Aperio. And I could talk more about that. Direct indexing has been around for quite a while, but not really big. So it’s natural you might not have heard of it. It really means you’re acquiring the public equities in a separately managed account. But think of it as mimicking what an index fund or an ETF would do. So I would describe that as writing three ways. The passive wave or indexing the second wave would be tax efficient and the third way would be around values and ESG and all that. It’s writing all those waves in one package and I explain how it works, but that’s the big picture of what it’s doing.

Luke Roush: How individualized is your approach at Varity or is it is it something where, you know you’ve got a menu and people choose off the menu, or do you actually consult with them to try to understand for believers who are clients or others who are values driven in different ways? Maybe just speak to a little bit of how you help folks arrive at the right product, so to speak?

Dave Beatty: Yeah, typically, Luke, what do most people do? That’s where people start because it’s so complicated. What do most people do? They just want to know it’s possible. That’s the first step. But if you really want to get into it, you can customize it however you want. So, yeah, we have menus. My goodness. We had a I say client. We really have advisors are our clients and their end clients. So this is an end client working with advisor and they’re coming from some faith perspective, but they’re also Armenian. And they were like, I don’t want to invest in Turkey. So they went deep down that path and now they have nothing niche. Yeah. So they could express that in their portfolio. And that was tremendously satisfying and motivating for them.

Henry Kaestner: So I happen this goes hand in hand with some of the other things that might be obvious to some about investing in terms of tax harvesting and some of the other controls that you give and maybe just go through that real quickly. So somebody listening to S.C., I think I get it so I can invest in an index. I understand that the index tends to be two thirds of the financial managers anyway, and index team can have really, really low expenses. OK, help me to understand, what are the three or four things that a parametric or a verity can provide you that make this really super compelling? It’s such a hot space right now.

Dave Beatty: Yeah, that’s a good way to ask it, Henry. I find most people that can’t get to the values until they understand the core part. So let’s say you didn’t even care about the value slice. Like I said, two waves. One, it’s just it’s an index product. So you want to get the results of the index and let’s say it’s five hundred. Can I invest in it at low cost? Well, of course you can. You can go buy the spider ETF, that really low cost or whatever vehicle. So why would you do something else? Well, you can if you had enough money, you can just go replicated in your own account. You buy all five hundred stocks in the right proportions and you get exactly the results of the index. You can do that. Well, why would you want to ETFs just fine? Well, if you had enough money and you can do that at low cost, all of a sudden you can add tax benefits because you can get first thing we do is we do sampling. You don’t have to actually buy all five hundred to get the same results. You can buy a couple hundred. And using statistics get very close to. The same results. So that’s the first step. The next step is, and you still have some oil stocks, you still have some tech stocks, you still have some consumer stocks, but if you classically cook goes up, Pepsi goes down, you can sell Pepsi by Coke and still be mimicking the index so you can actually harvest losses. Sometimes short term losses get a tax benefit now and at least defer taxes, and it’s surprising the benefit and I could go over that. So that’s the reason you have a separate account. You’re using sampling and you get the index results, but better even after your expenses. Your result after taxes is better than you can get with the ETF. So that’s step one. And once somebody becomes convinced of that, we say, well, you also can express your values. And it could be anything, could just be environmental concerns. It could be your issue is abortion, whatever, because you’re sampling. It helps you imagine it. Oh, you mean I don’t have to buy every drug stock I can avoid Johnson and Johnson, that manufacturers abortifacients and buy this other drug stock and still have exposures and still get the results of the index a little more? A little less maybe. But really close. Yes, you can do that.

Luke Roush: How do you think I’d love to just have you expound on that a little bit, that the S&P delivers eight percent this year and you’ve got someone who is not incorporating their values. How do you think about sort of the bips benefit of being able to do tax loss harvesting relative to maybe like an eight percent benchmark? And then maybe also talk about two different scenarios, someone who’s really narrowly defined, like I’m really sensitive to abortion and alcohol and tobacco and gambling and all these things. How do you think about the likely track near for them versus and then maybe somebody else who’s not so narrow but does have a couple of issues that they’re really sensitive to call it sort of abortion and perfectly OK.

Dave Beatty: So your first part of your question is around essentially the benefits of the tax. Is it really worth it? And then we’ll shift to the values on the I’m calling it tax. So that’s my lingo. You know, you don’t know what investment Alpha is will on taxes if you’re saving taxes. We’re just calling that the alpha. And if you can save present value about one percent a year on your taxes, that’s real money. And if the cost of the direct indexing is a fraction of a percent, so your tax benefit is usually multiples of your cost

Luke Roush: down to 70 or 80 bips on an eight percent base. Is that accurate?

Dave Beatty: Yeah. If you had a target and remember, we do have tracking here. So if the index got eight percent, well, most of the time you might be between seven and nine. On average, you still have eight. And then you have tax alpha, let’s call it on average, an extra one percent will after taxes, you’re really getting, you know, better. Now, what makes that even I could give you lots of detail about what makes the tax AlphaBeta worse. It actually diminishes over time. It’s usually a lot more than one percent up front. It’s less later. Another thing to understand is if you’re charitably minded, I could explain how, but you could double your tax benefit. So it could even be more than that, approximately one percent. So it’s for real. It’s predictable. No investment, alpha, hard to predict. Tax Alpha, very predictable. Even in up markets, you still get it. So that’s the first part. Is it OK to move over to your question on the value?

Luke Roush: Absolutely. Absolutely. Thank you.

Dave Beatty: OK, yeah. If you have those concerns, you listed a few and the ears were kind of the classic conservative Christian. You know, I want to screen out a few things tobacco, alcohol, etc., abortion, maybe those usually. And we could show you a menu. And actually, how many would drop out of the S&P 500 when you did those restrictions? That’s not going to increase your tracking error around the index. Every time you take something out, you screen it out. It means you’ve reduced your universe, which means we have fewer tools to work with in trying to still mimic the index. So, yes, it ups your tracking error a bit, Luke, but we can estimate that change. And I’ve never seen anyone balk at their when you can have a problem, if somebody just says, you know, you’re taking lots of stocks out of your universe, say you say, you know, it’s not just you low carbon, it’s I don’t want anything with carbon in it. You take up all the oil stocks, you start up and you’re tracking your substantially. You can see where I’m going. And we can always estimate that for people ahead of time so they know what they get into. Even in our menu, it kind of shows you how many stocks might I weed out if I have that exclusion.

Luke Roush: That’s helpful. So, Dave, I’m going to ask an obvious question then I want Henry to chime in. But we have good clarity on why many investors choose not to do either real estate, invest in your private equity venture investing just because of the long whole time, illiquid, high beta or high binary outcomes. But why doesn’t everybody do this? Maybe just speak to that. It seems everybody holds public stocks or most people hold public stocks. What’s the constraining factor?

Dave Beatty: Really? Good question. One, there is an issue about minimums. It’s so easy to just go buy the ETF. And it’s cheap and it’s easy and direct indexing, the minimums are coming down, but typically start thinking you need at least two hundred fifty five hundred thousand dollars in a separate account to do it. So that’s a deterrent. Most of the rest is honestly, I just think people becoming accustomed to it. It’s really hot. Now, look look at the sales that just happened of the two biggest players in the space. There’s a reason that the biggest players, Parametric and their parent, Eaton Vance, was just announced in the last couple of months to be purchased by Morgan Stanley. And just in the last couple of weeks, we heard the second biggest player in the direct indexing Space Aperio, an announcement of their acquisition by BlackRock. And all the biggest players you can think of in financial services are pushing hard into this. They see it answers the trends and ESG customization, personalization. It is a big movement. If people aren’t paying attention now, they will be.

Henry Kaestner: So if you’re listeners from Goldman Sachs, listen to that. Here’s the time they Badi Varity management. They’re the number three guy out there in the space. You snooze, you lose. TOTUS is a is a Christ follower. As you look at and have looked at the public equity market. What are the opportunities that you see for somebody driven by their faith to not only necessarily say no abortifacients or nothing that has makes money on pornography? And actually, before I go there, do you have the ability to when somebody comes to you and says, listen, I know that I know that I don’t want to be involved in pornography, but I have no idea which of the companies in the S&P 500 might benefit from that and where that might be de minimus. Do you have resources analyst, something where you can go back and say, OK, well, X, Y, Z company has gets two percent of their income from adult entertainment or somebody else gets a trace amount, but it’s less than one percent and maybe it’s de minimis. Do you walk people through how they can go ahead and say, OK, yes, that’s right. I want to get that screened out or do they need to come to you having already done their own research?

