The following is a conversation between Mark Stoleson, the Chief Executive Officer and a Partner at Legatum, and Denver Frederick, the Host of The Business of Giving. 

Mark Stoleson, Chief Executive Officer and a Partner of Legatum.

Denver: Legatum Limited is one of the most interesting enterprises you’ll ever come across. It’s a private investment firm headquartered in Dubai that uses its own funds to invest globally. The firm also invests in activities that promote anti-slavery, health, and educational initiatives, and it does so in a very distinctive fashion. And here to explain it all to us is Mark Stoleson, the CEO, and a partner at Legatum

Welcome to The Business of Giving, Mark! 

Mark: Thank you, Denver. Great to be with you. 

Our job is to take the amazing job that others have done before us and to steward capital, and ideas, and our gifts, and talents, and our networks in a way that leaves things just a little bit better for the next generation.

Denver: The name Legatum took me back to my Latin class in high school, which I must admit wasn’t a very pleasant journey for me. What does it mean? And what is the significance to the firm and the foundation?

Mark: Great. So, you’re right. Legatum is a Latin term, and the easiest definition is it means “gift” or “bequest.” So back in Roman times, if you were going to give a bequest in your will, or to one of your children, that gift would be called a legatum. You would be the legator, and the recipient would be the legatee, and the gift itself would be a legatum. 

And the reason why we chose that name is because we wanted our firm to be a gift, to be a bridge between the generations that came before us and the generations that will come after us with this sense of stewardship. So our job is to take the amazing job that others have done before us and to steward capital, and ideas, and our gifts, and talents, and our networks in a way that leaves things just a little bit better for the next generation.

Denver: Nice to find a word that can be a guiding spirit for the entire enterprise, and it certainly seems like you have found it. Your mission is to generate and allocate the capital and ideas that can help others prosper. So let’s begin with the generating of that capital. Tell us a little bit about the firm’s investment philosophy and the kind of things that you invest in.

Mark: So like you said, Legatum is an investment partnership. So, it’s an investment firm. If you took the roof off of it, it would look like any other investment firm in New York or London. And we’ve got our analysts and portfolio managers and traders, and we’re looking for great investment opportunities around the world.

Legatum itself is about 15- or 16 years old, but it comes with a heritage that extended back about 20 years before that. So we feel like we’ve got this incredible multi-decade heritage of investment primarily in the global capital markets. But in the last 15-, 16 years, we’ve really shaped the investment philosophy to fit the four partners. And today, the way that that looks is we kind of stand on the moon and look back at planet Earth and just ask ourselves: Where are the best opportunities today? And so, because we don’t have any outside investors, and it’s just our proprietary capital, we have really a real gift and a benefit of being able to invest in anything or to invest in nothing.

So, what you’ll find is that our investment strategy is really close to a very traditional Warren Buffet-like, long-term perspective investment strategy of just looking for fantastic companies that will compound value over many, many years to come. And then if we do that well, then we just remain patient, and given the nature of our capital, we can afford to remain patient and hold through times of volatility. If we do that all well, we generate capital, and we kind of tick the box on the first part of our mission. 

Denver: So sometimes the less busy you are, the better things are going. 

Mark: Yes. Warren Buffet has some great quotes. One of them is that: “Money moves from the active to the patient.” He also talks about the virtue of sloth, which we don’t normally think of as a virtue, but in the business of investment, a big part of success over time is just the virtue of patience. Like I said, Legatum is like 16 years old, and so we’ve had to learn some lessons along the way in terms of just how to remain patient, how to remain committed to our highest conviction ideas. But when we do that well, things tend to work out.

Denver: I can even see how sloth can be a virtue in our personal lives, too, because there is this penchant to look busy all the time, and it is so counterproductive just being at the computer and doing emails and just going around in a circle. 

Now, would I be right to say, Mark, that you’re not focused on impact investing or really carefully examining the CSR and ESG records of the companies that you invest in? And if that is the case, why would it be so? 

Mark: So the way that Legatum thinks about investing is we want to find companies and opportunities that will compound value over a long period of time. And not just our research, but our experience shows that companies that are run in an ethical manner where you have ethical business leadership, and you’ve got a long-term perspective within the leadership of those companies, and they’re providing goods and services that really are beneficial to society, those are the types of companies that should be around 10-, 20 years from now, and that’s a great fit for Legatum. 

And so, while we don’t run someone else’s slide rule over companies, we definitely look at every aspect of how a company is run, how it’s led, how its vision aligns with Legatum’s worldview, and we make investment decisions on that basis. 

The END Fund is operating in over 30 countries, and last year, even during the pandemic, treated over a hundred million people in a single year. So, it’s a great success story, but the key elements are: We’re willing to take a risk. We’re willing to fail. We’re willing to be bold. We’re willing to test our ideas. But if they work, we’re also willing to collaborate with others to see them scale.

