FULL TRANSCRIPT
Slava Rubin (00:00)
In this episode of Smart Humans we talk with Ben Miller, who's founder and CEO of Fundrise. We go down memory lane covering his podcast previously from three years ago and discuss how the world has changed. AI was not even a thing. And now it's a huge thing. He tells us about real estate. He tells us about his innovation fund for pre IPO venture. And we also talk about private credit. We get lots of predictions about why 2026 is going to be a huge year for the economy, for politics and the world at large.
and he gives us some amazing predictions for three years out. Three real estate markets you should think about, markets that you should be concerned about, and of course, some pre-IPO companies you can think about as well.
Slava Rubin (01:06)
Hello and welcome to the latest episode of Smart Humans. I'm excited for today's guest. We have founder and CEO of Fundrise Ben Miller, back on the show. I love repeat guests. So Ben, welcome back to the show.
Ben Miller (01:19)
Thanks for having me.
Slava Rubin (01:21)
Yeah, so one of the beauties of having a repeat guest is we're going to, you know, skip some of the where did this all come from? Where did you come from? What's your background? Since we could always look at the previous episode for that, but it's hard to believe it's been over three years since you've been on the show. And just to put that in context, you were last on the show around October, 2022, and people didn't even know what AI was or chat GPT or anthropic or any of this.
So it's just like a whole new world. So thank you for coming back on.
Ben Miller (01:50)
Yeah, it's great. I think we're going to show how unpredictable the world is.
Slava Rubin (01:55)
For sure. Yeah, here we are on the show trying to predict what the future is gonna hold. take that all with a grain of salt. Looking at some of the predictions that, some of the things that you mentioned, both the good and the bad from before, well, you were anti-crypto before. Where are you at on crypto today? Are you still anti-crypto?
Ben Miller (02:15)
Crypto has evolved. It's evolved a lot. it's become, I think it's finally found an application, which is stable coins.
Slava Rubin (02:23)
There you go. So just as perspective, BTC Bitcoin was under $20,000. You were quite short, not a friend of Bitcoin. It has seen as high as 120 something and now hovering in the high 80s. So I'm going to call that an error that maybe would have been better to be long Bitcoin, but who knows? Things can evolve. But I would love your, so you have some new perspective.
Ben Miller (02:44)
yeah, my crypto view is not about the investment. I don't have a view on trading cryptocurrencies. I was thinking of it as a real economy. What's its use? Does it actually have economic utility? And it had limited utility until recently.
Slava Rubin (03:02)
So are you in your personal net worth allocations? Are you now exposed to crypto?
Ben Miller (03:08)
Nope, no, because it's not a trade. I don't have a trading view on it. I just have it. I'm a builder. Can you build with crypto? Can you do something that's actually like has utility other than like as an investment product? And I think now you can.
Slava Rubin (03:23)
So you're not eager to maybe buy some Ethereum or Bitcoin or Solana or any of it.
Ben Miller (03:29)
No, I don't really trade anything. That's not like crypto is as an investment. I have no idea about that. I just think of it as like, what's useful in the world? What can you do that's useful and built with? Until recently, I struggled with crypto, but now I think there's like a whole ecosystem coming together that's starting to get pretty exciting.
Slava Rubin (03:51)
What was really interesting is you were the first and still potentially one of the only people to say that you got all out of public equities when we last spoke three years ago. I think that was about a decade ago that you sold out of all of your public equities. So fast forward three years now, are you in public equities at all or do you still have the same point of view?
Ben Miller (04:11)
No, I'm not in public equities. No, I'm only in, I mean, it's because I'm so concentrated in Fundrise really. that's like, Fundrise in real estate. like, I would say like, I'm very aligned with my shareholders.
Slava Rubin (04:26)
What's interesting about Fundrise is now you've advanced quite a bit with your ⁓ innovation fund, which is like the pre IPO type product, right? What's amazing is even before, I'm gonna give you some massive credit here. I believe I'm gonna get this right, which is even before AI becomes a thing, you're already talking about a company named Databricks back already a long time ago, which was pretty impressive.
How do you think about getting into these pre-IPO companies but kind of anti the public investment once they're public? Because obviously the pre-IPO companies become IPO companies at some point.
Ben Miller (05:01)
Yeah, I mean, I'm a private market person. The problem with public markets is really hard to rationalize anything. The price can be high and go higher. The price can be low and go lower. It doesn't trade on fundamentals, at least it hasn't in a long time.
on private markets, generally, not always, obviously, 2021, didn't. But generally, when you're investing in the private markets, whether it's tech or real estate, private credit, you're investing on fundamentals. And so a lot of these companies, we're a customer of the company, a customer of the software product.
you can get to a conviction based on fundamentals. And that's usually where I operate from. That's why I have trouble with investing in crypto. I don't understand fundamentals. It doesn't trade on fundamentals. That's fundamentally why crypto is successful and why I just like, it's just not for me because that's just not how I tick.
Slava Rubin (06:00)
Sure, One of the other predictions is you were very concerned about Taiwan and what was gonna happen between Taiwan and China. Fast forward three years to simplify things, I would argue nothing has happened. Obviously there's a lot more nuance to that beyond just that. Where's your head at?
Because as a matter of fact when we asked you for your three or four prediction, it was credit default swaps against Taiwan thinking that Taiwan would have trouble. So where's your head at now on Taiwan China?
