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Thoughts in Advance of the Chicago AAAIM Event

The Association of Asian American Investment Managers holds its Chicago Regional event on Thursday, July 26 at the offices of law firm Sidley Austin LLP, One South Dearborn, beginning at 3 and continuing until 7.

AAAIM confidently proclaims that its line-up of panelists is a collection of “rock stars.” Among them: Seamon Chan, founder of Palm Drive Capital; Cindy Lau, of Segal Marco Advisors; Gordon Liao, of Modjule LLC, and Han Shen, if iFly.vc.

AllAboutAlpha spoke recently with Mr Chan about this event, about Asian-Americans in the VC world, and about Palm Drive.

Chan co-founded Palm Drive in 2014. It is part of the Stanford University ecosystem, investing in software and internet start-ups. As his LinkedIn page says, “founders are unique, but the passion for innovation binds us together.” One of Palm Drive’s great successes in that line, Chan says, was Jet.com, an eCommerce concern founded by Marc Lore.

What was distinctive about Jet.com was that the company offered virtually everything on its site at its break-even price. It didn’t earn anything per transaction, so its only source of profit was from membership fees. The operation was also designed chiefly as a way of bringing customers together with third-party vendors.

In October 2016, Walmart announced that it was acquiring Jet.com for $3.3 billion. Most of that ($3 billion) was in cash; the remainder in stock.

Health Care and Fundraising

Another start-up with which Palm Drive has been involved is Clover Health. As Chan said, Clover “doesn’t just provide software to insurers; it is the insurer, using artificial intelligence.”

Clover had developed powerful predictive analytics capable of helping patients and keeping costs down. There was a time when the founders of a company that had done that would find a buyer (a traditional insurer) take their money and call it a day. But one of the trends in the venture capital market today, Chan says is to look for a start-up that wants to go further, that wants not to provide software that will help an established firm (a gatekeeper) by doing X, but that will challenge an established firm by doing X without the traditional gatekeepers.

Such trends are among the matters that Chan will discuss at the Chicago meeting. He’ll also discuss raising capital -- a critical role for leadership in the industry asset management industry, of course -- the money has to be raised before it can be put to work -- but a role that is sometimes intimidating to people to whom that isn’t part of a comfort zone.  

The Chicago event will also feature Suzanne Yoon intrerviewing Jae Yoon, the CIO of New York Life Investment Management, which is the asset management operation of New York Life Insurance Company.

Suzanne is  a founder and managing partner of Kinzie Capital Partners. She received a flattering write-up in 2016 from PE Hub as one of the list of “trailblazers: 10 women pioneering new paths in private equity.”  

More on the AAAIM

The AAAIM is headquartered in San Francisco, Calif. It works on behalf of Asian Americans who are themselves working across a wide range of asset classes: private equity, public equity, hedge funds, fixed income, and real assets. Its conferences and events are educational as well as networking events.

The goals of the organization (quoting now from its website, though Chan echoed these sentiments in our discussion) include bringing “support and dollars towards engaging and growing AAPI [Asian Americans and Pacific Islanders] education, outreach, and advocacy” within the world of private investment especially. This can involve for example research projects focused on supporting AAPI inclusion in emerging manager programs; work to engage decision makers on the importance of diversity within their portfolio of managers; and work creating opportunities for young ambitious AAPIs to network with influential people within the industry.