Welcome to the Horizon Kinetics Holding Corporation's 2026 Annual Meeting of stockholders. I would now like to introduce Peter Doyle and Steven Bregman, Co-Chief Executive Officers, along with Jay Kesslen, General Counsel.
Good morning, ladies and gentlemen. Thank you for joining the company's 2026 annual meeting of stockholders. I will conduct the order of business for the meeting. With us today are members of the board of directors. The meeting is being held in accordance with the company's bylaws and Delaware state law. During the formal meeting, which won't take long, we'll address matters described in the company's proxy statement dated April 20th 2026, which include the election of six directors, the ratification of the appointment of CBIZ Inc. as the company's independent registered public accountants for the fiscal year ending December 31st 2026, and the advisory vote to approve the compensation for the company's named executive officers. Balloting will be completed. We'll make a preliminary announcement regarding the results. Then we'll adjourn the formal meeting.
After the formal meeting, there'll be an opportunity for stockholders to ask questions of the company's officers. Before we go further, I'd like to note that during the course of the meeting and the question period afterwards, representatives of the company may make forward-looking statements regarding future events or the future financial performance of the company, which involve risks and uncertainties. Such statements are only predictions. Actual events could differ materially from those predictions due to a number of risks and uncertainties. I would refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K for the year ended December 31, 2025, and the company's quarterly report on Form 10-Q for the quarter ended March 31st 2026, then, of course, the company's current reports on Form 8-K
The documents all contain cautionary language. Identify risks that could cause actual results to differ materially from those contained in our projections or forward-looking statements. As for the notice of meeting, I have proof by affidavit that the notice of the meeting was duly given and the proxy materials were mailed on or about April 28th 2026 to all stockholders of record as of the close of business on April 24th 2026, the record date for the meeting. The affidavit, together with a copy of the notice, the proxy statement, and the proxy, will be filed with the minutes of the meeting. As the Inspector of Elections, I can confirm we have present in person or by proxy a sufficient number of shares to constitute a quorum. We are duly constituted as a meeting. We may proceed with the business.
We will vote by proxy in our online voting polls. Each holder of common stock is entitled to one vote for each share of common stock held of record as of the close of business on the record date. If you previously turned in your proxy and do not intend to change your vote, it is not necessary for you to complete another proxy or ballot. Your vote will be counted. If you're eligible to vote and have not submitted your proxy or if you want to change your vote, there will be a brief time for you to submit your ballot electronically or in person, if you're here, when the polls are open. The votes cast today will be counted in the final tally with the proxies previously received and disclosed in our public filings. The first item of business is the election of six directors.
It's discussed on page six of the proxy statement. As indicated in the company's proxy statement, the following six individuals have been nominated by the board of directors to serve as directors. They are Steven Bregman, Peter Doyle, Alice Brennan, Allison Nagelberg, Dan Roller, and Brent Rosenthal. The next item of business is to ratify the appointment of CBIZ, Inc. as the independent auditors for the company for the fiscal year ending December 31, 2026. This item is discussed on page 17 of the proxy statement. The final item is to hold an advisory vote to approve the compensation of the company's named executive officers, which is discussed on page 13 of the proxy statement. We will pause to see if anyone has any questions on voting procedures for the proposals up for vote. Okay. Hearing no questions, we're going to turn to the preliminary polling results.
It is now 2:04 P.M. Eastern Time on January 9, 2026, and the polls are open. We will wait a minute for everyone to cast additional votes or change their votes online, and if anyone in the room has a ballot they'd like to submit, we will include that. We will wait a minute. Okay, it's now 2:05 P.M. We are going to close the poll for each matter that was presented previously. We will not accept ballot changes or revocations after this point. Based on a preliminary report on the voting results provided by Broadridge, the results are as follows. With regard to proposal one, each of the nominees has been elected as director to hold office until the 2027 annual meeting or until his or her successor is duly elected and qualified.
With regard to proposal two, the appointment of CBIZ to act as the company's independent auditor for the fiscal year ending December 31, 2026, it has been ratified by a majority of shares present in person or by proxy entitled to vote. Finally, with regard to proposal three, the compensation of the company's named executive officers as described in the proxy statement, it has been approved on an advisory and non-binding basis by a majority of shares present in person or by proxy entitled to vote. These are the preliminary results of the voting. The final count may vary depending on the votes that were submitted over the last minute or so. Again, the final results, including any ballots or proxies received, will be set forth in the final report included in the minutes and also included in our report filed with the SEC.
That concludes the formal portion of the annual meeting of stockholders. I will now turn it over to Steven Bregman and Peter Doyle, Co-Chief Executive Officers, for some comments before we turn to questions.
I'm in the habit of turning to Peter and saying, "Peter, do you have anything to say?"
Obviously the big thing that's looming over this meeting is the passing of Murray. We lost a friend, a colleague, a mentor, a brilliant mind, and great person on every level. I still wake up a lot of mornings and it's surreal to me. It's painful in a way that I didn't fully appreciate how much. It's a strange thing to say about a business colleague, but I loved the person. I know all of you who have listened to the calls over the year felt like you got to know him, and as many wonderful things as I could possibly say, they were all true, and you could times that by any number that you want, and it would still be true.
That being said, Murray left us in really a great position. He left us with a strong balance sheet. He left us with strategic assets that basically all we have to do is have enough common sense to hang on to them, and we're going to do pretty well. Steve, I'm sure, will talk about it, there's certain securities that are really strategic assets that really provide opportunity for us to grow as a firm in the future that are available to us that were never really there in the past. From what I could see, just from over the last two months, there's really been nobody that's taken accounts away from us. We've won some additional money from existing accounts that Murray had direct contact with.
My guess is that probably sometime next week, I'm likely to win, or be part of a team that wins a fairly large mandate from a former client who went the way of indexation and is now coming back towards the way we invest. I want to thank the staff, including our legal. Jay says I don't give him enough credit. For really stepping up and showing a level of energy and commitment to building on Murray's legacy. I think all of you share the heartbreak that we share. We're here working every day. As Steven pointed out, the first two months have really been, let's just get a handle on where things are.
As I mentioned before we turned on the speaker, this past investment committee meeting that we had yesterday was probably the first time that I felt, okay, this is the way our firm's going to be run going forward, and I was very pleased by what occurred there.
Steven here. I'll just continue along some same lines. In terms of the strength of our organization, in terms of its staying power, which is item number one. First you have to be alive, right, as an organization. In terms of its vibrancy, which means its future potential, we are remarkably fortunate. One of our resources, which I really hadn't appreciated before, was I use this term advisedly. I was taken aback by the number of employees, here and there, personally, as an aside or came into my office to tell me of how passionate they are and how devoted they are to continuing this, experiment might not be the right word, but I'll just use it. This experiment, specifically in respect of Murray and what he was trying to do with us, and assure me that they are dedicated to helping that happen.
