Inside PHL Capital: Strategies for Managing $900M+ in AUM

"RAISE CAPITAL LIKE A LEGEND: https://offer.fundraisecapital.co/free-ebook/"

You'll fail as a fund manager if you think raising capital is all about the pitch, discover the real secrets to scaling from 600,000 to 900 million, while protecting your reputation and your investors. So if you want to avoid the biggest mistakes in private credit, then this episode is for you.

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[THE GUEST]: Steve Ponte brings over 25 years of experience in finance, construction, and real estate development to his role as CEO of PHL Capital Corp.

[THE HOST]: Ryan Miller is an Angel investor, former VP of Finance, CFO of an insurance company, and the founder of Fund Raise Capital,  https://www.fundraisecapital.co where his strategies helped emerging fund managers and deal syndicators to report raising over $1B following his strategies.

Transcript

Ryan Miller  

My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

You'll fail as a fund manager if you think raising capital is all about the pitch, discover the real secrets to scaling from 600,000 to 900 million, while protecting your reputation and your investors. So if you want to avoid the biggest mistakes in private credit, then this episode is for you. All this and more coming right now. Here we go. 

Ryan Miller  

Steve, welcome to the show. Man. 

Steve Ponte  

Thanks for having me on the show, Ryan, and congratulations on the success, happy to be here. 

Ryan Miller  

Yeah, it's great to have you, man, let's jump right into it. What would you say are some of the common missteps that emerging managers make, and what would you say that they can do to avoid some of that stuff?

Steve Ponte  

Yeah, I think, I think going out and trying to sell to the masses is a big mistake for people that are setting up and scaling to make it today, try not to be the solution for everybody in every problem. Be clear on who you are and who you're not and also just forget the pitch, you know. Listen to what it is if your customers are looking for what it is that they want, and find out what that common problem is, and try to focus on that, try to focus on the solution there.

Ryan Miller  

Awesome. So, so going out trying to sell, sell, sell, sell, gotta raise, raise, raise. Get this deal done, I get it, I get the vibe. I get the temptation but I think what you're saying is you can, that can get you swept away into areas that maybe you didn't intend on being, is that what we're saying here? 

Steve Ponte  

Yeah, absolutely. 

Ryan Miller  

Yeah and that's what you were saying about, well, you know, for a minute. Do a lot of listening. And that's something that you're really good at, is do a lot of listening. Make sure that you clearly understand the problem that your potential investors are having and how you fit in as a solution architect for that.

Steve Ponte  

Yeah, I think the other thing too, Ryan, is is, you know, not always be not don't be too quick to always look for the transaction. You know, establish trust, develop a reputation, develop some respect, and gain that trust from your from your from your investor and from your clients first and you know, the deal will come in, the capital will come from there.

Ryan Miller  

That's right, you know, we my philosophy. I know you've been following the show for a while, and because you told me about it when we first met, was the three Rs reputation relationships and results. And when you're when you're when you're doing a great listener outside of business, this is just as a human being, for heaven's sakes. If you're a great listener and you really understand, especially someone who's sought after like yourself for advice and deal advice and financing, listening is a value add. I absolutely love that, and that strengthens relationships, at least it does in my marriage. Turns out, when I listen to what my wife has to say, tends to go well, so but in all seriousness, focusing on that and really making sure that you do a listening tour. Sometimes I call that a road show, but just really understanding what is it that people are looking for, what gets their blood pump in, and how do I fit in that? Or how do I not and I make a referral, and that's where the relationships come in and you say, that's not really what I do. But I got, I got a friend, Steve, he does private credit. He's huge. Let me introduce it to him, I guarantee you're going to be delighted, right? 

Steve Ponte  

Yeah and I think to, you know, the average, the investors that are out there in the market today, they're, you know, they're constantly being pitched, and it's the old, you know, pound, the square pegs, or the round hole approach. And investors. They want solutions, and they want someone that's really understanding what their issues are, what it is that they're trying to accomplish, and really trying to understand how best to get them there, so again, it all comes back to listening and understanding.

Ryan Miller  

Yeah, I love that, you know, and that probably this, I'd love for you to unpack this a little bit, but talk about PHL growth from your first $600,000 starter fund to this 900 million+ AUM, what were some of those capital strategies and disciplines that underpinned that ascent?

