From Capital Calls to Market Access Financing Innovation Without Friction

Good afternoon everyone. Thank you so much for having us and thank you for uh being here. Thank you to Abu Dhabi Finance Week for organizing one more fantastic event and I'm join joined on the stage with people who are as as uh it was announced doing first and doing some fantastic innovation. So I'm just going to dive into it. Maybe to start with Ron.

Tell me about how did when did you decide that today's financial uh capital formation infrastructure needs to be changed and how did you come up with your solution and then how did you know that the market and the ecosystem was ready at the time?

Sure. So uh first of all liquidity is exist about nine years now.

Mhm. We established the company uh 2017. The original idea was to bridge the friction in venture uh uh venture debt segment. But very quickly we discovered that doesn't matter what private credit vertical you look at there's different type of friction depends on what vertical you look at. So when it's come to uh uh tech lending the friction is on the due diligence and the origination and negotiation and the challenge to scale is how do you track moving risk but when you look up market towards private equity backed and after that to CLOS's they also have friction it's just a different type of friction how you do diligence at scale without holding thousands of employees uh and without deteriorating the quality of the decision that you're making over time uh we discovered to build an asset management of new kind which is basically a core of very deep technology company 70% of our technology are data scientist and developers and we develop the future technology on which we rely to deploy capital at scale.

um 9 years down the road we had zero loss ratio uh deploying billions of dollars every years to companies in 35 different countries. So technology works it bridges the gap quite efficiently.

It works. It works. So here shall we talk about Fin Street? Tell us about the same question but in in your case how how did this come about?

Thank you Tamara. Um I think that the inefficiencies in the market are pretty evident. Um if you look at the global asset managers today they're already managing 150 trillion of assets and in various geographies or asset classes etc. The fact that the capital is not flu in terms of its movement between geographies and asset classes is not necessarily because of anything to do with it being strategic but rather more operational. And if I specifically zoom into private market assets, there's a lot of manual processes, bilateral syndication, Excel valuations that um you know the private market is still working on and um you know there is time that um such a big market which is 20 20 trillion asset under management had a scalable infrastructure had the discipline of um the secondaries mechanisms as well as access which is global and we're already seeing that in the market sentiment which is that the investors would like um to have exits and not be paying for um the ill liquidity as well as we're seeing that um you know the market infrastructure needs to come out.

We are exactly building that at Fin Street the virtuous flywheel which will um allow for trading uh for public and private assets across the world. And as in innovation accelerate, how does you keep up with um the speed? Do do you update your solutions? How what have you learned maybe u over these few years? Maybe Ron to start with you.

Question for me.

Yeah.

So at the end of the day, it's a matter of evolution versus revolution. uh when you pile information over a period of time,

you discover that just by the fact that you have more and more information, you can deploy faster solutions on different segments. So for example, today we're already tracking in real time 160,000 companies. the things that we can understand today in the market the different trends the different velocities uh um are completely different that what we could understand from data five years ago six years ago and so on and this is exponentially growth so um the key is the data the key is not the technology is the fuel that feed the technology because technology by itself it's nothing it's just like an a platform that you run through if you have enough data And that's again the key for everything. Then the technology itself evolve just by the fact that you run more and more scenarios on it.

So what what has been your main lessons over the

So let me just start by saying that we are the innovators and we are the disruptors and we are very young right now. Um but however every decision that we are taking we are very conscious that we lay foundations that when blockchain and AI which we are already slotted in for our current infrastructure is no longer the technology or there is another wave of technology that we need to adopt. For example, it could be quantum. It could be something else that we do not know. We make sure that our foundations and our processes and our technology is modular that it will not hold us back but rather you know that we can move swiftly and we can adapt and adopt.

Yeah true let's talk about adoption and how do you see uh it g it's getting the these new solutions are gaining momentum. So from your point of view what will uh it take to move it from early proof points to really mainstream usage as as you talked Ron even said everything is fintech as everything will be fintech. Don't even think about it. So let's where do you see adoption now and how do you see it uh going forward?

Thank you for the question and I think we are the best position to answer this question because we Chinese are always good at adoption. Yeah.

