India — Yesterday, Today and Tomorrow

Okay, good morning. Let's dive into it. Really pleased to have a former student of mine, Dan Tenenbaum, and who's going to tell us about...

Dan, the panel says yesterday, today, and tomorrow. So we've got to go back and then forwards also. After I was asked to moderate this panel, Dan wrote to me some time back, and it was quintessential Dan, which was a long essay of what he was going to say.

Pages and pages of preparedness. So to me, that's Dan. Very diligent, very thorough, which is why he's done well in the equity markets.

You know, very disciplined, very thorough. That's what you need to be, disciplined and thorough. And I think his comments will probably echo that.

And I did what I usually do, which is to say, Dan, let's have a conversation. So that's what we're going to do. So Dan, what...

let's just start by... rather than mechanically going through yesterday, today, and tomorrow, tell us what's changed. You've been there for 23 years?

Is that right?

25, I suppose.

1999, initially. 1999. So tell us what's changed.

As somebody from... you're from Minnesota, right? I am.

Minnesota. Not the most normal place to... from which to end up in India.

But tell us what's changed, personally, professionally, whichever way you want to go.

Nearly everything. Nearly everything. And it occurred to me as you were giving your opening remarks today about just how much this conference has grown, that it's not only larger, but it's changed in feel and character.

Usually when I get off the plane from India in the U.S., the first thing I'm doing is reminding myself, walk on the right, walk on the right. Don't forget to walk down the hallways on the right. And I remembered and nearly plowed into several people proceeding at good pace, going down the left in this conference.

And I think... I think that actually says something about the change in the level of connectedness of students at the business school and other educational institutions with India today. And it wasn't always that way.

In my class, which as you reminded me was a very long time back, I think there were already a number of people from India. But in my cohort, there were, as I recall, only three of us who had any Indian work experience and I was one of them. And I think by and large, people who had excelled and persevered and made their way to the United States and to good jobs and good educational opportunities mostly wanted to stay in the United States.

And you could sort of see why, because my experience had been working for a couple years in India at a startup right before business school, one of a lot of difficulty getting businesses moving. I had come in the fall of 1999, and just to locate that moment a little bit in time, because this will be for many of you the India of your parents' time, not your own. I think there were just about a billion people, but there were three shopping malls in the whole country.

There was GDP per capita of about a dollar a day, but it cost $2 a day or $2 a minute to call the United States. But it was okay because there was still a telegraph service in India, and it was just a very, very different environment, and that's what I dropped into. And the clearest recollection I have was my first day in this small crowd in their Mumpoint office, jet-lagged out of my mind, and the phone is just ringing and ringing, and all of the calls we're getting are from creditors of our company wondering when we're going to pay their bills.

It was a very alarming way to start a job so far from home, but what I came to understand is the company wasn't mismanaged. It was an issue where there was a body back then called the FIPB, the Foreign Investment Promotion Board, whose duty and right it was to review individually each and every foreign investment in a company, and they had concluded that everything in the foreign venture capital investment that we were due to receive for this business was in compliance with the law, but they just didn't care for the name of the company.

They didn't like it aesthetically, and resolving that one issue... What was the name? India Life Pension Services, and they said, India belongs to the government.

Life belongs to Life Insurance Corporation of India. Pension, there was some other problem. How would you like to be called services?

And just resolving that took a year, almost a year, and that was emblematic, I think, just kind of how tough it was to get going, and I didn't know this at the time, but I think you and Krishna Pallapu were producing this seminal piece of research about conglomerates in emerging markets, that it's an inefficient, value-destructive form of organization. A lot of places, if I can grossly simplify the thesis, but in India there's an economic rationale because it's just so hard to exist independently, and that was absolutely the case. We had constraints of regulators with the FIPB, of capital, there was no alternative venture capital market domestically, and just of incomes.