Steve Ponte  

Yeah, good question. I think when we, when we started to, you know, was really difficult to have that discipline out of the gate. So we learned a lot of lessons early on, which, you know, hopefully listening to shows like this and podcasts like this and and your guests you know, will help some of the listeners overcome some of that quickly. But really establishing yourself with the right stakeholders in getting alignment with people in the industry. I know when we, when we first started, we had made great efforts to make sure that we had, you know, good connections with, with bankers, with accountants, lawyers. Really establishing yourselves with, with industry leaders and people that would provide some mentorship. I thought that that was really helpful for us in terms of how we got started, and from there, learning the lessons of not trying to use the shotgun approach to investors and really focusing on those that we had aligned with in terms of what, what products we were offering and solutions we were providing to those, to those investors. So taking more of a sniper approach versus, versus the shotgun approach, and being everything to everybody, we got away from that. So that was a big, big one. So leveraging relationships, obviously investing, we had to invest a lot of rolling money. So people want to make sure that you're invested in what it is that you're doing that was that was really important. And of course, establishing that track record. I think one of the things we failed to understand was, was being patient. And I know everybody wants to grow and scale quickly, and I'm certain that most of the people and guests on your shows and will, you know, they'll, they'll share that. You know, things don't happen overnight. In a lot of cases. Well, maybe they do after you're established, but when you're getting started, you'll be patient with the process, and over time, with track record, again, reputation, respect, and you've established a foundation of trust, that's that's where you start to see that kind of inflection point and that scaling, that happens that everybody's hoping for so.

Ryan Miller  

How important was building an advisory board in the early days, walk me, walk me through a little bit of that. 

Steve Ponte  

Yeah, the advisory board was huge. I mean, it's kind of the chicken and the egg scenario. Ryan, you know, you've, you're, especially if you're a younger, younger person trying to establish, set up this fund. How do you gain trust when you're getting started and you've only got a little amount of capital leverage those that are around you? I mean, I've been very blessed in my career, having some great people from a variety of different backgrounds, whether it was real estate, banking, credit finance, legal, corporate finance, people that were older than me, that were always happy to help. You know, one of the cool things about this business, and also in this industry, is how many people are willing to give their time and help others, especially those that have been successful. I find that some of the people that are the most successful, you know, as long as you're being respectful of their time. They're happy to give back and really help people get a leg up and they're not protectionist. I really do feel that people want to help others, and I know certainly that's something that you're huge on, your show is huge on that. You know, one of the things I was thinking about why I wish this podcast existed 20 years ago when I got started, that would certainly have been helpful but anyways, here we are today. I think when you talked about the advisory board, that was a quick way to leverage, I should say quick way. It was a helpful tool in leveraging the experience and the trust that those people had built within their networks that rubs off on you. So by having those people surrounded by you, or you're surrounded by those folks, I'm sorry, really does give you some early credibility that you need, just that just you need that nudge to really build that trust with new investors, and having people like that around you that are established, have track record, have had good careers in vouching for you as a business person and also as an individual, as a real person. You and I talked about this, how important relationships are. So the fact that you've already got those relationships with some key people, that's a tremendous amount of leverage to get started in this business. So I couldn't stress, if I was going to stress one point today is surround yourself with a good advisory board.

Ryan Miller  

Yeah, agreed. I see it as it's one of those key things that when you have that in place, when you have an advisory board in place, what I believe is that most when you're pitching investors, they understand the aggregate of the experience of the eyeballs that are on their capital. And so when you're able to do that, and it's not just this, it's not a tactic, folks, it's not it's for your benefit. This way I see it is to say, like you said, people have had great careers that can give you the insight and turn decades into days, right, there are 40-50, years, maybe at some times, that they can bring that and bring you up to speed that cuts right through the noise, gets right to the signal, and so now you're more effective just by having them advise you. I love that.

Steve Ponte  

I mean, obviously we're talking about growing and scaling a business, but also just managing risk and that experience that they're bringing to the table. About some of the folks I know that we've surrounded myself, been hugely helpful in us avoiding large pitfalls over the last 20 years of our business. And, you know, very, very thankful to have that, that knowledge and experience, that that they could share with us that maybe wasn't as clear in the fog of, you know, whatever point in the business cycle that we were at. So that was also a huge benefit of the advisory board, is not only how to improve as a business, but a business, but also how to protect the business that you've already created. So that was a huge asset.