Uh you know just as in his um in uh you know SP spoke during his remarks in the mobile annual business forum uh on Saturday and he mentioned the difference between the uh AI uh uh especially uh for between China and the US. Chinese is more good at the adoption of AI. So so is financial infrastructure. uh actually know we think the uh financial instruction uh in infrastructure um uh development is uh mainly driven by uh technological we I fully agree with uh uh and uh uh you know we see that the adoption is happening everywhere for example uh locally in UEE uh we we are very happy to see that UAE is carrying out a lot of uh um measures of the modern regulatory reforms for example the uh published a new uh central bank law and uh the week before last uh UEIE and China signed an uh you know co-developed um uh central bank payment uh digital currency bridge leveraging blockchain technology to enable direct settlement and payment for the two countries. So there are all the um uh detailed measures for the adoption and uh uh also you know for uh CIC we are we as a leading investment bank in China and in investment bank always play an important role in the adoption of the financial uh indust uh finan infrastructure uh development.

Um one of the role we play is uh we we want to make the uh infrastructure stronger. uh we want to provide more um uh uh investment opportunities for uh the global investors to to share the development of the Chinese uh economy. Uh for example, this year we uh we doing quite well in the Hong Kong market. you know we we we are we we helped for example CTO of the the world's largest battery company to get listed in Hong Kong and raised as much as 5.5 billion US dollar and many of the cornerstone investors uh the sovereign wealth fund in the Middle East and during the process we also adopt some uh uh innov uh innovation of the financial infrastructure we have uh we use the total return swap tool to help uh the different regions um uh clients to access the Hong Kong market to participate in the IPO as a cornerstone investor.

Yeah.

Uh and uh one more thing I want to mention is that uh you know um everybody knows deepseek uh which is happening uh in China earlier this year. Actually you know uh the uh brother company of the deepseek is a leading quant uh trading firm in China named highf flyier and we have been the uh trading book for that company and all these kinds of uh uh adoption is is is uh used for that.

Interesting. Interesting. Ron can you tell us your view on adoption of these new financial uh infrastructure?

Sure. So from our experience we discovered something very interesting that tech adoption in finance is completely different than tech adoption in every other vertical of the market. The reason is very very simple. If you adopt something and you lose money, you don't have a second version. You have only one version.

So you have to do very disruptive move into the market, but you have to keep it very conservative in the way you roll it out. And this is a very gentle balance to keep how do you one one hand introduce something disruptive but on the other hand you don't lose money to anyone because no one like losing money right that's the the main challenge what we see is that organization like liquidity like F street uh we basically bridging this uh uh um we call it fill gap between capital technology adoption uh to the big financial organization because they're using organization like ours as an off-defense type of outlet to check the technology and then they join us after we prove it's working. So they deploy through us and after they deploy using our technology that's the evolution of adoption.

Yeah. Cindy, what what has been your journey with adoption?

Well, I think um the market is not really experimenting with something. I think we're starting to see evidence of that. The fact that the Msei index has currently launched uh a private and public exposure index um basically announces that investors believe that private markets are no longer just an alternative class. It's actually a relevant portion of their um portfolio, investment portfolio. um as well as that private markets and public markets should be allowed um to have interoperatability but also that our partners such as Franklin Templeton and Black Rockck have already done tokenized money market funds.

There's already other asset managers that have tens of billions of assets on chain. Um so you know that's that's full evidence but I think also for the UAE emerging in that which is that we are we've been as the UAE is Abu Dhabi allocators for a very long time and thus you know we appreciate um the the new demands uh for the investors the new demands of what the global capital flows will take and so the fact that the UAE is thinking about architecting a global capital markets and just principles um is something that you know at Fin Street we're leading um the sovereign agenda as well on that

and what challenges were apart from Ron mentioned a little bit that we first go through that part and then all the big ones are basically using our solutions what challenges were the most the biggest ones for you and how did you overcome them to date

so um our biggest challenge was the fact that There's a uh the market you deploying into in order to prove your technology is very different than the market that you deploying into scaling the business. What do I mean by that? We started the business with deploying capital to tech companies because we define that as the most risky, untangible, super volatile segment of the market and we said if we will be able to show zero default in this segment that will prove our technology works over a long period of time. However, this is relatively a small market. So when you come to scale it up, you basically move the technology in a market which is not scalable and now you have to move the technology to other verticals which are more scalable but less friction.

