And welcome everyone to another Smart Money Circle episode.
I'm Adam Sarhan. With me today is Will Fine,
who's the founder and CEO at Granite shares ETS with over 10
billion in assets under management.
Will thank you so much for taking the time and welcome to
the Smart Money Circle. Thanks Adam.
Great to be on the show. Thank you for having me.
So will I always like to ask, can you please tell us your
story and how you got to where you are today?
Yeah. So I've been in the ETF business
almost all of my career, say almost because after college I
worked in an investment bank as my first job out of university.
So did that very briefly and then ended up working at what's
now BlackRock. But in those days was Barclays
Global Investors and we were launching the first ETFs in
Europe at that time. So I've started my career in
London and, you know, stayed with the product ever since.
So I've been lucky that this product, the ETF, the Exchange
Traded Fund, has grown into a gigantic, you know, global
industry. But from very humble beginnings,
you know, we were working on the first products in the market and
I've followed that ever since. Wow, what a great story.
So right place, right time. Saw the opportunity, took it and
ran with it if I understand you correctly.
No, absolutely. And I think at that time, you
know, it was nascent, no one had any, any idea, you know, in
terms of how big the industry would get.
But I knew that this product was going to be popular.
And so you know, after BlackRock, I deliberately
elected to sort of start my entrepreneurial journey and went
to join a start up that was at the time trying to launch the
first commodity based ETFs in the market.
And it was an opportunity that I thought was was good at the time
and something that the bigger firms, including BlackRock
weren't doing. And so I joined this company,
had equity in in the business and it was a great ride.
We went from sort of 0 to over 30 billion at the height and
ultimately the company got sold. So once I started there, you
know, eventually made my way to, to starting my own business,
which is Granite Shares, you know, a few years later.
Wonderful. So tell us about your business
and everything you do because we're very interested.
Yeah. So we are obviously an asset
management company first and foremost, but we specialize in
exchange traded funds. And you know, as an ETF issuer,
we're involved in everything. So we do the design, we do the,
the launch, the management, the marketing of ETF.
So unlike perhaps some other, you know, diversified financial
services business, what's unique about a specific ETF manager is
that's all we do. So in other words, we specialize
in the ETF fund. And the brilliant thing about
ETF says it's really just a wrapper for all sorts of
underlying investments. And so we started a company,
we're headquartered in New York City, but the business is now
global. So we have products that are
listed on European exchanges. We have a team in Asia, and our
products are distributed all around the world.
And you know, we have a vast array of different investments
ranging from things like physical gold to leveraged ETFs
on single companies to, you know, high yield ETFs on
different underlyings that you know are generated through
options. So we have 10 billion give or
take in terms of assets and a lot of different ETF strategies
here Europe and and distributed around the world.
I'd love that so people can go to the website, it'll be in the
description to learn more about all the different products you
have As far as risk management, let's take the conversation
there, please. How do you handle risk and what
are some mistakes you see people make with respect to risk
management? I think that the, the way that
we think about it is that, you know, we're effectively like the
tool kit for investors. So we are the the company that's
providing those tools. So with ETFs, the main thing
that we try and do is deliver the stated investment objective.
Now that obviously changes and varies per fund.
So that could be anything from, you know, just providing
exposure to the Spot gold price to replicating 2 times the
return of NVIDIA stock over a given day.
So there are plenty of ways that investors, you know, can manage
risk and we can manage risk. And obviously from a portfolio
management perspective, you know, we have to have a robust,
you know, investment management process, you know, team in
place. And that's something that sets
us apart in terms of, you know, we do all of that ourselves in
house. It's not outsourced to others.
So in in, you know, the spirit of trying to, you know, make
sure that our products do what they say on the proverbial tin.
You know, that's what we do everyday and we obviously focus
to make sure that we deliver that quality on a daily basis.
I love that. Thank you for that explanation.
The vast majority of our audience are independent money
managers, high net worth investors, their clients and I
just, you know, do it yourself investors.
There's a lot of interest in ETFs in general.
One of our most, you know, whenever I interview people that
are in your space, I get lots of emails and questions and all
that fun stuff. If you don't mind, can you
explain to the audience how the 2X NVIDIA works and or some of
the options products without going too deep, but just, you
know, the stock trades all day, let's say it's up 1%.
How does a 2X ETF quote UN quote work?
And then the options I do if you can explain that high level.
It works in a similar way to leverage, just more broadly.
So if you were to borrow, whether it to be able to buy a
house or whether you were to just buy a stock yourself on a
margin account, it works in a very similar way.
In other words, if the underlying stock goes up by 1%
in a day, the objective of a leveraged ETF, if it's a two
times leverage would be to go up by 2% in a day.
And the exact same principle applies if it's a short.
So we have two times short ETFs and therefore if the underlying
stock was to go down by 1% in a day, the short ETF would go up
by 2% in a day. So that's how they work in terms
of options with the options products.
In our case, it's our yield boost family.
We sell options contracts and the reason for doing that is
when you sell an option, you generate what's called a premium
and that premium can be distributed to investors and
create a yield. So options strategies and the
most common ones are among the most common that that we use are
either things called covered calls or put writing strategies.
