The Global Investor

Episode 1: Marvin Yee on Deals

April 30, 2019 Season 1 Episode 1
The Global Investor
Episode 1: Marvin Yee on Deals
Chapters
The Global Investor
Episode 1: Marvin Yee on Deals
Apr 30, 2019 Season 1 Episode 1
Marvin Yee
Marvin Yee of Obris discusses how he sources, vets and manages investment deals.
Show Notes Transcript

In our first podcast, Marvin Yee of Obris discusses how he sources, vets and manages investment deals. This is a highly valuable deep-dive into the mind of one of our partners and how he's able to secure consistently much better than average investment opportunities for our members and the clients of Crown Financial Services.

Music from bensound.com.



Speaker 1:
0:10
Uh, this is over a spike crown private, uh Oh versus a membership based global investors syndicate. My name is James even sin. I am one of the partners of crown private, uh, joined with me today is Marvin Gaye, also one of the, uh, uh, partners of crown private. Uh, we're about three things, people, places and deals. In this particular podcast. We are going to focus on deals. Marvin, he, in addition to being a partner in crown private is the managing partner of crown financial services. And I wanted to interview, want to interview you today because you have a very keen mind of, uh, putting together investment deals. And I'd like to share with our listeners and those who are watching us, a bit of what goes on in your mind and your practice of how you construct deals. So Marvin, first question is, how do you find your deals?
Speaker 2:
1:13
Well, firstly, there's an understanding that the market for money is largely inelastic. So there are always deals around the, um, the key element is getting the right types of deals and the kind of the types of deals that are good for our investors. Um, and to that end, we rely a great deal on referrals, referrals, um, don't just from, um, people in the industry, but also people that we've done, uh, uh, we'll give in the past. Now this could be other co investors or it could also be, um, comp companies that we have invested in the past and I'm Julianne their networks. They have in turn referred, um, other opportunities to us.
Speaker 1:
1:57
Okay. Okay. Now we're based in New Zealand. Uh, tell me about, are your, are your referrals or your connections are the people you know specifically in this region are throughout the world?
Speaker 2:
2:13
Well, the world's a big place, but I'm suddenly, this region would be a, a, a major part of that, but not just in Australia or New Zealand, which are really quite similar in terms of, uh, of economy. Uh, and also legislation. Um, but also, um, uh, from the United States, Asia. And increasingly we're getting quite a few new opportunities in Europe. Um, we have investors from a wide range of areas, not just obviously in Australia and New Zealand. Uh, and also crown is not just based in, uh, in New Zealand. Of course we are also in Sydney, in Singapore and call them book.
Speaker 1:
2:51
Okay. Okay. So really around the world are our friends and our connections and our network is pretty, pretty wide. Um, what kind of results do your deals, the deals that you craft a produce?
Speaker 2:
3:07
Whoa. Well, ideally we would like to cruise a mouth, mouth, good results of course. Um, so certainly destiny, that's the first area that we look to, um, the, to concentrate on. But to the end is also understanding the, the cyclical nature of supermarkets and also the structural nature of that. And ideally you are, you want to combine the two elements and that's really how you get into an opportunity that is, that can provide you in the bath mat that return. And there's not say a general offer to the public whereby the, um, returns, um, we may not be that exponential. So for as an example, a lot of companies would, uh, are good at doing certain things. So whether it's making widgets or, or whatever service, but they may not be, they may not understand their industry so much. So having that understanding allows us to understand who I do or not. This industry is, um, um, undervalued or it's got about to go to a new cycle change. And the structural element of that allows us to take advantage.
Speaker 1:
4:19
Okay. And are these deals for anyone?
Speaker 2:
4:22
Well, the deals are targeted to wholesale that eligible investors. Okay. So, uh, legislatively that's basically the, the, the target. Um, of course, um, it's a, that also covers private equity firms who covers a corporate investors, um, effectively companies that own the financial markets conduct's act assumptions.
