Stewart: Welcome to another edition of the Insurance AUM Journal podcast. We have a very special guest today, Grace Reyes, CEO of The Investment Diversity Exchange, otherwise known as TIDE. Welcome, Grace.
Grace: Hi, I'm happy to be here.
Stewart: We are thrilled to have you. Your business connects and engages what I would call the movers and shakers in this business to promote diversity and inclusion in the investment industry. Your background is finance. You have a lot of relationships. I think you're like a mega power networker, at least the way that I view you. You've been all over the place. We're thrilled to have you, let's talk about what is TIDE.
Grace: So, TIDE was just launched last year in January 2020, and we gained so much traction in a short amount of time because we got the support of the most high-profile asset owners in the industry and very well-respected managers. So, when you combine that with our rockstar advisory board and a network that wants to help amplify our mission, just like yourself, we became a strong force to spark change. And so, yeah, we connect movers and shakers to promote diversity and inclusion, and last year we did this through a conference. It was supposed to be in-person, but because of COVID, we shifted to digital. And I think because of our digital presence and our quick pivot, we were able to capture that market fairly quickly and do well. And so, we've only been in the industry for only about one year and four months now, and doing quite well.
Stewart: I'm really glad to hear that. I really am. I want to be a strong voice for diversity and inclusion, not only in the insurance industry, but also in the investment industry. And one of the reasons I reached out to you for this interview is because it is the topic du jour, but I do feel like you are skating where the puck is going, not where it's been. So, when you're focused in this space, there's a lot of people promoting this. Why do you think there's a need for TIDE?
Grace: Yes, so I would agree that it's a pretty diluted space. I was actually talking to a very well-respected asset owner a few months ago, and he's like, "Grace, why did you start a new group when there are a lot of organizations out there? Why can't you just work with them?" And so, I told him that each underrepresented group needs their own voice because they face different challenges, but there still needs to be a United front. So, TIDE is uniquely positioned to be like the United Nations for diversity. And so, I told him if you're an asset owner and who's Asian and there's a black fund manager, how do you put these two together if you're working in silos? And so, that's how TIDE has become a class of its own, it's because our network spans from different groups. And so, we're proud of the network that we've built so far.
Stewart: That network is large and growing. It is an enviable amount of interest that you have. Question that comes to mind is, what misperceptions do people have about diversity initiatives?
Grace: Yeah. I think those who aren't supporters of the cause believe that if you're hiring diverse talent or allocating to diverse managers, you're not choosing based on qualifications. So, it's important to understand that we can be diverse and qualified, it's not binary. And I was speaking with a consultant once and he was like, "Grace, we don't allocate based on ethnicity, and so I don't think it makes sense for us to support this kind of event." And I was like, "No, that's fine. I'm not asking you to invest based on ethnicity. What we are asking you to do is to make sure that you're selecting from a wider range of managers and making the effort to widen that search." And so, the consultant was smart and he's like, "Yeah. Okay, yeah, that totally makes sense."
Stewart: Yeah. I just think that diversity and inclusion aspects of asset managers have become more and more part of the conversation. In the same way that diversity and inclusion has become more and more a part of board makeups and things like that. There's a lot of things to consider there. But shifting gears a little bit, let's talk about investment trends that you're hearing about. You speak with a lot of institutional investors, not just insurance investors, can you share the opportunities that they share with you?
Grace: So, I'm always speaking to different asset owners, but there's this one report written by Nuveen that summarizes all the things that I've been hearing about from institutional investors and it's their investor study called Think Equilibrium. And so, that study states that 55% are planning a strategic shift away from public to markets, and then 58% of asset owners aren't planning to enhance D&I practices or don't know if their organizations will do so. I think that's a great summary of what I'm hearing and it's a great study if you can get a hold of it.
