theCUBE + NYSE Wired: The FinTech Exchange | Ben Haber, Monark

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Ben Haber

Co-Founder & CEO

Monark

play_circle_outline Monark: Embedding Private Market APIs to Democratize Alternative Investments for Retail Investors and Advisors

play_circle_outline F-Prime-Led Investment and Webull, Altruist, Apex Partnerships Enabling Pre-IPO SPVs for Late-Stage Secondaries

play_circle_outline Evergreen Funds: registered products offering diversified private markets exposure with low minimums

play_circle_outline Modernizing omnibus infrastructure to cut 8% trade failures and scale real-time millions of small trades

play_circle_outline Fintech trend: B2B infrastructure firms rebuilding legacy financial backends via APIs

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Ben Haber, Monark

Ben Haber

Co-Founder & CEO Monark

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(INTRO)

John Furrier

>> Hi, I'm John Furrier with theCUBE. We are here at our New York Stock Exchange studio. Of course, we have our Palo Alto studio connecting Silicon Valley and Wall Street. This is our FinTech Exchange, as we explore the entrepreneurship, the innovation in finance, as technology eats the market. We're seeing all kinds of new invention. innovation, but also impact as money is trading, money is being managed by tech. We're seeing tech in every company, certainly AI. We see that everywhere. Our next guest is Ben Haber, he's the co-founder and CEO of Monark, who's got an awesome stack, who's doing some cool stuff in the private markets. As private companies stay private longer before they go public, a lot of liquidity. Ben, thanks for coming on our series, kicking it off.

John Furrier

>> John, thank you so much for having me.

John Furrier

>> First, talk about what you guys do. Let's set the table. What do you guys build? What are you building? What's the focus?

Ben Haber

>> So our core vision at Monark is to really help more people access the private markets. But I think the unique angle that we've taken in that journey is to bring private markets to the platforms that people invest through today. So whether that's your brokerage app or your wealth advisor's existing platform, Monark embeds access to private markets through APIs directly in that platform that users access markets through.

John Furrier

>> So you're an infrastructure play for front-end apps or systems where people are.

John Furrier

>> Exactly.

John Furrier

>> Like Robinhoods of the world, those people who are investing through there. Is that kind of the approach?

Ben Haber

>> Absolutely.So we work with firms like Webull on the brokerage side, enabling access to late -stage private companies. We just announced that partnership a couple weeks ago. Super excited to be working with them. And then on the RIA side, we work with a firm called Altruist, a good example of a large RIA custodian based out of L.A. and they help advisors get access to financial markets and manage their portfolios. And then through Monark, through our integration with Altruist, those advisors can now also access private markets.

John Furrier

>> What's the origination story? Was it private markets were hot, private markets, people staying private longer, or was there another vision? What was the vision?

Ben Haber

>> We really started with the infrastructure. So three and a half, four years ago, my co -founder Paul and I, we were students at New York University here in the city. And we were looking at private markets and we were seeing this trend of more access to privates becoming more exciting for investors and advisors. And in particular, the convergence of public market access and private markets. And by public market access, I mean the platforms that serve investors today, primarily in the public markets, that are now looking to add private markets as a new asset class in their existing platforms.

John Furrier

>> And it's pretty nice to have that enablement and vision. And then all of a sudden, the private markets are exploding. We were just talking before we came on camera about Databricks. I was just recently at their event. And they're a $188 billion company. If you think about that valuation, that's like $10 billion less than IBM. so you got to scratch your head saying, man, there's a lot of demand. And if you compare Databricks to, say, Snowflake, they're a public company here at the NYSE, that trades heavily, but it's almost half of Databricks. So you have this, there's always been that thing where, oh, private, it's not a real market because there's not a lot of volume, but now we're seeing growth in privates. How are you seeing that?

Ben Haber

>> Absolutely. You're seeing a couple of trends sort of converging at the same time. I think the first is the one you noted, private companies are staying private for longer. The average time that a company stays private now is 13 years, whereas in the 90s it was four years. So that means all that value creation is now happening in private markets instead of public markets. And so that's been a huge trend that investors and advisors are excited to really get access to. You're also seeing the trend of the largest alternative asset managers in the world. So think the Blackstones, the Apollos, really looking to retail and to advisors as another channel to get access to more capital and to bring their products to more people. You saw Revolut just a few days ago announced a partnership, I think, with Apollo and Blackstone to bring some of their funds into the Revolut platform. And then on the banking side, you saw Goldman just recently announced that they're really bringing private market access to their high net worth customers as well.And so you're seeing the beneficiaries of those trends.

John Furrier

>> Well, it's great timing. timing is everything. Also, you got to do the work. we'll get into the product and platform in a second. But it's interesting because now you have the AI wave where, the old way used to be you get a round of funding, you build out, you get the next one, you get escape velocity, pre -public, go public, boom. Now you're seeing companies go from zero to $10 billion value, revenue, $10 billion valuation, a billion or over $10 billion in revenue. This is insane velocity on the private side. So it's a little bit different. The forces there are also that not only just stay private longer, but they're getting to escape velocity faster. And then valuations go up. And where's the market?