Speaker 1:
4:47
Gotcha. Perfect. Thank you. Uh, I'm thinking about, uh, the components of a deal that you put together. And so my context is having traveled extensively with you and the world and having had meetings that have started off with, um, the introductions to a company and then watching as time goes on, the process that you follow to when you actually crack crafted a bespoken deal that is agreed upon by the, the company that we're investing in. Can you tell us what are some of the components are that, what are the key components of, for you in crafting of a spoke deal?
Speaker 2:
5:30
Well, firstly we have to understand what need are we trying to address. And that's normally not just money. Money is needed to, um, to do something. So it's not just a matter of providing money to accompany view. There's a lot better for us to understand what they're trying to achieve with it. This is the difference between raising, um, say $1 million. So raising $1 billion because at the end of the day, the, uh, uh, very just a very few constraints to people's hopes in genes. And of course the concept of that it takes money to make money is not a unique way. Um, the whole idea is how do we make lots of money from as little investment as possible. So from that point of view, understanding what the company's trying to achieve as a big part of it and understanding how we can assist in that manner allows us to be a strategic investor and also play a role, uh, post. Uh, the, the fundraise. So that we are typically not a passive investors in this context. So otherwise, so, you know, you're, you might've saw your mind into a mutual fund or
Speaker 1:
6:37
what does it, clearly the opposite of passive would be an active investor. What does that mean to you? Well, to,
Speaker 2:
6:44
it means that we have a, we have a degree of control on the company. Now on the, on the base level, we would typically look to a, depending obviously the size of capital that we bring our than we would typically look for board representation. Um, we were suddenly, ideally we would like to be, uh, to be a director of that company. And I'll be reading, may not always want to be a director of that company. There are circumstances where being a director of a company that puts us at odds with the interests of investors. So, um, so it really comes down to what we are trying to achieve. So if we are looking to be in for a short amount of time, um, and then we, and then look to exit quite quickly, then we probably don't want to be a director of the company.
Speaker 2:
7:22
Um, but, uh, if we are looking at something more strategic than we probably ought to be there and be able to steer the ship in the direction in which we would have no doubt stated to them in the early, in our offer documents to what we are wanting to accomplish. Okay. So there will be a key component of debt. Um, and depending on the levels of, of uh, of investment, occasionally we may ask, we may, um, condition of the investment may be that we end up doing the accounts with the company. We may end up taking, taking one that ball, we would have a double signatories in terms of certain investments that we, uh, in terms of signing rights on the accounts. So, um, obviously it comes down to the, the, the stick that we have in the company. That's probably something we will ask that we all are, we're 50% of the a or close to 50% of the company and probably not something that they wouldn't ask to be on 5% of the company. But either way, the intention is to ensure that we can have, we can exact some strategic value in that attitude of networks. We have, um, our true the, uh, to the, um, operations of crown itself, you know, be in transactions and banking, then mittens and so forth.
Speaker 1:
8:34
All right. Can I ask more about the, the type of companies that you got that appeal to you? Oh, we look first I'll ask nicely industry, but what are the characteristics that are most common? Well, yeah, check marks for you.
Speaker 2:
8:53
Well, an appreciation of other people's capitalists were important. So consequently, uh, degree of maturity, uh, from the founders, uh, or the, the, the directors to people who are running the, um, the, the company, uh, it's easier to probably spend what is a bad deal. And Matthew was, uh, uh, a bad company or company and we wouldn't, we wouldn't necessarily want to invest in is a company where, um, the investors, the, uh, the, the key people have very little stake in the company. Um, and perhaps the, uh, we were in a second phase of the company where the primary shareholders have already exited out and effectively we have a, uh, uh, a management of a company which has very little stake in it. And, uh, the problem is in companies like that in effect is that they created was a weird bureaucracy basically create itself. It's not a Google dissimilar from government really.
Speaker 2:
9:49
The more bureaucracy you had, there's always a reason to have to have a position. There's always things that need to get that. So the, the idea is to ensure that we have the right type of people that understands the, the, the kind of landscape that they are putting in. And more often than not, if, because we are looking for companies who have exponential growth, we need to look at people that are doers rather than our planners. Planning planning is important. You fail to plan, plan to fail. Having said that, it is important that they have the operational expertise to be able to do it themselves too. But they roll up the sleeves and do it themselves, which may not necessarily occurrence in certain companies where the management is our detached from shareholders. And there's a tendency in, and I've seen a number of occasions where the tendencies that shareholders are continuous source or investors or particular source of money. And of course we know that from experience that that is a finite commodity. And at some point the music is going to stop playing. I'm going to be enough chairs. Yeah.