I was really taken aback. I never really encountered that before in my work life. Everyone has either raised their hand to ask how they can help, or they've just stepped up and helped without raising their hand. I'm sometimes in the habit of sending emails late at night or on the weekend because that's just when I'm doing it, and I'm simply not organized enough to pend it for Monday morning. The people I work with more frequently, I've told them, or I'll even write it in the subject matter column, "Not for now, for Monday morning." I've had people not only respond to me on weekends. It's not my role to invade people's personal lives. Not just respond to me with an answer, but with a research report or an evaluation or something like that.
Only through that route do I know they're burning the midnight oil, and nobody asked them to. That's one resource we have. On the externals, on the tangible resources, well, you see our financials. They are exceedingly, and I might be repeating myself from the last conference call we had, but I'll do it nonetheless because it's not unimportant. I'm sure there must be some, but generally speaking, as a rule, I'm not aware of partnership type of organizations, law partnerships or medical partnerships or investment firms that really have substantial and meaningful, on a business basis, balance sheets. By and large, they pass out the income as they go along, even as they prosper. Whether it's the nature of those businesses, that they simply, they're partnerships by convenience and they don't really trust it to last, to put their life savings into or not.
We decided strategically early on when we first started that we would build up a very substantial balance sheet over time, if through no other mechanism than simply not paying ourselves out all the income we generate. In the early years, we kept our salaries once we were able to pay the rent and cover our base expenses. We kept them fairly low. They step up periodically but kept low for long periods of time. Took our income, which was passed out to us, and finally at a certain point, we reached a certain scale. I finally remember. If I were Murray, I'd actually remember the number. If I were a normal person like Peter, I'd probably remember the number. I got one year, I got one check, and whether it was December or January, I don't remember, but it was a big check.
Maybe let's call it $200,000. I actually looked at it almost lovingly because I'd never had a check that big in my hands before. I appreciated it for a few seconds, which is actually a long time. One, two, three, and I sighed, and I put it down, and I got out the two other pieces of paper, more or less the same size. One was a check that I wrote to myself to put in my bank checking account. The other was a deposit slip. Excuse me. One was a deposit slip, and the second was a check. The check I made out for about roughly 65% of that number, pay right back to Horizon to put it on our balance sheet.
The idea behind that, so you understand it, so you understand our thought process, was when we were all discussing before we even had started Horizon, when we were planning it, Murray taught us this strategic thinking, was let's just consider this on its face without any bias. We're going to have a business that's going to be investment advisors. We're going to be buying stocks and bonds. Not that we would've chosen those cards if we had them, but those are the cards we were dealt. We worked at Bankers Trust Company in the private bank. Our only business asset really was any relationships that might come therefrom and were kind enough or naive enough to sign on to us and become clients.
I say naive only because we're trusting because really, how does somebody know what's going on inside our four walls when we first start? Are we cohesive? Are we fractious? Are we sufficiently capitalized or not? They didn't know, but they came along, and I'm ever grateful to them. We understood that we're going to be in a volatile business, and those are the financial markets. Even if we are successful in getting a critical mass of accounts and we're fine and dandy, five years down the road or six or seven or eight, the market's going to go down a lot. When they go down a lot, we have a research business that generates revenues. Professional investors subscribe to it. Well, if a Fidelity fund manager gets fired because the market's down, she doesn't get to be a subscriber anymore. We lose that revenue.
Our assets go down because of valuation contraction, and some clients need the money or they're frightened and they make changes. Our revenues go down. We wanted to insulate ourselves strategically as much as we could, immunize ourselves from this volatile business we're in. We had a number of ideas, and one of those ideas was to build up a large enough balance sheet so that we could protect ourselves from having to make decisions that we thought would be bad decisions under duress, either on an investment basis. People do. They sell securities at the bottom because they don't want to alarm clients. Window dressing. They don't want clients to see some security, maybe like Texas Pacific Land Corp went down 50% or 60%, so they'll sell at the bottom because they're desperate to retain clients as opposed to buying it or maybe laying off staff.
They don't want to have to, that's typical on Wall Street. You go up and down. The idea was that if we could have a big enough balance of cash and securities, that maybe the interest in dividends thereon would be sufficient, maybe at least to pay the rent, maybe not all of our expenses, but at least enough so we'd have some staying power. To an outside observer, it might seem like a little bit of hubris. If you back your way into it, you need a few million dollars of interest income. Like you back into it, divide by 3% interest rate or 4%. You must have an enormous amount of capital to do that. How could we possibly anticipate that? We're actually Murray liked to regale people with the story.
We're having a meeting in our first conference center, which was a couple of seats at a Burger King across the street from Bankers Trust Company where we worked at 1 BT Plaza near where the World Trade Center used to be. We weren't thinking about it that way. We're just thinking, in principle, it should work. We almost didn't think we could get there. It just seemed impossible. We just decided that that would be one of our goals, and we got there. We don't have any worries about that. The other thing of Murray's insight and guidance we did was he wanted to ultimately, it wasn't really possible then. Ultimately, he wanted to be able to own what we'll call now strategic assets, to differentiate that from just traditional value investing. We practiced our version of value investing, and we still do.
There's a difference between, as he would put it, finding value, locating it. You come across some interesting company, somebody whispers in your ear, you go, "Wow, this thing is really cheap. This is a really good deal. Let me buy some, let me hold it for as long as it takes to get a good return out of it." That's finding value. Ultimately, what he really wanted to do was be part of creating value where none exists. As soon as we could find some strategic assets he began to buy, we began to study, we began to specialize in them. We know a lot about them, such as royalty companies, such as securities exchanges.
I'll call those strategic assets as differentiated from plain old value assets. I hope I'm not boring you with this, but I think sometimes understanding some of the details of what something's about helps you interpret and extrapolate beyond that. A lot of professional investors, I know it for a fact because we deal with them all the time. We might do some advisory work for another financial institution, they look at our portfolios, without an explanation, they don't really know what we're doing. They really don't. They'll look at P/Es. They'll look at price to book. They'll look at sector allocations, they completely misinterpret what we're doing. I'll use a couple of examples that are in our portfolios right now. Hawaiian Electric Industries, which is a recovering utility.
