Pulak Sinha – The Dawn of Asset Tech
Pulak Sinha is the Founder & CEO of Pepper.
Pepper is the next generation of smart digital infrastructure for asset managers bringing together the latest in cloud, artificial intelligence, open architecture, and user interface technologies. This new asset tech by Pepper represents the dawn of new and powerful tools allowing their customers to provide vastly superior service to their clients.
Before leaving to start building the digital platform that would become Pepper, Mr. Sinha was a founding member of GSO Capital Partners — currently one of the largest credit hedge funds. Mr. Sinha has also gained valuable expertise in the fields of regulatory risk and credit risk management for large banks, having worked at Citigroup, Bank of America, and Credit Suisse. Prior to moving to the United States, Mr. Sinha worked at a startup (Globsyn Technologies) in India, where he helped grow their six man team to over 300 strong, providing software and training services. He has an MBA from Columbia Business School and an undergraduate degree in engineering from IIT in India.
Pulak Sinha spends his free time hiking the wilderness, cooking, and trying to play chess. He lives in New York with his wife and daughter.
Bio source: onpepper.com
Alan Olsen: Good to have you with us today. And today we’re going to be visiting with Pulak Sinha. Pulak welcome to today’s show.
Pulak Sinha: Thank you. Thanks for having us.
Alan Olsen: All right, Pulak you’re the CEO of Pepper. You can find it onpepper.com. And we’re really happy to have you with us today. Can you tell us a little about yourself, who you are and how you got to where you are today?
Pulak Sinha: I grew up in India, I was happily working there as part of a startup. And this was the late 1990’s. I think there was this big wave where India got involved, which was the Y2k wave. And they said, the world all over is going to blow up and, and that was the time there was a big change even in India that was happening. And the startup I was with said, “Hey, you are doing well here,Why don’t you go to the US and start our operations there”. So I came to the US 1998. And I was an engineer by profession, I was starting this company, but it didn’t go anywhere. So ended up at Columbia where I did my MBA and ended up at a bank. I was in New York, everybody gets to bank in New York. In this bank, there was this trading desk, which said, we need some help. So I said, what help do you need? I had no idea what a trading desk was. I had no idea what they traded. They asked me a few questions, I was able to answer them, so they said, maybe this guy is good enough for us to keep. And as luck would have it. That desk spun off into a hedge fund. And that hedge fund was called GSO capital, it became one of the largest hedge funds in the world. And it was bought by Blackstone a few years later. So I was part of all of those journeys. And I learned a lot there, I learned a lot about what finance was, and taking all the learnings and all the different things that I did there and started peppered with it.
Alan Olsen: And so the platform pepper First tell me tell me about the name, Pepper,
Pulak Sinha: Everybody who starts a company actually spends a lot of time on finding that name. Somebody comes up with Yahoo, somebody else comes up with Google. We were in the same boat trying to figure out where to get a name that would that would really mean something to some people. And it wasn’t an easy name to come by. The way it happened was, our officers were on Wall Street. And at the end of Wall Street is the Trinity Church. And one day it was raining really hard and I was walking back from from our offices, and I went inside the church. And in the church there are lots of stories written all over the place. And I was looking at reading one of the stories and it was about how this church was established during 1695. And the British government that time had given all this land to the church and the church was getting established. And it is a fascinating story. Actually, it was really fascinating. And so I went back and checked on it. And one of the things they mentioned was all of this land which was just massive today in value, was given to Trinity Church for one pepper corn a year. And I said, Oh my God, that’s a great name for any instrument where you’re trading. And that’s how I got to use the name pepper.
Alan Olsen: So when an entrepreneur startup companies are looking to solve a problem, what are they out to solve?
Pulak Sinha: This goes back to, to where I worked at the GSO and, and it goes back and talks about a number of different things. And as I grew there, one of the big pieces that we saw was, this whole sector, which was developing, its credit management, these are complex instruments that are being built and managed by large investment managers. And the one thing that I realized was, technology wasn’t playing a big part in all the work that these managers were doing, technology was a very, very small end of road part where it was just, oh, yeah, we have a technology system somewhere in the way I could see in the way I had seen technology grow on the West Coast. And some of my best friends were there. It was an amazing space that was growing between 2000 to 2010, when all the Facebook’s and the Amazons became really big. And to me, these two have to come together, and to solve the problem of asset management. And that was the goal. That was what I wanted to do. And if you’d look at it their standard, I mean, everybody has the same problem. Both my data is everywhere, I can’t find this, it takes too much time, my processes are bad. So those problems have always existed, but the solutions have not existed. And that is what we are trying to solve.
Alan Olsen: What is asset tech, and why should we care?