So that was our challenge. I think the way we did it is just gradually move and unfold additional verticals one by one and it's a it's a long play. It's not something you can do in a year or two. It's like a decade long play. Absolutely.

Wilson, uh what if you were looking at the this new modern financial market infrastructure, what would be your maybe what would you like to see from regulators, policy makers, but also innovators themselves to for all these new solutions to to take flight.

Thank you for question. Uh first thing I uh you know uh we have the good wish for the regulator and policy makers as uh to further uh uh you know implement the the capital market reform. For example, in China, we uh ease and uh lower the barrier of the IPOs which uh can you know provide better uh and much more opportunities for the uh you know the leading startup companies especially the uh tech companies for example the uh leading robot company semiconductor company like unitry they don't have the revenue but they can uh leverage the capital markets with money and to help them uh further develop and the second is uh the the the further opening up of the capital markets uh We are welcoming the global investors like you know we have already working very closely with the stock world funding hereala edq so we we help them to access uh get better access to China to Hong Kong to the capital markets and to the investment opportunities there and the third one is um better connection between the regions for example we help the Chinese uh uh stock exchange uh Shanghai stock chain shin stock chains and Hong stock chains to uh establish the uh connect scheme with ADX with Dubai global markets and so that we are exploring the uh ETF connect uh and stock connect between the different uh stock exchange to help uh the the investors to access uh the the the other uh stock exchange.

Ron, can I go back with you because you just mentioned basically how is it building in one market then scaling it in another. So what would help you in all these efforts when it from regulators, policy makers, even innovators themselves that you want? What what would you see for them need for them in the future maybe for this to be to scale even more?

So we call our solution liquidity one. The reason we call it liquidity one is because we basically aiming to uh uh uh um seamlessly move from all stages of origination toward due diligence toward build structure deal structuring closing monitoring collection and so on and so on and so on. So the entire cycle is closed in our business. Our business is corporate loans in different scale. Um I think regulation is less of the problem.

Regulation is actually an opportunity because regulation force many financial institution to work with the organization like ours because they cannot take the risk directly. Okay, that enables technology deep technology companies becoming big asset managers and as long as you can deploy without losing capital, you will scale. So I see it more as an opportunity than a risk.

Sinki, what do you say? Well, I think um you know the market is definitely um inefficient as it stands and so um you know it wouldn't be possible in my opinion to retrofit um the problems and make it efficient with a legacy system or legacy regulation. So I believe that if there is some sort of international regulatory harmonization between various regulators across the world I think that will help. The way that we have as well overcome that is that we have established ourself within the ADGM where there is application of UK common law and the regulators can map to the um the processes and up to international standards but still there needs to be a lot more harmonization whether that's for the western regulators or the eastern regulators

and how do you see this um sector in the future we agreed in my questions is 10 years from now but I think that's too fast this moves at a much higher speed so in a year or 3 years maximum where where do you see and where do you wish to see this sector

maybe Ron let's go

so I can als I I it's for now I can only answer regarding our verticals I believe the next revolution going to be CLO uh at scale I think what we see now is most of the big players they looking at CLOS's as the most scalable market but they uh struggle to manage this and technologies that enable uh fast decision process uh low rate of mistakes and uh frictionlessness uh uh uh acquisition and sale of the CLOS's this is we're going to see a lot of changes

how do you see this working

I just want to me mention one thing uh that we already doing uh sync the uh to validation of the real asset including the infrastructure and the real asset will be a trend a very and exciting thing actually know we helping a lot of AI data centers to do the such kind of things and this will uh solve the liquidity problem for the reassets uh uh trading system uh and also uh green finance will be another trend I think will lead to the global capital towards an sustainable trans transition

thank you for

if I yeah thank you if I could answer that in one word it's Fin Street the next generation of digital capital markets but just to characterize it it's you know capital that's global assets that are um agnostic private or public regulation which is modern as well as you know there is no limitation on how uh frictionless and how smooth the market is

okay for one thing is for sure that it's new solutions are confident and I'm glad to see that thank you all so much for for your time and thank you for your answers and thank you all for being with us and listening to this topic. Thank you.