Ben Miller (06:42)
Yeah, mean, the thing that surprised me is that the Republicans generally have moved to a new political philosophy where Taiwan or Ukraine, essentially not strategic to us anymore. And so if China invades Taiwan, Russia invades Ukraine, we're not probably going to get involved.
which is like a break from the past 80 years, and I think that's pretty big, pretty big, I mean, I didn't see that coming. Usually Republicans were the hawks, Democrats were the doves. Now it seems like Democrats are the hawks, and at least MAGA are the doves.
at least unlike Russia, Ukraine and China, Taiwan. yeah, it was a total reversal of ⁓ historical patterns.
Slava Rubin (07:32)
So
moving into today, do you think that invasion into Taiwan is still potentially happening sometime soon, soon being whatever time period you say?
Ben Miller (07:42)
I mean, Xi Jinping has said that he has it at 2028, 2029, he's told his military to be ready. So I don't know. The way these things work, this is why people, it's binary, it's not analog. And if China did invade Taiwan and it went so badly, like.
I mean, you're talking about probably the worst thing to happen to anybody's lifetime since probably World War II or something. So it would be very catastrophic. it's hard to even sort of like, it's like an insurance policy. If you bought insurance in your house and your house didn't burn down, was it a mistake? Probably not. So that's why I think about Taiwan. It's the biggest risk in the world today. And you probably want to have insurance around it.
Slava Rubin (08:34)
How would you get insurance today around that? Got it, got it.
Ben Miller (08:35)
Recredit default swaps is probably, or you could
do deep, deep out of the money puts on certain companies.
Slava Rubin (08:43)
Like which ones?
Ben Miller (08:45)
I this is like I'm getting out of my depth, but because I'm not a public stock market person, but like, you know, Taiwan semiconductors or certain Taiwanese, probably Taiwanese companies.
Slava Rubin (08:56)
Um, you big, given that you're a real estate person, I asked you for three markets that you were long three years ago. And I asked you for a few markets that you were short. Um, I don't know if you remember which ones you said, but the, I looked it up. So it's, you know, it's my requirement. Uh, so the three that you were long or from three years ago were long Austin, long Columbus and long Nashville. Um, how has that worked out in the last three years?
Ben Miller (09:11)
Yeah, great.
Yeah, I Austin and Nashville's rental market's collapsed. Columbus probably has been fine.
Slava Rubin (09:35)
meaning that Austin and Nashville have done poorly over the last three years.
Ben Miller (09:39)
Well, it depends what you bought. yeah, it's been, because Office and those market sections have done well, but rental has collapsed in.
Slava Rubin (09:46)
I see.
Ben Miller (09:50)
in like the Sunbelt got oversupplied too much to build. And then people who moved there during COVID, some of them moved back out because it's coming back to the blue cities. they over fundamentally about oversupply and interest rates going from close to zero to five, five and a half percent. then so that what you had like seven, eight percent for for interest rates briefly. And that the combination of those two things crashed.
The real estate market has been in a recession since 2022.
Slava Rubin (10:25)
Yeah, we last spoke was October, 2022 and Columbus has, I mean, there was the whole idea of reshoring and kind of bringing back industrial. So, uh, has that kind of been, you know, green, yellow, red? How has that turned out in the last three years?
Ben Miller (10:31)
Mm-hmm.
think the reshoring is not, I would probably say I think yellow, it depends on the specific thing. mean, the tariffs ended up hurting manufacturing a lot.
So manufacturing has been in decline for the last nine months. I don't think Intel ended up being able to build. There was this big Columbus Intel project. They were going to build chips in Columbus. And I think that project never got off the ground, as far as I know. So I think a lot of reshoring didn't happen. It hasn't happened yet. it seems unclear. It doesn't seem like a good bet at the moment.
Slava Rubin (11:12)
Got it. And then the three cities that you were bearish on short, one specifically and two you threw in because I asked you for three, but the one specifically you were short on was Chicago. You know, worried about corruption and all kinds of things that going on there. And then also San Francisco and then DC. Keep in mind that San Francisco, again, you mentioned San Francisco before AI anything. So maybe San Francisco has evolved based on AI stuff, AI stuff, but
How's that worked out those three cities Chicago SF and DC in the last three years?
Ben Miller (11:45)
office has been, office Chicago, office DC, office LA, office San Francisco has gone to zero. So office went to zero in almost every big blue city except New York, which has been a little bit of a mixed bag where class A has done well and class B and C has mostly gone to zero. So office went to zero and then went to Chicago and San Francisco market, rental markets.
I mean, a little bit depends when you bought it, because I'll...
Slava Rubin (12:12)
Let's say
you bought it when you said it, October 22.
Ben Miller (12:16)
I mean, I think Chicago has done well. San Francisco, if you bought high end, it started to come back in the last 12 months. If you bought, you affordable or workforce housing, you probably got wiped out. Because San Francisco, essentially AI boom has been really good for the top, top, top of the market.
But then generally the mega trends of high interest rates, high inflation, and rent control has wiped out the bottom of the market, most blue cities. And then San Francisco office, other than the class A, office has been a bad investment for the last five years. And then DC has been horrible.
Slava Rubin (13:08)
across the board.
Ben Miller (13:09)
across the board, yeah. I mean, it was bad before, but then Trump kind of crushed it.
Slava Rubin (13:17)
Interesting. So seems like maybe you got Chicago wrong, SF kind of in between and DC you nailed it.
Ben Miller (13:26)
Yeah, and so like what's the pattern here? Three years ago, October 2022, interest rates had started to rise. Stock market had, I guess, started to collapse just about that point, right?
Slava Rubin (13:41)
Yeah,
it was early signal of bad times.