Ben Haber

>> Absolutely. We talked about this in the interview we did here at the Exchange a few weeks ago with Anthony at Webull. You know, investors want to be participating in that growth. They're seeing the trends in AI. They're seeing the trends in robotics, right? They're seeing these companies that are really changing the world, changing the way that the economy and the world work. And historically, they've been unable to access them. And so, Monark's infrastructure getting plugged into more brokerages and more wealth platforms can really help spread access to a broader set of the population and help more people participate in that growth.

John Furrier

>> Great macro trend for you guys. Congratulations. I think, that's going to be a great tailwind for you. Now on the business side, talk about what's going on in the business? How big are you guys? What's the business model?

Ben Haber

>> Yeah, so earlier this year, we announced our financing round led by F-Prime Capital, which is Fidelity's venture fund. We've been very excited to work with their team and a number of other great investors. And our core mission, as I touched on, is to plug into more brokerage platforms, plug into more wealth platforms, enable access to late stage private companies, which is our pre -IPO product. And in that product line, we structure single asset special purpose vehicles, which really pools investor capital and helps more people access late stage private companies at a lower minimum. And then very recently, this was our announcement with Altruist, we launched our Evergreen Fund product. And so that's providing that same access, same API integration for firms that want to get access to private markets, but in this case, for evergreen funds. And so those are funds managed by firms like Blackstone, Apollo, KKR, that's really providing diversified exposure to private equity, private credit, infrastructure, real estate, really the whole gamut of private markets in these funds. And so those are our two product lines today. And we sit on the backend of our partner firms, enabling access for their investors.

John Furrier

>> it's interesting. I was talking with some folks. We had an event in Silicon Valley this week, and I was talking to some folks at NVIDIA and some other AI infrastructure leaders. And they had this comment was, we're adding products and capabilities faster than we can explain them. I'm sure you have a similar thing. So explain the products that you guys have, the capabilities and what that is. And as context, the NVIDIA guy says, hey, we're not just a GPU company. We're an AI infrastructure because they got GPUs, they got Vera now on the CPU, they got networking, they got Omniverse. So you could say, well, they're a GPU company, but they aren't. So a lot of the key platform infrastructure folks like yourselves are coming into this challenge, but it's an opportunity, but it's also, you're so busy building out, how do you react to that? Because I'm sure you're living that.

Ben Haber

>> I think the world is moving faster every day, and it's incredibly exciting to be building in it. To describe our product lines, we started with the pre-IPO product, and so that's the late-stage access to private companies. We're seeing great growth in that product, more brokerages plugging into our APIs to be able to help

John Furrier

>> And that's simply getting in at pre -IPO stock prices.

Ben Haber

>> Exactly, so we provide the data feed, the market data, news, and research on all these private companies. And then we also are sourcing access. So we're working with a network of brokers and venture funds, syndicates, to make sure that we're getting great access to these private companies as they're raising primary rounds or issuing secondary sales.

John Furrier

>> So I don't have to be a big Morgan Stanley customer to get access too.

Ben Haber

>> Exactly. That's one of the main benefits.Bringing it to the mass affluent. And then the product line I'm super excited about to talk about is the Evergreen Fund product. And there's a lot of problems in the Evergreen Fund space today. There's roughly $600 billion of AUM in evergreen funds today. And again, these are funds...

John Furrier

>> Describe what an evergreen fund is. People don't know what it is.

Ben Haber

>> Sure. So a registered product, either under the '40 Act or the '33 Act, sometimes both, generally managed by a general partner like a Blackstone or an Apollo or a KKR, and providing lower minimums, $2 ,500, $25 ,000 in that range, to a diversified portfolio of private equity, private credit, infrastructure, or real estate investments. And so as the GP, these firms are going out, sourcing deal flow, creating these registered funds. And the unique thing about the product is that they're evergreen. So they're always raising capital and always deploying capital into new deals. So it's a great way for retail investors and their advisors.

John Furrier

>> So you get access to the ivory tower kind of big money, smoky backroom deals, of private equity.

Ben Haber

>> Exactly. And so what we learned with Altruist when we launched this product is we did a lot to innovate on the front end of that customer experience, right? How do you digitize the subscription flow? How do you provide market data and information so that advisors and their investors can really understand these products? And now what we're working on which I'm super excited about is really innovating on the back end of that flow So once that order comes into our api's where does it go today? There's a couple legacy transfer agents in the market and they provide ta services for most of these evergreen funds SS&C is a good example. They're the largest I learned yesterday that the DST system that SS&C uses you know when it was originally founded, that company?

Ben Haber

>> No.