Speaker 1:
10:55
Well when, I can't count the number of boards that you have been on of public as well as private companies. So I'm thinking about your past experience of 20 some years in this business. Do you have a checklist in mind when you're choosing, when you're thinking about companies or do you, are there just different? Tell me how you approach it will start to lead. We will look in here. We'll
Speaker 2:
11:21
look into things touristy as I mentioned earlier, the exponentiality of the opportunity. So why, why invest in this company? Understand the risk premium. So if the company's trying to achieve a certain thing, um, you know, when we are investing a, what state is the company ad and how strategic canal capital be employed. So that's the, that's probably the first area of, uh, to look at, to see whether we can strategically, uh, turn this company because you turn this company into what it's meant to be. Because at the end of the day, it's good having, uh, it is one thing to have confidence and other people being able to achieve some of the results. You can have complete confidence in yourself if you've done things before in the, and I'm not suggesting we take over the companies, but if we understand what they're trying to achieve, that we know that that's something that we can be a, that then we know that's something we can, uh, uh, assistant.
Speaker 2:
12:16
Um, and in those cases, you know, we have 100% certainty upon achieving certain results. So for example, um, if the company requires, uh, to be, it needs to be licensed in a particular area, that's an area we know we have some expertise in. We know too, you know, I would say at least 99% certainty that we can accomplish it. And then that means that it has a great evaluation, then that is going to be a good thing for investors. So this is different from just relying on somebody else wanting to achieve those results. Um, having so, so that's one element of it. Having said that, having a, having the, uh, the company with, uh, with passion for what they're doing is very important. Looking at employees that are not solely motivated by money because at the end of the day, um, at the end of the day, most of the companies that you're, that we're backing to achieve this exponential return are effectively companies who are trying to disrupt the industry or the, at the end, the day for the most part.
Speaker 2:
13:15
I think that would be a good good example. If you're the underdog, they are not, they're not the, they're not the dominant player and he's not yet. So consequently, if you have employees that are only there are only looking uh, for the uh, for um, uh, high Wyndham, Wyndham innovation, you're never going to be able to compete on that because there'll always be a larger company. They can do that. So strategically you need to balance, you need to balance those out. You need to ensure that the people that the, the staff and the management particularly adequately motivated to ensure that this, that the uh, the goals of, uh, of the shareholders and investors but two and the same really are going to be competent what the management is trying to achieve.
Speaker 1:
13:56
Those really are fundamental to a private equity investing. Absolutely. Something I've, I've watched really with great enjoyment is how you can start with the company in terms of their, the terms that they're looking for when they approach us or when we approached them. And oftentimes I will know your starting point and you consistently reach agreeable terms that are not where the company started. How do you actually achieve,
Speaker 2:
14:32
well, I'll go back to my earlier point. Understanding strategically what they want. Companies will come to you with a, with a plan, uh, typically, uh, that, uh, that requires you do liken the investor to have a passive stay in the business. They will many companies who want a strategic, um, but, but many companies don't necessarily understand what that means. And we have to, we have to decipher that, uh, that language because, uh, especially early stage companies, uh, you can conversely ask, well, would you like an unstrategic investor? So it's a, it's almost like saying I want a good person on the board as well. Yeah. As opposed to one the bad person. So the, um, so understanding what they're trying to achieve so they will come. So most companies, what they really mean is that they just want the cash. They want the cash, they have the vision to execute in a particular way.
