Take-Aways from May 28 “Restarts” Web Conference

by Mark Sanor, CEO of 360 One Firm

At the 361Firm & Alumni Connecting! joint conference on “Restarts” we continued a dialogue among family offices and other investors (LPs and GPs) on navigating new investment landscapes. This follows 3 global and 6 “Deep Dive” web conferences, with added breakouts for alumni groups. Please refer to the important disclosures in the materials, including this recording, and here are key takeaways:

Nancy Lazar of Cornerstone Macro shared tons of data (75+ charts on 35 slides) and her views:

• US recovery will be “wavy” driven by capex and onshoring for 12 reasons (see below)

• EM Boom is over. China is no longer as cost-competitive 

• US productivity growth will keep accelerating, driven by tech capex (66% from services), which has a larger multiplier effect on the economy vs. consumer spending

Stephen Burke shared data on US deficit spending and 5 steps toward a better future including the recommendation for a bipartisan plan that includes a multi-year investment budget into health care, education, digital and physical infrastructure, fixing the tax structure to make it fairer with less loopholes without raising taxes, and championing businesses that are vital for future prosperity. 

Then we had perspectives on Asia, Africa and Europe. From Beijing, Francis Bassolino acknowledged the logic in onshoring, but warned against de-coupling. From Geneva, Christophe Charlier shared his insights on Africa, and Eddy van der Paardt noted how their companies across 12 European countries are all back to at least partial production.

Harking back to Nancy’s comment that the Midwest is her favorite “emerging market”, Valentina Isakina noted the cost advantages of the Midwest, but the importance of studying multiple factors in choosing which state(s) for onshoring production.

Andrew Deye, Managing Director of JobsOhio, offered a unique perspective on Ohio’s $700B economy. Funded by a 25-year liquor sales tax, JobsOhio is Ohio’s privatized economic development corporation established to lead its job creation efforts by focusing on attracting and retaining jobs, with an emphasis on strategic industry sectors.JobsOhio has invested ~$150-250M per year into these sectors, and leads RestartOhio programs, and already now Recovery programs focused on themes like “open and secure supply chains”.

Three companies then shed lights on starts and restarts. Two are in the automotive industry, which has suffered due to Covid-19, but is working towards recovery and restarts.

Matthew Friedman, CEO of Bear Diversified, re-started production with one shift and is geared to throttle up to three on June 8, and noted that customer demand for its portfolio companies project a return to pre-C19 demand for the balance of 2020. 

Steve Burns, CEO of Lordstown Motors, talked about a silver lining in having access to talent as he revs up potential production of up to 200,000 electric pickup trucks on Lordstown’s 900-acre facility (which would have cost $3-4B to build from scratch). 

Katherine Hill Ritchie then shared what Nottingham Spirk is doing to adapt operating procedures and its high-tech products to the new environment. 

Valentina then shed light on the financial services sector and various anti-fragile innovations in fintech.

The Breakout Roundtables led to many great discussions and more connectivity. The “town hall” debrief merged into the Alumni Connecting! roundtables. In each, by tradition, everyone introduced themselves and shared their ASKs as to how the network could help them.

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Upcoming events include the following, which you can see at www.361firm.com/events, e.g. Deep Dives on Health Tech on June 2, Real Estate (Future of Work / Travel) June 4, Secondaries June 11, Schools & Sports Restarts June 16, Impact & Philanthropy June 18, and our next Global Conference June 25 focused on the “Recovery”.