It's an area, a sector we've done well in multiple times in the past few decades. Without going into details, they had the Maui fires a few years ago. All the litigation risks and recovery risks from insurance companies. All those risks have been defined any further actions thereon were stalled by the courts. That risk is over, now they're just in recovery mode. Now, an electric utility is pretty easy to know what it'll earn. It'll earn a lot of money over time, they'll use that to pay off the liability.
In several years, they'll be back to earning what they used to earn, it'll be a recovered utility. It'll have a very nice return. They'll reinstate the dividend like that. Okay. It's not a strategic asset in the way I'm talking about it because in three or four years, it'll have recovered. It'll be an ordinary utility. You'll earn a certain limited rate of return, which is not the level we want, we'll have to sell it. When we find an appropriate place to reallocate the capital net of, for taxable clients, the gains taxes they have to pay look for something else. It's not strategic because you really can't compound it for a long, long time. Compounding is Okay. I hesitate to repeat a story because it feels like I'm cheating, but it's really not.
There's this very popularly misattributed quote of Albert Einstein's that compound interest is the eighth wonder of the world, right? That if you understand it, you earn it, compound interest, if you don't, you pay it. He never said it. The idea is that people throw the term compounding around a lot as if they understand what it means, but they don't. You don't get compounding in three or four or five years. It takes a lot longer. There are people who think, they say, "Oh, I had this great stock." It was compounding. "I held it for five years. I sold it. It was great." They didn't get compounding.
The stock might indeed have been growing at 15% a year for five years, but the real return came because they bought it at a low P/E, let's say 15, and they sold it at a high P/E, say 30. They had a valuation change, but they misunderstood what it is. You don't see compounding for a decade, for a decade plus, or two or three decades. If you can hold something for two decades or a decade and a half or much less three decades, that's growing at 12 or 13 or 14, 15% a year. It can be remarkably remunerative. It can change your life. It can really dominate your portfolio.
I dare you to find me anybody working for a large institutional investor who will even be allowed to hold a security long enough to let it go from a 3% position to a 6% position to a 15% position. They're not going to be allowed to. If they insist on doing it, they'll just be fired so that the institution can practice its approach to portfolio management, Modern Portfolio Theory, and not let the portfolio get more volatile and so forth. Anyway, the point is if people can find such a thing, which is very rare, they wouldn't be even allowed to practice it. But even to find it is exceedingly difficult.
We have a bunch of summer interns working for us, and if we weren't keeping them so busy with more timely work we need, I'd, as an exercise, I'd have each of them try to find for me a company that they think has got a business model that's sustainable enough and vibrant enough and persistent enough that they think it could realistically compound at the current rate for the next two decades. I'm positive, other than anything they've heard of ours, they'll come to me with all sorts of ideas that simply don't meet the requirement, that those companies are much more cyclical or asset intensive or what have you, subject to regulatory risk. They're very few of them. Meaning there are really very few business models that do this. Royalty companies are almost a weird anomaly.
What kind of business can have 30 or 40, $50 billion market value in the stock market and huge amounts of revenue and have 12 employees or 15 employees, that have 95% pre-tax profit margins? Or securities exchanges, which are a step below because they do have computer equipment and technologists and compliance departments and whatnot. Still and yet, we're talking about free cash flow margins on the order of 50%. They make Microsoft look anemic. They're extremely unusual, and they have businesses that can persist indefinitely because of the nature of them. The thing is that 15 or 20 years ago, we couldn't own those because they didn't exist other than a select few royalty companies like Texas Pacific Land Corp and Franco-Nevada, which was the first of its kind. It created and invented a royalty company. The exchanges weren't public yet, right?
London Stock Exchange or New York Stock Exchange had to be demutualized, they had to come public. As soon as it was possible to participate in royalty companies or in exchanges, Murray did. Even before some of them were public. Minneapolis Grain Exchange, you're able to buy seats, and they were cheap enough. Even we could do it at that time. Buy enough seats, get on the board, establish a strategic kind of relationship with them. Murray basically herding cats, was able to combine Minneapolis Grain Exchange because of its particular strategic asset, which was a clearing license, which was underutilized. Bermuda Stock Exchange, which has its own particular attributes. Miami Stock Exchange, which had its own brand of special. Somehow get these three firms to talk to each other and combine.
Looking at our portfolios today, which Peter began to talk about, they're characterized now by these kinds of strategic companies, businesses that can compound for a long time. We have securities exchange. They're not the only thing that's in them. Land companies and royalty companies. You can actually have a diversified portfolio just with those. Amongst each of those, you can get diversification. As you said, if we just leave them alone for the next five years, the portfolios will continue converging on the best performing companies and we'll do just fine. Fortunately, it's even richer than that. For the last bit of this, I can talk for way longer than you want.
The last bit of this, though, is that one of the things that we were able to do as an organization is to graduate even beyond simply buying public companies in a passive way. We're able to participate in some instances with the company's management directly, so that they're even a higher level, call it level 1 strategic asset. The first such one or two obvious examples are Texas Pacific Land Corp., where we have board representation. We're not activist shareholders. It's not in our blood. It's not by inclination. We're not set up for it. We don't want to be set up for it. We also have board representation at MIAX.
The relationships with these companies means that we're in the flow, having direct relationships, interactions of ideas and exchange of ideas, and sometimes when you're doing that with people at a certain level, 2 plus 2 becomes 5, right? That's how we're able to become involved with other core holdings like LandBridge and Permian Basin Royalty Trust. We have employees now who are out in the field meeting these folks, coming up with new relationships. One of the things Peter and I have found ourselves, along with James Davolos and others. Ultimately, almost everything ends up coming into the lap of in-house counsel, because everything at some point has to become legalized. There has to be a document then. It's amazing how much this guy knows, because in a sense, almost anything of significance, it has to be memorialized, right?
It has to be memorialized, passes through Jay Kesslen's hands and his staff. One of the things, we're almost in terms of all the fast walking and fast stepping I'm talking about that we've had to do for the last month and a half, part of it is we actually have a wealth of ideas and possibilities, investment possibilities, or to evaluate or be counterparties for. They're coming over our transom or invited out to meet people, and at this point, it's a lot to handle along with everything else. In a sense, we already have a self-sustaining engine of engagement with the outside world and companies that are in formation or looking to expand or looking to change what they're doing, who find some value in speaking to us because we have a different approach to take or point of view to offer.
Because they understand that if their business fits with our inclinations, that we are long-term holders, that we're looking for the same thing they are, but from our vantage point. I'll give you one anecdote about that, about us not being activist shareholders. Years and years and years ago, when we first started having enough capital through client accounts to buy enough of certain small companies that we found interesting, little by little, in our way, we'd buy more every week, every month. Murray and I each had, maybe Peter also had these calls because he also wrote research reports. I did, and Murray did. Our names were, someone wants to look up our company, they'll see our names. We get a phone call from a CEO or a CFO of a certain company. For some reason, it was always after hours.