Ben Miller (13:44)
Yeah, so like, if I think about what was happening, what happened, and then what happened since the market collapsed and then recovered way faster, because of AI. And so I think the big sort of like, is that there was usually black swans are things you don't imagine happening that then cause bad things to happen.
Slava Rubin (13:54)
very rapidly.
correct.
You actually have a 23, 2023 becomes a awesome public markets year. then followed by 24 is the second 20 plus year, which is surprising. And now 25 is doing okay.
Ben Miller (14:20)
Yeah, yeah. like the black swan usually definition of black swan is something you never thought existed, ends up existing. So AI is like a black swan, but it's a bit like a gold swan or something. And so AI ends up being saves the market, rebirths venture capital, rebirths tech industry, out of, mean, some extent out of nowhere and ends up creating this huge drive in all tech.
Slava Rubin (14:31)
Right.
Ben Miller (14:45)
And so private and public tech has great. I don't know if you bought in October where you would be from October versus from the bottom. Yeah, yeah. Because it fell a lot and then recovered. And a lot of times people will talk about it from the bottom rather than from.
Slava Rubin (14:57)
You mean the public markets? I don't know that exact number.
I think 23
keeps on falling for a little while. But then also at the end of 23 is when you get Jerome Powell signaling that they're done raising rates. ⁓ But maybe that was already predicted a little bit before that. But then, yeah.
Ben Miller (15:16)
Mm-hmm.
Yeah, so I think that the public markets has been a little bit like the, I mean, it's kind of like there's been some winners and a lot of losers.
And so it depends on what you bought. Because most of the mid cap, most of the Russell and things like that done bad. Most things other than Mag 7 plus maybe like NVIDIA and TMSMC and things like that. Anything that wasn't AI hasn't done that well. Like real estate REITs, if you take real estate stock market, real estate stocks are the same price they were in 2016. So real estate is in a deep recession, hasn't rec...
Slava Rubin (15:38)
The MagSight.
When you exited, that's
when you exited your positions, public.
Ben Miller (16:00)
My position,
well, real estate's been crushed, absolutely crushed. And so when people talk about the stock market, they're mostly thinking about AI. And maybe they S&P 500 which is heavily weighted towards the top 10 companies. And so if an equal weighting of the stock market is actually done really terribly and a market cap weighted, it's done really well.
So it's the market and the economy is in a weird place because you have kind of this like the wealth you're doing better than ever and the most people are struggling with inflation and high prices and so there's sort of a split economy which probably gets more, probably continues. That trend probably becomes the mega trend. I'll call it the Mamdani trend of this decade.
Slava Rubin (16:52)
Sorry, what's mamdani trend?
Ben Miller (16:54)
Rich getting richer and the middle class under a lot of stress. Inflation.
Slava Rubin (16:59)
kind of like the K-shape economy a bit.
Ben Miller (16:59)
costume.
The whole thing called K-shape. But I don't like K-shape because I it's like, doesn't, I like, I'm a bit more colorful. I'm calling it the mamdani economy.
Slava Rubin (17:11)
Okay, sounds good. So thank you for going down memory lane here. It's a bit different of an episode. Our first 18 minutes here, we're talking about the past episode. So super interesting. Just to back up a hair, you're an incredible entrepreneur building up Fundrise, you know, have ton of knowledge in real estate and now evolving beyond that. We're going to talk a bit more about the, you know, you're really moving into two new asset classes, right? So pre IPO with innovation fund. And then now I think you're doing private credit.
right with a wrapper around real estate debt. All super interesting. Before we dive into that, we always like to know how you like to allocate your personal net worth. So I know you told us before that you're not in public equities or bonds, which is incredible because that makes you rare and unique, but you probably knew that already anyway. Has anything changed for the way you think about your investments today and how are you thinking about it? What are you allocating to?
Ben Miller (18:03)
I think if I had venture investors, they'd be happy because I'm just 100 % Fundrise It's like I'm all in on the company and the company's assets and the company's investments. have very few assets outside the company. I rent a house.
I have a family and so like, you know, my experience with money and partners, they love you to be like stressed out and just totally all in on the company so you just have to make it succeed. For good or evil, that's where I am.
Slava Rubin (18:34)
Nice and...
Are you doing any like, so we said no crypto, no publics, no bonds. You obviously have real estate. Your pre IPO is all going through your own vehicles. Nice. And then how about like, how much of your investments are yield oriented versus, you know, asset appreciation?
Ben Miller (18:43)
Mm-hmm.
I mean, have money in our private credit funds, but at this point, I'm just like, have everything in Fundrise, and I don't know my allocation inside Fundrise. It's not premeditated. It's very like, I go into where, like it's where the...
where when I launch something new, invest in it, I just go all in, but there's no allocation happening inside Fundrise in any deliberate way. I'm just all Fundrise all the time.
Slava Rubin (19:27)
and
And has anything specifically changed for the way you think in the last three years or is it just more of the same?
Ben Miller (19:38)
Well, over the three years, just to recapitulate it, so real estate is in a deep recession, as bad as it's been since 2008, in some ways worse than 2008 financial crisis. So it's one of the worst real estate periods in history, probably the top three in the last hundred years. Real estate's in a really bad place.
And then we launched the pre-IPO tech fund where anybody can invest in these private high-growth tech companies. That has killed it. And I've been telling everybody that I think that strategy is the best strategy.
And then the private yield and the private credit, like private credit to me, our private credit strategy is more about wealth preservation. It's not as people who are like, you I had somebody come to me and they're like, ⁓ like I feel like the stock market has peaked. I'm a little worried I want to.
put some money somewhere where I feel like I'll get an okay return or good return but not like, doesn't have a lot of like, volatility risk. And that's really what our private credit's about. And I feel like I don't know that many other things out there where I feel like, like if AI bubble blew up, I think our private credit funds or strategy, whatever you wanna call it, would not be significantly impacted.