Ryan Miller  

Brilliant man. And I'm totally sold, and I know that's a big part of scaling. So you know, speaking of scaling, how would you recommend people balance aggressive AUM growth with investor capital preservation? So really, what I'm asking is, where do we turn that, that risk dial to say, yeah, we want to grow, but we also want to preserve and protect the capital and the trust that current investors have given you, how do you balance that? 

Steve Ponte  

Yeah, this is, this has been a question that we've dealt with with our investors for you know, we've been in business for almost 20 years now, is, how big will pH I'll get? How will, how long will you guys continue to grow? And do you have enough opportunity to deploy the capital? And one thing that we that we absolutely will not go against what we've promised our investors, and that is, we're not going to take undue risk for the sake of growth. We've promised our investors a certain risk profile in terms of what their invested dollars and hard earned dollars are being invested into and we won't change that. In fact, along the way, we had some other opportunities in a different, in a different segment of the business, which I would consider a different risk profile. What, what we did actually, was create a new fund that aligned with that risk profile. So there's, there's different ways to approach, approach that. So we've had aggregate fund growth in, with different risk profiles. So we, but we've been very, very true to our investors in each fund that we have in terms of what the risk profile is, what the target yield is within those funds. And you know, we continue to stay true to what we've promised our investors. It's one thing we won't, we won't turn back on is our word and what we've done to our what we've promised to our investors. 

Ryan Miller  

Yeah, absolutely that. That goes back to reputation, man, I love that. And how, how do banks play into that growth versus capital preservation? Where do they fit into all this?

Steve Ponte  

Yeah, I think, you know, the banks, the banks, have been hugely helpful for us, although challenging out of the gate, it's funny. I mean, before I started my funds, I was in senior banking roles in Canada here, and you know, early on, you know, despite having the background in banking, was very challenging. In fact, we almost had to beg one of our Canadian banks at the time for up for a small loan. That was, that was almost 17 years ago that that bank had given that lent us $750,000 and that bank is still part of our syndication today, which is an eight bank syndication with almost 350 million of credit available to us. And you know, my partner and I are hugely loyal people and but the other part about the banks and why they've been so useful is one, obviously, we utilize some level of leverage, but we also talked about the trust and the reputation that we've established over the years with our investors. The banks have helped, you know, shine some light on that in the sense that, you know, we've got eight banks that have, review our financials and what we do every year on an annual basis, and that gives some more accreditation and credit to what it is that we're doing. If, if eight largest banks in Canada are suggesting that we're credit worthy for $350 million I definitely give some more comfort to some of our investors to know that their hunch is right, that we are worthy of that trust. So it's played a it's been a two pronged approach, actually, in terms of establishing those relationships. One is the credit piece, but then again, the other is just, you know, just verifying that credibility. 

Ryan Miller  

So I'd love to go a little bit deeper on that. So we've talked about going from your $600,000 I call it the prove it fund, to the 900 million AUM+, and you're still growing, this was amazing to watch. Then we go into, where do we turn the dial in risk? And so I want to go even a third layer deeper, a lot of what you do, I assume, has to do with underwriting, where we talk about that risk dial, right? This is where you really start to get a sense of the deal in your underwriting. What are some of those core underwriting principles that set PHL apart, both in your residential and large scale commercial land financing?

Steve Ponte  

I mean, first off, I mean the fundamentals are, you know, we lend against quality real estate with values that we clearly understand in markets, that we clearly understand with borrowers that have obviously an established track record and a probable exit. Those are obviously key and every lender is going to say that. But one of the, you know, it's funny, one of the key things that set us apart is we're still one of the very few lenders that still use common sense today, and common sense isn't all that common anymore. We talked about this earlier, Ryan and I think that's one thing that the Canadian financial institution has gotten away from. You know, they continue to compound with policies, procedures and regulation, which obviously are required for consumer protection. But at the end of the day, you know, there's a consumer at the end of this, and the customer that that that needs a solution for what it is that they what they're trying to accomplish, whether it's investing in their business, buying a home, buying an apartment building, doing a real estate development, so really finding just common sense solutions from a banking perspective and lending perspective that we've been able to provide to our customers, it's just the banks. The banks aren't, aren't providing for everybody. There's a large there's a there's a large and growing segment that requires alternative solutions to what the Canadian financial system is providing today.