They all ostensibly mean the same thing, which is you're
selling a contract and you're generating A yield from selling
that. So you're turning volatility
into income. And so that's the the benefit
they try and generate very high yields.
Thank you very much for that explanation.
OK, let's talk about some timeless lessons that you've
learned along the way that you'd like to share with the audience,
either business, life, relationships, health, anywhere
you want to go. Sure.
Well, I think as as somebody who started my own company and who's
now been going for eight years on that journey, I mean we are a
company that we raised venture capital from day one.
So we've been very much of a part of the venture capital sort
of investment cycle as well as business cycle with growing
Granite shares. And you know, I think there are
there are a number of lessons along the way.
But I think one of the main ones that I can think of in terms of,
you know, building the company is that probably like a lot of
things in life that it always takes longer than you think and
costs more money. And, you know, within that
there's a lot of stuff to to talk about.
But the other thing is about sort of persistence and about
being able to stay in the game. And, you know, a lot of
opportunities or a lot of things in life, you know, it's really
about timing. And so you might have the right
idea, but the timing is wrong. And it's about being able to
stay the course knowing that, you know, you'll get to a
pointless cycle when it is the right time.
And, you know, we as a company, you know, really took, you know,
a number of years before we sort of took off, so to speak.
And so there's a number of years there of, you know, struggle,
perseverance before things start to start to come, right.
I love that. So let's talk about the other
side of that timeless mistakes. What are some timeless mistakes
that you've made, you've seen other people make?
How do you learn from them so you don't repeat them?
Well, I mean, there, there, there are so many.
I was lucky. Like I said, I was involved in a
company where I was not the founder, but I had equity in the
business. It was a start up.
And you know, fortunately that grew into success story.
But you know, success stories are never linear.
There's always, you know, bumps and bruises along the ways,
always ups and downs and learning experiences.
And, you know, I think one of the things that, you know, every
entrepreneur should think about more than perhaps gets talked
about is it doesn't matter, you know, how great the idea is or
how good the opportunity is that, you know, there's no
business, like no business. And if you run out of cash, then
that's game over. And so, you know, a bit that
gets probably talked about less because it's not as exciting as,
you know, the idea and you're changing the world and all these
sort of amazing things people love to talk about is just
simply that a lot of it is about being able to stay in the game.
And that means being very prudent in terms of managing
money and making sure that you've always got enough cash on
hand to keep the business going. And that's a combination of, you
know, prudent management, that's a combination of, you know,
raising money at the right times.
You know, everything goes. There's a lot of things that go
into that, but you know, one of the biggest mistakes I see being
made is, you know, people running out of money and or
having to raise so much money that they get diluted down and
eventually the founder ends up owning nothing from what is
ostensibly a successful business.
Got it. Now that makes great sense.
I'd love that. Make sure you have enough cash
to stay in the game, as as you're saying.
So what about leadership? You've you're a great leader.
Tell us what lessons you've learned about leadership.
You've been led by other people and not just what makes a great
leader, but what are some lessons that people can do that
want to be that have that entrepreneurial bug they're
leading A-Team for the first time possibly, or you know,
anything along those lines, please.
I mean, I've always, I've always felt like it was very important
to lead by example. And, you know, I think it's
really, really difficult when you're first starting a company
and you don't have the, you know, the, the, the cash for
want of a better word, to go out and sort of hire necessarily,
you know, the people that you necessarily want to hire.
And you know, you're trying to hire people based upon a mission
or based upon an idea, the view that, hey, you know, join me
today. And you know, your compensation
will be lower than if you worked at A, at a traditional job or
whatever you're doing, but the pay off hopefully will be, will
be bigger in the long run. That's a, that's a tough one to,
to sell to people. And so, you know, getting people
involved from the beginning based upon, you know, what
you're trying to do with the company, the opportunity is
really difficult. And ultimately that comes down
to people trusting you that you're going to be able to
deliver that and make it a success.
So I think part of that is down to leading by example and
showing people that you're not just somebody that just talks
and does empty words, that you're out front and center
building the business, you know, being the face of the company,
you know, really trying to to push forward every day.
And so from that perspective, I think that's really important.
The second thing that that probably goes hand in hand with
that. And again, every, every company
is different, but I've found specifically relating to our
business that when you have a smaller team and you're pushing
really hard, it it's really important to, to give people
huge amount of latitude to do their jobs.
And in some respects, you could, you could take it to an extreme
and say that, you know, that you're really giving people
almost no, you know, training or, you know, management,
etcetera. But that that sort of has to be
the trade off because you don't have time to do that.
And you know, you're, you're giving people that opportunity
to thrive. But doing that in a way that is,
is sort of very autonomous. And, and, and I found, you know,
those work and clearly it's not for everybody.
It has to be for the right people, but you know, the the
right people thrive in that environment.
And those are typically the people that, you know, add the
most value in a very entrepreneurial organization.
Yeah, I think that's. A great point is that you're
getting high value people or people that are competent and
they can go get paid a job that equals their compensation right
now. So it makes 500 grand a year, a
million a year, 250 a year, a dollar a year, it doesn't
matter. But hey, don't take that million
bucks right now. Come with me and hopefully you
make 10. I see you're smiling.