Slava Rubin (21:07)
Great. And.
In regards to giving people some color, you gave us some metrics on Fundrise three years ago, but can you give us some high level color on how big is Fundrise and kind of your reach and customers and all that good stuff?
Ben Miller (21:21)
Yeah, mean, it's a K-shaped business because real estate's been, I would say, flat for three years.
maybe like, yeah, maybe like maybe single digit down in terms of like, Fundrise and over the course of three years. And then, you we created new businesses inside, you know, during that time. So we created this strategy where we democratized investing into growth tech, private growth tech companies. We were the first, it's now gonna become, I think, a...
it's gonna become normalized and lots of companies are following us. Cathie Wood from Ark followed us, Robin Hood's following. I'm sure we'll see other big companies do it. so, and that's like we create, so we created a whole new business basically that I think will end up being maybe as big as real estate.
Slava Rubin (22:16)
How much AUM is in that growth tech business?
Ben Miller (22:18)
I went from zero to 400 million in the last, I guess like really 24 months. I think it's gonna continue to grow and continue to like, yeah, things continue to scale. So that's been our biggest new business line.
Slava Rubin (22:35)
And how many investments is that? Meaning how many companies is that?
Ben Miller (22:40)
It's less, I would say it's probably less than 20. It might be like, we have made some small investments, and I know, like, if we looked at the, you know, like the names, like, you know, 10 names make up 80 % of the dollars.
Slava Rubin (22:57)
Can
you share some of those names?
Ben Miller (22:59)
Yeah, mean, Anthropic, OpenAI, Databricks, Anduril Ramp, Service Titan, Vanta, DBT Labs, Epic Games, SpaceX.
Slava Rubin (23:12)
Did you hear SpaceX might be valued at $800 billion?
Ben Miller (23:15)
Yeah, but then I heard him retract that. Yeah, that scared me. It didn't seem like that was... ⁓
Slava Rubin (23:17)
Yeah, yeah, that would be crazy.
But they
did say they might get IPO by the end of 26. That'd be pretty epic.
Ben Miller (23:25)
Yeah, surprising to me, I sort of thought they would never go public. So I don't.
Slava Rubin (23:29)
They are
23 years old.
Ben Miller (23:32)
Yeah, but what's the point?
Slava Rubin (23:35)
I'm not in charge.
Ben Miller (23:37)
Yeah, it's definitely beyond my pay grade too. It's a great business. mean, it's a great business. Phenomenal.
Slava Rubin (23:46)
So, and then the third business is the private credit business. How much AUM is in that?
Ben Miller (23:49)
Mm-hmm.
That's about $715 million.
Slava Rubin (23:53)
Got it, so I'm a customer, let's say I wanna get in, what are my options of, so how do I get into the growth tech? Am I investing into the fund directly? And what's my minimum?
Ben Miller (24:02)
Mm-hmm. Mm-hmm.
Ten dollars.
Slava Rubin (24:06)
Amazing. And what's the liquidity opportunities?
Ben Miller (24:10)
We have quarterly liquidity, quarterly tender offers currently.
Slava Rubin (24:15)
So if can I sell the entire $10? So let's just use a real number. Let's say I put in 100k So I put in 100k today and as part of the quarterly I want to take out the full 100k I could take out the full 100k
Ben Miller (24:22)
Mm-hmm.
Yes, every quarter.
Slava Rubin (24:30)
amazing. And I have to be accredited or retail.
Ben Miller (24:33)
Anybody can invest, any American.
Slava Rubin (24:36)
And this is not on a public exchange, right? This is not a ticker. I just go directly through you guys.
Ben Miller (24:42)
It's not traded. You can buy it on SoFi. It does have a ticker, but it's not traded. You could actually probably request it on Schwab or Fidelity, but we currently aren't available there yet. I-N-N-O-X.
Slava Rubin (24:45)
Right. you can.
Okay.
What's the ticker?
I N N O X.
Ben Miller (25:04)
like innovation X.
Slava Rubin (25:06)
Great. And then private credit, is it also retail? All retail, so in the private credit, like what's my option to get in there? ⁓ right, but what's the product that I've been getting into?
Ben Miller (25:09)
Everything's retail.
$10.
Oh, it's a yield product we make asset-backed lending investments. And so the yield's about 8%. It's basically, we've actually been doing private credit lending, or asset-backed lending for 10 years, so it's actually not new. And we've made a ton of investments. So that's why I have lot of confidence in the stability of it.
Slava Rubin (25:42)
Nice.
Very cool. Where are you? So you've been around now as a company for many years, right? Where you got 13 years, almost 14. So where are you in your growth prospects and you potentially being the right name inside of your own fund for pre IPO meets IPO one day company.
Ben Miller (25:47)
Mm-hmm, yeah, 2012.
Mm-hmm. Yeah.
That's a good question. I I feel like, I think I was just doing this analysis, like, we're worth more as one company or we're if if we're, as you call it, some of the parts analysis, whether or not, like,
Slava Rubin (26:13)
Mm-hmm.