Ryan Miller  

Got it. You know, one of the things you got me really excited we were, when we first met, you were telling me how you have these investor nights, and you have these times where they can ask you questions. You invite auditors, bankers, everybody to do a Q & A and I'm curious, because not a lot of people do that. How has that culture of transparency reshaped the investor trust or even capital sources?

Steve Ponte  

Yeah, that's an interesting story. Ryan, we what we thought was really when we started this, and I think we started this about year three, and I don't even know if we had 30 investors at that point in time, we were under a million dollars in assets under management. It was, it was a tiny fund at that time, and it was more so just to get together, do you, you know, break bread, give everybody an update on how we were doing, and just to touch base with our investors, and that evolved into an event that we host annually for all of our funds now, which we have, still have a waiting list almost as large as the list we had. We're finding it difficult to find venues big enough now to allow all of our investors to attend, but we've got, you know, north of 500 of our investors show up every, every annual investor meeting. And it's there that we have, you know, again, our bankers, or sorry, our investors or bankers or auditors, many of our appraisers or corporate finance lawyers or conveyance lawyers, anyone that's a stakeholder in our business. And it's a really fun evening, because, you know, you talk about transparency and trust. Well, you know, we don't have any senior arrangements at our events, you can sit wherever you want. You can sit beside our auditor and it's really great, because people really have the opportunity to talk. I'm not controlling the conversation, and it's and it's great. I think a lot of investors, the older investors, love it. It's a great event and the new investors really love it, because they get to see what, what our business is all about, and talk about establishing that trust, it's, it's a, it's a huge step up. And I know a lot of I would say some of our competition has been trying to copy that event, but I know we were one of the early ones that started that. And it's, it's a huge tradition in our business, and it's, it's been a massive tool for us. And the other part too is, I should say, you know, despite, you know, it being a great event, you know, there's, there's times we have, we have Q & A period at the end and I can assure you that those the questions that we get. They're not seeded like we have, we've had some real, some, some real, real fastballs coming in, in terms of some of the questions we've had and, and it's great, the investors realize really quickly that these are not seeded questions. They're not, they're not, they're not fluffy questions sometimes. And, and that's great. It gives everybody the opportunity to have real dialog, not prepared, and people feel a lot more comfortable about asking those questions in large, large group.

Ryan Miller  

Yeah. So back to the so this is one of those things that when you showcase transparency, that builds trust. And like we always say, I'm like, high finance is about trust more than it is about transactions. And so I think establishing that trust, and for me, as looking on from the outside in, I would say that probably had a lot to do with that rise from 600k to 900 million. 

Steve Ponte  

So I can't, I can't stress enough how, how? You know, I'll give you an example of that, Ryan, when we set up our second fund, which is a secondary mezz fund, and that was because we saw some opportunities with maybe some additional risk tagged to it. I mean, obviously the yields are adjusted for that terms of what our investors are getting back. But I can't, it was so interesting to see what happened, we had established such a track record with our existing investors that when we told our existing investors we were setting up a second fund that was higher risk, it was incredible how many investors, you know, had a check ready, and was like, hold on a sec here, guys, there's a process. We have to give you an offering memorandum, we've got to go through suitability. But it was incredible to see how many were you know, trusted us so much that I'm sure had we allowed them, they would have just given us a check, but I mean, clearly we had to go through the proper protocols, of course. That meant, you know, meet suitability, of course, but, but, so again, it comes, it comes back to the foundation of trust. It's huge.

Ryan Miller  

Yeah, absolutely. And, you know, operating a fund in Canada is no joke. This is why I decided not to. Now, I know yourself, a lot of people who are brave enough to face the regulatory terrain of Canadian Finance, and it's fine, like, we'll follow whatever rules that we're subjects to, of course. But with 14 or 15 regulators across all the provinces, like my American friends were like, 14 or 15, we got the SEC, what the heck is going on up there? Yeah, 14 or 15 different regulators across provinces. How do you embed compliance as a foundation rather than overhead, because this is a big job.