So you know you make 10 or 20 down the road.
So I fully feel. In in theory, but when you
actually present it to someone who's got a, a lifestyle that
time may have kids, you know, may have, you know, obviously
liabilities, that's a it's a difficult, difficult
conversation to have. Yeah, but when it works, it
works. And it's more than they've got
to have enough belief in that vision.
That's the dream. Yeah, that's the dream.
So that is the, you know, that's the classic risk reward pay off
right there. There can be no reward in life
without risk and you know that is the ultimate in terms of your
taking the maximum amount of risk and therefore you should be
rewarded accordingly. Yeah, I absolutely love that.
OK, so let's talk about the flip side of that adversity.
How do you handle adversity? I know successful leaders have
been through adversity, otherwise they wouldn't be
successful. And what are some obstacles you
had to overcome along the way? This is, this is a really good
question. I mean, I think to some degree
it, you know, there's adversity or there's tough times all, all
the time. And it, it's a bit, you know,
again, the mindset whereby you just have to keep going and
regardless of, of what's happening, there'll be plenty of
times when you know, you have really bad, bad days, you know,
bad periods, etcetera, and you have no alternative just to keep
going. And so, you know, you try and
obviously be as positive as you can without it seeing
disingenuous. I mean, I think, you know,
people obviously understand, you know, especially a business like
ours, super transparent. You know, everything we do in
terms of the funds is completely transparent.
So everyday, you know, anybody can look up, you know, how how
much money we have in the fund, you know, etcetera.
So you know, everybody that you work with is kind of aware of of
what's going on, but all you can do is push forward.
And I think it in some respects it's an easy answer, but it's
the, it's the only answer because you know what else, what
other, you know, choice do you have?
I think again, it comes back to the staying in the game comment
that you know, I think that's one of the key attributes you
need to have that you just need to be able to keep going
regardless of of, you know, what the current environment looks
like. Yeah, I love that.
I think that's really, really important because most people,
once it gets tough, they quit, they stop, and that's why
there's a few. That's.
What? Yeah.
And, and probably the second part of your question, I mean,
we've had, you know, so many different, you know, tough times
like along the way. But one of the things in our
business is, you know, every fund that you launch is not
going to be a success and you're going to have failures along the
way. And so, you know, being able to
to identify, you know, something that's failing and you know,
there's always an emotional component to it because you
launch something not expecting it to fail.
You launch something because you think it's a great idea and
everybody else should think it's a great idea.
But that's just not how life works sometimes.
And so, you know, you have to be able to reconcile that, you
know, something hasn't worked and then take actions
appropriately to, you know, to terminate that fund, to close it
down. There's always like different
partners that you end up partnering with that for
whatever reason don't work out. Or, you know, there's people and
there's all sorts of things that won't go your way.
And, you know, being able to deal with that and move on is is
sort of critically important. I.
Love that when you were saying the funds don't work, it's
almost like a trade. No trader puts on a trade
saying, oh, this is not going to work.
Everyone expects it to work. And then.
Yeah. And then all of a sudden it
doesn't work and then they've got to deal with it.
So being prepared for that is really, really powerful.
Yeah. And.
You hear this a lot about trading or investing, that it's
a psychology. It's about being emotionally
attached to a stock or whatever it is and, you know, realizing
that sometimes you might love the company, but the company
doesn't love you in terms of investment.
And, you know, is when to when to get out is equally as
important as when to buy in. Yeah.
Fully agree. I wrote a whole book about
psychological analysis, which is my contribution to Wall Street,
if you will, fundamental and technical analysis.
Well, all right, my thought process, that's not enough to
beat the market. If it was, everybody would have
owned a few islands in the Caribbean.
So the third piece puzzle, which is the psychological part, teach
people how to make rational, not emotional decisions.
And I love what you're saying here.
All right, beautiful. Final question for you.
Well, what is the best piece of advice you'd like to give the
audience or your 30 year old self?
Well, I think the, you know, the best piece of advice that that I
could give for anybody that is thinking about, you know,
getting in or starting an entrepreneurial journey is I
think sometimes there's this, you know, we perhaps place too
much emphasis on, you know, experience and being qualified
and being the right timing and all these things never
necessarily line up. And I think the best advice I
could give is people just need to start that there's never,
there's never a bad time to start.
And you know, if anything, you just sort of missing out on
opportunity the longer that you wait.
So I think if you're, if you're committed to doing it, you know,
you just need to start doing it. And so many times I've seen
people sort of procrastinate really longer, think about, Oh,
well, not this year, maybe next year or maybe a few years I'll
have enough experience or maybe I'll have, you know, squirreled
away enough money that I can sort of take the risk and.
You know, all of these things are sort of inconsequential on
the grand scheme of things, that either the business works or it
doesn't work. And I think the sooner you find
it out, the better. I love it.
Absolutely love it. Well, Will, thank you so much
for coming on the show. Congrats on all your success.
This was fantastic and hopefully we'll have you on again soon.
Yeah. Thank you.
Adam, great to talk to you. Thank you so much for having me.
Been a pleasure.