Dave Beatty: Most of the time they come to us and they can work off the menu and we can help them with that if you take it. I’m not sure what example to use, but first, let me describe what’s possible. Even on our menus, we have essentially strict and broader exclusions. So you can say in this area, I just want to have zero tolerance or very tight. I don’t want to get close to abortifacients in another area. Maybe it’s around alcohol. You’re saying I’m interested, but help me understand the area and we could help someone understand. There’s the manufacturers, the distributors. Here’s the impact of advertising in the space. Advertising is the one of the most predatory effects of the industry. You know, it’s often very specifically targeted in inner city neighborhoods next to a high school, et cetera. You know, we can go through some of those in education about the space and then we can show them how to apply it. It can have materiality limits that are based on just percentage of revenues. They could have materiality limits that are based on district dollar limits. I want no more than X dollars of revenue. Does that give you a window into it, Henry?

Henry Kaestner: No, I think that that’s good. So in many cases, you’re able to guide somebody through this process to go then let’s take the other places headed, which is as a Christ follower, understanding that Christian leaders have an impact to make, have the ability to make an impact in really any sector of life in the military, in the arts, in government, and then also in business. What does it look like for Christ to say, I want to invest in leaders that share my values and maybe it doesn’t have to do with a specific product or category, but maybe it’s the type of leader want you riff on that a little bit. And just when you see the future of the industry and some of the different things that you’re looking at, Varity, give us a sneak peek into how you’re thinking about advising clients, maybe some of the new product segments that you think might be able to be possible for the Faith Driven Investor.

Luke Roush: That’s going to also try and just interject. That’s also going to tie into this idea of how do we move beyond just things that we’re trying to stay away of, but how do we identify leaders that are positively impacting the world that they’re operating within?

Dave Beatty: OK, that’s great, Luke. But back to your question, Henry, I have to say, I think you’ve educated me on that more than I can educate you, because Verity is like these other companies. We start with publicly available databases to help people with their screens. And we don’t have good databases on Christian leaders and companies. And some of the perspective that you’ve drawn, we are working on some of those things, but we don’t have it off the shelf. So it’s not easy to be my first answer on that.

Henry Kaestner: But it’s in development, right?

Dave Beatty: It’s in development, yes. With your help and there’s other places, look, you’re getting the positive and negative screens like one of the positive screens we’re working on with our partner. Bright Light is a positive screen around racial reconciliation. Henry, I know you and your team, you’ve been very interested in the positive screens and how can we approach it, and that’s really appealing. In the past, traditionally, most of the best data is to help with negative screens. We do have positive screens. We have ESG data. And I could talk more about that. There’s a lot to talk about there. We have the UN Sustainable Development Goals, the UN Stig’s that we can use positively, but we’re working on how we can use more positive screens. But there are all of the peace, the positive and the negative together are what best help the investor apply their values.

Henry Kaestner: Tell us, what does that look like? How do you invest positively towards racial reconciliation? How do you say, gosh, Coca-Cola program towards racial reconciliation is outstanding, but Delta is not so much or vice versa. What does that look like?

Dave Beatty: I’m not going to give you a very complete or intelligent answer yet, although I think we’re close to being able to roll it out. But I would say it reflects some of what else we see in the marketplace. The ESG positive screens come from lots of companies. This is a very indirect way of answering and they’re problematic. What the data is, they’re usually very dated, 12 to 18 months plus old. They’re self reported. They’re defined very differently by different players in the marketplace. The cross correlations between some Mkhize ESG data and another is usually in the order of like point five, five to point six for your investment. People here well, understand that’s very low correlation and environmental scores. It’s higher. But when you get into the governance once, like, are there women on the board and so forth, there’s a few that correlate highly. But the labels are inconsistent. It’s very difficult area to apply. So I think the first thing I would meant is this industry still has a long way to go. There’s a lot of efforts you may be reading about to try to synchronize how we define ESG and the kind of force, a certain point of view on companies about how to approach those issues. And sometimes for Christian investor, those can be very welcome and sometimes they may not be. When you dig underneath, they may not align with your values. So I think that’s one of the things Varity is trying to work at, is to try to make these things less opaque for the Christian investor so they can understand them and make those choices. And we’re trying to make the right filters and screens available to those Christian investors. Very serves anyone I’m saying. But there’s a particular gap in the marketplace in what’s available to the Christian investor.

Henry Kaestner: Let me just ask this. Another kind of fundamental question back to direct investing is presumably something out of our listeners are having the wheels turn in their head, say I am just drawn to regional investing. I want to invest in the heartland. And so out of five hundred companies, maybe two hundred and twenty of them are headquartered not on the coast. And that’s just where I’m drawn to. I’m just coming up with an example. If I came to you with a list of two hundred and twenty, could you tell me if I gave you that list, all the stock samples get uploaded into this incredible cloud computer that you have. Could you then come back to me and say, well, Henry, based on that list, our data would tell you that you’re likely to be within four hundred basis points of the index or three hundred. Can you give that type of a sensitivity analysis? Because I’m intrigued by what you’re saying before, which is you don’t need to have all five hundred of the companies to approximate the returns of the S&P 500. You can do it on something less. So does your technology allow us to be able to say, if I give you my custom list, this is how close you can expect to track it with plus or minus in error?

Dave Beatty: Yes, and that’s not very technology. We have to layer technology onto the tools in the marketplace. But there are a number of tried and true third party tools that have been in use for decades to do exactly that. So if we did the screening and it was companies in the Midwest, etc., and we got our reduced universe, the tools do allow you to come back and predict. And you told us my benchmark is Russell one thousand or whatever you said we’d say how much the universe would be reduced and what your new tracking error would be. Yes, that’s tried and true technology that we can use.

Luke Roush: So as customers kind of come inbound to you, you talked a little bit about just asset thresholds that people need to be able to meet for today. It makes sense for them. What are most people coming in asking for? What are the first two or three questions? And maybe that’s illustrated for some of the investors who are listening to this interview to understand how they might be able to either send folks your way or have a conversation about direct investing in a values driven manner with some of their clients, maybe just kind of where do people start?

Dave Beatty: Typically, remember, we work with both. Investment advisers and with institutions, when the institutions come, it’s always they come in with their values, they want applied and it’s very targeted and specific. When an adviser comes, it depends. And we’ve had advisers come in and all it is, it’s only about tax. So that’s what drives it. That’s what they want to get. And we do that for them. And then some other advisers, it’s mostly Christian clients, and they’ve had some client who’s really important to them, that this issue is important to them when they’re finally realizing, you know, Verity can help us make this client happy. It could be they have a tax transition issue because the direct indexing is a great multitool. It’s not just put cash in the account. You can have a sum manager that’s not done well for them, an active manager pick it and they want to migrate it to passive. And we can take in those positions some very low basis and migrated into a direct indexing solution with a lot lower transition tax cost than they otherwise would have to pay and start layering in values or whatever they want same time. So it’s a real multitool to solve lots of problems with advisors.

Luke Roush: Makes sense to me. I think as advisors, there’s clearly margin pressure in that industry and I think there’s a lot of folks that are reevaluating how they align either with the White House or go independent and have a little bit more flexibility to deliver more customized solutions to their clients that they can’t maybe instead of a major White House. So I think that the value for our eyes is very clear to me. Is that where you see most of the growth in your sector? Is that why these other two front runners got bought?

Dave Beatty: Most of the growth has been in private client assets, but I’ve been surprised at the trajectory we have in the institutional space, and that’s with mostly faith based clients. And Verity is very responsive to that. So that’s been a thrill for us. If you look at the major players, Parametric, I was talking to one of the parametric staff just within the last well year and a half or so, and they said it was only about 10 percent of their overall assets that were being applied with values, which is a remarkably low percentage for all the talk you get in the marketplace. So that’s changing. But that gives you an idea where the industry is now.

Henry Kaestner: Yeah. So, Dave, I’m grateful for a time. I’m grateful for you helping us understand direct indexing the opportunities. I hope that our listeners are thinking about different ways that this can apply to their portfolio and what are the different ways that their values might be able to impact the type of portfolio that they put together that would look to an index, take advantage of some of the tax harvesting that you’re talking about, and participate more generally in the public equity space. Because, again, so much of our focus on this podcast has been on the private equity space, which continues to be really, really compelling. But we find, of course, that our faith can guide us in every asset class, how we do our real estate investing, how we do our private equity investing, of course, how we can now understand how to do it with our public equity investing. So thank you for that. We look forward to staying in touch with you, hearing about the developments that you’re seeing in the market and just how Faith Driven Investor might be able to apply this to their portfolios. We’d like to close out every one of our interviews with asking our guests what they’re hearing from God through his word. And it doesn’t need to be this morning, though. It could be, but sometime within the last week or so where you really feel that God is speaking to you and then maybe some area that we can be praying for you about.