Stewart: So, that's an interesting takeaway. I just want to requote the numbers that you shared. 55% are planning a strategic shift away from public markets to private markets. I think that's consistent with what you've seen in the insurance space. This is the one that troubles me, the 58% of asset owners aren't planning to enhance D&I practices, or don't know if their organizations will do so. To that 58% I'd say, wake up. That's an interesting takeaway. Diving deeper into the private market space, is there anything that's of special interest?
Grace: Yeah. And actually, so before I go into the private market space, I wanted to address the 58% about the D&I not knowing what they're going to do. And so, I think that's why there's a need for TIDE because, again, there's all these initiatives, but yet, there's still asset owners that aren't planning to enhance their D&I practice. So, those are the people that we want to get in front of, and those are the people that we'd like to have conversations with about the importance and the benefits of D&I. And so, yeah, and so private credit is in vogue. For instance, there are a lot of funds in our network that are all private credit, but they have different flavors and have an array of strategies. And they're getting a lot of traction and that's because of the sustained period of low interest rates, which makes private capital and distress that more attractive. And so, for the insurance industry, these kinds of investments match nicely with their liabilities in terms of maturity and interest rate risk, including managing duration, liquidity requirements, and overall risk appetite or volatility tolerance.
Stewart: So, you are on LinkedIn, not a little bit. I'm so envious of you and the way that you are so well versed on LinkedIn. And you're always seen with people like Scott Chan, who is, of course, the Deputy CIO at CalSTRS or Ed Fong, who is Senior Managing Director at UC Regions. People who are extremely elusive, hard to get in front of, and yet there you are in front of these movers and shakers. I love that term. What's your secret? How do funds in the industry get in front of people like that and what's your advice?
Grace: Well, it helped that Scott Chan was my neighbor when I lived in California. And perhaps, that's one of the things I miss most about California are people like Scott and Edmond, who I can text and be like, "Hey, let's meet for drinks, 5 PM, corner bar." And so, I have built up my network over a time span of over 10 years, and so, one thing I would say is relationships aren't built overnight. For me, getting to know the person and establishing a relationship comes first and foremost, and asking for the business, only if it's win-win, comes later.
Grace: And so, look, I get that we're in the business of doing business, but don't be so transactional. Don't diminish those that are not in power now, just because they can't help you, because you know what, those same people will be in power soon. And I think TIDE's network is in that sweet spot. We know those people in power now, and those who will be in power soon enough. And I certainly didn't have this powerful network when I first started in finance, but I built it over time. So, I would say you would have to be patient and at the end of the day, you have to invest in building relationships.
Stewart: Yeah. And I mean, we say it all the time, this is a relationship business. And it is in this industry, really a relationship business, because most searches are not done through consultants. They're done directly with asset managers. Those relationships do take years and years to build over time. There's a lot of trust and it's a very personal relationship. In my experience, and I think yours too, is that when you get in front of people, the majority of them want to help, if given the opportunity to help. And we're working on a large educational initiative that's similar in that, it's not a transactional thing.
Stewart: In some ways it is a longer run initiative. And in some ways it's a give back initiative. And that's why I think the diversity and inclusion activities that you do that is central to TIDE are so important, which is a perfect segue into your marquee event, which is coming up. You've built an amazing network and a speaker lineup that is enviable, it's called TIDE Spark. What can you tell me about TIDE Spark?
Grace: So, TIDE Spark is our marquee event. And I agree with everyone that virtual events will never be as good as in-person event. However, let's take a look at the advertising industry. Take a step away from investment for a while. It's estimated that companies will spend 650 billion in advertising, and companies spend so much on advertising because they want you to be familiar with their brand. Because if you're familiar with their brand, they're increasing the chances of you selecting their brand. And so, that's why Insurance AUM Journal is a good platform.
Stewart: We hope. We hope, Grace. We pray every day, trust me.