Ben Miller (26:16)
you're actually worth more is like to three different companies than the one. So I don't know the answer to that. It's something I've been thinking about recently. But it's real estate's been in a deep recession which confuses a normal person, because a normal person doesn't see that. They're not experiencing that. They're just looking at the stock market and say, oh, the stock market's up. So for us to be in a like a.
really realistic pre-IPO place, we need real estate to normalize, go back to normal. Like it was, you know, this is like unusually, it's 2009, 2022 was like, I would say like there was normal and it got a little hot, like it's been 20, 22 to 25 has been like, it's kind of like the 2001 to 2005 sort of stock period, just absolutely like.
devastated. Real estate, yeah, commercial real estate, ⁓ rental real estate, anything that's not, even single family housing, home builders, home builders are really distressed at the moment. So basically at this point, all real estate is in a stressed place, except for data centers. ⁓
Slava Rubin (27:12)
Real estate. Yeah.
And in
your opinion, like a good time to buy if you have a little bit longer horizon or is just concerning.
Ben Miller (27:35)
I mean, I
think it's bottomed personally, is my view. My view is that I think that, now this is like, as you point out, I feel like my predictions for 2022, majority of them were wrong. So.
What is the lesson from that? And I came out of that experience, being like, oh god, the market's, the world's super uncertain. I actually got a lot of the business decisions right, but the stock, the code of these large macro things, super humbled, I no idea, I have no idea how the world's gonna play out. And so.
I think the market's bottom, I think interest rates are gonna come down. I think that Trump's gonna drive them down. I think they should come down. We can talk about the economy. And I think that's gonna rebirth real estate. No new construction, new apartment building, new buildings basically ground to a halt. And that should mean that.
that there's a lot less supply and less competition and rents should go back up. So the two things that are making real estate look really attractive today, interest rates, falling interest rates, and no new supply. And those two things should create a good tailwind for real estate. And I think, again, it's pretty, I actually think it's inversely correlated with AI.
So you're gonna say, if I think AI is a bubble, what's the opposite of AI? One of them is probably rental residential real estate.
Slava Rubin (29:04)
Interesting.
You were talking about the sum of the parts, you know, in the pre IPO area, there's been a lot of momentum. Secondary trading is super hot. You just had some M&A happening, right? So EquityZen gets bought, Forge gets bought, industry ventures gets bought by Goldman Sachs. I imagine a few folks come knocking on your door being like, yo, you have like the same, same, but different, we should talk. Do you think about trying to ride that wave more or figure out how to get more scale through M&A
Ben Miller (29:16)
Mm-hmm. Mm-hmm.
Yeah, definitely thought about that. And again, this is why it's like maybe we're worth more to two people than one. Because we have created multiple businesses inside Fundrise. so one of them is a direct-to-consumer fundraising platform, which essentially no one else has been able to do. And that's primarily invested in real estate. Real estate is 2 thirds of our assets in our management.
which is why a real estate recession has been hard on the company. Now, our other asset class is growing fast, so we're diversifying rapidly, but a real estate company, like a Blackstone or Apollo or KKR, they're interested in that. And then there's the actual tech and the pre-opio tech and all of the tech side of it, and that's like a Robin Hood, a SoFi.
Morgan Stanley, Schwab, kind of. So there's really two different kinds of businesses in Fundrise. And there's a couple more coming that we're gonna launch soon.
Slava Rubin (30:38)
Sorry, meaning like new products, new verticals, new assets.
Ben Miller (30:41)
New business
lines, new products, new business lines. I think those will, no, no, not so much asset classes, but just new ways of doing business. Yeah, not yet, not yet, but soon. And so we have like, yeah, so I have like, I think we'll end up with, I think we'll end up with four major businesses by the end next year.
Slava Rubin (30:45)
within those three asset classes or you're go to a fourth asset class?
Great, anything you want to preview more here, since Inquire, you'll call me first.
Ben Miller (31:10)
That's what I believe, and so we'll have a lot of options.
Slava Rubin (31:13)
Which segues to the next question, which is now that you have multiple asset classes and multiple choices, how should I as the investor choose which one's right for me? Obviously there's different flavors of ice cream, but how would you guide somebody to think about that?
Ben Miller (31:26)
Yeah, I we're not supposed to, I'm not supposed to guide people in that. So I usually tell people two things. I mean, it's so much dependent on their situation. Like, it's funny, tech people invest in more tech, and real estate people invest in more real estate. Like, I work in both worlds, I know lots of people in both worlds, and I'm always like, you real estate people should invest in tech, tech people should invest in real estate, but they never do. Because ultimately diversification is like,
Slava Rubin (31:50)
Absolutely.
Ben Miller (31:55)
a smart thing to do if you're trying to manage risk. Very few people actually try to manage risk in practice. Like most people just want risk and they just, because essentially the last, how many years has it 17 years, risk has been, managing risk has been punished. Right? Since 2008, if you were just a all risk all the time and you could ride it out, you've been rewarded.
That hasn't always been the case in the US stock market, US economy. Sometimes like in 2008, 2001, late 80s, again, late 70s. There's been periods where risk has been absolutely punished. Very few people who are principals today actually have lived through that. And so they don't want risk management. Most people don't want risk management. They hate it.
Slava Rubin (32:52)
Your point is interesting and I agree probably it's very true. Those that have risks should be doing real estate. Those are in real estate, you know, should be getting some venture. So you are in both outside of your own personal allocation to your personal company. You you have a venture through your venture stuff and you have real estate through your real estate stuff. What's your percentage split? Again, outside of, again, outside of your...
Ben Miller (33:14)
I have no idea. don't
know what I'm, but it's not even like, it's not deliberate in any way. There's no like, it's like purely like, there's no like logic to it. It's just purely what I ever, did at the time. No, no, no, no, I just like, and I think about it as like,
Slava Rubin (33:30)
So it's not purposely 50 50 or 30 60. Okay.