It was 5:30 P.M., 6:30 P.M. in the evening. I get a phone call. At first, I didn't know quite what to do with it. He'd say, "Hi, I'm Joe Smith," I said, "Of such and such a company." I said, "Okay. Good evening. How are you?" He said, "Fine." Then he'd wait, there'd be some silence, and I'd wait. Finally, I'd say, "How can I help you?" He said, "Well, I just want to know if you would like to know anything." I said, "About what?" He said, "About our company." I said, "Not particularly. Is there anything you want to tell me?" He said, "Well." We went around in a little circle for a bit, and I began to realize what was happening. He said, "Well, I see you've been buying our shares." Then I'm slow that way. It finally clicked.
Maybe we got up to They don't call you when you own 4% of their shares. You start owning 4.5% of their shares, the treasurer, somebody's watching, and they watch these things closely. 4.5%, 4.6%, and they figure, of course, we want something, right? They're going to get a call from us. They figure maybe they should be proactive and beat us to the punch. I said, "Oh, I see." "No, we don't want anything from you." He said, "Because you're buying quite a number of shares." I said, "That's fine. We're buying the shares because we like what you're doing. We like your company. We think it's a good value, and that's all." He didn't really quite buy it. He figured I was being subtle. I said, "No, look, if we didn't like what you were doing, you wouldn't hear from us.
We vote with our feet. We don't mess with it. It's not for me to tell you how to run your business. We like what you're doing. That's what we see." That would be it. We get those calls periodically. That'll just give you an insight into our orientation. Some people might have been taking the wrong idea from the proxy battle we had with TPL, but that was to protect something we were already invested in. We had a lot invested in it, there was a lot to protect, and we wanted to be involved. That was probably the end of it for us.
Okay, with that, we can turn to question session. If you're online, you can submit a question through the portal. Let's give the benefit to those in the room and start here. If anyone has a question.
I'll be the first.
Okay.
I really liked what the talk about expecting TPL and LandBridge and MIAX, I've taken a haircut with those stocks directly myself. I continue to buy them. Terrible. You didn't mention anything about Bitcoin, maybe you could mention something about that.
Just for purposes of the call, the questioner was asking for comments on Bitcoin, so
You want me to take it?
You're going to say it first?
Not many people know that we invented Bitcoin. I am Satoshi. Fundamentally, we like it a lot. U.S. is running a deficit of roughly 6% of GDP. That's really horrible recession periods, wartime-type deficits. The continued debasement, not only here in the U.S., but around the world, whether it's the yen, the euro, et cetera, is going to continue. In dollar terms, we believe a single Bitcoin will continue to rise in value over time.
There's a real fundamental reason and logic and math behind Bitcoin. That remains intact. It's a better form of money, a better store of value, and it's better engineered. As a result of that, we believe in it from that standpoint. The mining aspect of it is still very important. Every four years, Murray has spoken about this. I'm sure you've heard from the past. The payout from the rewards, the block rewards, gets cut in half. It means the cost of production doubles. As a result of that, the price needs to increase in value over time. That math is still very much intact. Nobody's ever hacked the Blockchain. Nobody's ever gotten into Bitcoin's network to unsecure that.
If you believe that over time, people are going to gravitate to a better store of value relative to a handful of people that go into a room to determine the price of money, Bitcoin will continue to do well. How it gets from point A to point B is another story. We don't control that. Longer term, we remain very much committed to the position. We only put it in initially. I dare say that when we first got involved with it in late 2015, it was a very different proposition, and people thought we were a little crazy. We made it a very small position in our accounts. It has grown very substantially in some cases. We intend to leave it alone and let it continue to fulfill its destiny. I don't know if you want to add anything to that.
No.
That's essentially it.
All right.
I just want to interject one thing. How big is your exposure to Bitcoin, relative to everything else?
It's probably overall maybe 10% of our assets under management. Question was how large is our exposure to Bitcoin? That's the result of appreciation over time. It's really from a standpoint, it was probably maybe 25 basis points of our assets under management at the time that we got involved with it, and today it's about 10%, I would guess. Somewhere around there.
Good.
I just might ask a question of you gentlemen.
Sure.
Can you just discuss in just sort of general terms, a little update on the private investments that HKHC has?
You probably have a specific one or two in mind.
No, no. Just a little update. I just want to tell you, I work for Wells Fargo, and I'm very well covered by you folks. Tim, I have to just compliment you on Jim Davolos and James McShane. They do a wonderful job with me.
Oh, thank you.
But I just-
You deserve it
A little update on the private investments. That's all.
In my windy way, I'll start with the origin story, which two people can do exactly the same thing, but for different reasons, right? Turn on the news, you hear about some hedge fund manager, right? They'll describe us as hedge fund managers, and they presume it's all about the fees and that's our business. That's not how we started. Once upon a time, when we were much smaller, maybe we had a few hundred million dollars or several hundred million dollars under management, we'd come up usually Murray, right? Come up with an idea because he saw some dislocation in the market, and it was a really good opportunity. The experience we had was that since we didn't have a distribution system, meaning where can we get client money to put into this fund other than their own clients? No, we didn't have any funds.
It could be a strategy, right? We need somebody to create something for us. We'd call up we knew some firm like Morgan Stanley. Maybe we managed some assets for them or whatnot for their clients. Say, "Here's this really interesting idea." Someone there would say, "Oh, it does seem interesting." Then you have a series of meetings.
First, you meet with people at one level, then you finally get a meeting the next Thursday after the third Tuesday with another group, different peers higher and higher up hear what you've got to say and say, "It's very interesting, can you put together a presentation for us?" We go and do all the extra work and put together the presentation for them, they're very impressed, they say, "Okay, let's do this." Now time has passed, a market dislocation or an inefficiency doesn't last forever. Six months has passed, they're ready to start to go now, because they can guarantee that they can put $20 million in or $50 million or assign 1% a piece across 2,000 accounts or $200 million, whatever it is.
Then on top of that, they want to discuss the management fee, which we weren't thinking about, actually. They said, well. Their number was always very high. They want to charge a 2% base fee. It's a percentage fee. Number one, half the return's already disappeared, if you charge these fees, the client's not going to do very well. I mean, they'll be okay, they'll wonder, what was all the fuss about? Why did we sign these papers and documents? That's our reputation, too. It looks like we're spinning wheels to earn fees. We didn't like that.