Denver: Let’s turn to philanthropy, and let me ask you about three funds that you helped to birth and support. And the first would be The END Fund to address neglected tropical diseases. So, I have to start by asking: How does a global investment firm come up with an idea to take on a challenge like this?

Mark: It comes back to our mission. So we’ve just talked about how Legatum generates capital, and if we do that well over time, we should multiply our capital. And when you think about not just the four partners, but our entire firm… and everyone that works in Legatum is committed to this mission of taking capital and using it in ways that can help others prosper. And if we generate the capital, then we were looking for opportunities constantly on how we can execute on that mission. 

And given the fact that we are investors, we feel like… we can’t help it that we approach philanthropic investments in the same way. Sometimes opportunities are ones that you have dreamt up or identified, and you go after them; sometimes opportunities just land in your lap. And with something like The END Fund, it’s a phenomenal story, but it’s been one that’s repeated itself in Legatum’s history over the years. 

So, one of my partners, Alan McCormick was sitting down reading the FT over a cup of coffee, and he read an article about neglected tropical diseases. We’ve got 1.5 billion people that are afflicted with these diseases. They’re worm-based. So, they can kill you. They can make you blind or lame. They keep kids out of school and keep people away from work. And you really only find them in the least advantaged, the poorest communities on the planet. So, these are diseases that you do not find in wealthy, developed countries. 

He looked at it… as the article said, “You can cure these diseases.” Like “Actually, you can eliminate these diseases with a treatment plan that costs about 50 cents per treatment.” And just doing some quick math, we sat around and talked about it and realized this is a solvable problem. This is one of those very, very unique global health issues that could be solved in our lifetime. That sounds like high impact. So why don’t we go after that? And that led to a decade-long pursuit of knowledge and experience and relationships in terms of advancing that objective. 

We started off with a 10-year program in Burundi and Rwanda, and we treated about 8 million people a year. And what we found at the end of that time period is that the disease burden in those countries went from, in some cases in some parts of those countries, in the 70 percentile and 80 percentile down to single digits. So you really saw a tremendous reduction in the disease burden getting very close to elimination, which was the goal.

Last part of that story, Denver, which is really important, is that, OK. Fine. So we had some great success in a bit of a test case in two countries, but that still leaves billions of people, or over a billion people, that have these diseases. What do you do? In order to scale that effort, Legatum created what we called a fund and created an organization. We called it The END Fund. We took the Legatum name brand off of it and just opened it up to the world and just said, “Look, this is an unbelievable opportunity to really move the needle on an important issue. Who else wants in?” And the amount of support that we’ve seen is just overwhelming. And so you have everyone from The Bill and Melinda Gates Foundation to the Crowned Prince of Abu Dhabi, to many, many, many others who have come alongside us to support this effort. And it’s tremendous.

So now, The END Fund is operating in over 30 countries, and last year, even during the pandemic, treated over a hundred million people in a single year. So, it’s a great success story, but the key elements are: We’re willing to take a risk. We’re willing to fail. We’re willing to be bold. We’re willing to test our ideas. But if they work, we’re also willing to collaborate with others to see them scale. 

Denver: And it’s inspirational and instructive in that way because it’s so difficult for so many organizations to take that systems-level view of a problem. Too many things get in the way, like ego and things of that sort. But it is something that this society needs to do. And I think the pandemic has really brought that to the fore… that the issue and the people being helped needs to be central, and not the organization itself. 

Mark: Let me respond to that, Denver, because you’re absolutely right. But I have to say from a Legatum historical perspective, I wouldn’t say that we started off with The END Fund in mind. We didn’t start off with a desire to pursue collaborative philanthropy or a systems view. We’re just not that smart. We literally looked at a problem and thought: This is a huge problem; it’s solvable, and someone needs to just get started. 

And so, I think that in some ways, that’s something that everyone can do — is if you just do something, get started, get the ball rolling, and you might find that now, 10-, 15 years later, you’ve built something really incredible. And so, we kind of followed our nose through the whole process. Now, looking back, we can see that there were these really important elements of a systems-level approach and really in some ways, figuring out ways to collaborate with other donors and with lots of the many, many constituencies that come to play in something as large as The END Fund.

Denver: There are, I guess, about 250 million children around the world who never learned to read and write. And 60 million of those kids don’t even get a chance to try because they don’t get to school. You have created an organization to give those children a second chance. Tell us about that work. 

Mark: Great. You’re referring to something called Luminos, which is an organization that Legatum is incredibly proud of, and I wish everybody knew about Luminos. But Luminos itself has a great story, and similar to The END Fund, it started small, and it started with just trying things out and figuring out how to test our ideas.

