Steve Grace: Sam, welcome to Give It A Nudge. It’s great to have you on the show. Your business is incredibly early stage, only five or six weeks old. Let’s start by you framing up what you’re doing.

Sam Phillips: Absolutely Steve, thanks very much for having me. We’re building a platform. Our company’s name is WeReach Alternatives, our platform is WeReach, and what we’re doing is enabling Australian sophisticated investors to access the world’s leading private market opportunities. The opportunities which don’t include traditional listed stock markets, and which have long had hurdles to entry for individuals and self-managed super funds.

Steve Grace: My understanding is you’re opening up investment opportunities that are normally only open to people with very large minimum investment amounts. Is that right?

Sam Phillips: That’s correct. Early-stage investments through private equity have been around forever. One of the hurdles is minimum investment size. A leading private equity fund may be raising $10 billion for a new fund, and the minimum investment size is likely $10 to $50 million. No matter how well connected you are, you’re unlikely to write a check for $10 million into one single investment.

Steve Grace: And historically these investments have returned higher than other investments?

Sam Phillips: Exactly right. Private equity investments are long-term, typically seven to ten years. What those investment managers are doing is getting into a company at an early stage, supporting it through the journey through to an IPO or M&A opportunity. The historical outperformance is significant. They also help with volatility. They’re not as liquid as a stock market, and we tend to sell stocks at the worst time psychologically. Having a longer-term less liquid investment as part of your portfolio levels out the volatility as well.

Steve Grace: You mentioned you’re only about five or six weeks old. How did you get here?

Sam Phillips: My co-founders and I met on the Antler platform. We formally came together about six or seven weeks ago. Yes, I think we hold the record for the earliest stage business you’ve had on the show.

Steve Grace: Tell us your story. How did you get into this space?

Sam Phillips: I’ve been around in financial markets for about 25 years. I started in stockbroking in the mid-90s as internet-based trading took off. I moved quickly into strategic business roles within finance companies. In 2001 I moved to Hong Kong. In the last five years my focus has been private equity. What’s driven me is seeing how private markets in an unstructured way is chaotic. Last year I did $400 million US in private market transactions. People said congratulations. It was a horrible year. Every time we interacted, the number one goal was not to let anyone’s reputation get hurt. I’ve been looking for a way to do private markets responsibly, in a way that’s transparent, credible, and fully regulated by Australian regulators.

Steve Grace: So you’re bringing it from the wild west to something fully transparent and controlled.

Sam Phillips: That’s right. The reputation risk and counterparty risk come right down. The technology platform is what makes it possible. The large private equity groups weren’t set up to take $20 million from 400 investors because the administration was too complex. With a platform like WeReach we can aggregate investor demand and deliver it efficiently to the PE managers in a way they’re comfortable accepting.

Steve Grace: How did you find your co-founders through Antler?

Sam Phillips: Antler interviews around 1,200 to 1,500 people, chooses 80, puts them in a room, and says go for it. Within a few days I met Angus, who had a CTO background and understood how to build technology and go-to-market strategy. A couple of days later I met Hugh, a lawyer who had worked in the Caymans and had deep operational understanding of the private market space. Antler puts you in pressure situations to work as a team, and people’s personalities come out under pressure. You quickly realise if you’re compatible, and luckily we were.

Steve Grace: What’s been the hardest thing so far?

Sam Phillips: Validating the idea. It’s very easy to validate an idea in your own head. Real validation is when you go to people and ask are you actually on board. We’ve gotten that validation from the PE groups, from the private wealth advisers, and from the Australian Investment Council. That’s what’s made the Antler process faster.

Steve Grace: Why is the Australian market an interesting opportunity specifically?

Sam Phillips: Post-royal commission, Australia’s private wealth advisers have been constrained in what they can sell. They’re moving away from bank products, and they’re trying to put clients primarily into listed equities, which are essentially commoditised now. You can trade for free on a Robinhood-style app. These advisers are looking for differentiated product for sophisticated clients. We want to start an education process with them, getting them comfortable putting clients into private market opportunities in a responsible and credible way. It’s an education process, but one driven by the most credible players in the space.

Steve Grace: Sam, thank you so much for coming on the show. It’s been great.

Sam Phillips: Thanks Steve. We look forward to coming back in a few months and giving you an update.