One day, Murray decided. This was during a period when, was that in the wake of the Enron and the collapse and the IT bubble collapse, where there was a period of time. There's more than one, but there was a period of time when there were all sorts of bonds
corporate bonds trading at $0.60 on the dollar, $0.50 on the dollar, $0.40 on the dollar, some were convertible, some weren't. We thought they were either money good or in liquidation. They were still worth 50% more than what they were selling for. It was like a bull market in a bottle. When you have a bond that's selling at $0.50 on the dollar or $0.60 on the dollar, the market, in a sense, is correct. They've got a problem, it's not stable. Either six months or a year later, it's heading toward liquidation or it's recovered. As a business, the business that borrowed, that issued those bonds, it's going to recover or it's going to get worse. The time was of the essence, he said, "You know what?
Why don't we just create some kind of our own private fund?" I guess we had Jay by then. Jay could put the documents together. We'll just call clients of ours who might be interested in it, and it'll be a fairly short phone call. Maybe I wrote a precis of one or two pages just to describe what the opportunity is. Someone's either not interested or they are. If they are, you have a bit further discussion, and then they can just put the money in, and when the opportunity is over, we'll send them back the money, or they put it back into their accounts. It worked out very nicely. It was a modest amount, right? At least we could get it done. It was something we could do, and we put our own capital into it. That's the way that started.
I don't know if it was for that fund or a subsequent one where we said, "From now on, let's do it this way, where we're in control of it, and we don't have any extra people involved." Even when it came to fees, something very interesting happened. We didn't know which fees to charge. We asked our relationship managers, what fees should we charge? They weren't quite sure. We asked them to poll their clients that they were in touch with. We said, "To make it easy, let's give you three basic choices.
You can have a flat management fee, like 1%, or 1% and 20%, a 1% management fee and 20% incentive fee, which seems to be the mode, or zero and 20%, we won't charge you any management fee, but we'll take an incentive fee." We, all of us, I think, we all thought clients would say, "1% management fee, no incentive fee." We would've done anything they wanted. Almost to a person, you know what the answer was? They like zero and 20%.
Yeah.
We thought, that's fascinating. They were pleased enough to pay us a big, fat incentive fee, so long as we weren't earning anything while we're sleeping, right? They could acknowledge that maybe this won't work out, and it won't be anybody's fault necessarily, but we don't like the fact that you're getting paid for that. That's the way we structured that. In terms of our private funds, there are a number of them. They're quite diverse. I guess one of the first major ones was South LaSalle Fund, which ultimately held Minneapolis Grain Exchange, and ultimately converted into MIAX.
A more recent one, again, care of, to give you a living sense of it, care of our relationships that we developed through our engagement with Texas Pacific Land Corporation, getting to know people who have businesses in land and mineral interests in that area, or consultants who actually have businesses dealing in that. One relationship leads to another. We were led to SandboxAQ, which is a large math or large quantitative model run by Jack Hidary, late of Google, who is a physicist and computer scientist. That's doing nicely. We have some in global securities exchanges, which is able to do some things both in the public and private markets that we can't do in individual accounts. We have one that's called the Which is the minerals and royalties?
Royalties and Real Assets.
Royalties and Real Assets Fund. It sounds like more of the same. Well, we already have TPL, and we have LandBridge, and this sounds like more of the same. It really isn't, because this is a fund which is engaged with operators who can do things in the private markets at wholly different, meaning much, much lower clearing prices. Not only because properties are private or businesses are private, but sometimes there are very time-sensitive sellers of a really interesting mineral property. It's not something that's advertised on any brokerage list anywhere. You might be the only interested party. There are many interesting things they can do there. They can develop the properties themselves. All sorts of interesting opportunities we come across simply through the level at which we're operating now. So I think specifically you were probably interested in Sandbox and-
Well, Sandbox and I went to the TPL meeting, and I didn't have the appreciation of how closely TPL worked with Bolt, because the president of Bolt spoke, and that was fascinating.
Mr. Kesslen?
Give me another person from Bolt Data & Energy. I don't know. I don't remember his name, but it could be.
Texas Pacific Land made a $50 million investment in that.
Yeah. No, that's why I mentioned it.
Yeah.
They had him present, but I didn't have the appreciation, and I just thought it was fascinating how closely they're working together. They mentioned that they spoke several times a day.
Murray actually put them together.
Yeah.
Because.
Eric, because as a machine or Eric Schmidt, that's how I sort of put.
Yeah
dots together between Sandbox and-
Yeah
Bolt.
Eric Schmidt, former CEO of Google, is intent on building He had a plan for what's called powered land, where you make land and you prepare it to be available for a data center. Murray got to meet him and educate him about the resources logistically that you need to come together, the natural gas and the land distant from population centers, and the water, and the favorable regulatory scheme and so forth, and realized TPL is who you ought to talk to. That's how that-
Yeah.
Yeah.
Yeah.
That all ties in. You might have seen a week ago that Alphabet raised $85 billion. That tied into the thinking that these cash-generating businesses are no longer They're still cash generating, but they're going to use all of that in capital expenditures on building out that. We have no inside information, but my guess is that there will be a deal announced where Bolt is going to build something on TPL's land and-
Well, that's what they said.
That's, yeah.
They were talking about the complexity-.
Exactly
of the deals. Essentially saying you just have to be patient, but we're working. As a shareholder and as an outsider, I didn't have the appreciation of how closely the two companies were working together. That was sort of eye-opening for me.
Right. Just to give you, we're moving offices. Next time if you come visit us, we'll be on 6th Avenue. We've moved an office down in Summit, New Jersey, they put two desks together, trying to create more space and more places for people to sit. When they did that, the computer wires couldn't go properly with the arm that was supposed to house that.
Yeah.
They had to change that. That's just a small little thing. If you're talking about a $50 billion deal, with potentially being in business together for 25, 30 years, the level of complexity just going to take some time. People want it to happen yesterday, and that's-
That's right
That's the horizon that you need, the long-term time horizon. There's no question that's where it's going. The amount of capital expenditures happening in 2026 is going to exceed $800 billion for AI. That money is going to the western part of Texas, they're coming to TPL's land, LandBridge's land. WaterBridge is going to benefit from that, et cetera. If you have patience, stock's going to do what it's going to do in the short term. Longer term, it's hard to see how these companies aren't going to benefit greatly by that.
Yeah.
The other side of the coin for people who actually care about the stock market, right? Peter was referring to this, is that there's kind of a myth. It's kind of a myth and not a myth because in reality, it was true that the Googles of the world and Facebooks, and Netflix in a way, the internet-dependent business models were kind of capital-light businesses. We talk about the cloud, and you put your photos in the cloud. It's all so light and insubstantial. They had the highest sustainable profit margins for large businesses other than for exchanges and royalty companies that in the history of the stock market.