Dave Beatty: Thank you. It’s interesting because in just the last couple of weeks, I was marinating a bit on Romans fourteen. Now that’s where it talks about the strong and the weak brother, you know, who thinks that they can eat meat and who thinks that they shouldn’t and so forth. And it really does apply to the conversations we have around faith based investing, you know, to not judge one another, even when we have different opinions. It’s just common. You know, have you ever disagreed with someone about what’s allowable behavior? And, you know, the chapter really encourages us to come at it with love. And I’m both convicted by that. And also doesn’t say, though it doesn’t deny Paul is really one who ate meat and thought it was fine. So he wasn’t saying both positions were right. He was talking about how we love one another. So I’ve just been thinking about how that applies and the work we’re trying to do together. And Faith Driven Investor

Henry Kaestner: says very interesting. So maybe the extrapolation of that, of course, is somebody might say, gosh, my faith tells me that I shouldn’t invest in anything that has a carbon footprint or it produces things in somebody else might not have that. And what your application is here is that let’s not be judgmental necessarily. Maybe there’s some other areas that are maybe less the greater, but maybe not. But you’re. Larger point is, what I’m hearing from you is that you’re hearing from God that we’re to be known for our love for one another, not to judge what is helpful for somebody to come to know God in one instance may be different for somebody in another instance. And so let’s make sure that we’re erring on the side of loving and understanding and not judging.

Dave Beatty: That’s right. And whatever our opinion, all of us, in the end, the Romans, 14, says, you know, every need shall bow and every tongue give praise to God, whatever our opinion, which is probably a good note to end on. Indeed. Indeed.

Henry Kaestner: Dave, I’m grateful for you. Thank you.

Dave Beatty: Thank you, guys. So good to be on this journey with you.

Andrew Manton: I was asking for advice on how they worded things in their prospectus and how they talk to clients who might be faith based and might not know how they go about finding their way in the overall context of the investing world, because it doesn’t have to be binary, doesn’t have to be your faith based. You just talked to faith based advisors and that’s how your marketing to that’s all you really want to talk to.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. We’ve got a special guest today in the virtual studio, Andrew Manton and Andrew is a guy that’s got a really neat story. We spent a good amount of time on the podcast talking about private equity. We have talked about public equities before. We tend to focus on some of the fun groups, the fun families that are more specific in the faith driven space or in the value space. But today we’ve got a guy who is a portfolio manager who is really serious about his faith, and he works in a largely secular firm and he’s going to share with us about his story and what does it look like for him. And our hope through this, of course, is that if you’re listening to this and you’re motivated by your faith and you’re working on Wall Street, you’re working in financial services, that some part of Andrew’s story might be an encouragement to you as you look to be salt and light and look to the guy to guide you and what you’re doing as you invest with excellence. So, Andrew, welcome to the program. Thanks for joining us.

Andrew Manton: Thanks. Great to be here.

Henry Kaestner: So we love to hear about the personal backgrounds and the faith journeys of all of our guests, whether it’s on the Faith Driven Entrepreneur podcast or Faith Driven Investor podcast, of course. So tell us who you are, where you come from, and weave your faith journey into that as well, please.

Andrew Manton: Sure. Yeah. So as you said, I work for a company called Shelton Capital Management and I’m a portfolio manager for a couple of mutual funds, both international ones and international. One is a purely M fund.

Henry Kaestner: And that’s what I mean. Emerging markets.

Andrew Manton: Emerging markets, correct? Yeah. So I’ve been on Wall Street persay for about 20 years, a little over when I came out of grad school, right around two dozen ETFs, I went to the Asia Asset Management, which is Deutsche Bank’s asset management group, and was hired by an international team there. And we almost immediately jumped to another firm called Victory Capital. And then that happened right before the bubble burst, really. So the firm that we were at victory went from about 50 billion to 16 over the course of about five years. So it was very difficult for us

Luke Roush: in the wrong direction,

Andrew Manton: wrong direction, very difficult to raise money. So from a business standpoint, wasn’t the best place to be. So I left there to go to another company, a small company. I wanted to kind of take away the big firm risk, as it were, and went to a small company. And within a year that from one from about 10 billion to one billion. So I had a firm but shrank quite a bit again. And that firm just had to fold because of the loss of revenue there. So eventually found my way to share some capital. And I was about five years ago and I’ve been here ever since. But the international strategy that I’ve been running now for 12 years has a 12 track record. However, when we got here, we sort of had to start over from a mutual fund standpoint. So we have a mutual fund. It’s almost a five year track record now. And I just took over my firm, just bought another company last year and we took over an IBM fund as well. But three years ago, I was feeling pretty lost. Business wasn’t great, wasn’t getting a whole lot of recognition. The performance is really good. The funds, which is something, was missing. My wife and I for a long time were talking about how we could kind of weave in the kingdom to what I do day to day. And so we would talk quite a bit about setting up another fund to either mirror what I was doing or set up some kind of a giving fund with proceeds from the fund I was managing. And nothing really felt right. And I didn’t know how I was going to look. We prayed a lot about it together, but three years ago I got a phone call from a group down in Alabama and they said, hey, you know, we’re a faith based firm. We put models together of faith based mutual funds for faith based advisors. You know, we’ve been we need a new international fund. We’ve been following you performances. Great. We ran through all the companies to our screen. They screen out fine. You know, by chance, do you run any money for faith based groups or organizations? And I jumped up thinking that this is like the first time I get a chance to actually talk about my faith and what and how I picked stocks and how I incorporate that and what I do and just kind of hit me that. Well, this could be a great thing. So through that phone call, we started talking a little bit more and they said, you know, this sounds great. You should really take a look at this faith based industry now, this faith based investing industry. There’s a group of companies that are pretty exciting that are doing some interesting things, and you really should be a part of it. So I did that. And through that connection, I met a lot of people at various of the firms like Eventide Ameriprise. And very quickly, I got connected to a lot of people that told me their story and what they were doing.

Luke Roush: So, Andrew, just out of curiosity, who was the first person that called you and said, hey, have you ever thought about Cole Pearson?

Andrew Manton: It was awesome,

Luke Roush: awesome

Andrew Manton: So shoutout to Cole. But yeah, he’s really the one that really. Into this and through him very quickly, I met a lot of people, so, you know, the great thing about this is that everybody is so eager to help, whereas in most of Wall Street, nobody wants to help. It’s kind of you’re on your own and it’s your own island. So you go through that, though, I start taking a look at the space. And it was a big difference from what I saw then versus 10 years ago when I looked at the group of funds that were out there and the industries that were in the space world 10 years ago. If I’m being honest, it wasn’t all that exciting. There was a bunch of firms out there, not a bunch of few firms that were doing a lot of negative screening, and they were just kind of applying a screen to an index to pass a strategy, basically.

Henry Kaestner: So before I’m going to interject just one thing, because this is really important. This is much of what the media, the podcast is going to be. I do want to come back to the beginning, though. Did you grow up in a Christian home? Are you an adult convert? I, for instance, worked on Wall Street in the 90s as a secular guy and got caught up in all that. And I’m curious about how you came to have an active faith. Walk us through that a little bit. Where’d you grow up?

Andrew Manton: So I’m from Chicago. I grew up in a suburb north of Chicago. I grew up in the Catholic Church, actually went to a Catholic school my whole life. And I did not have a good experience. A lot of things happened to me that were not positive. So, yeah, I think I, like many teenagers to college age kids, fell out of the church for sure. In fact, quite the opposite way. I mean, I was studying very secular things. I was very far away from the church at that point for a time. It wasn’t until I really got married again. And my wife, who was a Lutheran at the time, we started talking about what is our marriage going to look like? How are we going to raise our kids, things like that? Were this whole idea of faith came back into my life and was telling Justin that we moved down to Dallas not too long ago,

Henry Kaestner: by the way, is our executive producer and the executive director of Faith Driven Investor.