Speaker 2:
15:26
Um, it's usually a behag big hairy audacious goal. And we, and we want to support that because you don't get exponential returns by not going after the Higgs, so, so you're not to do so by understanding how we can, how we can strategically assist in that area. That's really where we provide them a solution that goes along with the funding. So we say, well you may be asking for this given example 100,000 for 10% however, we know that without our involvement we can basically achieve what you want to achieve in say a third of the time, um, to, you know, I was resources and knowhow and so forth. And but for that we will, we basically will only invest at a valuation of say 500 so you and 20% as an example. And we also want a board seat because in order for us to assist you to reach these goals, we need to have a degree of influence. So that's an example where the uh, where we, because we are actively involved and I guess from a, from a rationalization rationalization standpoint, we are involved in the creation of that. Wealth companies typically come to you reasonably fully priced. They come to you with the potential and you're investing in that potential. In this initial from stance. We are actually part of their potential. We are the part of creating that potential. That's why we can have a much higher, we can have a much larger, uh, negotiating, um, uh, position.
Speaker 1:
17:04
Thank you very much. Next thought in my mind is, um, crown private has a fairly diverse, a rather diverse portfolio ranging from startup to more established deals. Um, you just described the conditions of the types of what you consider a good company. And a, I'd like to understand how startups fit into that. How do you choose startups? Because there are a lot more, um, variables vagaries in an early stage company then in an established company with a mature and established a structure. So how would you, how do you find decent startups or do good startup?
Speaker 2:
17:48
Well, the first, the first, the first thing to look for is to ensure that there is an opportunity there. Now I'm not with the startup. The exponential, uh, forecast is probably not that relevant because you're starting from zero. You know, anything that's going to be better than that and every so arguably ever resolved. This is going to be exponential. So I will look at the risk premium, look at the, the firstly to see whether it could work. I'm sure you clearly you need to create a distinction between a, uh, an investment strategy, uh, and has to add and to be distinct from that of a gambling strategy. So the concept of spray and pray, it's not one that spray and praying. Yeah, exactly. It's not one that I subscribe to. I use the, uh, in, in many respects, I used an analogy of, or that table.
Speaker 2:
18:50
I'm not really a Gambler, but I understand the mechanics of how it works and it really comes down to a matter say, well, am I going to get more than a for this type of risk? Am I going to get more returns than that wouldn't necessarily get in the table. So on the roulette table, you, you've got 36 to one stuff pay out. That's my understanding. I could be wrong, but that's my understanding. Um, you know, barring a few hours, probably a bit less than 36 before with a few other pieces on the board. But the key element really is that are, am I going to get such an exponential for the amount of money and putting in, uh, or so that just bet it all on black than if I bet on black I get 50%. I have a 50% chance of winning by and large.
Speaker 2:
19:34
So that's really the, the kind of, uh, of uh, understanding on the exponentiality of the opportunity. So we all need to have a basis of that. So now I look at it from that point of view first and say, well, okay, if that company passes that and it is going to be a, uh, it is going to, there is an exponential potential then it expression having established that is to say, well, now I want to be part of the deal, but how do I get the best value in this? And that's really where we see how we can assist them to achieve that. And understanding of course that were startup companies, there is a distinct, um, premium, um, that needs to be placed on the risk. And the earlier that you're involved in the company, the more binary that that investment is, the higher the premium needs to be. So it is not the, it is, there's a system that is not designed to be easy. It is certainly designed to ensure that the, um, there is a, an appreciation, um, both by the company as well as the investor that, uh, of the, uh, of the premium associated with the risk capital at least to things off. So
Speaker 1:
20:50
you're on a, we've already sketched on a number of boards and I know that you're on a early stage boards as well. Um, with your experience in private equity, how do you apply that to your board involvement
Speaker 2:
21:05
startup? Well, the Buddha, the startup is this naturally, it's a lot more advisory base compared to a board in a more established company, which is arguably more governance spaced. So there needs to be an appreciation of the, of the two elements advisory. Typically if the younger founders involved typically where we are going, where we have a more active role in the company, but also understanding that for the company to grow beyond a, uh, a startup, then it requires some reasonably, uh, uh, significant understanding of the governance requirements for that. And that is really where, uh, look in the board or board ruled that is one of the elements of being able to transform the company from a, a startup mentality to one that is more mature without necessarily compromising on the enthusiasm that is requisite for a startup, for the company to succeed. So that's really the, the balance of the two.
