I'd like to welcome Kim Lennox, who's the chairman of Renaissance Partners all the way in from Sydney, Australia.
Kim, welcome to the New York Stock Exchange and delighted to have you on FinTech TV.
Great to be invited.
Thank you.
It is quite the space to have seen so many times but now being in it.
A little bit different being here firsthand and you know, nothing like being on the floor of the most iconic exchange in the world.
No, no disrespect to ASX or any of the other.
Local exchanges in Australia, but kind of all started here's the shouting all gone, right?
And probably a great segue to our conversation, as you know, I understand.
Being the chairman of Renaissance Partners, looking at kind of the future, what's going to be happening, and move that to present day investments.
So maybe tell us a little bit about the strategy and what you're up to at Renaissance.
Sure.
So one of the things we think is part of our point of difference is that we look at what will be the compelling story.
That if you have put 10 years into the future and you said let's say we were going to be invited to a TED Talk, what would that future TED book be about?
What would be the storytelling that tells you the back because people get engaged with stories and so as a result, when it comes to dealing with all the stakeholders of addressing.
Areas that we focus on, which is energy, transport, and housing in terms of the crises that exist in not just Australia but other markets in the world for a supply of housing that is insufficient despite the fact that there's demand, which theoretically doesn't make a lot of sense.
Why can't we build a house if we want one?
It's certainly a problem in Australia.
And in energy, all the ability for renewable energy to come through as well as nuclear and other technologies, and yet we're finding ourselves with a less stable grid.
Spain just recently and the challenges of how that becomes something where energy stays affordable.
All of these journeys involve that and one of those is definitely transport, so we focus on that very recently.
So there's a couple of things to jump into there with Transporter.
I'm going to go right to the stablecoin innovation.
So if I look at your your TED Talk 10 years from now, look today, we've got this alpha capture of 1 to 10 years that we're going to look to take advantage of.
Talk to me a little bit about what you're doing so differently within the stablecoin and where that ties into carbon and give us a little rundown.
So part of our view on the world is that we need to be able to measure carbon if anything else as a measure of resource intensity.
So even depending on how you want to use it, we need a method that tells us that something's more efficient than the alternative, and carbon becomes a really good tool.
The issue is that carbon markets have been less than perfect over the last decade or so as they've existed, and so we have blockchain as a technology that is very successful in creating trust amongst stakeholders and cross-border arrangements.
Carbon is a worldwide factor, so we end up with the ability to link them together.
Which isn't new in itself, but what is new is to look at fostering the projects yourself to feed them so you can facilitate a controlled creation of new carbon credits, and you also back them with a treasury that enables them to be settled.
So if they're open for 8 hours on a cell and it doesn't sell in that time, the Treasury settles the account at a minimum price, and that minimum price is built there by an order to back your own just like stable coins are intended to be in mini arm.
So you said that so eloquently and I'd say humbly, but there's some aha moments in that for me.
So if I can almost vision this is vertically integrated because you're actually creating and producing.
The stablecoin from what you're doing and the hemp side of the world, sorry, well, we take what we're doing for granted so it's not so much something to share as easily as it should be done.
So what happens is is where we've got a project, our founding project is an industrial hemp.
And a forestry project in Timor-Leste, a country that's just north of Australia on the edge of an island with Timor, sorry, with the Timor Island with Indonesia.
It's one of the newest countries in the world.
I learned something and it is, it is a fledgling country that has a lot of opportunity.
And we have a partnership with the various stakeholders in the country, and that will bring about the ability to grow industrial hemp, which is something that is both carbon sequestering hard word to say, and also is is in a product that's useful for bringing through packaging, so fiber packaging, the coffee cups, all those sort of things that the packaging of products that you buy.
All the things that get thrown away, all that fiber, it becomes a more efficient way to do that.
And also building materials, bricks and fiber boards and the sort of things that make furniture are all something you can make out of hemp.
So this is all profitable undertakings and so the project makes a profit in this case in the order of $50 to $100 million a year's substantial, and with that the carbon credits become.
An extra.
So that's where we use the charity side of our business to educate through providing the carbon credits which we could sell into the stablecoin instead and backing it with the money.