Steve Ponte  

It's a big job. In the regulatory landscape in Canada, it continues to get more complex. And you know, there's two ways you there's two ways you can really, really look at it, Ryan is you can look at compliance and regular regulation as a hindrance, or you can really think about it as a value add to protect investors and your customers, it's a good thing for everyone. Helps further develop trust at the end of the day, we keep coming back to trust that getting alignment with regulation and your solution to providing to investors can be a really powerful combination. But nevertheless, it is an onerous task. It is something that requires a lot of investment. It requires a lot of oversight, especially as a CEO, the business is ultimately responsible for compliance within the organization. You know, it's not something you can take lightly and you know, for our business, you're right. I can't remember. I think I have to double check. I can't I can't remember even the account to tell me regulars we have. But we've got a provincial regulator for each securities, of course, securities regular for each province we operate in, as well as a lending regulator in each province that we lend in. And in addition to that, you've got AML, FINTRAC, it's, it's can be quite burdensome, for sure. 

Steve Ponte  

We really, we really do try to think about compliance and regulation in our business as something that we can work complementary through our business and our investors know that we're taking a leading position in that it's not something that we're just trying to meet, meet the bare minimum. They our investors, realize and understand that we're setting the bar within the industry and how do we do that? One of the things that we are really proud of is we work with several of the regulators on working committees on new policy that they're looking at establishing, not only to provide some input about from industry on some of the pros and cons of what it is that they're trying to push forth, but also thinking that through the through the customer's eyes and lens of, does this actually help? Does this truly actually help protect the consumer and what are the, what are the pros and cons of what it is that's trying to be introduced. So we've really taken a leadership role there, within our organization to try to help set that policy, I think it's good for our business, and it's been good for industry, and our investors and customers know that we're taking a leading role there. So there's a real opportunity for a business to not just comply, but also take part of that, of that process.

Ryan Miller  

Yeah, make it better, for sure. So when it comes to trying to figure it out, especially the complexities in the regulatory environment that you operate in in Canada, that you've got your hands full. Are there any other any, perhaps service providers or communities, or anybody looking who's listening to Canada, where can they go to kind of help get the right footing? Anyone you'd recommend?

Steve Ponte  

Yeah, well, I would certainly, I would certainly advise not to do what we did when we first started out, which is bang your head against the desk and try to figure it all out ourselves. But you know, through, through some experience, you know, we leveraged that. Again, this is where advisory board was really helpful for us and helping us establish certain relationships and and connections with consultants in a variety of different components of the regulatory regime, whether it was, you know, the AML shop, Anti-Money Laundering shop out of Toronto, which was hugely helpful for us in in establishing a AML policy for both AML and FINTRAC compliance. This was a huge feat, and we had to do it in a very short order on the lending side of our business, and they were really helpful. So a shout out to those guys, those guys did a great job for our industry. I would definitely reach out to them. With respect to that, I would also consider joining a variety of different industry associations. I know on the lending side of our business, we have CAMLA or the Canadian Alternative Mortgage Lenders Association. Again, there's a variety of different businesses, such as ourselves and other leaders and even smaller businesses there that are really taking or contributing to conversation and discussion around what are the challenges in the industry, whether internal or external. And again, people are really open to doing what's best for for industry. You know, so saying we're not competitors, we are competitors, and we do get out on the street, and that's, that's great, but you know, we're all doing our best to make sure that it's a healthy landscape. The other part, too, is, and not to pump your tires too much here, Ryan, but you know, listening to podcasts like this, I mean, what talk about a great resource for getting some information and listening to guests. I would throw that out there to all your guests, I mean, if there's anything I can help with or you think that's intriguing about what we talked about today, you know, please reach out, and I'll share some more information at the end of the podcast, but you know, please do reach out. Happy to be a resource.

Ryan Miller  

Yeah. PHL Capital, Steve Ponte, absolutely, and we'll get that contact information at the end. For sure, I'd love to talk about so since we're talking about organizations and we're talking about service providers, I'd love to talk about just some of the systematic resilience, or some of the systems of tech stack. Now, the favorite tool, as we all know, is Microsoft Excel, it's a great tool. How did you transition from Excel to scalable tech, and how has that enhanced that oversight and enabled you to future proof your business?