Today, it was a bit of a mirage because the only reason they could do that, they didn't really have asset-light business models, but the internet, the backbone, the pipeline for them to conduct their business, was basically something that already existed and that they didn't have to pay for. An essential prerequisite, part of what would be their infrastructure that they didn't have to pay for.
The telephone companies in some way.
Yes.
Yeah.
Yeah. The shorthand version of that is that these net neutrality rules by the FCC, which were designed to ensure fairness for all, but particularly for the retail customer, was that the controller of that data pipeline, like the phone companies, Verizon, for instance.
Yeah.
That they couldn't engage in preferential pricing. They couldn't charge a favorite customer less. They couldn't choke back somebody's data usage. The flip side of that, perhaps the unintended consequence, was that as internet traffic grew and grew and grew because these business models expanded, they expanded, the Verizons of the world had to build up and enhance the size of their networks and go to fiber optic and so forth, and they had to do all the funding of it. They funded all the billions of dollars that the internet-dependent companies earned, which is why they've been terrible investments for a decade or two. At a certain point, I recall reading Netflix might have accounted for 40% on a given night of network traffic, but Verizon wasn't allowed to choke back their usage.
In a sense, it was false, in reality, they earned all this money, right? Now that they're into, they believe, whether it's true or false, they believe that they must spend on these data centers to be able to provide all the computing power for AI, otherwise they'll be left as roadkill by the side of the highway. They're doing that spending. To date, as of this past quarter, let's say, or this coming year, they no longer have free cash flow, and they've begun to borrow. Now they don't have a free ride. Now they're going to start to become, just as business models, ordinary companies with an asset-intensive balance sheet. They're going to start to have their cyclicality. At a certain point, there might be price competition, there might be a return on capital contraction and valuation contraction.
One of the reasons why they might pay a company like Bolt to prepare the ground for them and to lease assets to them, it's because they don't want those assets on their balance sheet. They just don't have enough cash to go around now. They're essentially different. They're still being.
Google and who?
Yeah.
Mag seven.
Mag seven.
Okay.
Mag seven. At a certain point, people are going to realize that they're not what they think they are, but they're being priced as if they're still the same old companies.
I'll add a caveat to that. That's probably true. The underlying point below that is that we don't have the degree of predictability, or those businesses don't have the degree of predictability. For us, maybe the agentic agents that are going to be used and the tokenization of that is going to create tremendous amounts of free cash flow in the future, and some of the capital expenditure is going to be justified in a big way. We just don't have that visibility. We do know that they need to make that happen, and we're going to own those assets instead.
Although it should be noted that agentic AI is even more compute-intensive than your regular AI because they have to observe and process many more different sets of AI activities. That's going to be a further source of demand for compute power.
I'll give you an example. This happened to me last night because I was making dinner reservations for tomorrow. I went on to the website of the restaurant. Google came up, said, "Would you like our agent to reach out to you and get back to you on this?" I said, "Sure." They tried several times. They told me, "We've tried. It didn't happen." Later that day, they confirmed that I have reservations for tomorrow night. This all took place from an AI agent going on. You're going to see more of that every day of your life in ways that people are going to have 25, 30 different agents. There's a theory, and I'm kind of leaning towards that way, that it's not going to be doom that people are going to lose jobs.
You're going to become much more productive, and you're going to have things that are going to be working for you. It's going to free you up to do other tasks in the same way the internet was able to do that for a lot of people. It's unclear anyway to us that these companies that are laying out the type of money that they are, which is just incredible, unlike anything we've ever seen in the history of industry, that they're going to get the proper rate of return. Again, the land, the power, the water is going to be necessary in order for that world to come, and that's where they're going. As Murray had said prior to his passing, the center of gravity is moving to Texas. I don't think people, particularly in the Northeast, understand that.
If you read the papers and all the corporations that have laid off workforce here in New York, New Jersey, et cetera, and moved them out to Texas, you've seen that accelerate over time.
Also, I'd say that maybe we won't be as correct as we think we will be, we think there are a lot of ways to skin a cat, we think we have one of the winning hands for investing in AI, right? You can try to select the right company, the right bauble, and presumably, even if you're correct about the winner, that somehow you didn't pay so much for it, that you'll still get a decent return. You can try to control some of the necessary and limiting factors for them to enact that strategy and the resources. We own the resources, and it's not even necessary that those companies be terribly profitable, just so long as they operate and require those resources. That's our game as far as that goes.
Any online questions?
No online questions. If you're logged in using your control number, you can submit a question online, anybody else in the room have a question in the meantime?
Could you maybe touch a little bit upon the ETF business and just sort of how you view that platform of funds and.
The question for those who couldn't hear is just to touch on the ETF business with a little more detail.
That's a great question, and it's where I'm going to turn my attention to next. We have really excellent underlying products. We haven't had a lot of success in getting money into most of those. Part of it is a chicken and egg problem. We started them with our own capital. Friends and family put money in. You don't get on platforms where you have $50 million, $100 million, and then to do that. We've been bootstrapping that.
I know Murray was a big fan of that, of just sort of the word-of-mouth referral.
Correct. Ripples in the pond and everything else like that. I'd like to accelerate that. I'm reaching out. I've met with somebody. I actually didn't meet with them yet, but I have their presentation where they're presumably going to provide leads for us in order to help people get exposure to who we are and how we think.
I see.
To answer your question, we've had great success because, I think, of the timing of the INFL product, but we have other products that deserve as much money as that, and that's going to be one of my big pushes.
No, the point you guys just made about Texas sort of jogged my memory about the Texas ETF, which is-
Yeah.
Bringing it all.
If you look at the underlying performance, they deserve to have more money, including that fund itself. We're talking about it's a rounding error to us as a firm. It deserves more.
Thank you.
Other questions in the room? That's it. Murray would have us here for four more hours.
True.
I'll close if nobody has other questions. We're on good footing, and there's an expression I used in the last call that we had. Is that if you're on the wrong train, get off at the first stop. We're not on the wrong train. We're on a really nice train, and things could I had never seen Murray as optimistic in the 41 years that I've known him regarding what we had in our portfolios, including the privates. There's no reason to believe that that's not going to come to fruition. In my estimation, it's around the corner.
I guess now I think I have a number of questions. One is for the Bitcoin assets like Consensus Mining, Winland. Are you just going to continue what you've been doing? Any sense of merging Winland and Consensus Mining? There was also, I remember Murray said frequently that when it got up to 50% of Winland, he'd be much more disclosure. Winland has been very light on the disclosure. You're, last I checked, 44% or something like that. In other words, is anything going to change in that there?