Andrew Manton: I was telling Justin that we moved to Dallas for a couple of years after we got married. And you know, where I grew up in Chicago was very much a denominational thing. You went to a certain church and I didn’t really know anything different. But down in Dallas, there’s a lot of just Christian churches, non-denominational churches. And that’s when I really kind of realized that there’s this whole movement going on that is beyond being this or that. And it’s just it’s all about the Bible. So we found a church down there and started going. And it happened to be like most churches are in Texas. It was a megachurch. And I didn’t think I like a megachurch, but I fell in love with it. The pastor really spoke to me in ways that I’d never heard before, just about our truth in the Bible and who God wants us to be. And growing up in a Catholic church, there was a different conversation. It was a different way of thinking about the Bible and just that denomination of Catholicism. So through that, I got baptized again and really started to pick up where I once was when I was much younger and my faith. I went to grad school after that, and then we moved to the northeast where I am now in Connecticut. And we often joke know there’s been some revivals that have gone for this area. But the Northeast is not necessarily a place where we think of great religious awakenings happening. But there’s really a lot of things happening here that are kind of remarkable. I have an incredible group of friends that I’ve met here. There’s a ministry that we’re very close with and tied to now here in Bridgeport, Connecticut. Most of my friends are found through that ministry. And we have a men’s group now that’s at the

Henry Kaestner: Bridgeport Rescue Mission.

Andrew Manton: No, but we do work with them as well. We give to them. But the ministry is called we want more. But through that and just the brothers that I have now, through that, it’s really been something I just never would have thought was possible growing up.

Luke Roush: So, Andrea, I’d love to just kind of jump back into the story of what you do and how you feel. God’s presence in picking stocks and thinking about both negative screenname, but also positive screening. How do you go about that work? I mean, it’s a topic of interest. It’s a topic of particular relevance right now. So I’d love to just get kind of your philosophy around what that looks like in your current context.

Andrew Manton: You know, the way that I do it is very simple, really, the question that I ask when I look at a company is what’s the business? Is it on coal? Is it positive to society or not? Is it going to be adding fruit to people’s lives or not? And that’s kind of the first question we start with, and that’s what we’ve always done.

Luke Roush: So just to follow up on that, when you say fruit. How does that manifest itself in the context that you’re looking for?

Henry Kaestner: And give us some examples of some companies like, oh, my goodness, that’s exactly the type of

Luke Roush: jobs, what is human flourishing look like in the world of Andrew Amen stock picker extraordinaire?

Andrew Manton: Yeah, there’s so many examples that every company has its own, really. I try to pick apart what the businesses and then see what the product or service is. So, you know, one example in Indonesia, Indonesia is a fascinating country, is the fourth most populous country.

Luke Roush: I used to live in Indonesia.

Andrew Manton: I think I read that look.

Luke Roush: Good example.

Andrew Manton: Yeah. So you probably know you probably heard of bankruptcy out there.

Luke Roush: Oh, yeah, sure. Bankruptcy.

Andrew Manton: Yeah. So that’s one company we invest in. And the thing about bankruptcy yet, and you probably know a lot about microlensing as well in that part of the world, but Indonesia is interesting in that it has a state run micro lending program and it’s run through the banks. And Bank Rakyat is one of the biggest banks that uses this program. But Indonesia’s got its own challenges and banking because it’s an archipelago, its people are hard to reach. You can’t just set up a branch in one place because people just can’t get there. Yeah, yeah. So they are people. They give people a phone, basically. And there’s bankers all over the country walking around meeting farmers and people that have never been bank before and giving them loans.

Luke Roush: I think Montrachet actually did a deal either with Gergich or grab we were early investors and grab it to where both companies. And that provides maybe a really interesting distribution network for what Bank Rakyat is doing.

Andrew Manton: Distribution is definitely the key there because they have to be creative. It’s very high tech, which doesn’t necessarily you wouldn’t think of that in that part of the world. But it is. And the bankers are very unique and they’re walking around. Thanks. They can issue a loan to anybody on the street or in a village. So it’s an incredibly well-run program. It’s the state oversees the program. And so the banks are capped and what they can lose, but they’re highly incentivized to get loans out and do it quickly to other banks or the non bank.

Luke Roush: As you get into like a company like this, do you fly over and meet with the management team and try to see what it looks like on the ground? Are you doing it from a distance? How do you think about really kind of getting to know the company?

Andrew Manton: Yeah, usually from a distance. I mean, bankruptcy, it’s a huge company. So they come here. We’ll see in at conferences. I would love to say that every company we invest in, we go and see what they’re doing in various parts of the world, that we just find the resources for that, for one thing. But again, that’s why we say to larger cap companies, because we know who they are, they have a reputation. We’ve seen management before. And so it’s usually just more formal settings or a lot of phone calls.

Henry Kaestner: So I’m fascinated that you talking through this so you have this faith awakening when you’re in Texas, you come back up to Connecticut and obviously played in some ministries and become more alive in your faith and you’re alive enough in your faith that you have gone on to a reasonably public podcast. Not like we’re as big as Joe Rogan, but pretty big podcast to talk about your faith in investing. What do your coworkers make of your faith, how important it is to you and how it informs how you think about picking stocks? What does that look like?

Andrew Manton: Yeah, well, it was a concern when I first started bringing this up, I mean, again, this is three years ago when I started getting excited about this and wanted to talk about it more and more. So really, I stood up and one of our company meetings one time and I said, look, I’m a Christian and this is how I look at stocks. And at the time, I was nervous because I didn’t know how that was going to be perceived, but I was really surprised and the warm welcome that I got from that. And Shelton has been incredibly open minded about this incredibly welcoming and huge advocates of mine through this whole process. So they’ve allowed me to add some language to our perspectives about this. It’s been interesting to see how individually people have come up to me and ask questions. The sales team usually gets me on the phone call and we have a prospective client that they’re talking to. So it usually happens in the first or second phone call. And so they get to hear me talk to them and we’ll talk about things that they might be used to pray in the call. We might talk about

Henry Kaestner: your praying with your customers on a call. Yeah, that’s how does that come up before I go too far away. So what does it look like to change the wording in the prospectus to identify the fact that faith is something that you value and helps to inform how you steward LPI capital?

Andrew Manton: Yeah, so that was something I wasn’t sure of either. Again, reaching out to others in the community for advice on this was critical. It was introduced to Robin John at Eventide. He took an hour and a half an hour for a phone call to talk about what they were doing. I was asking for advice on how they worded things in their prospectus and how they talk to clients who might be faith based and might not know how they go about finding their way in the overall context of the investing world. Because it doesn’t have to be binary, doesn’t have to be your faith based. You just talked to faith based advisors and that’s how your marketing to that’s all you really want to talk to a lot of my clients or they may or may not know my faith. I don’t know. And there’s some that doesn’t come up at all. But it was really important to me to get some advice on this. So, Robin, walk me through how he would do it and help me kind of find the language that I felt comfortable with in the shelter and felt comfortable with to it. Just a little bit of language talking about how we want to just buy companies that are doing good things, some specifics around that and things that we won’t invest in as well. But it’s not like in your face language saying, you know, we’re not doing this and that and we stay away from everything that we use in stocks. It’s more gentle language saying that, look, we’re trying to do the right thing here. We’re trying to invest in companies that are just having a positive impact in the world.

Henry Kaestner: You find people that as you talk through that say so refreshing. And I’m also motivated by my Christian faith. And I’ve just I’ve never come across somebody that brings that up in a presentation like this.

Andrew Manton: Yeah, occasionally. I mean, it it’s usually that I know who the person is that I’m talking to. And so they’re either aware of it or again, it’s not a faith based conversation. But the adviser is not somebody that we know through Kingdome Advisors or has been introduced to us. And I might be a little bit more guarded sometimes in how I talk about it. The message is the same. We’re still out there trying to buy companies that are doing good and we’re just through that. We stay away from things that aren’t. It’s that simple, really. And the way I view it is it’s taking ESG to a whole other level. Really know people don’t want to buy things that are polluting the world. The companies that are contributing to that, which is great, is a great thing. But we seldom in that conversation do they talk about what they are investing in. And if those companies are really good companies, I mean, a lot of people don’t care about investing in things like companies that contribute to the gambling industry. Alcohol, tobacco, cannabis. Yes, things like that. That’s a whole nother conversation I think we should be having. I think that the faith based, world based investors should be leading the way and talking about those things because there’s a whole nother avenue we’re not going down right now.

Luke Roush: So you’ve got a global perspective. And as you talk about some of what you were just sharing on in terms of things that we as Christ followers should be known for, not known for, do you find that message relevant outside the US because it feels like it’s kind of picking up steam inside the US, but what do you experience external? And then also I want you to come back and just talk a little bit more about what prayer looks like and across cultural context, because some people would say it’s challenging enough to do here in the US, but you’re actually doing it globally, which is pretty exciting. So maybe just comment on both those things.