Steve Ponte  

Yeah, I mean, again, Excel is, I'm a big Excel fan, but, you know, at some point in time, and it works, when you're you've got a $20 million fund, but when you've got a variety of different in our business, you've got investors, you've got different, different asset classes on the lending side, whether it's, you know, residential construction, development, land loans draws, you've got multiple worksheet after worksheet after worksheet that are interconnected. It starts to become a liability when you think that you know one wrong. You press a, you press enter, or minus somewhere. By accident, all of a sudden, there you've got problems. So, you know, we've, we've used a variety of different tools in our business on the lending side, we've gone through a group called mortgage Automator, which is really a loan management system that's been helpful not only with with getting us, you know, a scalable foundation which we can manage our mortgage loans, but it's also helped us with things like also on the regulatory component. So they it actually checked a few boxes for us. Not only was it something more scalable than Excel, that gives us much more, much more granular real time data that we're able to access and make decisions from which is hugely important in our businesses. How do you get timely, real time data? And you know, using more cutting edge software these folks on the lending side, you know, exempt edge on our on our investor platform is huge as well. Not only has helped us just information and data and making real time decisions, it's also helped us from a regulatory and compliance perspective. You talk about finding some efficiencies that was, you know, using those types of, relying on tech and software has helped us really scale the business and helped us navigate through the regulatory framework that we're that we're exposed to, so, really important. 

Ryan Miller  

Absolutely. So your tech stack, would you say that that was part of your ability to go from 600k to 900 million?

Steve Ponte  

Absolutely. In fact, I I'm not sure what the number Ryan, what the number was Ryan, but, but probably when we got to 400 million, I would argue that our Excel, as good as it is and as in, as intricate as it can be, went from an asset to a liability, and was something that we knew with with every additional dollar that we raised, and as our fund got larger, that was just fraught with risk, and we just needed to find a different solution and thankfully, we've been able to find that. 

Ryan Miller  

Yeah, brilliant, yeah, I know tech once you're. You're able to keep up with the tech stack and really start dialing that in. I've had a lot of people, and myself included, it is a critical factor. And with AI and the Rise of the Machines, and soon, we'll have our robot overlords, but until then, it's going to be a great, great scale tool, for sure.

Steve Ponte  

I mean, AI, I mean, just another that's a whole other topic. AI is going to just, I mean, it's gonna revolve, revolution, revolutionize a lot of businesses. But talk about scalability in our space, in terms of lending and processing data and, I mean, it's, it's gonna be massive the level of, it's not that we will lose bodies over it. I mean, I think about the many analysts that we have in our business, but you know, these folks are going to be able to help with different things in our business going forward. But AI is going to be able to scrub the data that we have to provide real time solutions and scenarios and analysis and sensitivity analysis in our business that is just going to make us that much sharper of a business. And you know, for those that are going to be stuck in the past that continue to be comfortable with just using Excel, you know, they're going to get left in the dust, unfortunately.

Ryan Miller  

Yeah, yeah, absolutely. I'd love to zoom out and just in, in the market right now, one thing I've noticed, and you and I spoke about this when we first met, I remember is about how banks are starting to tighten a little bit, right? They're very selective on, on, it's kind of a risk off environment, at least, that's how it I'm sensing it, so with this, with this risk off environment, that that traditional banks are taking all five of them, right? It's not a lot here, but they control it. How is PHL positioning itself just to meet the demands from both brokers and borrowers in the markets that you're in?