You want to answer it?
Just to be clear, he's referring to FRMO's ownership of Winland.
Yep.
just so we're keeping our eggs straight.
Steve and I are not Murray.
Right.
we'll have to carve out our own path. We have spent a fair amount of time on Consensus Mining already. The mining environment today is not very attractive for Bitcoin or for the merge mining that Murray was doing with Litecoin and Doge. We've turned our attention to another coin that is actually very profitable, at least it was yesterday and today. Where it goes tomorrow. we're looking at a lot of different alternatives with regard to that.
With regard to those situations?
Yes.
Okay.
Yep.
What about Wren Group? Was he the main manager of Wren Group? What's going to happen next?
Wren is a closed-end fund. I've been looking after that on a daily basis. It trades at a discount, in my opinion, an unjustified discount. It owns a lot of the privates in there. It's open for people to see. I think they have great potential. I personally have been buying that fund. Murray had been buying it before his passing. No reason to believe that that's not going to be a wildly successful investment. You're buying TPL, you're buying Bolt, you're buying Sandbox at a discount to their fair value.
You said that you've been buying it, and Murray had been buying it, I think Some things Murray was buying for himself.
Yeah.
So-
Professionally in some cases. Yep.
With regard to the things that are illiquid that he was buying for himself, now I don't know if there's a federal estate tax problem. Is anything going to need to be sold?
I don't know what you're referring to. We know the situation. In my estimation.
Nothing to check?
Nothing big has to happen or things that have to be liquidated wholesale. I don't feel at liberty to really discuss that.
Right. Understood.
Any other questions?
How about from the youngest member of the audience? You have a question? No?
Maybe you can speak a little bit more. I know you've talked about organizationally things are good and everything else, sort of how you see the firm positioning itself. A lot of the public perception of the firm was Murray. I think maybe, it's hard to say more than he deserved in a sense. I think a lot of you have published a lot of good research over the years. How do you see sort of your external communication and everything else in terms of growing the firm and for that matter, this maybe is relevant to sort of how you're bringing up the next generation of people as well.
Just to repeat the question for the viewers, the audience there. They're asking about firm positioning, the public perception, Murray being the figurehead, external communications, and the next generation.
I don't think about positioning ourselves at all. I don't consider ourselves marketers. I personally, Peter can have a different point of view. By the way, we can have different points of view here. I can tell you frankly, without reservation, we've never had a fight, none of us here. Not any of the founding principles. We just talk to each other. If I've got an idea, Peter's got an idea, Murray had an idea, he'd try to talk to us about it, and sometimes we wouldn't quite see. He just figured he had to explain it better.
Yeah.
He might explain it better and say, "Oh, I see it." We still didn't see it, and he'd go back and think about it some more, right? Talk to us some more. He might end up saying, "I guess it's not such a good idea." Just rational discourse among people who respect each other. I don't think about trying to raise assets per se. I think about what we're doing and what we're interested in doing. We have a good idea. We wouldn't mind letting people know about it. Peter talking about the ETFs. We think we've got some good ideas, and we think it can actually be useful to people. If we can let more people know about it, that's fine. It'll take care of itself.
We have come to learn a little more intimately that we've got a lot of talent here that really wants to contribute more and be more useful. They're already bringing us ideas. Our first generational move, in terms of preparing for the future is elevating James Davolos to, what is he, Director of Research?
Director of research.
Director of research. He's had a 20-year career here. It's been his entire career. He's homegrown, and he's really ready for it. It's funny, you think you can't get water out of a stone, but if a stone is engaged, it does it itself. At this point, what we're really thinking about is giving more to various employees who are up for it and want to be engaged in it. On the research side, in the market to start interviewing more analyst trainees to free up our analysts to be more value added. It's a process. I'd like to repeat the process we started with years and years ago, the first time we wanted an additional analyst, is someone who hasn't already been, dare I say, have their ideas tainted, misoriented, polluted relative to our approach by having too much working experience.
I'd rather get somebody who's in a state of ignorance, right? That's merely a momentary state, but have the interest and proclivity to learn things the way we do it. Have them assist our analysts and train up. That's how we developed some of our very first successful employees is I went to what I'll call some of the working-class colleges in the neighborhood, Baruch and Pace and so forth. I'd spoken to the career placement office at a couple of these places. I asked if for any of your seniors who are interested in business, if they have an internship here one semester and we'll really put them to work, not copying or filing, can they get credit for it? They said yes. We wrote up an internship program description, and five or six young people started one semester.
By the end of the semester, because they have things to do, they've got jobs, they've got obligations. One by one, they peeled off, and there were two left. They both became very productive employees. We hired them. Maybe we'll go that route, but that's one area we're thinking of. In other areas, too. It's a very apt question. We're heading in that direction.
I think that's great that you don't all agree. There may be new directions. How do we get a sense of what are some of the new directions that Horizon Kinetics will be going? Will it be in the writings that we'll see on the website and things like that, or what?
Well, there's communication. Murray used to have frequent roundtables. People could call in and ask any question. I've heard some of them like, "Well, Murray, may I ask a question? I've got a six-year-old. I'm thinking about what kind of educational orientation a pre-K program ought to have. Do you have any favorites?" Like Montessori. As Peter said, we're not Murray. We have to work within our own limitations and give it our own affinities. I think what we'll do, I already have a couple planned. One is already scheduled for late June, is we'll have some roundtables, but they'll be more narrow focus. One might be on, I gave you a hint of it, on the changing business model of the Mag Seven type companies and what some of the details are of that.
We can open it up for questions, it'll be more focused that we can be prepared for and give some, let's say, value-added responses too. We're not as quick on our feet. Murray liked to work without a script. He liked to walk the high wire because he liked it. I don't. Engagement's important, we'll probably ask for some questions to be sent in in advance. We can answer those and maybe some phone questions, kind of like that.
That said, he worked without a script today. You were going to ask a question?
Yeah. You mentioned that it's extremely rare to find a compounder.
Yeah.
In your opinion, is HKHC a compounder? If it is, where does that compounding come from? You mentioned you're not interested in raising assets. Is it the balance sheet?
Well, it's not that I'm not interested in it, but that's not my focus.
Okay.
There are certain things I think will take care of themselves. Right?
One of the great things about Murray and what he taught us earlier is that people have problems they would like solved. If you can help solve them, they're going to find you. A lot of the products that we have out there that don't have a lot of assets really solve problems for people, and they just need to be shown those products. That's really, I'm going to take that upon myself to try to raise the assets in those particular funds. I don't really want to have a list of ETFs that are not profitable for the organization. That's not helping anybody. If we can get these exposed to the world, I think there's no reason why they shouldn't have much more in the way of assets in those products.