You know, the people I worked with back then, university graduates were earning $100 or $200 per month, so they weren't going out at night, they weren't consuming, they were living with their parents, and that affected the kind of markets that were available, and yet, these companies were doing pretty well. The one I was involved with, I was the 18th employee and first foreigner when I began, and by the time I left, there were 300 employees, and I was still the only foreigner, but we were getting some traction. It was eventually sold to a New York Stock Exchange listed company, and the overwhelming perception I had was, if the constraints could just ease a little, that Indian entrepreneurs and Indian business and the Indian economy would go a long way, so that was the then, that was the base into which I came.

So what made you go to this India life, pension, services? What made, you're a kid from Minnesota, so just out of curiosity.

So almost entirely good luck and happenstance. In the Minnesota of the 1980s, it was even more homogeneous than it is today. I don't even think we have an Indian restaurant in my city for well into my teenage years, so I knew nothing, but I had the good luck in retrospect that when I got out of college, I was working down the street at Bain & Company and loving the intellectual challenge and enjoying the skills I was learning and really loving the people, but 24 years old, was eager to do something maybe a little bit different, a little more hands-on, something somewhere else in the world, and by blind good fortune, everyone I worked with and for was from India, and so although it was really off the map as a place to go at that time as a foreigner, I was surrounded by people who said, hey, this is something you could do, including I guess your neighbor Ashish Singh, who was then my manager and went on to head Bain India, and I cast this very wide net because Indian companies didn't formally recruit here, I think then or now, and via a friend's mother's family friend's business school associate, they found someone who might be looking, and incidentally the mother, I realized later, was Professor Mahir Desai's mother-in-law, so in classically Indian fashion, you know, big country, small world sort of situation, so I got there without any obvious value to offer in Indian company, but a lot of enthusiasm.

So the big country, small world issue I want to get back to because it speaks to a fundamental issue that I think India has something to contribute to the rest of the world, which is allowing it not to be such a small world, and becoming much more inclusive, technologically, socially, politically, economically, which I think is the dramatic change, but we'll get to that. Tell us about now, your business right now, and educate everybody in a few minutes about the model of your company, and what you do now.

Yeah, so to flash 25 years forward, I was in entrepreneurship, I came back, did a degree here, and spent a little while in venture capital, also focused on India, and then for the last nearly 20 years, I've been doing public equities, and seeing India evolve from a really small public equity market with very little foreign participation, and one in 500 Indian families maybe own a mutual fund to today this $5 trillion equity market. In our business model as a firm, within that, has remained pretty constant.

We invest exclusively in Indian public companies, and we make concentrated, long-term, non-index investments in a range of companies across industries, which has turned out to be most of all a good fit for U.S. and global allocators, pension funds, university endowments, foundations, who are looking to participate in India, not because they necessarily want to track day-to-day the equity market index, but because they're looking to back great businesses that can grow along with India over time.

What would you say is different about... First, a simple question. If somebody over these 20 years were to hold a standard big company equity index in India, as opposed to going through your firm, all the research that you probably do, and so on, how does that compare?

It would probably have done well.

We've done well. I have to be a little careful from a compliance standpoint, but we've done well. We've done better than the index over most of those time periods, and the index has done pretty well, too.

I think that's been one of the real strengths of India. I mentioned that it's bigger, it's more democratic, there are more people involved, but the aggregate performance has been really good, too. Over that time period, India among the major markets is second best in returns in the world, after only the United States.

It's been a pretty happy experience in total, but it's been a pretty difficult one sometimes for individual investors. When I think back to the early years of India Capital and subsequent market cycles, a lot of the other firms that began around the same time we did, or that started around that time, are long gone. That's a curious thing, when the market has actually done pretty well.

I think India has continued to be a place where big, visible, sometimes pretty well-respected companies go under. Big banks, major software companies, several real estate developers, a lot of telecom companies. I think you asked what the comparison is with the index or with the broader markets.

While I don't want to get too deep into the performance weeds, I think one thing we're very proud of as a firm that for all the years we have data for and all the investments we've made, we've made some great ones and some not so good ones and some really boneheaded ones, but of the bad ones that the aggregate losses from those total to about 8% of invested capital. What continues to be tricky about India, but also continues to keep us having something to do every day is that that challenge remains in India. It remains pretty hard, at least from a distance, to distinguish between the companies that are really good and those that just look like it.

