Meeting CEO Prakash Hariharan & looking at the trajectory of the industry

Jason: Hey everyone, thanks for joining. here with Prakash. Today, we're going to do a little intro. You're going to meet really that the head of the snake, if we want to call it, of AnalytixInsight. We're going to learn more about Prakash and his background, kind of the spark for starting the company, and then go over kind of what the day-to-day week-to-week roles look like as a CEO.

But Prakash, first things first, how are you?

Prakash: I'm doing fine, Jason. Thanks for having me over.

Jason: Awesome, awesome. Well, here, we usually like to dive in pretty early on, you know, kind of like the first couple jobs out of school, and then we'll go through the career path.

Prakash: Yes, I mean, I got my master's in finance with a mathematical finance degree, like what you call it, financial engineering. I was working as an analyst at Dominion Moderating Service, mostly on the credit side. Then I worked for a long period of time as a portfolio manager, fund manager at Front Street Capital. Close to 10 years, running a bunch of funds there, and had a very good exposure to the buy side. 

We were among the leading firms at different points in time in the resources and the tech space. So, I did work very closely with the partners there, and we did a number of investments in tech companies that have done so well in the last 10 years. People missed these lifecycle stocks like Descartes Systems, for instance. We were a big shareholder, and I look at the share price today, and if you'd asked me about this company 10 years back, I would have had a different view. Some of these have been really long and good runs.

Likewise, and after my career there, I was more keen on building a company after financing so many of them as a buy side, particularly on the tech side. And I was really interested in machine learning and content creation. I felt there was a clear-cut migration on the buy side, for instance, for fund managers into products and platforms that are basically disruptive to the fee structure that is prevailing in the industry. We had the 220 model migrate and the mutual funds migrating to ETFs. And now we're getting into the zero-commission, robo-advisory services, which has been the transition. But effectively, when you're looking at the wealth management business, it's changed drastically with the advent of technology. There is a complete disruption in the traditional models, like what we've seen in so many industries, whether it's e-commerce or streaming movies, and now, for many years, esports as well.

Jason: Yeah, and we could do a lot of cool videos going forward, some good teasers here for talking about the changes. Quick here, just to hear some interesting ones, you know, fund manager for 10 years, investing in some tech, must have seen some pretty cool things. I'm just curious, doesn't have to be the biggest winners, but anything interesting you saw or invested in?

Prakash: That's difficult, difficult to keep track of it. But let's face it, we are living in a world today where the top five, you know, top ten stocks by market capitalization globally happen to be from the technology space. And if you go back 10 years, the composition of the top 10 stocks, the market cap was completely different. So, you know, we are having at least six companies, now five to six companies, with a market cap of over a trillion dollars today, which is never the case 10 years back. It was very different.

It was the energy companies, the banks, and so on and so forth. So in Canada, we've had a very interesting transitionary period from a resource-focused stock market to a more diversified portfolio of assets. A lot of the tech companies in Canada, unfortunately, don't last to get sold; they get bought by bigger companies. 

That's always been a path for Canadian tech companies. When we look at the space ten years back, there were still Networks that were bought, which is now a part of a bigger company. There was Photon Controls that was bought recently for over 300 million dollars, Shopify now, obviously, which is everybody's top pick ,but it was not a very big company before. Descartes Systems is another one, and a whole bunch of gaming companies that have been disruptive in the technology side. We just saw Score Just Bar being bought for over 2 billion. And prior to that, there was Amaya Gaming which became Poker Stars. A lot of Bay Street and Front Street Capital were heavily involved in a lot of these companies as investors. There were also private companies that got bought before they went public too, like there are a bunch of companies in the Marsh Center in Toronto that are private there that were sold before they were public.

Jason: Yeah, pretty cool. Well, if anyone has some questions, make sure to drop them below. We'll dive into the life of the fund manager another time for sure. So, walk me through. Tell me the sparks we were already kind of alluding to, you know, seeing the fund management fee structure change and people changing. Walk me through the spark for AnalytixInsight and kind of what made you say, "Hey, from the fund manager side, let's start one."

Prakash: Well, as you look at AnalytixInsight, the core offering for the company is a migration towards a low-fee, disruptive platform and taking it all the way through. We saw mutual funds replaced by ETFs, and then now the ETFs have been replaced by robo-advisory services.