Ben Miller (33:41)
try and answer your question as best I can, like...
What I see investors do is they buy momentum. So whatever has been hot is what they buy the most of.
Slava Rubin (33:54)
Which you're kind of allergic to, right?
Ben Miller (33:56)
That's the problem. I ⁓ went through 2001 and 2008. So went through two different bubbles popping. Fundrise went through a real estate recession and COVID. And so I'm usually, as you said, I'm curmudgeonly about risk. And so normally I'm about risk management. And most people just don't want that. And so I would say AI seems really good, really exciting, but like...
You know, doesn't, I would generally want to buy the bottom of something, so I'd want to buy value. It's funny that I'm a value oriented investor, yet our growth tech fund has done, we bought good names and we bought them, I mean, when we were investing in these companies, like, as you said two, three years ago, like they weren't the hot names. Like they were good, they were good companies, don't get me wrong.
Slava Rubin (34:47)
But they were not value, mean, come on, SpaceX,
Anthropic, Anduril these are not value names. I mean, they went up a lot, which makes you look very smart and good investments. I'm not anti these investments, but they're not value names in any way, or form.
Ben Miller (35:02)
No, no, not value in the sense of that, they actually like, I'm not gonna speak about one, but I'll speak about them generally. Until recently, and I'd say last year, before that, you were buying these companies at really high growth rates, 100 % growth at maybe like 15 time multiples.
Sometimes they were growing 200 % a year, and I started trying to create this term, is basically revenue, it's growth adjusted revenue multiple, I call it GARP, growth adjusted revenue multiple, or growth adjusted revenue to price, which is like PEG, but for revenue. And you were getting these companies at like a steal. I thought they were a steal, I mean, just thought, my God, like.
You know, like, it's like, some of these companies, you're like, if you compared to the public companies, they were just so much cheaper from a growth adjusted basis. They were just really cheap. That was my view. Now, it's not a value investment in the same way, because obviously it's a growth investment, but they just did not seem overpriced to me. And, ⁓
Slava Rubin (36:13)
And you seem to be right, since they went up significantly.
Ben Miller (36:15)
So if,
yeah, yeah, but as I said, who's predictions are, I'm humbled by that. we're lucky our tech fund came at the right time, bought the right stuff. We diversified our fund. So I don't think we're like, it's as, we're not concentrated.
Slava Rubin (36:33)
I mean, as an abstraction to that point, my personal opinion is vintage diversification is very important in venture. Not to detract from how awesome your fund is doing, but it could have started a few years earlier. Maybe you would have had exposure to a pre-AI sort of class that maybe would have done much worse. Or in the future, your next vintage will not have the same maybe growth type rates, et cetera, et cetera. That's not anything to do with you. I mean, more speaking to the listener that
Ben Miller (36:50)
Yeah, yeah.
Slava Rubin (37:01)
Sometimes you just have to diversify across vintages. Not sometimes, it's important to diversify across vintages because the people that get it right are not brilliant and the people that get it wrong are not dumb. Sometimes you just get stuck in a vintage.
Ben Miller (37:13)
Yeah, I totally agree with that. I would say two things that are example of what I did it right and what I did it wrong. We launched our tech fund in 22. We started raising money, and we didn't deploy it. We had $50 million when Silicon Valley Bank blew up because we didn't deploy it. And our returns were basically flat for a year.
And so it's like they're vintage actually. We ended up deploying it when we started seeing opportunities. And so that's the hardest thing to do because it's hard to know. It's also hard from a kind of like discipline point of view. And then in real estate, the opposite, I did the opposite. Now I tried to hold back a lot of cash in 2021, but we still deployed too much at the top of the market.
to say what you just said in the way I think about it is the cycle is the most important thing in investing and you don't want to be, and you called it vintage because that's how a person would think about it, but in real estate you think of it as an economic cycle and you don't want to be too much at the top. And so how do you manage that? The way I would say is that you'd want to be
There's different real estate in a different cycle than private credit. Private credit is different cycle than private tech. You can look at international emerging markets. So you want to try to diversify where you are in the cycle and the way to do that because you can't really sit on cash on the top because you don't know when you're at the top.
So that's why, that's another way to look at diversification is just try to, okay, Europe was super cheap a couple years ago, Japan was super cheap, they both went on a tear. America is really expensive and there's a of people think America is like probably a risky bet today and you want it to be emerging and international, dollar seems expensive. So I think that like the way you manage cycle risk.
or vintage risk, as you said, is by looking across different classic classes, which is the opposite of what most people do, including institutions. Most institutions and people are momentum chasers.
Slava Rubin (39:31)
That doesn't always work out.
Ben Miller (39:34)
It works out in venture, because venture is momentum industry. The whole industry is just a bet on momentum over and over again. But if you're a person or you're institution and you want to be diversified, you can't just bet on momentum.
Slava Rubin (39:51)
What do you see? around the corner to 2026. This podcast will come out in December of 2025 as we're now recording. What are your predictions for 2026?
Ben Miller (40:05)
Well, what are the big questions? Big question is, is AI, are we at the top of AI? And then for me, is real estate at the bottom? Those are the two big questions for my business. I think that there's some political uncertainty around, if a very different economy and different environment, if you end up with a ⁓ house or Senate controlled by the Democrats.
that could really affect things too. So I think those to me are the big things that are the political question, an AI question, and the real estate. And I think real estate has bottomed, and I think the Democrats will split, I we'll have a split government after 26, which I think is gonna end up having a huge effect on a lot of things. a lame-duck presidency at that point.