So Luminos really came from Legatum 15 years ago where Legatum supported over–I want to say over 1,500 projects in over 100 countries, just micro projects supporting what we call frontline entrepreneurs. So these are folks who are in their community. They’re from that community. They’re making a difference within their community, whether it’s education, slavery, health issues, or whatever. But these are the folks that really know how to make a difference in their community. And rather than having a top-down approach, Legatum wants to come bottom-up and wants to identify those people and support what they’re already doing. So, with that strategy in mind, Legatum has supported, like I said, over 1,500 projects all over the place. 

One of them was in West Africa, and we went out to visit it. It was in Mali. And what we saw was that there was this interesting policy quirk in that country where if a kid doesn’t go to school, when they’re 7 years old, like if they don’t start kindergarten in that country, then the only way that they get back into school is they have to pass a test. It didn’t really make any sense. And what we heard were stories of kids who were kept home to look after their brothers and sisters, or help tend livestock, so that’s fine. But now, they’re 8-, 9-, 10 years old, and they want to go to school, but they can’t get in because they can’t pass the test, and they can’t pass the test because they’ve never been to school. 

Denver: Yes. There you go!

Mark: And so, this is a problem. 

Denver: It’s a catch-22.

Mark: So you could approach that problem in lots of different ways. One is a policy approach. You could talk to the government and see if there’s a way to iron out that quirk in the system. The way that we did it was to just support something that was already going on in Mali, and it was pioneered by some Norwegians, and they called it “speed school.” And the idea was you could take any kid from age 8 to 12, and basically use the Montessori type of educational approach. And you have them sit in class for like five-, six days a week. The parents would support it with a little bit of microfinance funding so that they have skin in the game. And what you saw were these unbelievable off-the-charts results, where you would have like 98%, 99% of the kids able to pass the test and get back into the school system after less than one year. 

Luminos is now operating not just across Africa, but also in the Middle East in Lebanon, because this — if you want to call it intellectual property — this ability to kind of come in and have this accelerated learning program that is so powerful, and it can be translated in lots of different situations.

Denver: Wow

Mark: So, OK. So now you’re seeing this in Mali and thinking, “That’s unbelievable. Can we do that in other places? Is this something that can scale?” And so, where Legatum came in is we worked with our partners and supported, in some ways, the transplant of that really amazing idea and intervention into Ethiopia. And we’ve worked at it for over a decade, and the results have been tremendous. So, you’ve got hundreds of thousands of kids that have been through this program, and it continues to grow. 

And because it’s so effective, and because it comes alongside the state school system, there’s no resistance from a government perspective. They love it! And what you’re finding now is in Ethiopia, we’re beginning programs where we’re actually equipping the government, and the government schools to do the same thing. So, it’s been very effective.

Luminos is now operating not just across Africa, but also in the Middle East in Lebanon, because this — if you want to call it intellectual property — this ability to kind of come in and have this accelerated learning program that is so powerful, and it can be translated in lots of different situations. So it can solve the Mali policy quirk, but it can also be really helpful in sort of a post-conflict situation where you have Syrian refugees who are now in Lebanon, and kids have been out of school for different reasons, but the approach can be the same. You envision a scenario where all of those kids have accelerated learning and can kind of get right back into the flow of things when they’re able to return to school. 

So, we’re super proud of Luminos. Caitlin, who’s the CEO there —  I know that you’ve spoken to her — she’s incredible, and the whole team is just doing a great job.

Denver: Do you think speed school would work in a post-pandemic world where kids, because of the COVID slide, have fallen behind? Are there elements of it that might be useful? 

Mark: It does sort of expand the mind, doesn’t it? 

Denver: It does! 

Mark: That’s how these things work, Denver, is you start off with this very small scenario that you think is unique in a West African country. It turns out that it’s actually really useful in a different context in an East African country. It turns out it’s really effective in a Middle Eastern country for different reasons. And now, the whole world has had all of its kids out of school.

Denver: I know! For a year!

Mark: What do we do about that? And so, is there something there? I would love to think so. I think the Luminos team is effective because they’re so focused. They know their mission, and they really are focused on some of these less developed countries. However, the technology or the IP that underlies it absolutely is effective to get any kid within that certain age range back up to speed quickly.

And so, whether it’s exactly the Luminos program… or it’s the thinking that underpins Luminos, that’s the kind of thinking that we probably need right now. There’s so much concern about: What is the social… What is the educational… What are the long-term impacts on kids that have been out of school for a while? Well, time will tell. However, if there are solutions in at least getting kids back up to speed in terms of just the curriculum and back into their grade level, that’s something that I think that we would all be interested in. 

Denver: Absolutely. And it’s not only just the thinking that undergirds Luminos. I think it’s the impact that it’s had to give people confidence that it’s possible. That if you really have a concerted program, you can get your kids– and particularly from low-income communities who’ve fallen even further behind– back up to speed. So, there are really some interesting possibilities. 