When they eliminate the entire advisor in the middle completely for a low-fee structure, and that's a trend that's just going to keep coming through. We just saw what's happened with Robinhood, with the zero-commission, low-commission stock trading platform. Almost everybody is watching the transformation of the wealth management and the investment business. So, when AI and machine learning are going to be a cornerstone, and I did feel when we started AnalytixInsight, our plan was to do a lot of data analytics, look at a lot of company filings, create content pieces which would enhance the investment tools for people to look at, particularly in stocks and companies that don't have any research coverage. There's no information. For instance, if there's a stock that's up 50% in the last week and there's no research coverage, people want to know what happened to that company. Likewise, if you want to buy stock of a company, you need to have a tool to look at it before you make an investment decision. We felt that can be put together by AnalytixInsight.

There were probably five or six big data providers globally, which include groups like Bloomberg, FactSet, Refinitiv, Morningstar, that dominated this whole data business. And they are the go-to gatekeepers for financial data, but they're all in the raw form. So we wanted to work with, be a disruptive force in that business, to take that raw, unstructured data and give meaningful content, which is a route that these big data providers haven't been able to go for, simply because of the cost curve and the technology disruption that AI and machine learning brings. So we wanted to basically explore that area. And when we started building it, we were right because almost everybody is very much interested in the space now. 

Fintech is a new word that didn't exist when we started. Even methods like remittance, payments through mobile applications are now a part of our day-to-day lives and I do think, you know, going forward, trading stocks and making your wealth management requirements being fulfilled through these technology applications would be the way forward for almost everybody in this business. 

Jason: Yeah, some great industry chats to talk about. It’s funny, yeah fintech you didn’t really hear until five years ago. And even five years ago, it was like fintech, what's fintech? So extremely interesting. We'll go into that kind of emerging business and where you're seeing things go. And now, you know, really my last question for you is, now walk me through kind of, you know you guys build these awesome pieces of software and we’ll do deeper dives into them but talk me through kind of what your day-to-day, week-to-week looks like now with an operating platform, you know, as a CEO of Analytix.

Prakash: Well, it's quite busy. Number one, the day-to-day operations have changed because everybody is virtual right now, given the pandemic situation. And actually, if we do live in a world where there's going to be hybrid working, companies like AnalytixInsight, cloud-based companies, are going to be more and more powerful tools for people to operate their businesses. So, we have seen this transformation dramatically in the last one year. 

We are very keen on developing the stock trading platform, making it very robust with the bells and whistles of machine learning and data analytics as a part of the offering. So, we are very busy in getting that platform live and up and running, which is actually underway currently. We got our license in April, and we have also established a partnership with one of the biggest banks in Europe right now, who are looking to migrate a lot of their customers over to this platform. So that's a big shift in the business model that we've had for a few years prior to this. It's a scale-up of the business at that point in time.

We are also adding a lot of features within the AI toolkit that we have developed, which are very unique. We announced the ESD initiative, for instance, and we'll be adding a number of features for companies for wealth management tools, which will be a very unique toolkit that will be a part of the whole offering. So, we are busy. We have a number of projects, a number of deadlines in front of us, milestones that we're looking to hit as a company. I think in the next year or so, we have a roadmap in terms of what we're executing on, what we're developing, and what we're building. It's going to be very interesting to see how the company lands after that when we are live with our trading platform, live with some of the updates on our AI and machine learning piece, and at the same time, have stronger strategic partnerships that we're building through a number of initiatives.

Jason: Yeah, no, and lots of teasers for things that come. I'm not, no, it's hard to, I'm gonna say we'll get into these at another time. But, you know, wow, the passion and, you know, obviously the tools are extremely exciting. I know we just gave people a little bit of a look under the hood, talking to Scott about the platform, and I'm sure we'll get a ton of questions that we can go through as well with you. Extremely exciting. 

Thanks so much for joining. 

Anything else? Last chance. Anything else about yourself you want to put in this video?

Prakash: Nothing other than the fact that I'm extremely delighted to be a part of this change that we're seeing in the business because I have been a part of the buy side, making investment decisions and picking stocks, and looking at
opportunities. We're looking at a very interesting credit cycle unfolding here for the next two or three years, with this massive amount of stimulus in the market. It's going to be a hybrid and a different work-life balance, working from hybrid locations, managing teams in Europe without being there, through the virtual environment. It's a reality. And I'm delighted that I'm a part of this process. So personally, I couldn't have been more excited because we picked a company to build that never actually saw these situations unfold in society. But we knew that eventually, there would be a huge demand for creating content and building investment tools that require some of these innovative technology pieces. But to be a part of it, as we are bang in the middle of this right now, is very exciting and interesting for me personally.

Jason: Yeah, no, awesome. We'll be able to talk a lot more. Obviously, thanks so much for doing this little intro video on yourself. Prakash again, thanks for joining. Looking forward to chatting again soon. 

Prakash: Thanks, Jason.