Ben Haber

>> 1969. They probably had a mainframe. Exactly. So very, very legacy technology. And the problem that's happening now in this space as more of these evergreen funds are coming to market and growing in size is that the actual technology supporting the transactions in these funds is breaking. And so there's now an 8 % error rate in the evergreen fund market, which means 8 % of trades are failing and need a manual intervention to reconcile and figure out what happened with my trade, what went wrong with it. Obviously, that's not going to work as this market scales from $600 billion to $2 or $3 or $4 trillion of AUM.

John Furrier

>> It's kind of like New York. I was just watching on the news here in New York and in New Jersey, the storm that hit, the plumbing was so bad that the streets were flooding. That's essentially the equivalent of what's happening here is that that plumbing was built for different velocity streams, different volumes.

Ben Haber

>> Built for legacy, large check writing, institutional investors.

John Furrier

>> Small number of players.

Ben Haber

>> $50 million, $100 million checks, small number of players writing big institutional checks. That's not the world anymore. Now the world is how do you get 100 ,000, 1 million, 10 million retail investors through their advisors primarily to invest in these evergreen products? You need scalable infrastructure on the back end of that trade to actually allow the industry to scale. And so that's what we're working on now with our omnibus product, which is really what we see as the solution for scaling the evergreen fund market. And it consolidates the trading activity into a single omnibus account instead of straight through processing all of those trades with the transfer agent. We saw this in mutual funds. Charles Schwab with their OneSource product brought a lot of the mutual fund world into omnibus trading. And that's now modernizing the plumbing on the evergreen fund.

John Furrier

>> One, it's just an opportunity that swung your way. One, it was in your wheelhouse on the product side, product market side.

Ben Haber

>> Exactly.

John Furrier

>> And oh, wow, there's some problems here. We could actually vertically integrate some tech.

Ben Haber

>> Exactly. I've learned in fintech, you have to be really close to the problems to actually have the opportunity to solve them. From the outside looking in, it's often hard to understand how an exchange like the NYSE works. It's what's behind the curtain.

John Furrier

>> There's a lot of grind going on there.

John Furrier

>> Exactly.

John Furrier

>> We've seen that in AI, too, with agents. A lot of the automation workflows is the IP. Talk about your platform, because now you have the product market fit on the product side. I'm sure there'll be more as things start spinning up. But back end, scope the challenge out there and how complex is what you guys are working on.

Ben Haber

>> It's complicated. So let's say an advisor places a trade for an evergreen fund through their wealth platform, right? Our API takes that trade in. Now where does that trade go? It has to ultimately end up at the transfer agent. Today, that's a straight -through process to the TA. The trade goes to the transfer agent. they book that trade in their system, they send back a confirm, the trade is executed. Tomorrow, that trade will be trading through Omnibus. And so instead of all those trades going to the transfer agent, they get consolidated inside of a single Omnibus account held with that advisor's custodian. And it really brings a lot of the trading activity into a much more streamlined experience and reduces the load that the transfer agent has to handle. Instead of millions of trades, it's only a handful. And so that's really how you scale every market, Public equities, mutual funds, now evergreen funds. And so we're super excited to be a part of that. And I want to talk a little bit about what that means then.

Ben Haber

>> Yeah, go ahead.

Ben Haber

>> It changes how you can sell these products. Today, evergreen funds are primarily, I'm an advisor or I'm an investor and I want to get exposure to a Blackstone fund. I'm going to go click on that Blackstone fund in the marketplace, invest in it. Hopefully that process is digitized. If the platform is using Monark, it is. If they're using a different service, it may not be. But either way, you're investing in one fund. That's changing. And the way that that's changing is that advisors really want portfolios to be constructed for them. You have $16 trillion of assets today in model portfolios. And those model portfolios are managed by large asset managers like Fidelity, State Street, BlackRock, Vanguard. And what they do as the model strategist is they really build the portfolio for the advisors. So they select which funds, which equities, which fixed income products are going to live within that portfolio. And then that portfolio trades programmatically over time. And so for the advisors, it makes it a lot easier to say, hey, I want maybe 10 % of my client's portfolio to be in private markets. So I'm going to click a model portfolio that has a 10 % sleeve that's allocating to a number of different evergreen funds. In order for that to work, you need that back -end infrastructure to be scalable because now, again, you're not talking about a few trades with $50 million, $100 million tickets. You're talking about tens of millions of trades, sometimes millions of trades in a day to really enable that sort of experience for advisors and investors. And so it has real impact on the way that advisors can sell these products to their clients and how investors can get access to the products.

John Furrier

>> You have to build a transactional system at scale, real time, have that database work get done. That's a tech company.

Ben Haber

>> Absolutely.

John Furrier

>> You're a tech company.

Ben Haber

>> We are.

John Furrier

>> FinTech, I guess.

Ben Haber

>> Proud to be a FinTech company.

John Furrier

>> It's funny how the word FinTech has been changed over the years. What's the biggest change in FinTech you've seen over the years? Because, it's changed. It was FinTech, usually payments, banks, and then it went to crypto. Now you got back to tech again, almost a full circle. What's been the biggest observation?