Pulak Sinha: Asset Tech is really one of the deep subjects, which we are kind of aware of all of us, but never really get into what asset management, what all of this is all about. And I’ll take an analogy. All of us, everybody in the US will probably talk about that have opinions and have debated about health care. And it’s a huge area and we know it needs to get better. There are there are so many inefficiencies in it. And Asset Management is a very similar sector. Very, very simulated, it is absolutely massive. I mean, today, American managers or investment managers manage close to over $100 trillion in assets. That’s more than all of the GDP of USA, and they are managing it and that money actually affects us directly. Our 401k is there, pension funds or their entitlements there. They’re all using these asset managers to manage that amount of money. So on one hand, it directly affects us. On the other hand, it affects the whole economy, when these asset managers actually allocate money to the right sectors, we have growth, if there are and there are many countries where all of this money is actually siphoned away. And then we see what happens there. So it’s a it’s a very, it’s a dynamic sector, it’s a very large sector, it’s extremely complex, lots of regulations. Quite, I would say opaque. And technology is what will make it available to a lot of bigger audience, and more people will get into it and will have better systems. So that’s what asset tech is all about. How do we bring that sector out and provide them with the tools so that they can want they can one, manage the complexity and two they allocate better, they are better as a strategic partner.
Alan Olsen: What are some of the lessons that you’ve learned and running a startup?
Pulak Sinha: The first thing and this is something that is very deep for me is it really brings out who you are as a person. You can’t be you can’t you have to be honest with yourself of what your strengths are, what your weaknesses are. And even if I take away everybody that honesty to self was one of the biggest lessons that I ever learned, I don’t think I had ever thought about myself more in any other role anywhere else than when I started this, this. So that was I think the number one thing. But there are two other things which I think I care about one verse. The second one is creativity, what I realized was creativity is not just about making art or making music, I mean, obviously, those guys are hugely creative. It is also about being able to do things in a way where you can create a lot more value than what you’re putting in. And that creativity has what kept Pepper together. The paths that different entrepreneurs choose are always different. Ours is our own path. But what has sustained us and what has put things together is the creativity of the team. The third thing I will say is in this, this is something that Malcolm Gladwell has talked about, and others have talked about 10,000 hours of something, when you work on something and becomes you become a master at that. I don’t say that we’ve put 10,000 hours, but when the team puts that kind of thing together, those kinds of hours to get there, they really can produce good stuff, they really can change the world and creating that team and being able to do that was the third big lesson for me.
Alan Olsen: So from the client’s perspective, why why would clients come and use your services when they have options out there in the market? What is your value added?
Pulak Sinha: More than anything else, what we are aiming to create is the trust, and trusted so many different ways, trust the system, trust in the data itself. I mean, today, what does happen is there are systems, that the asset manager may not trust that system and say that the data is right. So the trust in the data. But more than that the trust in that Pepper will be providing them with the services that they require. And that trust is extremely important, especially in this space, when a large asset manager is managing managing billions of dollars, he needs to trust us, explicitly and implicitly. And if he does not do that, he will just move away from us. So our whole goal is to create the trust and distrust at multiple levels. And that’s what I have been focused on from day one, whether this is the way we interact with our clients, this is the way our security needs to be there. This is the way our data needs to be housed in data for our client for our clients is extremely important. And it’s their data so nobody else is extracting value out of it. I mean we see that in the social media today that people take somebody else’s data and then just use it. You can’t do that with asset management you have to make cood concious of that data. And so we are creating all the values of trust everything to us is about the trust and I think that will be what we will be able to bring to our clients over the long
Alan Olsen: There’s always a good story of navigating cultures especially for first generation immigrants tell me yours.
Pulak Sinha: Every immigrant and especially now that there have been a lot of success stories in the US so many CEOs now are Indian. So you get to hear so many of these stories, but all of them will have a few things in common. They almost all will say we came with two suitcases, very little money, landed on a cold day somewhere in New York, vegetarians didn’t get any food that day, speaking strange English language. So those are common, I had it also. I had learned to drive in India I wasn’t a great driver or anything. The first emplouer that I had, he bought me a car, it was a 10 year old car it were in the I think the first week I was driving it became hugely foggy and I did not know how to turn the heater on so that the fog will pour out of the out of the screen. And I was driving and every two minutes I was stopping and trying to rub off that fog, and I didn’t know what to do. And then this guy comes up and he says, you are new to driving. And he helped me- he just showed me that switch had to be turned off. And this thing could be driven. I had never driven with defoggers on in India- never seen that switch. So that was to me, I to me, it was you will get help. If you are if you need help, you will get the help that he that you require. And you just have to keep doing the things that you are doing. And I think that was to me a big inspiration that I got. I don’t know who that gentleman was, he just took his time. Stood on a highway he stopped next to me and gave me that instruction.
Alan Olsen: Alright, Pulak, I got time for one final question. How do you think you can change the alternatives market?
Pulak Sinha: I think that’s a that’s a very important question and that goes to the heart of what you’re building. We have a platform strategy that we are trying to put together. Where, what we want to do is have hundreds of investment managers all working on a single platform. Each of them have their own sets of data. Each of them have their own workflows, each of them are independent of each other. But at the end of the day, they are all connected in many ways. A Pension Fund invests in an asset manager who invests in somebody else, it’s a highly complex chain and we are creating that chain on that technology platform. And I think that is what will be a differentiator.