The ones that just look like it manage to, I don't want to say fake it, but they replicate it pretty well.

Let's stay with that. Is it a fair summary to say that your model is predicated on basically rising with the tide, the India tide, but avoiding the bloopers?

I think that's one good way to characterize it because the bloopers are incredibly costly.

I'm not implying that it's easy to avoid the bloopers. That is actually incredible to be able to do that. Having just with one of my friends invested in Baiju and gotten my brains blown out.

I'm exhibit A for being subject to blooper dim. I'm looking at my friend here. I get it.

Tell us about that. Avoiding the bloopers. What do you guys do that allows you to avoid the bloopers?

Right. I think the lens you typically employ is one of market structure. I think if you think about it not just from a market structure standpoint, India's investing has grown and matured in so many ways.

Yet for all the volume, all the investing Twitter handles and YouTube channels, there remains some dearth of good, objective, rigorous analysis of businesses. What's left in its absence is proxies. Is it a big company?

Does it have a brand? Is the CEO well credentialed? Is there a big four auditor?

What do the major investment banks have to say about it? In the Indian context, more than other places, that's proven to be unreliable across the board, that Indian companies produce earning surprises versus what others think they're going to do far more often than others, which is the mild version of it. At the extreme, you can have these major companies that don't just go under because companies go under everywhere in the world, but manage to go under in a way that's totally unpredictable to major respected smart market participants.

One element of it is just trying to be able to look around those corners. In our case, the way we've addressed that is with this pretty small portfolio that we don't trade all that often, it gives us a lot of time for a research team where people have backgrounds in entrepreneurship or private markets or consulting or forensic accounting or even business journalism to understand these companies from a lot of different angles. That's something that in a different market, you would absolutely want to do, but it might not be distinctive.

There would be dozens of people crawling over it at the same time. In the Indian context, I think it can be a differentiation in a much greater sense because not so many have those resources today.

That's one category of informational problems that bedevil the allocation of capital in a macro sense. The other one that you would traditionally look at is malfeasance or contract enforcement problems and so on. Is it your sense that I've done my share of starting companies in India sitting on boards in the US and India and stuff like that, but my question is, you also said some minutes ago that superficially everything looks good, even on the companies that end up being bloopers.

If I sit on a board in India, which I try not to do, the rules are pretty much the same. You've got disclosure and this and that. You've got regulator and so on.

Are you also saying, in addition to the information problems, that it's possible for companies to get away by not following the rules in effect de facto as opposed to de jure? Because that would be very different from what, for instance, my friend Ashish yesterday, the gentleman who runs the National Stock Exchange said. He was touting the governance of publicly traded companies.

I think you can run the gamut. There have been well-publicized instances when rules were not followed, but sometimes it's just bad business decisions, bad allocation of capital. There was the brewery that started the airline.

There was the electronics company that bought coalfields in Mozambique. There was the power infrastructure company that started a movie studio. It's not necessarily a fraud.

In fact, in my experience, fraud in India is probably no more common than anywhere else in the world. I think the difference is really just that the safety valves that exist in other markets are not present yet to the same extent. Well, short selling is relatively uncommon, and so that ecosystem of people pounding the table or forensic financial journalism that's evolved around it is uncommon.

I sort of mentioned these enthusiastic buy recommendations from analysts, and I have to be careful because somewhere is the CEO of one of the big domestic brokers, and they do great work, Nitin, I swear, but as a group, a typical equity research analyst in India, remember there are 5,000 publicly traded companies. Some aren't covered at all. Those that are covered, the analyst might be looking at 25 different businesses in three sectors and maybe more than one country if it's a global bank, and then you take the investors themselves, and because of this basically really healthy increase in the flow of domestic investment, there are all these very new investment managers.

There was data just this week that the median mutual fund manager in India has either zero to one or one to two years experience, so essentially not even a complete market cycle, and so the ability to diligence these things with care, especially when the business model might be owning 100 stocks and churning them once or twice in a year just is not quite there yet.

So just a small aside, and I mean it to be an illustrative question, why is short selling not more prevalent? Is it a regulatory issue or is it just an experience issue?