Speaker 2:
22:16
And the reality of the matter is that we don't, we don't really invest in a very early stage companies. So, and I'm thinking about, you know, pre-seed, uh, see very, very rarely. I mean, we wouldn't be invested in the back of a Napkin, for example. So the reality of the matter is that the ideal situation for, uh, in terms of the lifetime lifespan for company would be where we can add some value in transitioning them for what maybe a, a family one or one to five. If it's for one season and less than 10 men company, we should be involved in the transition of that say 10 million company to a 50 man company. So that's, and we provide the, the, and one of the things we add as a, what I would add, it's a board members to look to turning that company into a, into a capacity where they have both the retaining the enthusiasm, but also being able to have the governance structures in place to basically create that vamp for exponential growth.
Speaker 1:
23:20
Well, I appreciate that because I think PR firsthand of uh, companies that we have invested in when they're early stage and then when we're presented with an opportunity to participate, participate in another round, we're not doing some blindly, we're not doing so like atypical a newcomer investor. We actually have someone like yourself who is on the board, has, who has overseen the development of that company so that if we're participating in a yet another round of investment, we have confidence that with that company and with the people that are running that company and essentially we're also very active in the, in the running of that company. Um, very great, very helpful. Um, I think at this point we'll, I'd like to just briefly summarize that are our focus has been on, uh, Marvin and how you bring us to two deals, how you structure deals.
Speaker 1:
24:20
And granted it's not just you, but our focus of this particular podcast is on you. I'm really clearly not to over flatter you, but a really a significant significant capabilities that you demonstrate in crafting the bespoke deals that we produce for our members. Uh, so thank you for that. I would like to highlight just two more things. One is I'd like you to speak just a bit about crown financial services. So crown private is, uh, in partnership with crown financial services sharing the same crown. Uh, can you speak to that a bit? What is crown financial services and what does it bring to us? Sure.
Speaker 2:
25:04
So Carl private is a subsidiary of Kong [inaudible] financial services and a crown financial services is a regulated entity. It is. We have a regular hour. Um, and that's when business is regulated by the financial market's authority. Our transactions business is regulated by the Department of internal affairs and our depository business is regulated by the Reserve Bank of New Zealand. What the, uh, the benefits, um, translate to is that crown private is able to, um, benefit from the hereditary nature of some of these licenses and in our case, but typically those in dealing with investors and also being able to, in a, uh, being able to refer on other types of opportunities, say to other art, the other areas of the business slash transactions and so forth, whereby these are particularly helpful for say, portfolio companies that we invest in. So if a company says they may have difficulties in, uh, in, in having banking facilities for an example and we may invest in them, but, uh, and, and this part of that, um, that combination, we may be able to, um, uh, as part of the proposition and may be able to assist them in having, say, lines of credit, uh, chunk, some transactional accounts and so forth.
Speaker 2:
26:39
Obviously depending on the type of business. So it becomes an expanse, a, a much wider proposition than just providing a company, uh, with, with, with growth capital or investment. So I'm sure. So that's, that's effectively the relationship. Um, and also we know that the would be investors can have confidence that, you know, we, the types of deals that we, that we presented them are, are ones that are not, would that be cause uh, ones that are well vetted. There are ones that had that taken into account the risk premium and obviously the exponentiality of the investment, um, without compromising its quality.
Speaker 1:
27:26
Absolutely. You know what, I do want to focus on one phrase because it's come up several times. Risk Premium, uh, speak, speak. Just define that in your own, in your own terms because that is clearly a focus of what we,
Speaker 2:
27:40
well, absolutely it was premium is it's effectively a situation where if you're going to be investing in earlier stage company, things are naturally going to be more risky than perhaps if you're invested in IBM. So where a company, we're an established company, uh, with, uh, with a very low risk premium and you can substitute that. Ibm could be at t and t could be whatever. Now you may find that a variation of, of, uh, the, the, that the returns you get and you know, government, treasury bills, I've been example the returns on other, exactly. Great. People are not going to rely on disagree deal for them to create wealth. It's in more of a method of storing wealth. And we need to have those types of things as well, but not quite the focus off of what a crown is as well, but then they can't private fo the therefore the, um, the risk premium is simply taking into account the risky nature of earlier growth stage companies and ensuring that we are adequately, um, uh, recognized for that.