Andrew Manton: Yeah, I mean, I think it’s definitely really depends on the part of the world, too. I mean, so if we’re talking about companies in Europe, for example, I mean, Europe, the EU is founded on this whole premise of equality. It’s all about everybody’s equal. And that’s a pretty nice value, a virtue that I as a Christian can get behind. So it’s relevant when we’re talking to those companies. It’s relevant. They care what I think from that point of view. And I do feel like I have a voice and they listen. So when we’re talking to them, I think it’s certainly relevant and they’re receptive to it. When I’m talking about European companies to American investors, it does take a little bit of explaining because there’s things that maybe a European company would do that is not new or different, but just a little bit more liberal. Let’s say, again, this whole idea of equality means that they’re signing on to the UN standards of code of conduct for different things and their human rights initiative. So they might be giving to organizations that we might not agree with, but it’s in the spirit of equality. And again, that spirit can get behind. So that’s Europe. But there’s other parts of the world, too, that are very different. I mean, China, as we all know, is got a lot of challenges. Other controversial governments like Russia or the GCC countries, you know, much different stories. And you have to think about each culture, each country as you’re going into it. We have policies around certain countries. We won’t invest in Russia at all.

Luke Roush: And that’s where I was going to go. Maybe just some overarching kind of rules of the road for Christ followers who are out there. Listen to this message thinking about, OK, I want to do this. I think maybe I’m called to do something. Internationally, where should I start or where should I avoid any council on that?

Andrew Manton: Yeah, I mean, for us again, it’d be much easier if we had this very broad rules. But we have to go country by country. So for Russia, in my experience, it’s just not easy. It’s corruption. It’s just such a part of that country and it’s reverberates into the corporate world way too much. And so we just that risk to us is just not worth it. So we stay away from Russia. China is another is something I talk a lot about. The Communist Party has definitely changed in the last 20 years quite a bit. And Americans really, up until a couple of years ago were unaware of now what has been happening in China, the moves that they were making, the policies they had in place. And it was frustrating, certainly from an investing standpoint, to watch companies certainly that we invest in and in Europe, for example. And even here in the US, IP is being stolen or attempted to be stolen every day. So if we’re talking to a technology company in Europe, we have to ask questions about what, if anything, has been stolen. How long will it be until China starts a company that’s going to mimic what you guys do? So we talk a lot about IP theft. Certainly the human rights issues that are going on in China is something that we are very concerned with. And all of that limits what we invest in. In China. We still invest in China, but just to a very limited degree, yes, we stay away from companies that have anything to do with the state. So any state involvement, either through ownership or subsidies, companies that are usually on the list of the top industries that China is trying to go after and trying to strengthen. And it’s usually a lot of the tech areas

Luke Roush: coming back to Russia just for a moment. Many of us have followed the news of the Michael Calfee trial and some pretty significant developments even there in the last day or so. Has that experience kind of resonated in your world or is it more segmented off into private equity? Hasn’t stretched into public equity?

Andrew Manton: Yeah. And again, because we stay away from Russia, it’s not

Luke Roush: that wasn’t what led you away from Russia. Something else.

Andrew Manton: Now, we’ve had this policy in place for a long time. It’s just it’s a frustrating part of the world to invest in. But that country is different in how it’s run versus China, for instance.

Henry Kaestner: Tell us about some of the areas in the world that you are pretty excited about in an area or markets that you think are overlooked, that you think deliver good value and growth opportunities for your clients?

Andrew Manton: Yeah, I think in other parts of Southeast Asia, Indonesia is definitely one. Vietnam is definitely one that we’re looking at a lot more these days. Like about Vietnam. Yeah, they’re going to pick up traction companies that are looking to diversify supply chains away from China. That’s going to take a long time, but they’ll be beneficiaries slowly. And it’s kind of starting from a low base. So I think that they’ll definitely be beneficiaries of that over time. India, of course, will also be that they already have the infrastructure in place, I think to a large degree to benefit from that. And they continue to advance infrastructure projects to help that along. So that’s definitely an area. I mean, it’s dodgy areas like in Europe, Western Europe, for example. And then they have great companies that people overlook or don’t think about or maybe are household names, but they’re run by very good management teams and they produce returns to shareholders that are really good. And I can point to studies proving that some of the best foreign companies are actually in Europe and not the US. And certainly there’s good ones in the US, of course, that we of. But there’s a lot more in other places outside the US.

Henry Kaestner: How do you see as an investor, how do you see covid changing in the global markets? Maybe in a different way. I mean, obviously there’s some themes about working from home and the advancement of some technologies in telecommunications, in Zoom’s, et cetera. But maybe it’s something that a lot of people might not see coming down the pike that you think is different because of this era we’re living in.

Andrew Manton: But, yeah, besides what you just said, I think everything is just going to speed up in terms of being digitized. We invest in one company, for example, in Brazil. It’s called Arco Platform, and it’s a education company. And what they do is they basically taken the whole education experience from kindergarten to, I think through high school now digitized it. They sell their platform basically to schools or school districts and schools are run a little different down there, but they’ll sell the whole package. And it’s a whole curriculum. Along with the technology to schools. The schools will use this to teach all their students and it’s digitized all the way from the student to the teacher to the parents. So it’s the parents can track what the students are doing. The teachers are seeing what the students are doing. They get instant feedback on different things. And this is something that’s pretty advanced. But it’s taking place in Brazil right now. And I think the interesting things that might be more important going for. Or as we have these periods where there’s lockdowns or just the need to be flexible, so that’s one example that I want

Luke Roush: without going into all the detail of sheltered capital strategy. So Brazil is here now. Indonesia is here now. Vietnam is interesting. Now, what’s next? Fast forward five years where the regions of the world that you’re most excited about in the future.

Andrew Manton: I think Africa is always interesting. It seems to disappoint in many ways. But, you know, as we look at frontier markets, persay, there’s certainly a lot going on in Africa. I think that that could be something that’s maybe a little longer than five years down the road, but 10 years

Henry Kaestner: job growth there, apparently more in Africa than India and China combined because the just the age of the population. Right, right.

Andrew Manton: Yeah. It’s got demographics on its side. So that’s pretty exciting. You know, education is something that’s going to have to fill in there. But, yeah, I think that that is definitely a huge region that could could benefit from.

Luke Roush: So two practical limitations that I think oftentimes keep investors from wanting to wade into overseas public markets. One is questions about currency risk, and the second is questions about liquidity. How do you think about those things in the context of your work and that if there’s a faith overlay to some of that love to get your perspective there?

Andrew Manton: Well, you know, we are fundamental investors and part of our work investing overseas is to really have a stance or a view on the currency of the country that we’re investing in. So that’s part of what we do. We don’t hedge currency, but we have to believe that the country, the currency is not at risk of some kind of devaluation, let’s say. So that’s what I would say on currency. And the other thing is the companies that we’re investing our Large-Cap. So the average market cap of anything in our portfolio is a weighted average, is about one hundred billion dollars. So they’re big. So in most markets in the world, those are not going to have a problem with liquidity when we have liquidity rules around what we can invest in. So there needs to be a certain amount of liquidity in a stock and a company for us to invest in it.

Luke Roush: How about Insider Holdings? Some of these companies are pretty tightly held, at least in Indonesia and the Jakarta Exchange. Do you have any things you look at their practical counsel?

Andrew Manton: Yeah, again, it’s country by country. Every country in Asia, it seems like from Korea to Japan, they all have a certain culture there in the way that there is insider holding and or cross holding. So it’s something that we have to consider for sure. You know, there’s no hard and fast rules about that, but we have to understand what the connection is. You know, I love to say that we always want we really do always want an independent board, that’s for sure, made up of outsiders and that are not connected to the CEO in any way. So that’s one thing that we do really scrutinize. But the whole thing is country by country. It’s more about what’s normal in that country.

Henry Kaestner: And then and it’s been great having you with us. It’s really neat to hear encouraging to hear a faithful story of the way that you look at investing, the way that you look at the world, the way that you’re culturally appropriate when some witness with others in your firm and with customers and really appreciate you spending time and just being faithful out there. One of the things we like to do whenever we close out any of our podcasts is get an understanding from our guest about what they’re hearing and God’s word. And it doesn’t necessarily need to be today, though. It definitely could be. But maybe something over the last week or last month that you really feel that God is speaking to you about through his word.