Steve Ponte  

Yeah, great question. I mean, it's no secret, when you think about banking in Canada. I mean, we've got some tremendous banks, in fact we've got a very, very stable and strong financial system. We have very large banks in Canada that tend to follow and operate very similarly. I know they like to differentiate each other, but they do operate a lot the same. With every year that goes by, there's tightened credit policy, more rules, more compliance and less common sense in lending, and as we know, financial markets and in debt, in this case, requires very customized solutions, in many cases, for what people are looking for. This is why you're seeing the rise of of the alts that we talked about Ryan, and this is why you've got your podcast, and why you're so why you're so popular is there's this whole segment of the market that's just emerging with a ton of force be just because of this, because the large institutions are becoming, you know, they're becoming too rigid, and it's opened up opportunities for for companies like like us, like PHL, to operate, provide solutions for customers. And I think about, you think about just the banking in Canada, like the mortgage market in Canada itself is I don't, I don't have both. I think the last stat that I had was 2.42, 2.5 trillion. It's probably more than that today. So when you think about our space, managing five or 5% and growing in that space, it's it can be a huge, huge market, and it will continue to grow and I don't see that changing anytime soon. I think that the banks consistently, and listen, this isn't a knock on the banks, we've got great relationships with the banks. They, they, they fill the void for 85-90% of the market, but that segment of the market that needs something more boutique and more bespoke and customize. You know, whether it's they need funds quickly, they need funds for a shorter period of time, they just need alternatives, and we're providing that in this marketplace, and thankfully, it's a massive market in the US and Canada is, I believe we're at least 10 or 15 years behind what where the US is and will be a space that continues to grow in Canada.

Ryan Miller  

Man, you're not kidding and how have you seen any changes in regulators or anything like that?

Steve Ponte  

Yeah. I mean the break, I appreciate the regulars have a difficult task the in a market that continues to evolve. You've got social media, you've got not going to get too political here, but you've got scammers online. You've got the amount of fraud that's in the market today, it makes it very difficult for regular to try to protect investors and also protect borrowers and with that comes tighten policy, more rigidity. And unfortunately, it's kind of the throw the baby out with the bathwater kind of scenario where that, you know, extended policy and procedures ultimately makes it difficult for customers to find solutions, and good customers to find solutions. And yeah. I mean, we're going to continue to see this, this, this trend for the for the foreseeable future.

Ryan Miller  

Yeah, awesome. Well, that's good news for you, man. So given today's heightened regulatory and capital challenges, what would you say are some of those key success factors for structuring in MIC, your mortgage investment corporation?

Steve Ponte  

I think the key, the key factors, would be making sure that you understand, understand all the stakeholders that are in in the market today. So making sure that you've hired the appropriate professionals that understand compliance. They can get it right from the start. Join industry associations, listen to podcasts like yourself, and really making sure that you understand both sides of the balance sheet, in our case, as again, because we have investors, and also investors that are, that are providing the capital for our business, and then the borrowers in which we are deploying that capital to generate a return, really understanding both sides of the balance sheet there. When I'm when I say that, I mean understanding what solutions you're providing for both of those stakeholders. So for the borrowers, we're providing an alternate lending solution that they can't find from conventional banks and credit unions across Canada. And then, obviously, for the investors, the investors are looking for something they perceive to be safe, stable and obviously providing a healthy, risk adjusted return. So I feel like the MIC space has really done a great job. We've got lots of great competitors as well, but, you know, groups like PHL have been able to find a nice balance that helps both of those stakeholders. And also, I think being clear on what it is that your borrowers and investors are looking for and making sure you're not trying to clients again, trying to provide solutions for for everybody know what it is that you're trying to do and stay focused on that

Ryan Miller  

Brilliant man. So before we wrap things up, is there final thoughts, is there ways people can reach out to if they want to learn more or anything at all?

Steve Ponte  

Yeah, feel free to reach out to us at steveponte@PHLcapital.com, I'm on LinkedIn, check out our website. Happy to chat with any, anyone that's got any questions about our space, or if there is any consultants, etc., that people are interested in, happy to share that information, or even our industry associations. Happy to, happy to connect with you and I really want to thank you, Ryan for allowing me on the show again. Huge fan, and I love what you're doing, for for finance guys like myself, I only you know, my only beef is that I wish that this show was available 20 years ago. I probably would have saved myself of a lot of stress over the years. So, so keep doing what you're doing, man, really appreciate it.

Ryan Miller  

Well, appreciate it. And we've been very fortunate to be in the top, I don't know, 2 or 3% in the world, and it's all because amazing guests like you. So you're part of the Making Billions alum man, so appreciate you man. So just to summarize everything we talked about, build your advisory board, leverage their experience for you to compress decades into days. The second one is, you got to nail it on compliance, and that's typically done with the right provider. Steve provided one of them that he likes, but make sure that however you do it, just make sure you do it. And finally, remember, finance, it's more about trust than it is about transactions. Don't be afraid to go on a listening tour. You do these things, and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller  

Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.