I think the Blockchain Development Fund is a strategic product that people really should have as a core position in their portfolios. The world just doesn't really know about it yet, and that's our fault.
I'll give you another example. I had a debate at one of the Grant's conferences quite a number of years ago with Jack Bogle when he was still alive about active management versus passive management, and I really enjoyed it. As I told him at one point, "I don't really want to debate you because I agree with 99% of what you're saying." Particularly when I came to realize, actually, during the debate, was that he had a different policy objective than we do here. We're just engaged in taking care of our clients, right? Our clients either are sophisticated enough to understand how to select an advisor or not, or we're just taking it upon ourselves to try to make the best decisions we can for them. He's thinking about the average person. Right? Main Street. They don't even know the people.
It's not their fault. They do something else for a living. They don't know the difference between a broker and an advisor. They don't even have that basic differentiation in their minds. They hear about the stock market on television. There are things we can do to help people, even more sophisticated people. Maybe even high-end financial advisors at big firms. They have a good idea. They would like to be more diversified in their equity exposure overseas in certain markets, maybe emerging market like India or in Japan. There are good reasons to think that Japan is underrepresented and will be a much more vibrant market. The only way they know how to invest is through the standard indices. All those indexes really invest in are because they have their own liquidity requirements. There are trillions of dollars behind these asset allocation decisions.
They have to invest because of their liquidity needs, and they have requirements. Daily volume and so forth. They're invested in the large cap, mega cap companies in all these different countries, which are almost necessarily, for the most part, global multinationals. Right? You invest in Italy. Italy's a small market. How can you have a multi-billion dollar market cap company with a sales base to match coming from Italy? You can't. Galileo, which is an airline reservation system, is one of the largest companies in Italy. It'll be in an Italy index. Galileo necessarily gets about 98% of its revenues from outside Italy. The entire Italy ETF, on a look-through basis, probably gets 70% of its revenues from outside Italy. Semantically, you're investing in Italy, but in reality, you're investing in everything but Italy. The same would go for investing in India.
India is a really deep and rich and broad market. They got over 5,000 public traded securities there. Probably close to 2,000 or, I think 5,900 that are above $250 million market cap. When you invest in an India ETF, you're not reaching any of them. If you're interested in the vibrancy of that market, or if you're interested in the future vibrancy of the Japanese market, which the government is forcing little by little by little, but inexorably to happen. Why don't you peel off a little bit of your index money and put it into our Japan ETF or owner-operator ETF or into our international securities exchange ETF? One of the best ways to participate in the expansion of an economy, particularly in an emerging market, is through finance-related companies, insurers, if not securities exchanges, security adjacent, like registrars and clearing houses.
There's a multiplier effect there. We can help people achieve what they think their goal is, but they might not even be aware there's a better way to do it. That's, as Murray would say, that's our line of country.
You guys have written a lot about the perils of indexation and the problems. I applaud all that. It's a lot of brilliant thinking. Sometimes you guys, including maybe perhaps Murray, have complained about it. I don't want to hear the complaints because, to me, you have a non-economically motivated counterparty, and exhibit A is 2024, when, if I'm not mistaken, Texas Pacific Land Trust, which was not in any index, got added first to the S&P MidCap 400 and then to the S&P 500 the same year. You can just see what it did to the stock price. It was fantastic if you were a prior holder of TPL, which you were, because all these forced buyers are coming in after you already own it. That's a great thing, which I'd love to see you guys take advantage of more.
There's an elephant in the room right now, which nobody's mentioned, which is SpaceX and the way they changed the rules of indexes just so that MIAX cannot take advantage of the Bloomberg index, and they didn't want to be—I guess CBOE or CME or somebody didn't want MIAX to have that advantage. Suddenly they're relaxing the rules and letting SpaceX and Anthropic and OpenAI come in without profitability. I'm just curious what you think about it, particularly all of these passive index buyers who are ignorant and they're just buying it because it's in the index without looking at it. Are they not weak hands? They're buying it because it's going up, but that means when it's going down, they're selling it. Right? Yeah, I'm inviting your comments.
I could say to one degree, looking at it, that we're lucky the indexes work the way they do.
Yes.
Perforce, they're not looking at what we do, and they're not interested. We have less competition. We have fewer eyes looking at or even interested in what we're doing than we used to. The active managers have declined, which means analysts of actual individual securities, their ranks have been thinned. Those that remain, many of them shifted over to be analysts of ETFs and ETF strategies.
They have money yanked away from them.
Yeah.
Even if they-
One day, we believe that eventually, for a moment in time in history, which will be very long in actual experience, the Eye of Sauron, if you remember that reference from J.R.R. Tolkien's "The Lord of the Rings." Anyway, will turn toward resources. What Murray has talked about for quite a while was that the world's coming full circle. You reminded me of that. World's coming full circle. We thought that we were living in a financialization age, and you didn't have to pay any attention to hard assets. The cloud is supported by millions in each data center, millions of pounds of steel, unknown millions of pounds. Well, they know them, of cement and aggregates and copper and silicon and water provision and natural gas.
It rests on a bedrock of hard commodities, there'll come a point when the attention of indexers turns to that, if they think there's money there, they'll invent some new fund or some new tilt or some new style, they'll try to figure out a way to get it. There's just not enough market cap to go around. Maybe some smaller or more innovative. Maybe iShares can't right up front, but some smaller, more innovative ETF family will decide to start. Who's that guy we know who's got the first gold ETFs and Oh, VanEck. Maybe a VanEck will or WisdomTree or somebody, and they'll want what we've got. We don't need it to happen, eventually, the odds are they follow performance. There might come a year when the conventional indexes are down a lot because of certain sectors.
Right away, the agents, the agentic AI at some of these firms will identify which sectors are going up and what the relationships are and say, "Hard assets." They'll come to us. Maybe.
Any other questions? Nothing submitted online. If there's anything else, do you want any final comments, or we can close the meeting?
No. Thank you all for coming, and hopefully we're able to address your questions. My take is that, again, I don't want to repeat what we've said already, but we're on very solid footing, and we have the ability to grow this, including the next generation. I mentioned earlier, before we got on the call, the meeting that they had, the investment committee meeting, was really an excellent meeting, and it was really a shared discussion. A lot of voices chimed in in a way that I had actually never heard in our organization. I was really gratified to see that happen, and I told Steven that twice today now. Thank you.
All right.
Thank you all.
This concludes today's conference. Thank you for attending and have a pleasant day.