Speaker 2:
28:46
And when I say recognize it means we are given a much better return to appreciate that. It's not the, mostly the old saying, you know, a high risks Haggin Louis login or for our point of view. What we are trying to do is to minimize the risk while still retaining as much of the upside as possible. And that does take into account, um, ensuring that the, uh, that the, uh, degree of risks understood. And not so much just from a capital preservation standpoint, but in terms of the premium that will be attached to our investor dollars for taking, for taking the company, for believing in the company, perhaps at a time when they most need it.
Speaker 1:
29:28
Great. Great. You know, that actually reminds me of another question that, um, uh, and a lot of the deals that we participate in are not, uh, an equity position but structured debt. Can you speak a bit about what you're looking for there and what are the, what's the, what does the return, not the actual return, but how is that valuable to our investors to be involved with a structured debt a little bit?
Speaker 2:
29:56
Some respects, the, a lot of the structure that, uh, elements have come out from a, uh, from an understanding, um, that many early stage equity investments. Um, in fact, I would say the majority of early stage equity investments do not a very binary, the idea of, um, of a structured debt product is to ensure that we can, we can hold the company to a degree of accountability to what they're telling us. So it is a, uh, it is, it provides, unlike say, an equity investment where it may take some time for us to raise around, um, and B and bring on investors to be interested in it. Most structured debt investments, we can commit to it. Uh, you largely utilizing all resources. We can underwrite the deal in a, in a, in most instances. And therefore the effectively what the company is trading on therefore is the, are they are really paying us a premium for us, providing them certainty.
Speaker 2:
31:06
So we give them that. So they understand that there's a degree of certainty that the, that we provide. And that's going back, the price of that largely is us saying to the, the company, well, you have to do what you see agreeing to do and this is not just the best effort basis, um, you need to do to, you are legally obliged to do so. And typically we have warranties and so forth, uh, that, that MBA registered securities against, um, against assets of the company to ensure that those things occur. We don't provide that facilities to everyone. I'm obviously having a debt facility in a startup. It's not particularly helpful. Um, you know, not, not unless the person's repaired the more which has house, um, the reality of, and we wouldn't go after that anyway. Well you would for Christmas read them all. It was just house.
Speaker 2:
31:56
They would go to a bank rather than a correct and get the much lower interest rate and perhaps who were comfortable would they would get from us. So there is that. Um, so certainly the um, uh, the debt products typically are much high yielding. That's really the, I guess it would be looking at a greeter greeter crime group, uh, that uh, uh, debt is a big part of our, of our offering. It are, we tend to look at a much higher return. We have a, uh, being crammed financial services, um, have originated in the, uh, in the financing of uh, started off in for the financing of equipment. Really its effect. It is in effectively licensed as a finance company. So that is a, that is the, the nature of the, of the, um, of the business that are of our core missions. So doing finances, something that we are, we are well familiar with and what we are doing is, uh, in, in cases of the structured that is providing a, uh, almost a vague type facility in an industry where there it is typically not a lot of security.
Speaker 2:
33:09
There's not a lot of debt funding available in those areas outside, uh, you know, and Oh no, having to having to mortgage their house. So we come in, in the, in between spot and are able to basically, uh, reduced significantly really the, um, the risk premium in that respects, particularly if you're looking at securitized debt. Um, but also, uh, that enhances our ability to influence companies as well. So, you know, a number of the number of the investments we made in the past, even through that deals have resulted in us having some degree of influence on the board. Um, and some of those have translated to a additional, uh, additional investments which comes with an additional board seats. And in this, by understanding the different nature of the company that we can best assist them in that. So we, we are, uh, it is not uncommon for us to bring on an industry expert that fit the system, the board for example, because at the end of the day, our priorities two fold, we want the company to succeed. That's first and foremost, uh, effectively many of these debt facilities. Um, I do criminal of speaking softly, but you know, carrying a,
Speaker 1:
34:23
I think that a lot of crossover with private equity, a significant crossover there that is a hybrid isn't it? And I guess that's the difference. That's part of the Udl,
Speaker 2:
34:32
the nature of which, you know, if you, if we were just purely providing debt, we will be dissimilar from a former Bangor or regular finance company.