Mark: It’s such a good point. I think if you can imagine the life of… let’s go back to that kid in a remote village in Mali. So, they didn’t go to school at kindergarten, and that’s it. They’re locked out of the school system forever. Just imagine that life trajectory of that kid, and then imagine how that could change if they actually can have this accelerated program and get back into school. Because by the time that they want to get back to school, the desire is there. The commitment is there. They want it. Their parents want it. Everyone’s committed. The speed school program that Luminos is doing requires parents to be involved at some level, so you’ve got that family commitment to it. 

And that’s what drives… you know, we’ve had academics do full research on the Luminos program, and they’ve confirmed the outcomes are incredible. We’ve got it in the high 90 percentile of success rate. So I guess the point is: it could sound cliche, but the reality is giving a kid a second chance can absolutely have, over the course of a lifetime or even that child’s future family, it can be astronomical. How do you measure that? We’re not sure. We’re still focused on: How do you measure the impact of just getting a kid back into school and the effect on their life? But extrapolating out the effect could be absolutely massive. So, it makes us very, very excited, and we love seeing those scale. 

Denver: And I love that you mentioned parental engagement. I had the CEO of Springboard Collaborative on the other day, and he said the biggest missed opportunity in education right now is thinking that low-income parents don’t want to become engaged, and nothing could be further from the truth. And he started a reading program during COVID and the scores are off the charts. The teachers have met with the parents; they’re learning how to work with their kids, and it’s just out of sight. So these are big, big time issues.

Let me move on to your third one that we were talking about, and that is: Legatum has a long history in fighting modern-day slavery throughout the world, and now that work you have there is centered around The Freedom Fund. So before you share with us what they do, how do you define modern-day slavery? 

Mark: I think The Freedom Fund actually does a really good job of it. So there’s research showing that there are people who do not have freedom of movement over their own body in the world today. It’s astonishing to think that that’s true. But multiple different research reports have shown that the number is somewhere between maybe 30 million to 40 million people who fall into that category. And they largely today are in this South Asian corridor. 

Slavery is as old as humanity, and it still exists everywhere. But if you want to look for the highest preponderance of it today, the research shows that it really is in the India-Pakistan-Nepal corridor, so that’s where you’ll find The Freedom Fund. 

Denver: Focused. 

Mark: Focused. High impact. 

With The Freedom Fund, what you saw was this major, in some ways, almost awakening in the world to the fact that slavery still exists and that people are being trafficked. And if you want to talk about the poorest of the poor, it’s hard to imagine someone who is more poor than a person who doesn’t even have control over their own body, who’s not free to get up and do something different.

Denver: And you’ve also done this in partnership with a couple of other organizations, correct?

Mark: Absolutely. So, again, The Freedom Fund has a similar story as The END Fund and as Luminos. They’re not identical, but they have similar elements. 

So, The Freedom Fund really was born from a Legatum perspective.  It was born out of many, many years of supporting anti-slavery and anti-trafficking initiatives all over the world. And so, like I said before these large fund ideas, Legatum was funding hundreds, even over a thousand projects. Included in those are these anti-slavery, anti-trafficking efforts. And so, Legatum would support an initiative to pass a law that makes slavery illegal in a Central American country.

So you come across a Central American country where you see people are being trafficked, and the police and prosecutors can’t do anything about it because there’s no law on the books that gives them the ability to file charges. So Legatum would support an initiative just to change the law. That would be one example of what we would do. 

We got involved in fighting the use of young children in the fishing industry in a West African country. So, again, horrible stories of kids getting picked up from their neighborhoods or from markets and being pressed into involuntary servitude on fishing boats, getting caught… and that’s just horrible, awful things. And we would come in sort of like a laser and support that type of project. 

I think with The Freedom Fund, what you saw was this major, in some ways, almost awakening in the world to the fact that slavery still exists and that people are being trafficked. And if you want to talk about the poorest of the poor, it’s hard to imagine someone who is more poor than a person who doesn’t even have control over their own body, who’s not free to get up and do something different. And maybe it’s my childhood growing up in this country, but that offends your deepest sense of humanity — that a person wouldn’t be able to just be free and would be in bondage to another human. So, if you want to see Legatum’s juices get flowing, it’s these types of issues. We’re passionate about doing what we can to combat that. It turns out Legatum’s not alone. And so, we partnered with The Freedom Fund, taking a page out of our END Fund playbook, to try to scale up our efforts and do this on a global basis. 

And we found just incredible partners. One is Humanity United, which is out of the US. It’s the Omidyar Family back set. They share the same passion, and they brought some really great experience and unique skills to the table. And then you have Walk Free, which is out of Australia, and is an amazing organization. And they also have a different approach and some different experiences. 