Andrew Manton: I’m sure, you know, for me lately, I mean, anxiety has always been a part of my life to some degree, and that’s something I struggle with. And I’ll often look when I have a problem that comes up like anxiety or something else, I’ll look to the Bible, look to certain verses for inspirational things to see if something pops out. Lately I’ve been doing that. It’s just anxiety. And what’s really been popping out of me, really, is that my heart is really not in the right place. When I think about this, why do I really need I’ve been asking why do I really need to look for these things that I look to quite often and try to feel better? In other words, where is my heart really? Is it really that I just need comfort right now or am I really not believing that I have strength? And so the thing is, it’s going

Henry Kaestner: to be very hard in your position. You’re going to bed every night with open positions around the world. Yeah. You’ve raised money from from investors. They get a sense that you’re going to make the good bets. And undoubtedly, at least over the short term, I bet you have a good number of stocks that don’t look really good and promising in the short run. And that’s that’s got to be really hard.

Andrew Manton: Yeah, it has been lately. I’ve been underperforming the last month or so, and it’s because of where we are in the market. I tend to underperform when the market is getting very frothy. I tend to be very valuation aware and so we cut and or sell positions before they can get too expensive. So we tend to miss out on the last little bit to the market. So but through this, it’s caused a little bit of anxiety, but, you know, I’ve got this rock that I got at the Bible Museum a long time ago in Washington, D.C., and it’s Philippians for 13. And I looked at it the other day and it just hit me that why am I not looking to my strength, the strength that I get through him? Why do I dwell on that? Why do I dwell on the anxiety? And so I’ve been having these thoughts around that. And I guess where my heart is when it comes to issues that quickly pop up like anxiety instead of that ravaging my day or my moods or my just the way I feel and ask why am I not looking to my strength? Why am I not going to the strength which we all have within through? So that’s kind of what I’ve been thinking about a lot recently.

Henry Kaestner: That’s very good. Thank you very much.

Andrew Manton: Thank you, guys.

Collin Timms: That morning, I put on my clothes and I, I reached out into the cupboard and I thought of a wad of notes. It was a good bundle. It was ten thousand rupees. And I put it into my pocket and I left home and I said a small prayer and I said, God, let me start every day like this with a lot of money in my pocket and good intentions in my heart.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. It’s awesome to have you all back, William, my co-host. How are you?

William Norvell: It’s good to be here. It’s a great day to talk about investing, you know?

Henry Kaestner: Well, actually, every day is a great day to talk about investing. Today, though, is not only that, it’s a great day to talk about investing and take a little bit of a side trip to India, which is one of my favorite countries. If you haven’t been, you need to go. This is going to sound too pejorative. It’s much better than this. But I call it an assault on the senses. But it’s just an overwhelming to the senses. It’s just the sights in the smells and it’s the colors. I mean, just the colors in India are just amazing. So today we’re in Bengaluru, which a lot of people also know is Bangalore, of course. And we’re talking to Colin Temes from Gardian Bank. And this is one of those times for you as a listener to go and spend some time in the show notes because there are some links to some videos that will do a better job than William and I will about talking about the impact of Colin and Gardian Bank and what it’s made on our lives. You’ll be able to be brought into it through this great partnership we have with Faith EMCO and Faith in CO is itself an initiative out of Seattle Pacific. And this is actually really good time for us to plug the small group, the FDE group that we have. The FDE group is a collaboration that we’ve done with the Faith and initiative in Seattle Pacific and then also with JD Grear. We have an eight week series where we bring together cohorts of entrepreneurs all around the world. We have three hundred of them going through it right now, I think in the next one. Our plan is I think in the fall we have a thousand faith driven entrepreneurs going through these groups. And what you do is you have this three minute story at the beginning and then you have teaching from JD Greer for about 15 minutes. And then there’s a group facilitation. It’s really a cool thing because you get to participate in it with other entrepreneurs at your stage all around the world. And so it’s a lot of fun. So that’s Seattle Pacific. That’s a plug for them. And then also for the FDE group, which you’ll find both of those on our website. But before any more time goes by. Colin Timms, thank you for joining us. Welcome to the program.

Collin Timms: My pleasure to be here and talk to you, Henry.

Henry Kaestner: Well, thank you. And as we get started, we do this, of course, with every guest we have. We’d love for you to give us a flyover of who you are. Who are you, where do you come from? What are the steps in your professional life that have gotten you here? But but we have faith into that, too. When did faith become a part of your work?

Collin Timms: Well, I’m basically an Indian. I have this strange name calling Daems because and what they call an Anglo-Indian, you know, some God knows how many generations ago there was some ancestor of mine who came out of the United Kingdom. And we are the legacy of the one hundred years of British rule in India, a very, very small community of people. So I grew up in a small town about 60 kilometers away from Bombay and basically lived most of my early life in a lower middle class family with dreams of doing well, doing business and becoming a rich man one day. And many of my ambitions met with success and many of my dreams came true. And that’s when I realized that there has to be more to life than just making money, because making money ended up becoming much too easy. And there was a internalization of thought and introspection for a few years. And then I felt that in the rediscovering of the practical part of the Christian faith, of service, of helping people is where the greatest satisfaction, the deep satisfaction and wellbeing for me. And that’s the part I was set on roughly about maybe about twenty five years ago. And I’ve been on that path ever since.

Henry Kaestner: So we was going to get more into the banking part later. But I do want to ask one thing, because some number of people are going to be thinking India banking. Is this microfinance? Can you give us just a quick description of what Gardian Bank does? And then I want to kind of get back into how you get into that a little bit more, because I know there’s some great stories on that. But Gardian Bank, would you consider yourselves in microfinance or are you somewhere in the middle? Is it a more traditional banking? Just tell us what Cardium Bank is real quick, please.

Collin Timms: So it’s important to understand the financial services landscape of India. There are various kinds of banks in India. They’re government owned banks, which we call the PSU banks, public sector unit banks. They are the large bank like State Bank of India and so on. Then there are commercial banks with a privately owned private commercial banks like they see the product in the US and so on. And then they would be foreign banks will set up shop in India for many, many years, like Citibank and Standard Chartered, ANZ within days and so on. And then there are regional banks that are set up in the cooperative structure. Urban cooperative banks and regional cooperative banks, Gardian Bank is something that I founded about 22 years ago, and at that time, the way I set up a bank with the least amount of entry point capital was a co-operative bank. And so I went in for that kind of a structure. So we are an urban co-operative bank, which means that we can do all banking activities, unlike nonbanking finance companies. Microfinance is largely done in India by one banking finance companies, which are restricted to only giving out loans, raising capital through borrowings and not through public deposits. But there is a co-operative bank and take public deposits and give out that money in various ways, including microfinance. So we do a wide spectrum of financial services, but we are also restricted in many ways because of our cooperative structure. And that is one of the negative points of being a co-operative bank the way we are. But right now, we’re in the process of transitioning from a co-operative bank into commercial small finance bank. So the new banking entity that has been created in India to look at the bottom of the pyramid financing and what we are called a priority sector financing in India, and those are all small finance banks, but they are in the company structure legally. They are designed to be companies, unlike what we are right now, cooperatives, and they can operate nationally and without the restrictions that we are faced with right now.

Henry Kaestner: So I’ve long been taken with microfinance. I used to serve on the board of a great ministry called Hope International that engages in that. But one of the things that I was impressed with when I went and spent some time with India was that it didn’t seem that there are many institutions that could help small companies that were hiring people. Microfinance did some great things in terms of financial poverty alleviation and spiritual poverty alleviation, and I’ve continued to be drawn to that. But again, it didn’t seem that there’s much set up. If I had a bike shop and I wanted to expand to the next town and I wanted to hire five or 10 workers. Is that something that you all can do? A guardian?

Collin Timms: Yes. To microfinance is the main objective is to draw people out of poverty. I do have a foundation for the Bridge Foundation, which has been involved in microfinance for over 30 years now. So we understand microfinance very, very well, microfinance, the Bridge Foundation and most microfinance organizations around the world. Their main objective is to impact poverty. Microfinance is a means used to impact poverty, and the microfinance is directed to micro enterprises that somebody started could be in a village or a small village, petty shop or a basket of things that she buys from the market and says door to door. The idea is to empower people to lift themselves out of poverty with a little bit of financial support from the institution and a lot of entrepreneurial zeal and hard work from the individuals themselves. Now, it is quite different from banking. What we do is, is a wide spectrum of banking, which may include microfinance. We do have a microfinance program, but we also do other forms of other financial services for the individual. So it would handhold the individual right from getting a loan of maybe one hundred dollars right up to getting a loan of a million dollars. The entire spectrum can be offered by an institution like Gardian Bank.