Ben Haber

>> I think since we've started Monark, even a little bit before, over the last five years or so, you're really seeing a lot of companies taking this infrastructure approach. So B2B, how do we rebuild the back end of financial services? We have a great partnership with Apex Clearing. They're doing that in the public market side now through their partnership with us. They're doing that for private markets. But really what these firms are solving for is, to your point before, if you're a 30 year old financial firm and you're built around legacy data, mainframe technology, right? You don't have APIs. You're not able to interact in real time.

John Furrier

>> They don't know what serverless is.

Ben Haber

>> Exactly.

John Furrier

>> It's like what?

Ben Haber

>> And so you're seeing a lot of firms, not just in private markets, also in fixed income. Great company called Moment that's doing this. You know, you're seeing it in securities -backed lending products. I think Provable Markets just announced a raise yesterday. And so that's really new technology firms solving legacy processes and systems that really power the entirety of financial markets.

John Furrier

>> And I think people don't appreciate that outside of the top 1 % of financial services firms, the big names that have $10 billion IT budgets, it's pretty anemic IT -wise. Talk about that, because it's not just in the areas you're in. I've seen commercial banks like, what? You have what kind of systems? they're kind of like, I won't say slow moving, but they didn't really have the pressure.

Ben Haber

>> I think there's a few things happening. I think, to your point, it is very hard for very large institutions that have legacy businesses that serve clients every day to really focus on core innovation. Some of them try. Some of them do it through investing in early-stage companies that are solving those problems, which I think is great and a trend that we're a beneficiary of. But it is very difficult. When you have trillions of dollars of AUM, you're serving millions of customers to rebuild your entire back-end stack. That takes a lot of money.

John Furrier

>> It's like changing the airplane engine out at 35,000 feet. It's hard.

Ben Haber

>> And so it's much easier for these firms to partner with newer upstart fintechs that are able to solve these problems, but then partner with these large brands and these large firms to benefit from the trust and the credibility and the institutional knowledge and the standardization that these large financial firms have built with their client base over decades.

John Furrier

>> Well, great that you're working on that. Put a plug in for some of the momentum you have and what's your focus as you look forward?

Ben Haber

>> We're super excited about our pre-IPO product, really excited about the Webull launch. We have a couple more partners that we're announcing later this year in the pre-IPO side. The Evergreen Fund product is taking off. The Altruist partnership is doing phenomenal. We're super excited about model portfolios. We think that's the next big wave to bring evergreen funds to even more investors.

John Furrier

>> Explain what model portfolios are for people who don't know.

Ben Haber

>> So it's really a large asset manager, like a BlackRock or a Fidelity, that creates a portfolio and really assigns a set of weights to different securities. So maybe I want 60 -40 is the most classic model portfolio, 60 % equities, 40 % fixed income. but now you're really seeing more firms shift to 50 -30 -20, 50 % equities, 30 % income, maybe 20 % private markets. And then once those model weights are in place, that portfolio can trade programmatically and rebalance every day, every month, every quarter, depending on how it's structured, to make sure that the portfolio stays in that 50 -30 -20 weighting. And that allows advisors to talk to their clients about their goals when they're investing instead of just the specific investments that they might make.

John Furrier

>> They're handcuffed in what they can do. You can give them more options. They can dial up things, change ratios.

Ben Haber

>> Exactly. You can talk to a client and say, hey, do you want a conservative portfolio, aggressive, moderate? How much weight do you want in private markets? How much weight do you want in fixed income, in equities?

John Furrier

>> It's like the young people want risk, and then I'm retiring, give me the fixed income. So this is what people do. And then the domain experts are the asset managers. You enable them to be more productive and have more agency in what they do.

Ben Haber

>> Exactly. And really solving those backend technical problems to allow that private market sleeve to exist within a model portfolio.

John Furrier

>> Ben, thanks for coming on theCUBE. Really appreciate it. The NYSE Wired community appreciates that. we're seeing changes up and down the stack in all sectors. Obviously, right now, AI infrastructure is hot. Financial infrastructure has been smoking hot for a while, but it kind of gets overplayed by the AI hype and build -outs. We kind of have a lot of money flowing. But it's kind of the same picture. It's the same accelerated enablement.

Ben Haber

>> Absolutely. That's what's happening. Absolutely. Every industry right now is going through real change. As the world moves faster, as people demand more, as consumers demand more, companies have to react. They have to build new product. They have to establish partnerships to really improve the experience that they deliver to customers.

John Furrier

>> As my friend John Chambers said to me on theCUBE many years ago, former CEO of Cisco Systems, companies win in transition. And there's a huge opportunity for your customers to do that.

Ben Haber

>> Absolutely.

John Furrier

>> And that's what you're doing. Thanks for coming on.

Ben Haber

>> Thank you so much, John.It's great to be here.