And then on AI, I know I just don't know. I think it's really, it's definitely riskier than it was a year ago. If you look at the spectrum, you're paying a higher price, more things have to go right than before for it to be justified. But I'm not out of the market. doesn't seem like, it's not like 1999 I was there. It's not like 2007, it's not like 2021.
It's not insane. It's just expensive.
Slava Rubin (41:30)
So,
lightning round on the economy. So, do you think we'll have a recession 12 months from today?
Ben Miller (41:38)
I think I worst a mild one.
Slava Rubin (41:41)
So yes or no?
Ben Miller (41:43)
Not a technical recession, no.
Slava Rubin (41:46)
No, but maybe mild. Got it. How about employment rate, unemployment rate?
Ben Miller (41:54)
⁓ up modestly up
Slava Rubin (41:57)
Okay.
I'm out.
Ben Miller (42:00)
High fours
at the worst. We're at 4.4 % unemployment or something like that. So maybe it to 4.7%, 4.6%.
Slava Rubin (42:10)
I love the precision. How about rates, federal fund rates?
Ben Miller (42:14)
Fed funds lower for sure, three and a half to three. ⁓
Slava Rubin (42:19)
which is how many,
which is.
Ben Miller (42:21)
We're at
four today, so that's like probably 75 bips a year from now would be like ⁓ a midpoint.
Slava Rubin (42:26)
So you think in 12
months we only go down three, down three turns.
Ben Miller (42:31)
325 is like kind of a midpoint guess. Maybe three, three to three, but it's like highly contingent on like, there's like, I mean, this is, there's signs that the economy's re-accelerating, there's a sign that's slowing down, it's because it's a K, K-shaped, it's binary, there's two different economies happening, the AI economy and the non-AI economy. That happened in 2010s, you remember Slava, like,
New York and blue cities, San Francisco were on fire and like the rural heartland was getting devastated by opioid addictions. Like there was a really split economy in 2010s, caused a lot of political strife. I see that reemerging.
Slava Rubin (43:17)
inflation?
Ben Miller (43:19)
I think lower.
Slava Rubin (43:22)
Inflation's coming down.
Ben Miller (43:24)
Yes, because a third of inflation is shelter. And shelter is like close to, real time, close to zero. And the Fed measures it to this really obscure thing called owner equivalent. And so it's laggy, super laggy as a survey. But I think it's coming down. Tariffs also are a shock, one-time shock. So I think it comes down.
for the next 12 months.
Slava Rubin (43:49)
And even though you're not a public markets investor, this time next year, stock market is up, down, or flat.
Ben Miller (43:58)
I have no, I mean I'm like the last person to ask about that. I'm gonna say flat, but that's because I have no idea.
Slava Rubin (44:04)
And you already gave us your prediction, which is you think there's going to be some significant elections in 2026, which are going to really switch things around and you're going have a split house and Democrats are going to take some seats. Is that right?
Ben Miller (44:16)
Yeah, or, I mean, or and, I think that's true. think, I mean, it's not gonna be like some radical change, but I think that the, you when a president's in the last two years of their term, they're a lame duck, it's all about who is taking over from them, and that, and the Republicans are in the middle of a lot of, I mean, they're war with each other between the sort of traditional Republican and the new Republican, and I think that's gonna cause a lot of like, of,
challenges for the back half of the Trump administration.
Slava Rubin (44:51)
The, a bit of a segue off of all of these economic predictions back to the original predictions, back to your core real estate knowledge. Can you give me a couple cities again that you're long today in December, 2025 and a couple cities that you're short in terms of real estate?
Ben Miller (45:09)
Yeah, I'm in Long New York. Long New York, I New York is like gonna go on a, it has gone back into the office to work in person and virtually no other city has. And I think that's gonna cause all sorts of social, cultural and economic consequences that are very positive for New York.
Slava Rubin (45:12)
Wow, okay, long New York.
And you're referring to commercial real estate.
Ben Miller (45:39)
Well, I mean, I think it's just gonna cause everything to be better. Rental, retail, because you know, if you walk around New York, I don't know if it's been in New York recently, last year, it is just, it's so crowded on the street, there's so much energy. There's no other city today in America that has the energy. And I was bearish on New York for, from 20.
Slava Rubin (45:43)
Got it, everything.
Ben Miller (46:02)
15 to 2016 to recently. So I'm like, I was very bearish in New York. Now I'm like, I couldn't be more bullish. So New York, number one. I think San Francisco obviously is obvious. Number two, I think that Dan Lurie, the mayor is just phenomenal. I think he's, think that they got the politics right and the business right, it's gonna work out for them. Three.
Probably like actually I would probably say in Austin is at the bottom. If you wanted to buy today, I think Austin.
Slava Rubin (46:31)
Sorry, even
though Austin did poorly over the last couple of years, you're saying because it's bottom, it's an opportunity. Got it. And then, where are your shorts?
Ben Miller (46:35)
Yeah. Yes. That's my call. Yeah.
I'm short, I'm probably short Washington DC again. ⁓ Three years from now, if we go three years from now, where we maybe have a new president, maybe the president's a Democrat, and think DC would come back. But I'm not sure the next three years are gonna be great. Three years more Trump, Washington DC, probably not a great city for growth. Other cities, embarrassed, embarrassed on Los Angeles.
Slava Rubin (46:45)
Oi. Wow.
Ben Miller (47:08)
Los Angeles is like, ⁓ just has a lot of political problems and AI is really crushing the entertainment industry. And those two, I think, are pretty negative. I don't know if I have a third. I don't have a good third one for you.