So that's fascinating to weave in the charitable side, the education, but you're almost putting a floor, if that's a fair description to that stablecoin.
So instead of effectively burning it, right, you're really having that treasury within the framework.
So it's kind of changing that dynamic.
Yes, so it's using carbon credits as a mechanism to control supply and to give meaning to the token, as it were inside the blockchain.
So you have a real world signature of an audited output of a gold standard carbon credit that is then attached to the token.
The smart contract within the token and the blockchain means that it settles on a floor price, and something I haven't mentioned is the floor price is indexed at inflation.
So that you then have a value trivial to say that whatever you bought the coin at the floor price at that time will stay in the currency of the day.
So it's an Australian dollar, US dollar, it'll move with the with the with the inflation.
Excellent.
I want to jump to a little bit of transportation, which is tied to your whole ecosystem play it seems.
TAA.
Tell me about it.
TAA wouldn't be a brand too many people here in America would know, but TAA, which used to stand for Trans-Australian Airlines, was the government owned airline that was operated at the level of being as well known as TWA or Pan Am here in America.
It was changed over in the 1980s.
It stopped becoming a brand then, but it's very nostalgic.
One of the top 10 brands of Australia, as it happens, we've been able to secure that brand, and we're going to bring it back as an airline.
Now Australia has some troubled history in having what they're described as the third domestic airlines.
But in this case, the trend that we're seeing in terms of the story for the future TED Talk is to say Australia used to be an origin of transport, so 60% of the people would leave Australia of the travel would be Australians leaving and coming back.
But Australia's on the edge of half the population of the world China, India, and so on which have up until now not really been in mass traveling, are now enormous travelers, and some of them want to come to Australia.
So as a result, the trend will be that Australia stops being an origin of travel and become a destination of travel.
It needs an entirely new airline just to consider how tourists and visitors want to travel around the country versus the way.
The way in which the Australians move around for business reasons and personal family reasons.
As a result, you end up with Trans-Australian Airlines being back to help tourists see Australia.
So I'm going to put a point here in our history.
So when we look back to look forward to 2035, when we look back at this, the new narrative of from origin to destination, you heard it here from Kim Lennox as we're talking about the new TAA, but that makes so much sense to me when you frame it that way, particularly.
As Australia is on the edge of so much of the global population, and now as we have increased wealth creation, that ability to travel, it seems like a natural narrative in Australia, the cities of Australia, there's not many major cities.
There's only 25 to 6 million people in Australia.
It's a size, the country is the size of the lower 48, but there's almost no one in it.
A lot of it's not very habitable, genuinely red centered dirt desert.
But the cities are on the southern side of the country, so the tourists have to fly across 4 hours of desert to land in Australia, and if they're a tourist, they might want to go look at the desert, which means they spend 3 hours flying back over where they flew to go visit what they want to see.
That makes complete sense if you're an Australian trying to leave your city, but it makes no sense if you're a tourist trying to come to the country.
Not many people in England fly to Denver to come to New York.
It makes no sense, and that's what we do for our tourists in Australia.
So a big pivot there and we will bring along tourism.
So that Australia can now be accessible for the real Australia that everyone wants to see which which includes the kangaroos, but very much the open spaces.
Kim, unfortunately we're running out of time, but I would love maybe just give a little view of the exit strategy, some of the pathway to the United States and what you see there.
So one is we mentioned the stablecoin, so there's certainly an interest in in seeing how that's that that will be able to operate inside the US market, and we'll be looking into that after we've got the grounding done in the Australian market, which we know well.
And for the airline it will quickly come into a fleet of around 100 planes across its operations and with that we'll be looking to better manage the risk of those as assets and the American market is one of the best markets in the world for pricing that type of risk and so the intention would be to take the airline leasing side of the core of the business and bring it bring it to America.
I love it.
Cross border.
We're creating origin, destination, new stablecoin, and a pathway to airport leasing here in the United States.
Kim, you have to come back and see us again whether remotely, but we'd love to have you in studio here and let us know about the progress.
That'd be great.
I'd love to do that.
Thanks for bringing me in.
That was our pleasure.
Thanks for joining.