So there have been regulatory aspects in terms of what securities were permitted to short sell. There have been market structure issues and it's been very expensive, and there have been just the returns haven't been very good from doing it because after all, in a basically rising market, you have to be really right, and you don't just have to be right, you have to be right soon if you're a short seller. So essentially it's the same problem on the long side.

In India historically, you can get everything right about a company, and that transmission to share price performance can take a moment, and for people like us, we can afford to wait. We have things we've bought for three years, they delivered all the earnings we thought they would and none of the share price performance, and then in six months it all catches up. But if you are shorting where your losses can be unlimited and it's costing you just to hold the position, that's proven to be pretty tough competition.

In your notes to me, Dan, you said that in India, just because of the phase of development, you started with the three malls in all of India story, and then of course, if you go to Gurgaon or Bangalore or something, there's so many malls you can shake a fist at. But you were still saying that it's way less than China, some statistics like that. And as I recall, the corollary to that observation was that there are plenty of, dare I say, plain vanilla sectors where you can make a lot of money in India, and it's not necessarily the same places that you make money here or something like that.

Would you care to add anything?

I think that's right. I mean, I was at the last session and it quickens the pulse to think about all the things that India can do in AI, in now I guess you don't say e-commerce, it's quick commerce, in drones, in those opportunities are real, but one of the other things that makes India at least a little bit tricky is the growth coming from an outsider standpoint. Remember, a lot of these investors are trying to make decisions from Hong Kong and London and New York.

The growth isn't always where you think it would be. E-commerce growth has indeed been fantastic, but right now residential real estate is growing even faster. Media streaming growth has been good, but at the moment, at least on a paid basis, power is growing even faster.

So we invest in all those things. We have consumer tech investments, but it can be true that if you look in the right places that metal bashing in the global context old economy businesses can grow really well, and I think it's become sort of an old yarn to say India's penetration is here and China's penetration is there, and the French drink 40 liters of wine and Indians drink only a teaspoon, and imagine if everyone in India drinks 40 liters. But I think what's different is that in a lot of these industries that growth is starting to happen. That this gee, wouldn't it be nice is becoming the story of today.

So if you look, for example, at power, India's like 80 years behind the United States in power consumption and 20 some years behind China, but not my estimates, but International Energy Agency in the next half decade, India will put up more power capacity than US, Europe, Brazil, Japan combined, and it is an opportunity and yet famously Indian power generation companies have been kind of black holes of shareholder value. One reason or another really hot IPOs just did not do well.

So I think part of what keeps us busy during the day is first finding the growth in places that maybe you wouldn't expect, but beyond that it frequently in India is not the most direct proxy for whatever that economic theme is that's the most interesting in investor returns. There are power gen codes, there are distribution companies, there are specialty engineering companies and it's sometimes in the boutique ancillary where actually the shareholders do best.

So I want to pick up on a couple other things that are in my mind from just going in and out of India all the time. The, and you alluded to this in the beginning, the number of, the sheer number of participants in the equity markets has ballooned. I don't know which regulator was responsible for this, but this idea of monthly buying into mutual funds for instance, something called acronym SIP standard.

Systematic investment. Systematic investment program for a couple bucks or three bucks, dollars, you can continue to buy positions in mutual funds. I imagine this comes with a lot of rampant I'm cautious about using the word illiteracy, maybe inexperienced and relatively unsophisticated investors.

And when I think about my experience, you know, doing research in China and India and building a software business in China, you always vary of the vary of the regulator there cracking down on particularly anything that had to do with taking the public's money because of the maybe paternalistic attitude that the public is not educated enough. How do you think about being in the public markets and seeing a flood of relatively inexperienced participants coming in? What is your thinking on that?

In time, it's going to be a wonderful healthy development for the market. In the first instance, I think it does carry a lot of risk with it. You alluded to the fact that most of these people are first time investors.

I think someone from the National Stock Exchange was talking about people with day jobs and they can just sort of trade on their phone and that carries a degree of risk. Not everywhere in pockets that a lot of these first time investors are trading in derivatives. And by the regulator's estimate, more than nine in ten of them are losing money.