But the combined effort of these three organizations… and we hammered out how we were going to do this from the beginning. And so, you’ve got one organization that really wants to focus on the legal side of things and the prosecution side of things and the policy side of things. One that wants to make sure that there’s an awareness at a very senior political leadership, and that supply chains and systems are all supporting an anti-slavery agenda. And then you have Legatum, and I feel like we’re the folks with the boots on the ground. We’ve supported hundreds of projects around the world, and that brings with it a lot of experience and also authenticity in the space. So, when you put all of that together, it’s very compelling; it’s very powerful. 

And I think one of the outcomes of The Freedom Fund that wasn’t planned but has been perhaps one of its greatest areas of impact, is just in networking. So, The Freedom Fund works with over 100, maybe 150 local frontline organizations across India, for example– India and Pakistan and Nepal. What happens is if you come in and you’ve identified and you’ve screened amazing frontline organizations with their leadership on the ground… doing various different things – some are doing a rescue; some are doing rehabilitation; some are doing repatriation. You’ve got all these different pieces to the puzzle, but they’re all working in an atomized fashion. They’re all working alone. We come in as The Freedom Fund; you identify them and you support 150 of these organizations, you then have this incredible convening power or ability to bring them all together. 

And so, we’ve done that, and it has been so much fun to watch these passionate social entrepreneurs on the ground connect with other people from across the country that they had never met before. And they then do what they do, which is they figure out what else they can do, and how they can help each other and how they can multiply their impact, and in a way that it’s hard to imagine it would have happened had you not had this kind of larger approach from The Freedom Fund. 

So just like with Luminos, we’re incredibly proud of what The Freedom Fund has accomplished, and because of the impact, The Freedom Fund has become an authority in the space as well. Nick Grono is the CEO. He’s tremendous. And it’s been really fun to see The Freedom Fund becoming a leading voice in this space.

Denver: It’s such an interesting story. And I know what you’re talking about. When you have 150 organizations that come together with others, all of a sudden, they feel like they’re part of something much, much bigger that really drives them. And also with all these partnerships, I love the way you described it with Walk Free and Humanity United– you all have complementary skills. And too many nonprofits think they have to be everything to everybody, so they do everything pretty poorly or mediocre. Whereas, if you have a core competency, and you can match it with a couple of other organizations that have different core competencies, you can really go places. And that is what has been done. 

I want to ask you about the other two Legatum institutions you have. But since you mentioned India, you’ve had some experience there in investing in microfinance. Some of it is not so good, and some of it is spectacular. Share that with us. 

Mark: Our investments in microfinance in India came from just our mission. Our mission is to help others prosper. And because we have our investment business, one of the sectors that we invest in is financial institutions and banking. And our view is that banking and the financial world is important to prosperity for everyone. It’s the way in which we allocate capital globally to each other. It’s the way that finance finds great ideas and funds great ideas that can serve humanity. 

So, we’re believers, in general, in the power of finance. But when you take that down to a granular level, human beings need health. They need education. They need freedom. But they also need access to basic finance, basic banking services. And you see around the world, whether it’s unlocking finance through Hernando DeSoto’s efforts, or just in access to basic banking, it helps unleash growth and prosperity in a country. So that’s the core of the belief that animated our action.

Looking across India, the facts that we found, and this is going back 15 years now, was that you had estimated somewhere around 400 million or 500 million people with no access to any banking services or financing whatsoever. There are half a billion people who are totally unbanked. Well, what would it look like in terms of a nation’s prosperity if you could solve that problem? So that’s the question that we’re pondering.

One way to do it that had been done was through NGOs. So, you would have faith-based organizations– and this is historically in India– and others who would take a small amount of capital and start loaning it out and helping self-help groups of women who would borrow money and pay it back. And it was great except you can’t scale it. Even if you reached one million people, that would be tremendous, and they weren’t even reaching that many people. What do you do with the other 499 million? 

Denver: Yes, sure.

Mark: So just looking at the scale of the issue, the only way to address it is through a model that is scalable and that is sustainable. And the only model that’s both scalable and sustainable is a business model. And so, lo and behold, microfinance comes to the fore– private sector microfinance– and suddenly within India, you had multiple different private sector companies that were just growing like gangbusters. 

And what we found — this is just anecdotal — but what we found was that the private sector companies that were run well could provide finance to people at a respectable rate, but they could do it in a way that respected the person. And that because it was commercial, they had to build a brand. They had to be known to be trustworthy. And so, there was almost a leveling of the playing field between the lender and the borrower. 

What we heard anecdotally over and over and over again from borrowers on the ground across India was that they preferred that to the state-based approach, which would be at a lower interest rate, but would come with all sorts of complications. So, first of all, no one would come to your village. You would have to go to them, so you’d have to go to some other village. You’d have to leave your business or your fields or your kids or whatever, and take a trip and go somewhere else to get finance. Then you wait in line. Then when you actually get the finance, the rate was low. But again, what we heard all the time was that corruption would be a factor in that transaction. So the person, the officer lending the money would charge a little extra and line their own pockets, and the result is the effective interest rate that the borrower pays was just as high as private sector microfinance. 