Speaker 1:
34:40
Correct. It really is strategic finance fab where it's, so the goal is that it's a win win for both parties. Ultimately we want, uh, we want our shareholders are our investors to benefit from. Absolutely. I'll show you
Speaker 2:
34:56
listening to these needs to benefit from the congress and what we're trying to create here as the congruence between forecast and actuals. Right.
Speaker 1:
35:04
I'd like to speak to one, I'm not going to go into the specifics of the name of the company, but a deal that we have that you put together recently, I certainly appreciated the balance of the security that you brought with the risk of investment that um, it's though it is a high yielding a outcome, the risk for it is quite low and that is you Marvin putting together that deal and structuring in a way that the company gets what it needs. Our investors get the return that a is warranted and the risk for them is extremely low.
Speaker 2:
35:49
Yes, certainly that is the intention. It does take some time to put those, uh, those deals together. Um, of course, um, uh, I think the deal you are referring to particularly that had to go to three different regulatory bodies, uh, for, uh, for approval. And we were in a unique situation of being able to capitalize on the fact that it was only open to is select type of investor. We were able to use that and also utilize a, uh, a, uh, uh, another aspect of a, of a different part of the regulation you had to go to for us to be able to exit the investment. And that meant that we basically have a reasonable premium. We're very low risk, sort of the transactional is guaranteed because effectively in order for this group to uh, to gain the significant control they needed someone like ourselves to basically create the structure that allows us to come in and go out. We used to be easily.
Speaker 1:
36:47
Excellent. Well, I think we're going to wrap up in just a moment, but I do have one more question for you. Uh, we, we in crown can be based anywhere on the planet. Why New Zealand?
Speaker 2:
36:59
Well, New Zealand's a very unique location. Um, firstly it is a, uh, it, it has been number one on the transparency perception index for at least the last two years and has only gone up, um, in that, on the index. So hacking be number one and go, keep going up. Well, it's based out of a hundred. So we just keep killing me accumulating more and more points. I think we went from 73 to 85 or something to that effect just in the past year. So from a structural standpoint, it is a good location to provide confidence to other regulators that this is a, this is a clean structure. It is not located in a tax haven. It is a structure which has a degree of confidence, uh, internationally. So that's, that's one. Um, because when do people think of New Zealand? The, uh, for the most part, if there was a view on our political view on those matters, most people would agree that it's New Zealand's quite neutral on those things.
Speaker 2:
38:05
Um, so consequently it is, um, it is not, not involve and arguably it doesn't, may not necessarily matter. It was a big deal, you know, where it comes in on the political spectrum, but, uh, that neutrality is know, um, at least in the mind of regulators. And also investors I think helps us in that process. But more accurately though, while we house, so we have that reputation. But the type of structure we use for investments, uh, particularly, um, uh, tax friendly. So, you know, we make use of, uh, legally, of course we have a postural entities, entities that are approved by the IOD and then revenue departments for particular kinds of investments to ensure that the eye exam from, uh, from at least New Zealand taxation anyway. And that allows, uh, a very robust structure for, uh, the type four, um, particularly in regards to how capital gains tax is calculated, which for most investors that will be the probably means on which, uh, they will be gaining the income from these investments.
Speaker 2:
39:16
So that's a, we have, uh, we have other structures that are not just based on Islamic instructors based on Singapore. And that is a reasonably good structure in regards to, uh, income tax, um, for, so we would say a hostess for courses there are different, there are different structures to suit. Um, so we're not exclusively based in New Zealand is certainly not, uh, not all structures are based in New Zealand, but particularly, and I guess we see this a lot more with our current, uh, with our current members, particularly the ones in the u s and so forth. The, um, the nature of taxation, uh, of these investments, uh, in New Zealand and the nature of that station and goes along with our structures is one that's particularly, um, more friendly, more optimized than they may otherwise be used to. And therefore that also changes the, uh, risks dynamics in terms of the investment triangle. Yeah.
Speaker 1:
40:12
All right. Well, Martin, thank you very much for your time and thank you for leading as some deal Friday. [inaudible]
Speaker 3:
40:25
[inaudible].
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