That many of them have put their hard-earned savings into some of the smallest, least liquid, most difficult to understand companies. And there's day trading and there are meme stocks and all that. And that's one side of it.

But on the other, as you rightly said, there have been 85 million of these SIP accounts open. What is it in the U.S. context but dollar cost averaging and choosing to have your investment intermediated by a professionally managed investment, commingled investment scheme. Right now, there are a lot of new managers and there's sort of a sorting function that has to happen.

In time, though, what it's led to is not just more capital into the market, but a deeper, more liquid, more democratic market. One thing people like us look at is that historically, although the Indian economy functioned really based on things that were happening endogenous to India, the credit cycle, businesses, government policy, the Indian financial markets would oscillate wildly based on global investors' risk-on, risk-off preferences. So influential was that marginal dollar of global investment into India.

Today, domestic flows dwarf foreign investment. There are some excesses in pockets, but what it's meant is the beta, the correlation with global markets has declined, as it should. In time, that will make India that much more attractive as an investment destination.

You asked about the role of the regulator. I think they've got a very hard job. There are 5,500 publicly traded companies.

There's been explosive growth in mutual funds. There has been a lot of evolution in improvement in all sorts of regulatory aspects. But one thing that, you know, if they were to ask me, I would say now is the time to think hard about what sort of checks and balances they want to place into these retail flows, because at a certain point, these kind of investment phenomena get so large that it's very difficult to tap the brakes retrospectively.

You have no choice but to slam on them. I'm thinking here of Chinese real estate and things like that. Maybe now would be a good moment to think hard about what other safety valves need to be in there.

I was just reminded yesterday, again, the NSC gentleman talked about how there are warning labels everywhere. Do not trade this. You will lose money.

Nine out of ten people are losing money on different platforms as a way of dissuading people, but it doesn't appear to have worked so far.

I think that's helpful, but coming from the U.S. context, how many sports gambling advertisements begin with, if you have a problem with gambling, call this phone number. Don't gamble. And then here's why you should gamble.

I think that's a start, but ultimately regulation has a role, although I would caveat that by, in my view, governments in the world would do well not to listen to hedge fund managers, including this government. Probably they listen too much, but that's been my take on it.

Let me switch gears again, given the time that we have. My impression of the debt markets, the debt capital markets, I don't think you play in those, right? You play in the equity markets.

Let me ask you, just as an intelligent analyst of the equity markets, because obviously what happens in the equity markets depends on what's possible in the debt markets, too. My impression of the debt markets is that they have been much slower to develop in India, and partly that's been because the banks have been traditionally a ready source of quote-unquote free capital for the so-called promoters, and not calling out bad stuff and ever greening the loans, and so on. So why go to the equity markets, traditionally, if you have an endless spigot of a friendly bank?

That's obviously changed a great deal. We have some unbelievable banks in India now, but the debt capital markets, I think, are still more lackluster. Am I correct, or am I mistaken?

So I am an observer and not a participant in the debt capital markets. I think it was historically the case that for various reasons, that there was only a liquid market for very, very high grade corporate debt. And that meant that if you could not sell down other forms of financing, it became difficult and expensive to initiate it.

And my expectation is it will mature because if you just apply a top down lens, the Indian government is doing the things they should be doing to welcome global fixed income investing. Getting India into some of these, on a sovereign basis, some of these global bond indices by keeping the fiscal deficit relatively low. Theoretically, that should open up space for businesses to borrow more.

And yet it's been slow, and I would submit some of that reason is because the banks, as you said, have upped their game. That if you go back 30 years, there were a lot of horror stories about what it actually took to get a loan. And without talking about the seamy side of it, one of those is you just had to be from a very well-known, well-credentialed business house, and you had to have hard assets.

And today, I think Indian banks are doing a much better job of underwriting some of these newer age lines of credit. And that system has grown a lot. The Indian banking system has grown 40-fold during my time in India.

So they're better able to address the capital needs of Indian companies. But of course, there too, it's super early days. So after having said, I won't do an India here, China there, I will let you know that the largest Indian bank is smaller than the 12th largest Chinese bank.