Henry Kaestner: So, Colin, tell us about the story, the origin story of guarding back how to get started. What drew you to it?

Collin Timms: Well, like I was saying, I reached a point in my life where I began to introspect and look inwards and try to find that level of satisfaction and peace that I just could not find in acquiring companies and building businesses and chasing dreams and opportunities. And I was skilled at business, and that’s what I understood. I knew and I didn’t know how to serve. What should I do? I knew I needed to do something with this. I knew I felt very deeply that God blessed me with a lot of good fortune, a lot of blessings of health and happy family and everything. And I needed to give back and I wasn’t sure how. And then I got a call from my local pastor and he said that I know you’re a businessman and I have this guy who was talking about doing a small business and maybe you can talk to him and maybe you can help him out. He wants to borrow some money from me. I don’t have any money to give him, but maybe you find it worthwhile to help him out, to lend him some money. So I told him, I’ll come to your office if you call him to the office at a certain time, and I’ll come then and have a word with him. And that morning I put on my clothes and I. I reached out into the. But then I thought of a lot of notes. It was a good panel, it was ten thousand rupees and I put it into my pocket and I left home and I said a small prayer and I said, God, let me start every day like this with a lot of money in my pocket and good intentions in my heart. And my prayer has been answered. I start every day like that. It’s never changed. And that’s where it started from and from. That led to trying to seek opportunities to use this skill that God had bestowed on me, of understanding businesses very quickly, looking for opportunities and developing them. And somewhere along the way, the opportunity arose to start a bank. I’m no banker. I’m an engineer by profession. I’m not even a financial expert of any kind. But I read about banking. I learned whatever there is to learn about banking. And I managed to get two thousand six hundred people to put small amounts of money together and created own bank. Sometimes people tell me that it is a miracle that it’s happened and I completely agree with them. I look back and I wonder how the hell did I do it myself, you know? So that’s how it happened. Along the way, it has been bordering on obsession with me, completely focused on it. Even now I go to the bank every day, do I don’t have to do so, but it’s going and be still functioning. The bank has to operate and I still feel I have to be that not much to do with Seppo. Encourage the staff and make them feel that, you know, if you are going to face this, I’ll be the first one to face it. But that’s how it is. That’s been the journey and the motivation for me. I’m not a great churchgoer. I don’t go to church that much. I don’t give sermons and I don’t sing. I can’t sing to save my life. I don’t I don’t have any other way of glorifying was serving God. All I know is to go and do my work and Zarian back. And I believe that’s the way I got Amen.

William Norvell: It sounds like you’re doing a good job at it, which is fantastic. And one of the things I would love to dig into is the early days of Christianity and moneylending, because, you know, I’ve got a little history that’s actually worked for a Sharia compliant private equity firm for a few years. And, you know, we had all kinds of intricate rules where we weren’t allowed to use gold and metal in some contracts because they’re used as of money. And as you know, Sharia compliant debt is a very intricate structure. I would imagine you’ve probably seen more of it than I have, but you know how to get around it, because they had a pretty good sense that, you know, the Bible actually had some negative things to say about debt and lending. And I think a lot of people probably listening here maybe have thought those things before of, wow, is the Bible telling us not to engage in that? Should I get a home loan? Should I not? I mean, those are specific questions, but I’d love to have you take us to. What do you think the Bible says? What do you think early Christianity had to do with lending and money and sort of the banking practices as we see them today?

Collin Timms: So that’s a disclaimer. I’m no theologian and I’m no expert on Christianity and the theology.

William Norvell: Well, you’re in good company now. None of us are great theologians either.

Collin Timms: So I read a paper sometime back that talked about the concept of banking, which is the concept of money lending. And what I gathered from that is that the early Christians were basically people who lived in fear. And they were in most of the time that the years and they lived in very close knit communities. And before that, the concept of money lending has always been there. As long as there’s been a rich man and a poor man, there’s been a concept of money lending. But what the early Christians introduced was the whole concept of community money. And that’s what banking is largely, you know, no banker sits around with. It’s not his money. He’s lending out. He’s lending the money of the community. So the community contributes money through savings, through deposits, and that money is then lent out to people. This is a concept that I would like to believe was invented by the questions that people contributed their resources together and then lent it out to those in need and those in need who took those resources that did not get it as a gift or a donation. They were obliged to pay it back and pay it back with interest. And that’s how the corpus was protected and the purpose continued to grow. And I believe that that is the earliest form of banking that I can think of.

William Norvell: Well, that’s fascinating. I had never heard that before, and as you run, Gardian, how do you feel? You know, obviously, you know, I assume truth and integrity and things like that are there. But is there any other ways in which your faith sort of influence, how you try to think about lending practices, how you try to think about interest rates? I don’t know what else there could be, but just are there any other ways that you feel your faith influences how you run the bank and the actual practices that go on there?

Collin Timms: I think the most I get asked this a lot, what is an institution, how do you define an institution? And largely institutions are defined by their values and what defines us. Then we call ourselves Christians use a set of values that we choose to live our lives by. I don’t believe it is the big Krosby that Amen X or the the caller. There’d be a way around that makes or the kind of preaching and the words that we speak. But it’s the deeds, it’s what we do and the values by which we do our daily work in whatever it is that we do is what defines us as Christians. If we want to be called followers of Christ, if we want to be called Christ, like in whatever it is that we do, we need to do it that way. And I think in banking, the sweet spot for applying those values, I have found in to sum it up in one word, empathy. You know, banking can become very, very impersonal, but banking can become very low touch, high tech and distant and cold because you’ll find many bankers tell you that you can get too close to the borrower you can’t get because at some point you’ve got to go and recover the money from him. You have to say no to him. Sometimes you have to deny him some services or some facilities. So it’s very difficult to do that when you’re close to somebody. And what is and what is lost out of that is the aspect of empathy. So this is something that I think we consciously want to correct in Gardendale. It’s not that we sanction every loan that comes across the loan officers desk. There is many times that he has to deny the person surveys say, or even fire a subordinate. But you do everything with a degree of empathy. You do it with that feeling. And you know that in many ways is, I think, the distinctive factor that is there. And once you bring this whole element of empathy and once you feel the way that other person feels, it is very difficult to do all the negative things that unfortunately sometimes happen in banking, which is like a mis selling or overselling that and pushing people into debt, and it can be avoided and so on, because you know that this is going to come back to bite you sooner or later and it is against your core values. So I think empathy is the strongest factor that drives us.

William Norvell: That’s good. That’s good. I think that’s a great way. And especially with banking. Right, exactly. What you just talked about, how so many people, if you can’t get into their shoes with empathy and understand what’s best for them, they can go wrong. Right. And there’s no shortage of headlines of banks not serving their customers well and ending up in fraud and in the wrong places. So I love that. And I’m glad you were able to talk through that. And that leads me to think about could you tell us about your average customer? Who is it that you’re serving mostly with Guardian Bank? And how do you think about that empathy? How do you think about serving them well and what’s best for them?

Collin Timms: Our average customer would be, you know, in the Indian demographic you have if you draw economic pyramid, the economic profile of the population would form a pyramid with the largest portion being at the bottom, being the poorest people living on less than five dollars or ten dollars a month. And then there are different layers of that pyramid going up to the very top, the people living in billion dollar homes you may have read about. So India has it all. You know, we have the entire economic pyramid and it is a very, very flat, which means the bottom is very large. We have almost 200 or 300 million people that we got in banks of the layer of the economic pyramid that is slightly above the bottom most. We are, unfortunately, as a bank we are unable to. So those who had abject poverty and need without a job, homeless people like that. But we serve the lower middle class profile and that can be defined as people with a monthly income of anything between maybe three hundred dollars to about maybe a thousand dollars a month, between three hundred dollars to a thousand dollars a month combined family income, maybe two people earning that that kind of money. So that would be the profile of our client base. And they would be made up of schoolteachers, factory workers, you know, taxi drivers, people who made servants, janitors, shop assistants, all that the entire blue collar working community that we would be serving that is largely guarding bank serves at present. We do have about in terms of numbers, about ten, fifteen percent for the wealthy, a set of people. And we serve their needs, too. But we believe our calling is in serving this layer of the demographic.