So guess what? People voted with their feet, and they preferred the service that would come into their village and that would serve them where they’re at, and that would actually come back on time, and that would do it in a commercial manner. So, given those dynamics, private sector microfinance absolutely took off, and you had tens of millions of people suddenly receiving private sector microfinance and banking services. 

So, Legatum got involved in that, and we allocated capital to a company that we thought was a leader in the space, and everything was going great. And then, at some point you sort of had like The Empire Strikes Back, and within one state in India, the government passed a law that said these private-sector microfinance companies are welcome to continue lending money, but they’re not allowed to collect it anymore. 

Denver: There you go. It’s not a good business model, is it?

Mark: It’s really hard to run a business under that circumstance.

So the business that we invested in, obviously, it collapsed and it was a very difficult time. But Legatum didn’t stop. And if you understand our story, we felt like that was an injustice, not just to our company, but really to the entire space. And OK, fine. How are these hundreds of millions of people ever going to get basic banking services? And under what timeframe? 

So, we got involved, and we actually got involved lobbying with the government, writing papers, trying to help decision-makers understand the implications of that type of an approach… how to do it better. The outcome was that India passed just a fantastic federal law that set a floor on the entire industry, clarified for every state across the entire country how microfinance would work. And on that solid foundation, you’ve now seen the revitalization of private sector microfinance in India. 

So, although we had to go through a tough valley, we were able to come out the other side. It took many years to get there, but this is the type of work that Legatum gets involved with, is we’re not looking for quick impact or quick results. We understand that you’ve got to remain committed and remain hopeful over long periods of time if you hope to really move the needle. 

And like you said, after that baseline level of support from the government was established, Legatum did get involved again in helping promote the sector and invested in some really great microfinance stories as well. So yes, sometimes we learn from success, and sometimes we learn from challenges. And oftentimes, it’s the challenges that teach us more than success. 

Denver: No doubt about it. Well, you stuck with it; you persevered, and again, systems change… because it just didn’t help that one thing; it helped the entire microfinance industry there. And I know what you say sometimes about commercial compared to state. People like to be customers because they like to complain. They don’t want… they feel that there’s a power balance between that… that I expect this and there’s a lot more dignity to that for the person who’s getting the loan than there is in many other circumstances. 

Mark: I love… I’m so glad that you said that, Denver, because dignity is such a key word.

As we were investors in microfinance, we would fly to India and take members of our team. And we would go all over India, to Raipur, and to Uttar Pradesh, and all over the place. And we would meet with self-help groups. And if people have a caricature of what a group of Indian women in some remote village are like and think that they’re just victims, it’s the exact opposite. They’re tough. They’re strong. They’re articulate. They can tell you exactly what they want. They have dignity. And we would sit down with them and their self-help groups and say, “What could we be doing better?” Like, “What are the issues here?” 

And they’re not shy. This is not scripted. They would say, “I wish that they’d come twice a week” or the number one complaint that we would get is, “We would like to have access to more finance. I was able to buy one extra cow, but I could have another two. And we’ve got a cap on the amount of finance that this company will give us.” Now, that was there for a reason because we wanted to be very careful about not overburdening people with debt, but there’s a huge amount of dignity in giving people choice. 

Denver: No question about it. They’ll tell you that, “We want some more products. Why don’t you offer a few more products for us?” You know what I mean? 

Mark: That’s it. That’s exactly it. 

One of our observations…is that people want a job. If you ask people what they really want, they want a job. And why do they want a job? Because they want dignity, and they want to control their own destiny. And they don’t want people to tell them what to do. And people, in that regard, are the same all over the world.

Denver: Just say a word or two about a couple of your other initiatives. One is Legatum Institute. Now, that’s based in London, and it examines the journey from poverty to prosperity. Just tell us a little bit about that work. 

Mark: Absolutely. So, again, with this mission in mind, we want to help people prosper. A lot of what we’ve talked about today is kind of helping the bottom of the pyramid, if you will, or working on executing on that mission from a humanitarian perspective. And that’s good, but that alone doesn’t actually create sustainable prosperity. 

So Legatum doesn’t… we don’t have PhDs. We’re not development specialists, but we do have a tremendous amount of experience traveling around and investing in all parts of the world. And one of our observations — surprise, surprise — is that people want a job. If you ask people what they really want, they want a job. And why do they want a job? Because they want dignity, and they want to control their own destiny. And they don’t want people to tell them what to do. And people, in that regard, are the same all over the world. 