So that process will continue to play out for some time, which is what will keep people like you and me busy, but it's happening.

Okay, so let's do the following. Let's open it up. And then I'm going to reserve the last two, three minutes for myself to ask Dan a wrap-up type of question.

So floor is open. Ask a question. Don't make a speech.

End with a question mark. One question. This lady here, nice lady here.

Go ahead.

Hi, thank you for insights. My name is Yupta. Small question.

First, what are the three major predictors that you look before investing into a business? And considering current capacity that India has, which three industries are the most growing and invest-worthy industries for you?

Wow. Let me try and distill that down a little bit to maybe one-on-one, if I can. I think there's a narrative that's evolved that the predictor you need is that people, to find out if a company is investable, is that people in the know tell you, and you become an insider in these informal information and kinship networks.

And after 25 years, I guess in some respects, I count as an insider. But my experience has been that actually the kind of work you need to do is exactly the kind of work you would do anywhere else in the world. And a lot of that information is in the public domain, especially for companies that have been traded for a while.

Are they good stewards of shareholders' capital or not? If you talk to their lenders, would they have good things to say about them as a borrower or not? If you go to their distributors and Crawford Market, and do they say that these people are easy to work with or not?

Are there related party transactions? Or sometimes it gets tricky. Are there second-level related party transactions where through via, via, via?

And this is why the forensic accountants come into play. But ultimately, it's there in the record. Are these people pursuing legitimate opportunities in a decent way?

It just takes work the way it would in every asset class. What opportunities are worth investing in? I think they're everywhere.

India has, atypically for an emerging market, public equities that aren't dominated by any one industry or any one commodity. So you can play anywhere. But if you ask me what's become particularly exciting, I think there's this migration as incomes have grown from all of us got used to thinking about consumption is Unilever and it's toothpaste and shampoo and crisps.

And as thankfully, almost everyone in India has access to those things, it's a lot of fun to think about what these tens of millions of newly lower middle-class families might want next. Their first automobile, their first apartment. I would group within that some investment decisions like life insurance that you start to think about when you have a little bit more built up that you want to protect.

And I think in all of those India, once again, is still decades behind in penetration. Indians spend $3 on makeup per year. Chinese spend a multiple of that.

Americans spend 140. But the factors are in place for them now to grow quickly. So those in terms of how you diligence an opportunity and at least one place we're looking, I think both of those have a lot to offer.

Okay, let's take another one. Yeah, gentleman there. Yeah, go ahead.

Yeah, hi. I was curious, so given you've spent time in venture capital in India, how you contrast the performance of venture capital market versus public equities. I think the sense I get is like BC in America is seen as like the golden land, whereas in India it's so early.

Is that how you feel about the public markets as well?

By the way, most VC firms lose money.

Yeah, and this is a global phenomenon to be clear about that. In India, it's been tough going. I think it's Bain, Ernst & Young does this work where they look at all the money that's been invested over the life of the industry.

And since 2000, maybe 35 cents on the dollar have come back in the public equities market. And this is an apples to apples comparison because it's sort of start to end point as opposed to capital deployed over time. But the dollar returns are seven or eight fold with a lot of challenges as I've tried to be transparent about.

I'm an optimist about venture in India. I think it has many of the right ingredients for it to do tremendously well in terms of great entrepreneurs, new industries, companies that could benefit from funding and mentorship. And yet, at least if you look backward, it's been hard.

But in terms of my own personal evolution, if I'm honest about it, I probably saw a little bit of that. And then some of it is just what you're cut out for. I have a lot of friends who are still in private equity in India.

And we go to the same events where I don't know the power minister is speaking. And invariably after chatting, they make a beeline for the seats in the front row so that they're the first in line to shake the minister's hand and talk about projects they wanna work on, which would absolutely terrify me. And I'm seated somewhere in the back just kind of watching it all play out, which would make me a horrendous VC and is a relatively useful personality type for public equities.

So probably that's more of the difference.

Okay, let's take one more from the back. None from the back. Okay, why don't you go ahead.

Oh, thank you, Dan. Thank you, professor, for giving us, sharing your thoughts on investing in India. My question is based on specifically equities in India from a foreign investment perspective.