John Furrier

>> I'm John Furrier. This is the FinTech Exchange Series. We explore the innovators who are making it happen as the world transitions, and certainly we've crossed the threshold. You're seeing the AI impact. That's just the beginning. Every single sector will be impacted by technology. Financial services is one of them. Democratization, another theme. Getting access to the old clubby systems now is going to be there. More flexibility for domain experts to offer better products. This is what happens when you see the innovation. We're doing our part to bring that to you. Thanks for watching. Thank you.

Ben Haber, Monark

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(INTRO)

John Furrier

>> Hi, I'm John Furrier with theCUBE. We are here at our New York Stock Exchange studio. Of course, we have our Palo Alto studio connecting Silicon Valley and Wall Street. This is our FinTech Exchange, as we explore the entrepreneurship, the innovation in finance, as technology eats the market. We're seeing all kinds of new invention. innovation, but also impact as money is trading, money is being managed by tech. We're seeing tech in every company, certainly AI. We see that everywhere. Our next guest is Ben Haber, he's the co-founder and CEO of Monark, who's got an awesome stack, who's doing some cool stuff in the private markets. As private companies stay private longer before they go public, a lot of liquidity. Ben, thanks for coming on our series, kicking it off.

John Furrier

>> John, thank you so much for having me.

John Furrier

>> First, talk about what you guys do. Let's set the table. What do you guys build? What are you building? What's the focus?

Ben Haber

>> So our core vision at Monark is to really help more people access the private markets. But I think the unique angle that we've taken in that journey is to bring private markets to the platforms that people invest through today. So whether that's your brokerage app or your wealth advisor's existing platform, Monark embeds access to private markets through APIs directly in that platform that users access markets through.

John Furrier

>> So you're an infrastructure play for front-end apps or systems where people are.

John Furrier

>> Exactly.

John Furrier

>> Like Robinhoods of the world, those people who are investing through there. Is that kind of the approach?

Ben Haber

>> Absolutely.So we work with firms like Webull on the brokerage side, enabling access to late -stage private companies. We just announced that partnership a couple weeks ago. Super excited to be working with them. And then on the RIA side, we work with a firm called Altruist, a good example of a large RIA custodian based out of L.A. and they help advisors get access to financial markets and manage their portfolios. And then through Monark, through our integration with Altruist, those advisors can now also access private markets.

John Furrier

>> What's the origination story? Was it private markets were hot, private markets, people staying private longer, or was there another vision? What was the vision?

Ben Haber

>> We really started with the infrastructure. So three and a half, four years ago, my co -founder Paul and I, we were students at New York University here in the city. And we were looking at private markets and we were seeing this trend of more access to privates becoming more exciting for investors and advisors. And in particular, the convergence of public market access and private markets. And by public market access, I mean the platforms that serve investors today, primarily in the public markets, that are now looking to add private markets as a new asset class in their existing platforms.

John Furrier

>> And it's pretty nice to have that enablement and vision. And then all of a sudden, the private markets are exploding. We were just talking before we came on camera about Databricks. I was just recently at their event. And they're a $188 billion company. If you think about that valuation, that's like $10 billion less than IBM. so you got to scratch your head saying, man, there's a lot of demand. And if you compare Databricks to, say, Snowflake, they're a public company here at the NYSE, that trades heavily, but it's almost half of Databricks. So you have this, there's always been that thing where, oh, private, it's not a real market because there's not a lot of volume, but now we're seeing growth in privates. How are you seeing that?

Ben Haber

>> Absolutely. You're seeing a couple of trends sort of converging at the same time. I think the first is the one you noted, private companies are staying private for longer. The average time that a company stays private now is 13 years, whereas in the 90s it was four years. So that means all that value creation is now happening in private markets instead of public markets. And so that's been a huge trend that investors and advisors are excited to really get access to. You're also seeing the trend of the largest alternative asset managers in the world. So think the Blackstones, the Apollos, really looking to retail and to advisors as another channel to get access to more capital and to bring their products to more people. You saw Revolut just a few days ago announced a partnership, I think, with Apollo and Blackstone to bring some of their funds into the Revolut platform. And then on the banking side, you saw Goldman just recently announced that they're really bringing private market access to their high net worth customers as well.And so you're seeing the beneficiaries of those trends.

John Furrier

>> Well, it's great timing. timing is everything. Also, you got to do the work. we'll get into the product and platform in a second. But it's interesting because now you have the AI wave where, the old way used to be you get a round of funding, you build out, you get the next one, you get escape velocity, pre -public, go public, boom. Now you're seeing companies go from zero to $10 billion value, revenue, $10 billion valuation, a billion or over $10 billion in revenue. This is insane velocity on the private side. So it's a little bit different. The forces there are also that not only just stay private longer, but they're getting to escape velocity faster. And then valuations go up. And where's the market?