And so, when we look at how can you build sustainable prosperity, the primary drivers are entrepreneurs. It’s the people that create jobs. It’s people that create opportunities. And so, we wanted to get involved in entrepreneurship. And I’ll talk about that in a second. That’s Legatum Center at MIT. But even if the humanitarian situation is good, and even if entrepreneurs can operate and can build businesses and grow them, all of that still exists within a policy framework. So you can have the best entrepreneurs in the world, but if they’re in a country like Venezuela right now, or Zimbabwe, it’s going to be really, really difficult for them to do what they do and to build that kind of opportunity and to generate that kind of growth. So policy matters. 

And when we set up the Legatum Institute in London, we set it up in London because it’s a global city. We set it up because the UK punches way above its weight. If they get something right in the UK, oftentimes people will follow it. So the mission, like you said, is to create pathways from poverty to prosperity. And the flagship product that the Legatum Institute has is called the Legatum Prosperity Index.

And today, it’s… We started in 2007, and it was really just the four partners of Legatum. writing this thing. Looking back on it now, it’s surprisingly cogent and good considering who wrote it. Today, we have an unbelievably incredible team in the UK who are doing regression analyses and just bringing a level of sophistication to the 80-plus variables that drive the Prosperity Index. But what it’s looking at is what drives prosperity and what holds it back on a national level, and communicated in a way that policymakers can absorb quickly and then can implement. So the whole goal is: How can we equip decision-makers, policymakers, to make better decisions that help promote prosperous societies?

And we kind of feel like if you do that, then you’ve got the whole stack. You’ve got the humanitarian piece where it’s really needed. You’ve got the promotion of entrepreneurship in the middle that’s driving growth and opportunity. And you’ve got prosperity-minded policymakers at the top of the stack who are just creating an enabling environment to let everybody else get on with it, live their own lives, make their own decisions — free to fail, free to succeed, and free to make a contribution. And that’s what Legatum is about. 

What makes life worthwhile is you have to have a sense of opportunity, have a sense of upward mobility. I want to have good relationships with people. I want to have a sense of freedom, like I can do what I want to do. And all of those factors have now been woven into the Legatum Prosperity Index to give what I believe is the single best indicator of national prosperity that exists today.

Denver: And it’s a broad definition of prosperity, too, correct? It’s just not GDP-type of prosperity. It is a more holistic way of looking at it.

Mark: Right. On the front cover of the first Prosperity Index back in 2007, we included a quote from Robert Kennedy. And I won’t be able to recite the whole quote, but the point was that GDP measure is one thing, but it doesn’t measure what makes life worthwhile. And every human being knows that. You know that. We all know that. What makes life worthwhile is you have to have a sense of opportunity, have a sense of upward mobility. I want to have good relationships with people. I want to have a sense of freedom, like I can do what I want to do. And all of those factors have now been woven into the Legatum Prosperity Index to give what I believe is the single best indicator of national prosperity that exists today.

Denver: And people are always waiting for it. Let’s go up to the Center at MIT. Tell us about that. 

Mark: So the Center at MIT is… now, with that framework in place, you can understand why it’s there. But the whole idea was, traveling around the world, we encountered incredibly bright and promising, gifted young people who would come from a country like Zimbabwe or like Burma, and who would be the type of person who could get into an MBA program at MIT. So you’re talking about kind of just the top student in the whole world but who couldn’t pay for it? They couldn’t afford it. And so that’s the sense of Legatum Center is: How can we set up a center that is specifically focused on equipping those young folks with not just pretty much the best education that money can buy, but with something more… with a vision and an understanding about what really drives prosperity, and their role and their opportunity in that? 

So, the hope is that the Legatum Center would attract the best and the brightest from all over the world. Take however long they’re in the program, these Legatum Fellows… help them with the basics of building a business, whether it’s writing business plans and networking with finance folks and venture capitalists, but importantly, equipping them with that sort of a mindset of: I have an opportunity. I can go back to my home country and bring a worldview, in addition to my skills and my network that I obtained in the US. And that’s the vision. 

Then beyond that is if we do that really well over time, we’re going to create some incredible case studies. We’re going to build the best businesses all over the world, and you’ll see a common denominator, which is these Legatum Fellows or people connected with the Legatum Center. And if we do that, then the Legatum Center will have the ability to speak with authority and with experience into how to create societies that promote entrepreneurship because promoting entrepreneurship doesn’t just matter in some country in Africa. It matters in Western countries. It matters in the United States. If we can remove some of the obstacles and help facilitate an environment where entrepreneurs can do what they do, which benefits all of us, that’s good for the world. 

And the Legatum Center is well on its way. It has an incredible leader, Dina Sherif, who is tremendous. And I don’t know if you’ve had a chance to talk to her, but I really encourage you to connect with her. The Legatum Center has never had better leadership. It’s got an incredible vision and a team that’s coalescing around this mission. So, yes…very proud of the Legatum Center. 