Slava Rubin (47:15)
.
That's
okay, that's okay. So we always like to ask what content you like to read or watch or listen to. Anything, I think you mentioned the acquired last time. Anything you'd like to mention for us today?
Ben Miller (47:33)
I haven't had any new discoveries. Obviously, like everyone else, I am listening to Dwarkesh I was early on Dwarkesh. I had him on my podcast, actually. I tried to advertise on his platform. was going to be the first advertiser because I just thought, this guy's a genius. Now I can't afford to.
So what do I listen to now? I don't have anything great. I've been reading I've been reading a lot of like history I've been I mean, you know what I use a lot. I spent a lot of energy. I spent a lot of time Asking ChatGPT Claude and Gemini these business strategy questions
Slava Rubin (48:11)
that's a brand new thing from three years ago for sure.
Ben Miller (48:14)
Yeah, I probably spend this weekend, eight hours, like hours and hours and hours using AI as like a combination research and content creator around mostly business questions and AI questions. But really anything, I think is a source of content that I just like, it's so different.
Slava Rubin (48:33)
and you get to personalize it
so much.
Ben Miller (48:35)
Yeah, it's not content in the traditional sense, because I'm using it. It's almost like I'm interested in a topic, and I want to learn about it, and I use it as a source. Instead of Google reading blog posts, I use AI and sometimes look at the sources. So this question about is AI a bubble, I've spent 30, 40, 50 hours on.
And because if I ask a question of ChatGPT I'll go ask it on Claude Gemini to see if, and ask it different ways. And so it's been really fun way to think about something.
Slava Rubin (49:09)
Amazing. And then we always like to put our people on the spot for a prediction for three years out. So what is one public market stock that you'd be long and what would be one non-public markets investment that you'd be long anything. We prefer if you don't sell your book.
Ben Miller (49:21)
Yeah, yeah, of course. I can't, I'm regulated. Public market stock. Shoot. I should have prepared for this better. Give me a second.
Slava Rubin (49:31)
That's your arm thinking, look, I like it.
Ben Miller (49:33)
Mm-hmm. Mm-hmm.
three years from now.
So I think a lot of these pre-IPO companies are gonna be public. And so I wanna say one of those companies, like I'm really bullish three years from now, Anduril It's private today, but it's public within three years.
Slava Rubin (49:41)
Sure.
Well, that would be your private today.
No, but you could
pick Anduril but that would be your private.
Ben Miller (49:53)
okay.
Slava Rubin (49:54)
Well, let's go first with your private. Would Anduril be your private?
Ben Miller (49:59)
I think from a risk adjusted return point of view, just think it's not as correlated with AI. And AI could go through a choppy period. I think Anduril is like a mega trend.
Slava Rubin (50:09)
Right, it's a defense tech company, just to tell others.
Ben Miller (50:12)
Yeah, it's, I mean, if you think about the things I think about, the big things that would be most disruptive, and so if drones became commonplace, it could really disrupt public safety and national security in a way that we haven't seen in a long time. Like maybe nuclear bombs were as disruptive.
And so we don't have, and whoever, that's just such a serious mega trend and Anduril is the US, is leading US solution to that. So I think that's my bullish. ⁓
Slava Rubin (50:45)
Great.
That's your private pick. And then do
you have a public markets pick, meaning a public stock that exists today that you're long three years from now?
Ben Miller (50:55)
I mean, I guess I'd go like, I'll just go like a real estate REIT, like MAA, Mid-America Equity Residential, something like that probably is, MAA or EQR, those are two, two.
Slava Rubin (51:09)
MAA
Ben Miller (51:17)
They own rental residential, MAA, Mid-America ⁓ owns a rental residential in the Sunbelt. EQR owns rental residential in the big blue cities. So I think those are both two, over the next three years, we'll see strong, they sort of are like proxies for what we own in our real estate, our own real estate portfolio.
Slava Rubin (51:39)
Awesome. Well, Ben, thank you. We covered a ton. It's been a windy road here from being shocked that you're now supportive of stable coin and the idea that there's a crypto use case going down memory lane and talking about where you got right, where you got wrong. The fact that China has not attacked Taiwan yet. DC is horrible place for real estate returns. AI was a golden swan. And now, know, Fundrise is moving into not only a second product, a third product, and soon one day.
I couldn't get out of you a fourth product, but you guys, since we last spoke, have now created an awesome growth tech business, $400 million of AUM with some killer names, SpaceX, Ramp, Anduril, Anthropic, and many others. Your private credit business is doing really well. I love the fact that you've invented your own term, which is GARP, the growth adjusted revenue to price, and trying to find some value there. You really think that real estate has bottomed mostly because of falling interest rates and because there's no new supply.
And, you know, you made some predictions for us that there's not going to be a recession, maybe a mild one, that, you know, the unemployment's going up, but moderately, the rates are coming down to maybe, you know, 75 basis points. Inflation will actually start to decrease and all of this will lead to a flattish stock market. You gave us some long predictions for real estate, very bullish New York City, bullish San Francisco, and then also think Austin is bottom.
and you're short on DC again, AI is not helping Los Angeles and ⁓ you your new content that you couldn't tell us three years ago is actually AI, which it's incredible. The fact that you're using it as much as maybe you would been using a podcast or some blog, et cetera. You gave us your REITs for public markets, MAA or EQR. Of course you gave us the the fence tech company, Anduril as your private ⁓ pick for three years out. Ben, we covered a lot. Thank you so much.
Ben Miller (53:30)
Amazing job there Slava, thank you.