Ben Haber

>> Absolutely. We talked about this in the interview we did here at the Exchange a few weeks ago with Anthony at Webull. You know, investors want to be participating in that growth. They're seeing the trends in AI. They're seeing the trends in robotics, right? They're seeing these companies that are really changing the world, changing the way that the economy and the world work. And historically, they've been unable to access them. And so, Monark's infrastructure getting plugged into more brokerages and more wealth platforms can really help spread access to a broader set of the population and help more people participate in that growth.

John Furrier

>> Great macro trend for you guys. Congratulations. I think, that's going to be a great tailwind for you. Now on the business side, talk about what's going on in the business? How big are you guys? What's the business model?

Ben Haber

>> Yeah, so earlier this year, we announced our financing round led by F-Prime Capital, which is Fidelity's venture fund. We've been very excited to work with their team and a number of other great investors. And our core mission, as I touched on, is to plug into more brokerage platforms, plug into more wealth platforms, enable access to late stage private companies, which is our pre -IPO product. And in that product line, we structure single asset special purpose vehicles, which really pools investor capital and helps more people access late stage private companies at a lower minimum. And then very recently, this was our announcement with Altruist, we launched our Evergreen Fund product. And so that's providing that same access, same API integration for firms that want to get access to private markets, but in this case, for evergreen funds. And so those are funds managed by firms like Blackstone, Apollo, KKR, that's really providing diversified exposure to private equity, private credit, infrastructure, real estate, really the whole gamut of private markets in these funds. And so those are our two product lines today. And we sit on the backend of our partner firms, enabling access for their investors.

John Furrier

>> it's interesting. I was talking with some folks. We had an event in Silicon Valley this week, and I was talking to some folks at NVIDIA and some other AI infrastructure leaders. And they had this comment was, we're adding products and capabilities faster than we can explain them. I'm sure you have a similar thing. So explain the products that you guys have, the capabilities and what that is. And as context, the NVIDIA guy says, hey, we're not just a GPU company. We're an AI infrastructure because they got GPUs, they got Vera now on the CPU, they got networking, they got Omniverse. So you could say, well, they're a GPU company, but they aren't. So a lot of the key platform infrastructure folks like yourselves are coming into this challenge, but it's an opportunity, but it's also, you're so busy building out, how do you react to that? Because I'm sure you're living that.

Ben Haber

>> I think the world is moving faster every day, and it's incredibly exciting to be building in it. To describe our product lines, we started with the pre-IPO product, and so that's the late-stage access to private companies. We're seeing great growth in that product, more brokerages plugging into our APIs to be able to help

John Furrier

>> And that's simply getting in at pre -IPO stock prices.

Ben Haber

>> Exactly, so we provide the data feed, the market data, news, and research on all these private companies. And then we also are sourcing access. So we're working with a network of brokers and venture funds, syndicates, to make sure that we're getting great access to these private companies as they're raising primary rounds or issuing secondary sales.

John Furrier

>> So I don't have to be a big Morgan Stanley customer to get access too.

Ben Haber

>> Exactly. That's one of the main benefits.Bringing it to the mass affluent. And then the product line I'm super excited about to talk about is the Evergreen Fund product. And there's a lot of problems in the Evergreen Fund space today. There's roughly $600 billion of AUM in evergreen funds today. And again, these are funds...

John Furrier

>> Describe what an evergreen fund is. People don't know what it is.

Ben Haber

>> Sure. So a registered product, either under the '40 Act or the '33 Act, sometimes both, generally managed by a general partner like a Blackstone or an Apollo or a KKR, and providing lower minimums, $2 ,500, $25 ,000 in that range, to a diversified portfolio of private equity, private credit, infrastructure, or real estate investments. And so as the GP, these firms are going out, sourcing deal flow, creating these registered funds. And the unique thing about the product is that they're evergreen. So they're always raising capital and always deploying capital into new deals. So it's a great way for retail investors and their advisors.

John Furrier

>> So you get access to the ivory tower kind of big money, smoky backroom deals, of private equity.

Ben Haber

>> Exactly. And so what we learned with Altruist when we launched this product is we did a lot to innovate on the front end of that customer experience, right? How do you digitize the subscription flow? How do you provide market data and information so that advisors and their investors can really understand these products? And now what we're working on which I'm super excited about is really innovating on the back end of that flow So once that order comes into our api's where does it go today? There's a couple legacy transfer agents in the market and they provide ta services for most of these evergreen funds SS&C is a good example. They're the largest I learned yesterday that the DST system that SS&C uses you know when it was originally founded, that company?

Ben Haber

>> No.

Ben Haber

>> 1969. They probably had a mainframe. Exactly. So very, very legacy technology. And the problem that's happening now in this space as more of these evergreen funds are coming to market and growing in size is that the actual technology supporting the transactions in these funds is breaking. And so there's now an 8 % error rate in the evergreen fund market, which means 8 % of trades are failing and need a manual intervention to reconcile and figure out what happened with my trade, what went wrong with it. Obviously, that's not going to work as this market scales from $600 billion to $2 or $3 or $4 trillion of AUM.

