How many investments in financial technology has your family office, Angelic Ventures, made? What is your primary investment thesis driving your commitment to fintech? Through Angelic Ventures I have made 40+ early stage investments, ranging from Lending Club, Zopa, CircleUp and Fundbox among others in credit marketplaces to AlphaSense, Dataminr, Motif, OpenFin, Symphony, Selerity and TrendRating in Fintech, and Colu, Coinbase and TradeBlock in blockchain. My primary thesis is to choose trends that will be important and get in early.
As a venture and early-stage investor, is it more about the jockey, or the horse? The jockey and the racetrack.
Which fintech racetrack have you placed the most bets on? Communication and marketplaces because of network effects. I invested in an early round at Lending Club because I believed that the spread between what banks paid to small depositors and what they turned around and lent to them via credit card debt was huge (1500bp +) and that credit underwriting was increasingly algorithmic. I’ve stayed with this theme of credit arbitrage, including a new institutional credit platform that I’ve recently cofounded, but remains in stealth mode.
Which companies in your fintech portfolio are enjoying the greatest response in the marketplace? I love all my children, but Transferwise, Illumio and Symphony are getting the most attention.
We are very impressed with AlphaSense, a company that you have invested in. Your thoughts about its future? I love the Jockey (Jack Kokko) and the pain point AlphaSense reduces is a real one – research overload.
We have covered the distributed ledger technologies extensively. Where in its evolutionary cycle do you see blockchain settlement? Early days, but very promising due to the auto-reconciliation nature of DL. So, rather than each dealer needing to keep its own separate database of trades, which must be reconciled to a central master, once a new block is written to the blockchain reflecting a new set of trades; all participating nodes are automatically reconciled and synchronized.
You spent 19 years at global news and professional information provider Thomson Reuters — 11 years as the CEO. What has struck you most with respect to the evolution of financial media? The fact that fast and accurate, while still necessary, is no longer sufficient. To provide differentiating value over Twitter and other machine feeds, financial journalists must provide context, analysis and an actionable point of view.
What is your view on click-bait headlines? I can’t resist “10 Sure Wins in fintech.”*
Thanks for the headline. Who provides “signals” and who simply provides “noise” in the financial media; in investment circles? I cannot resist a shout out to my many friends at Reuters; I have to grudgingly admit that Bloomberg, WSJ and Financial Times are damn good too. Dataminr deserves special mention for its extraordinary [signals to noise] ratio.
What’s wrong with cable broadcast financial media today? The need to point to a cause for every 1% movement; however, David Westin on Bloomberg TV is excellent.
You actively blog on fintech and politics at tomglocer.com. During the campaign you referred to candidate Donald Trump as a “sociopathic liar,” “buffoon,” “a dangerous racist demagogue,” “un-American” and declared… “Don’t, worry, he is a clown and he won’t be elected.” Now that he has been elected, how do you describe President Trump? POTUS; the people have spoken and must be respected; however, that has not changed my opinion of the man.
Why did Hillary Clinton lose? I only voted once, and at that, in NYC.
Does the media have a liberal bias? Many intelligent people do, at least on social issues such as immigration, civil rights and press freedom…
On regulatory, tax and fiscal issues, you favor some traditionally conservative positions. You advocate that the SEC, CFTC and the Consumer Financial Protection Bureau merge into a single agency that balances investor protection with vibrant and fair capital markets. It won’t happen given the desire of Congressional oversight committees to keep their separate influence.
You also advocate in favor of lower corporate tax rates and revamping the tax code to make it simpler, shorter and fairer, suggesting that “all individuals pay at least 20% of their income and gains.” Do you favor a flat tax? I favor a flat minimum – no one should pay less than 20%, but I also believe people who have been as fortunate as I have should pay more, but not more than 50%.
What are you reading now? Homo Deus by Yuval Noah Hariri and Underground Railroad by Colson Whitehead.
What is your essential book(s) on business, media and/or finance? The Innovator’s Dilemma by Clay Christensen
What is the first website or app that you check every day? Reuters and QZ.com.
Favorite musical artists, living and dead? Grateful Dead – unfortunately they cover both categories.
What is your favorite New York steakhouse? My own Kalamazoo grill; second choice, Peter Luger.
Who is your business hero? My heroes are the peacemakers such as Nelson Mandela, Martin Luther King and Yitzhak Rabin; business does not seem that heroic to me.
Which sector/subsector of the stock market do you see the most opportunity for the year ahead? Financials and FANG (Facebook, Amazon, Netflix and Google).
Your view on the recent Snapchat IPO and the company’s prospects going forward? While I play with most new consumer applications, including Snapchat, to make sure that I understand the direction technology is going, I prefer to keep a historical record of my online interactions. Thus, as a user I’m more a fan of Twitter (@tglocer), but as an investor and Morgan Stanley board member, I’m pleased that the IPO was a success.
The “Trump bump” has resulted in an unprecedented post-election market advance. How does it end? I hope via a soft landing as it reverts to the mean; however, I fear a more abrupt drop if Trump undermines the Pax Americana that has benefited global trade.