So I just wanna know that working for a fund myself in the past, the normal nature of investment thesis based on the feedback I've got is that you do not find enough volume in India compared to the U.S. And foreign investors face a lot of restrictions and policy issues when investing in India from the funds they operate here in Boston or the U.S. overall. How has the policies changed from an FDI perspective 25 years ago to now? And how important is that in the future for India to be a stable, less volatile market in the future?

Yeah, that's a good question. I mean, the first update I can give you is the Foreign Investment Promotion Board is now long gone. So in most categories, as a foreign capital allocator from most geographies, including the United States, those investments are presumptively approved.

And you see that in terms of the level of FDI, the Apple factories, the Samsung manufacturing, all of that. Foreign portfolio investing, there still are some licensure issues. You're required to get what's called an FPI license.

It's generally pretty easy to get. And there are hundreds, if not thousands, of licensed portfolio investors. So I think it's less a regulatory issue and more that when I consider the challenges to investing in India, a lot of them are exacerbated or hard to address when you're sitting in Boston or London.

And the question is, what would this distributor sitting in a market somewhere have to say about the company? That you have to be pretty committed to sending people there to do that work in depth, especially if you want to invest in lesser known opportunities. And that doesn't just mean really small companies.

There are any number of really interesting businesses that for one reason or another are just not well covered by journalists or in the public markets. Among our best returning investments in the last few years was a company that didn't go to investor meets, didn't hold quarterly earnings calls consistently. It was majority owned by the Indian government, which would terrify a lot of people.

And if you got an investor presentation, what you would see are pages of scanned financial statements and not much else. And that maybe is what's keeping people away from India, at least as the way we would invest in it.

So let me take the prerogative of the last question. So you were in school here 25 years ago, give or take. What should I have taught you that I didn't?

In the spirit of self-improvement for me.

I think, I don't want to dodge your question, but I think you taught me some wonderful things. You know, I still have for ready reference the work on conglomerates and if I remember right, you and then Professor Nittin Noria supervised a field study I did working with Indian banks and I think we called it agricultural credit, but really it was microfinance. And we did all this work and now with the benefit of hindsight, microfinance has had its ups and downs.

And that's been kind of interesting to, you know, we put a stake in the ground, what we thought. And then I go back and read it in wince. And the person we presented to, who was a rising executive, has spent the better part of the last five years in jail.

And, you know, but these are all the lessons you need in a sense to think about how to operate, you know, anywhere, but India included. And I think it's, HBS was a great training ground for that. And I say that not as an advertisement, but just with the benefit of reflection.

And I'm incredibly encouraged when I come here now that the level of knowledge about India among the entire student body, but I'm especially thinking of the Indian origin students is outstanding. And like, that's what gets me fired up is that the number of people who wanna vote with their feet to go back to India, I think is wonderful. And I think you're leaving them really well-trained to do it.

So it makes me an optimist.

So I got off lightly. But on a serious summary note, I think one of the things that Dan exemplifies is willing to lean into the phenomenon, right? Which is what we like to think that we promote, we meaning the faculty and the institutional environment he likes to promote is immersion in the field as opposed to purely book learning.

There's some role for book learning, but actually experiencing things. So he talked about how from Bain, he was eager to go out and do something, whether it's the thing that Nitin and I supervised. I did it with Nitin last night.

So I'll remind him that his amazing supervision did some good. But it's being out there and experiencing the phenomenon. That's the most, there was a young kid who came up to me right before the spandrel and said, I forget his name from Northeastern and said, I really wanna, oh, he's raising his hand, there he is, yeah.

Saying I really wanna do something productive, but I don't know what to do. I thought it was a perfectly reasonable question. Sounds like my son.

And I said the same thing to him that I say to my son is don't worry about it. Just go look at something that's interesting like Dan did. In that case, it was, you know, he wanted to go somewhere, not particularly India and lean into it, learn something, roll up your sleeves, you'll probably mess it up a couple of times and that's okay.

And then your interest will become clearer. So Dan is a good exemplar of that. So please join me in giving him a round of applause.