John Furrier

>> It's kind of like New York. I was just watching on the news here in New York and in New Jersey, the storm that hit, the plumbing was so bad that the streets were flooding. That's essentially the equivalent of what's happening here is that that plumbing was built for different velocity streams, different volumes.

Ben Haber

>> Built for legacy, large check writing, institutional investors.

John Furrier

>> Small number of players.

Ben Haber

>> $50 million, $100 million checks, small number of players writing big institutional checks. That's not the world anymore. Now the world is how do you get 100 ,000, 1 million, 10 million retail investors through their advisors primarily to invest in these evergreen products? You need scalable infrastructure on the back end of that trade to actually allow the industry to scale. And so that's what we're working on now with our omnibus product, which is really what we see as the solution for scaling the evergreen fund market. And it consolidates the trading activity into a single omnibus account instead of straight through processing all of those trades with the transfer agent. We saw this in mutual funds. Charles Schwab with their OneSource product brought a lot of the mutual fund world into omnibus trading. And that's now modernizing the plumbing on the evergreen fund.

John Furrier

>> One, it's just an opportunity that swung your way. One, it was in your wheelhouse on the product side, product market side.

Ben Haber

>> Exactly.

John Furrier

>> And oh, wow, there's some problems here. We could actually vertically integrate some tech.

Ben Haber

>> Exactly. I've learned in fintech, you have to be really close to the problems to actually have the opportunity to solve them. From the outside looking in, it's often hard to understand how an exchange like the NYSE works. It's what's behind the curtain.

John Furrier

>> There's a lot of grind going on there.

John Furrier

>> Exactly.

John Furrier

>> We've seen that in AI, too, with agents. A lot of the automation workflows is the IP. Talk about your platform, because now you have the product market fit on the product side. I'm sure there'll be more as things start spinning up. But back end, scope the challenge out there and how complex is what you guys are working on.

Ben Haber

>> It's complicated. So let's say an advisor places a trade for an evergreen fund through their wealth platform, right? Our API takes that trade in. Now where does that trade go? It has to ultimately end up at the transfer agent. Today, that's a straight -through process to the TA. The trade goes to the transfer agent. they book that trade in their system, they send back a confirm, the trade is executed. Tomorrow, that trade will be trading through Omnibus. And so instead of all those trades going to the transfer agent, they get consolidated inside of a single Omnibus account held with that advisor's custodian. And it really brings a lot of the trading activity into a much more streamlined experience and reduces the load that the transfer agent has to handle. Instead of millions of trades, it's only a handful. And so that's really how you scale every market, Public equities, mutual funds, now evergreen funds. And so we're super excited to be a part of that. And I want to talk a little bit about what that means then.

Ben Haber

>> Yeah, go ahead.

Ben Haber

>> It changes how you can sell these products. Today, evergreen funds are primarily, I'm an advisor or I'm an investor and I want to get exposure to a Blackstone fund. I'm going to go click on that Blackstone fund in the marketplace, invest in it. Hopefully that process is digitized. If the platform is using Monark, it is. If they're using a different service, it may not be. But either way, you're investing in one fund. That's changing. And the way that that's changing is that advisors really want portfolios to be constructed for them. You have $16 trillion of assets today in model portfolios. And those model portfolios are managed by large asset managers like Fidelity, State Street, BlackRock, Vanguard. And what they do as the model strategist is they really build the portfolio for the advisors. So they select which funds, which equities, which fixed income products are going to live within that portfolio. And then that portfolio trades programmatically over time. And so for the advisors, it makes it a lot easier to say, hey, I want maybe 10 % of my client's portfolio to be in private markets. So I'm going to click a model portfolio that has a 10 % sleeve that's allocating to a number of different evergreen funds. In order for that to work, you need that back -end infrastructure to be scalable because now, again, you're not talking about a few trades with $50 million, $100 million tickets. You're talking about tens of millions of trades, sometimes millions of trades in a day to really enable that sort of experience for advisors and investors. And so it has real impact on the way that advisors can sell these products to their clients and how investors can get access to the products.

John Furrier

>> You have to build a transactional system at scale, real time, have that database work get done. That's a tech company.

Ben Haber

>> Absolutely.

John Furrier

>> You're a tech company.

Ben Haber

>> We are.

John Furrier

>> FinTech, I guess.

Ben Haber

>> Proud to be a FinTech company.

John Furrier

>> It's funny how the word FinTech has been changed over the years. What's the biggest change in FinTech you've seen over the years? Because, it's changed. It was FinTech, usually payments, banks, and then it went to crypto. Now you got back to tech again, almost a full circle. What's been the biggest observation?

Ben Haber

>> I think since we've started Monark, even a little bit before, over the last five years or so, you're really seeing a lot of companies taking this infrastructure approach. So B2B, how do we rebuild the back end of financial services? We have a great partnership with Apex Clearing. They're doing that in the public market side now through their partnership with us. They're doing that for private markets. But really what these firms are solving for is, to your point before, if you're a 30 year old financial firm and you're built around legacy data, mainframe technology, right? You don't have APIs. You're not able to interact in real time.