William Norvell: That’s great. And you said three hundred dollars. A thousand dollars of. And let you know we have a primarily US based audience, we do have some international audiences. I mean, could you let us into a layer deeper that maybe don’t understand the Indian market quite as much? Are you helping them sort of checking and savings accounts? Are they getting loans on homes, loans to businesses that Henry talks about? What services are you typically offering your average customer?

Collin Timms: First of all, to have a savings account and to be able to generate some savings? We call it in our direct deposit account. We encourage them to save to put away a small amount of their income every month towards a saving food, then using that account for conducting all the other transactions that they would have to. And definitely a big need is, you know, providing them with the capital required for their house when they want to buy a housing loan, a loan for education of their children, both short term and long term loans on education and then business loans for them to recapitalize or roll small businesses into bigger ones. Those are very much what we do, create supplementary income by maybe adding an extra room to the house and renting that room out and finding supplementing them for what they do. We encourage them to create supplementary income to, in addition to the existing income, also loans to buy vehicles buying a two wheeler scooter that goes for the motorcycle gets them from point A to point B faster, makes them more efficient in whatever it is that they are doing. And a lot of them also get loans to buy a car to improve the quality of life and mobility and things like that. So it’s a very wide spectrum of lending. We do a lot of work also in health care and education. That’s going to be our focus going forward. Has care lending because healthcare is a serious issue. And, you know, you’re reading about what’s happening in India right now. It is nothing but exposing in the most cruelest form possible the weakness of our healthcare infrastructure in this country. It has always been like that, but it took a 19 second wave to completely laid back. So we want to be very active in that space going forward.

Henry Kaestner: Macfarlan the majority of our listeners know how big India is and they know it’s such a large market and they may even understand a little bit about the culture. Maybe they’ve heard some things about Modi and Hindu nationalism and what that means for Christian aid workers in ministries. But can you talk just a little bit about what to look for Western European or American investor to think about coming into India can happen? I mean, what does it look like? And does any council you’ve got and here’s what I’m trying to do here. I’m trying to make this actionable of sorts. We probably have somewhere, you know, a thousand people listen as podcasts and they’re mostly accredited investors in the United States. And what I want for them to be able to do is to be inspired, encouraged by the stories we bring them. I also want them to be able to see that they can actually take steps and action and say, you know what, I’m going to get involved in India. There’s ways for me to participate. The need is there now, especially to be able to invest in businesses because so many people have a heart for India but can’t do that through Christian missionaries in ministries anymore. I’m hoping that you might be able to speak to that in response. I hope investors think about, yes, I can roll up my sleeves, I can get involved in India. It’s not insurmountable. And boy, the time to invest is now because some of the other things that I might have otherwise done with my donation capital have been removed from me.

Collin Timms: Well, there’s definitely scope to invest in a country like India simply because there is just so much to be done. You know, any field you can speak of, there is so much to be done. I’m no expert in other things, but I can tell you about banking and the Guardian Bank journey. We started out in bank 20 years ago with a very, very small capital, just thirty like. So we’re pleased with that, maybe about fifty thousand dollars or so. And today we have a net worth of six or seven million dollars. And we are on the brink of our next big leap in growth to convert ourselves from a cooperative into a small finance bank, go national with what we do and be able to offer the products and services of what we offer in the way we want to offer it in a strategic manner focused on health care and education in this country across the length and breadth of this country. Now, that is a huge, huge potential because right now we are in the urban district only of Bangalore and being able to serve maybe four or five million people in this city alone. But imagine when the canvas that we are looking at is one point three billion people across the country. The growth potential is tremendous in whatever it is that can be done. This leads to two things. One is tremendous opportunity for economic investment. That’s one way of looking at it. A great economic investment, a great save. Investment into an organization that can give you a reasonably good return over a long period of time, that can give you maybe three or four extra done in five years. In addition, a very powerful social impact, because if you choose and make the right investment into the right kind of organizations, the social impact that it can develop and deliver in terms of transformation of lives, of people that that organization touches is immense. Now, there may be many opportunities for economic return and financial return in many jurisdictions, many geographies around the world. But a combination of financial return along with social impact. Your best bet is countries like India, where there is a huge canvas to bubble here in terms of both economic growth as well as social development. So my message to your investors is to choose organizations whose institutions that are on a growth trajectory and with a viable scaling up plan and with very sound management people who have proved themselves in terms of integrity and capacity to deliver on the promises. And I don’t think you can go wrong. There are many, many examples of success stories that we can talk about.

William Norvell: Macfarlan great advice. Thanks for sharing that with our audience. So in addition to Gardian, are there other great companies that you might point some folks to to check out the research, to look into?

Collin Timms: Or there are many, many companies in the engineering space that are companies in the pharmaceutical space. They have great growth stories. You know, we got a company in India called Glenmont Pharmaceuticals started by England and said today it’s grown into a billion dollar company, started very small, and whoever invested in a friend of mine from UK was an early stage investor in it, cashed out with hundreds of millions of dollars. So, you know, there are great stories in the technology space, you name it. There are great stories. It would take a little bit of effort and handholding to find the right, because you can imagine there are many, many, many entrepreneurs and many people, many areas to invest many slots to put that check into. But you need to be patient and be vigilant about where you want to invest in the kind of place you want to invest in for those who would be interested in bankers in the next phase of its growth. And if there is any interest to anybody who is watching this, we could send information memorandum to them and they can look at it. If this space is of any interest to them, that’s great.

William Norvell: And actually, my last question before we wrap up would be along those lines. Could you maybe give a closing, I guess, please, not the right word, because that’s a little too strong. But, you know, high growth startups, equity, things like that are very exciting to people these days. Crowdfunding is taking off. Could you maybe give a closing, I guess, plea for why banking, such as what you do a guardian, is so important for the economic development of people that obviously God cares about because he made us all. But could you maybe just ERG our audience to pay a little more attention to the lending aspect of the investment landscape?

Collin Timms: I think the key factor here is sustainability. I’ve been a businessman all my life and I’ve chased the 10x return and ended up with no return. And then I have learned to be satisfied with the two and a half X return, and I know I’ll get that fixed if I put it in the right place. So sustainability over a long period of time is extremely important, especially when you are investing in a developing country like India and a developing jurisdiction. Now, there are many, many unforeseen circumstances and many factors that can interfere with your venture. Excel spreadsheet growth plans know it’s very easy to draw those things up, but it’s very difficult to foresee all legislative changes, regulatory changes, interest rate shocks, currency shocks, natural disasters. And you are seeing lockdowns and things like go with it you and completely disrupt and transform business plans and business trajectories. So it’s very important to focus on very strong and stable kind of businesses, especially in developing markets that have a long term sustainability and a long term growth. And banking happens to be one of them. Manufacturing is another one if you get it right, if you get the manufacturing right, almost every second person in India, whereas Bata shoes, you know Bato. He’s a check individual who Kamia some seventy five years ago to India and invested here, and it’s a household name. I mean, I don’t think Bato is as famous in the Czech Republic as it is in India. So, you know, people have come here and invested very, very early on and benefited a great deal, but they’ve invested in something that is long term sustainable. So my suggestion to people with capital is, you know, the higher the return and you know this, I shouldn’t be telling you this, the higher the return, the higher the risk. But there is a large number of unseen circumstances in countries like India and countries in the developing world that you have to take cognizance of. And maybe you should recalibrate your thinking to a more reasonable rate of return. And in return, you what you would get is more social impact and I think more long term sustainability.

William Norvell: That was pretty good. That was pretty good. Thank you so much for walking us through that. And I think hopefully you’ll have a lot of people more interested in the space than they were before they started this podcast as we wrap up. We love watching where God can intersect our listeners and our guests. And so the question we love to ask is, is there a place in God’s word in scripture that you might want to share with our audience that’s been particularly meaningful to you or could be something you read this morning, but a scripture verse or a story from Scripture that maybe has guided some of who you are and where you are today?

Collin Timms: Well, if there is one thing that motivates me and guides me and keeps me coming back to the plow is that this feeling that I have and it permeates my thoughts and permeates my subconscious, my dreams, I just feel I have to keep doing the best I can in whatever it is that I’m doing. And I believe that is my calling, that I have to do more and more of that. And whenever I, I get bouts of doubt in that, it comes in the form of the I look around me and still see so much of poverty and still see so much of misery, especially in these times when we’re seeing this and what’s happening in college and all of that, then God gives me some small successes and that just to get my chin up again and just to remind me that what I am expected to do is to do the best that I can do and leave the rest to him. I have more control over what will happen. And God doesn’t appear to me the way he does to people in scripture and all of that. But this is something that I keep feeling from deep within is that I have to continue to do the best that I can do.