Grace: And this is based on psychology. One of the principles of attraction is familiarity, and studies have shown that we are attracted to what is familiar to us and that repeated exposure to certain people will increase our attractions for them. So, that's where TIDE Spark comes in. Our event gives funds the exposure they need to the right people. We have over 9,000 on our distribution list, I have over 20,000 followers on LinkedIn. In addition, my profile is ranked top 1% within investment management industry on LinkedIn. And so, given the digital world that we live in, it's important more than ever to find ways to get your fund top of mind within these asset owners. And so, TIDE had become second to none in promoting firms that support diversity and inclusion.
Stewart: Where can people find out about this event?
Grace: They can visit our website, www.tidexchange.com. That's with one T-I-D-E-X-C-H-A-N-G-E. Or they could follow me on LinkedIn by searching for Grace Reyes.
Stewart: So, it's Grace Reyes, R-E-Y-E-S. Okay. So, you got 20,000 LinkedIn followers. I hit 4,000 and nearly had a parade in my hometown. Like, "Oh, I've got 20,000." I'm like, "Oh, okay, great. I'll never ask that question again." So, this is the part of every podcast that unless our guest has listened to a bunch of our podcasts, don't know that this is the section called ask me anything. And so, here we are, Grace, no prep on this question. Your graduation day from college, regardless of what festivities may have occurred before, you are looking bright eyed and bushy tailed in your cap and gown. You're waiting, waiting, waiting. They call your name finally, because you're the Rs, And it's way down the alphabet. Up the stairs, across the stage, get your diploma, quick handshake, and a photo op. Down the stairs you go and you run smack into Grace Reyes today. What do you tell your 21 year old self?
Grace: Wow, that's a tough question.
Stewart: That's a good one, isn't it?
Grace: Yes, it's a good one.
Stewart: That's a good one. So, what do you think? What would you tell your 21 year old self? After all the things that you've been through, you come at this from a unique perspective. I never answered this question myself and I grew up in rural Missouri. I was a first generation college student. I didn't know anything. My grandfather went to eighth grade. I didn't understand anything about this industry, and I didn't know this industry existed. And that's not an ethnicity thing, that's an exposure thing. And when I teach, I've got students whose names aren't Smith and Jones, who are really talented, that aren't aware of these opportunities. And it's for a lack of trying, it's not for a lack of effort or anything else, they just aren't aware of it. And so, I think what I would tell my 21 year old self is to take a lot of risk because I was playing it safe because that was a solid job. That's what you know. But for a 21 year old kid today, that's facing the D&I issues of the day, that's a different thing.
Grace: This one's a funny story, I think. My first exposure to private equity was Pretty Woman. I'm like, how instead of wanting to have Julia Roberts' life and being given all these gifts, I'm like, "How can I be more like Richard Gere?"
Grace: I didn't have exposure to private equity growing up, except for that. And I would say if I were to go back to whenever I finished college at UCLA, I would say just continue to be true to yourself and be authentic. Yeah, I think being true and sticking to your values is really important, and I think that's really what has helped me get through these few challenging years. But now. I think everything's looking up and all that hard work and all those challenges are finally paying off. So, I'm quite excited for the future.
Stewart: I love your answer, it is so authentic. But it is from the bottom of my heart, what you're doing is so important. Nobody does it better than you do. You are a force, in it is you. I mean, you are a force. I could take the same mailing list that you've got and I couldn't begin to do what you've done. So, I really wanted to have you on. I really appreciate you taking the time out of your schedule, and I really applaud your efforts. For anybody who doesn't know what TIDE is, and that's the TIDE exchange with one E. T-I-D-E-X-C-H-A-N-G-E.com. If you don't know, now you know. Grace Reyes, thanks for being on.
Grace: Thanks for having me.
Stewart: This is the Insurance AUM Journal podcast. You can find us on all the major platforms. If you like us, please follow us. We're available on LinkedIn as well and on our website. If you have ideas for podcasts, please email us at email@example.com. My name is Stewart Foley, and this is the Insurance AUM Journal podcast.