John Furrier

>> They don't know what serverless is.

Ben Haber

>> Exactly.

John Furrier

>> It's like what?

Ben Haber

>> And so you're seeing a lot of firms, not just in private markets, also in fixed income. Great company called Moment that's doing this. You know, you're seeing it in securities -backed lending products. I think Provable Markets just announced a raise yesterday. And so that's really new technology firms solving legacy processes and systems that really power the entirety of financial markets.

John Furrier

>> And I think people don't appreciate that outside of the top 1 % of financial services firms, the big names that have $10 billion IT budgets, it's pretty anemic IT -wise. Talk about that, because it's not just in the areas you're in. I've seen commercial banks like, what? You have what kind of systems? they're kind of like, I won't say slow moving, but they didn't really have the pressure.

Ben Haber

>> I think there's a few things happening. I think, to your point, it is very hard for very large institutions that have legacy businesses that serve clients every day to really focus on core innovation. Some of them try. Some of them do it through investing in early-stage companies that are solving those problems, which I think is great and a trend that we're a beneficiary of. But it is very difficult. When you have trillions of dollars of AUM, you're serving millions of customers to rebuild your entire back-end stack. That takes a lot of money.

John Furrier

>> It's like changing the airplane engine out at 35,000 feet. It's hard.

Ben Haber

>> And so it's much easier for these firms to partner with newer upstart fintechs that are able to solve these problems, but then partner with these large brands and these large firms to benefit from the trust and the credibility and the institutional knowledge and the standardization that these large financial firms have built with their client base over decades.

John Furrier

>> Well, great that you're working on that. Put a plug in for some of the momentum you have and what's your focus as you look forward?

Ben Haber

>> We're super excited about our pre-IPO product, really excited about the Webull launch. We have a couple more partners that we're announcing later this year in the pre-IPO side. The Evergreen Fund product is taking off. The Altruist partnership is doing phenomenal. We're super excited about model portfolios. We think that's the next big wave to bring evergreen funds to even more investors.

John Furrier

>> Explain what model portfolios are for people who don't know.

Ben Haber

>> So it's really a large asset manager, like a BlackRock or a Fidelity, that creates a portfolio and really assigns a set of weights to different securities. So maybe I want 60 -40 is the most classic model portfolio, 60 % equities, 40 % fixed income. but now you're really seeing more firms shift to 50 -30 -20, 50 % equities, 30 % income, maybe 20 % private markets. And then once those model weights are in place, that portfolio can trade programmatically and rebalance every day, every month, every quarter, depending on how it's structured, to make sure that the portfolio stays in that 50 -30 -20 weighting. And that allows advisors to talk to their clients about their goals when they're investing instead of just the specific investments that they might make.

John Furrier

>> They're handcuffed in what they can do. You can give them more options. They can dial up things, change ratios.

Ben Haber

>> Exactly. You can talk to a client and say, hey, do you want a conservative portfolio, aggressive, moderate? How much weight do you want in private markets? How much weight do you want in fixed income, in equities?

John Furrier

>> It's like the young people want risk, and then I'm retiring, give me the fixed income. So this is what people do. And then the domain experts are the asset managers. You enable them to be more productive and have more agency in what they do.

Ben Haber

>> Exactly. And really solving those backend technical problems to allow that private market sleeve to exist within a model portfolio.

John Furrier

>> Ben, thanks for coming on theCUBE. Really appreciate it. The NYSE Wired community appreciates that. we're seeing changes up and down the stack in all sectors. Obviously, right now, AI infrastructure is hot. Financial infrastructure has been smoking hot for a while, but it kind of gets overplayed by the AI hype and build -outs. We kind of have a lot of money flowing. But it's kind of the same picture. It's the same accelerated enablement.

Ben Haber

>> Absolutely. That's what's happening. Absolutely. Every industry right now is going through real change. As the world moves faster, as people demand more, as consumers demand more, companies have to react. They have to build new product. They have to establish partnerships to really improve the experience that they deliver to customers.

John Furrier

>> As my friend John Chambers said to me on theCUBE many years ago, former CEO of Cisco Systems, companies win in transition. And there's a huge opportunity for your customers to do that.

Ben Haber

>> Absolutely.

John Furrier

>> And that's what you're doing. Thanks for coming on.

Ben Haber

>> Thank you so much, John.It's great to be here.

John Furrier

>> I'm John Furrier. This is the FinTech Exchange Series. We explore the innovators who are making it happen as the world transitions, and certainly we've crossed the threshold. You're seeing the AI impact. That's just the beginning. Every single sector will be impacted by technology. Financial services is one of them. Democratization, another theme. Getting access to the old clubby systems now is going to be there. More flexibility for domain experts to offer better products. This is what happens when you see the innovation. We're doing our part to bring that to you. Thanks for watching. Thank you.