Denver:  And as you said, these entrepreneurs create that one thing that people want most, and that’s jobs. And so that’s where it all comes full circle. 

We’ve been talking, Mark, about the track record that you have and Legatum has in forging partnerships and collaborations. For that matter, the four core partners of Legatum are still there together and reportedly still like one another. So let me ask you this: What are the keys of making a partnership work? 

Mark: Wow. Well, the keys to making a partnership work, Denver, are the same keys that make any relationship work.

We have been together for…we’re going on 17 years, and we’ve been through thick and thin. So we have seen high highs and low lows. We’ve been through … and that’s just in the business. One of the four partners got married during that time. We’ve had families. We’ve had parents pass away and attended funerals together. We’ve become godparents of each other’s children. So, what started off as a work relationship and colleagues very quickly became friends, friendships that over time… it’s just evolved into something much more profound, and it’s like a comradeship and a brotherhood. 

And the thing that unites us– we’re from different countries. We’ve got two people from the UK, one from New Zealand, I’m from the country of Arizona, and we all come with very different life experiences as well. But the thing that binds us together is a set of beliefs and a view that you only get one go at life. Make it worthwhile. Use it to do something for someone else and to serve other people. And if you can do that together with people that you like, and you can do it at scale, those are some of the ingredients of a worthwhile life and a life that… you know, David Brooks talks about sort of résumé virtues and eulogy virtues. We’ve talked about that. 

Denver: Yes. Absolutely. 

Mark: You know, eulogy virtues are: OK, well, what happens when you’re in your coffin and people are talking about you, what are the virtues that your life exemplified? And that’s something that really animates not just the partnership, but everybody that works at Legatum. People care. People are passionate. People give themselves to this mission. Some of the core elements though, to really address your question on point, of how do you do that with other people are – 

The power of agreement means we don’t always have to agree with everything, but we’re going to operate with a sense of unity. 

Denver: With other organizations, too. You’ve done it at both levels.

Mark: And so, Alan McCormick… mentioned him before. He’s obviously a tremendous partner and friend, but he really helped set some of the core principles of what has made the Legatum partnership successful. And one of them is the power of agreement. And it just sounds really simple, but here we are as a partnership, and we’re not all equal in terms of net worth and background and everything else, but we are all equal in terms of ideas and in terms of our relationships. And the power of agreement means we don’t always have to agree with everything, but we’re going to operate with a sense of unity. 

And so, we generally will not make a large material decision at Legatum unless we are in agreement. But even if we’re not totally in agreement, we will do it with a spirit of unity. And that spirit of unity has kept us together through thick and thin. And because, you know we would rather actually go slower, we’d rather actually not make a decision than have something move us from a place of right relationship.

Another one is keeping short accounts. So we’re human beings. And we can annoy each other. And we can take offense or misunderstand something. It’s just normal human relationships. Well, one discipline that we’ve really committed to together is the discipline of keeping short accounts. So if there’s an issue, rather than burying it or just kind of brushing it off, we’ll surface it and go ahead and tackle it head on.

And given what we’ve been through, through financial market crashes and Coronavirus and everything in between, those are just but two principles. But when you apply some basic disciplines around your relationship, and you have that long-term perspective, and you deeply care about the people with whom you work, it’s amazing what you can make it through. 

Denver: And that last one, too. I think the thing that sets organizations apart is that ability to deal with conflict, and so many people are averse to conflict. Often, it’s because of the way they grew up in their own homes or something. They avoided it at all costs, and they take it right into the office with them. But as you suggest, things fester.

Mark, when you were growing up in that great nation of Arizona, I’m sure you never imagined yourself in Dubai. Give us one or two things that are special about Dubai. 

Mark: Only one or two things? Well, first of all, Legatum could be anywhere on the planet. We don’t have to be in Dubai. We don’t have any investors from that part of the world. And really, we don’t have… other than our building… any investments in that part of the world. We have a huge amount of respect for Dubai and what that country’s leadership has done. And effectively, they’ve created a place where people can build and run businesses. It’s a place of entrepreneurship. 

For Legatum, specifically, when we looked around the world, we wanted to find a place that was well-suited for our type of business. So we invest in everything from East Asia, to South Asia, to Europe, to the US, literally all around the world, and mostly in the public markets. And so, just from a time-zone perspective, that time-zone corridor is much more advantageous to us than say, like being in San Francisco where we’ll be working through the night. So that’s one. 

The other is logistics. So, pre-pandemic, you’d find Legatum people on planes. We’re boots on the ground. We go visit companies, visit countries constantly in circulation, and Dubai’s travel infrastructure is second to none. It has the busiest airport in the world, and they’re just committed to world-class infrastructure. And so, that helps our business a lot. 

And finally, Dubai is great for world-class talent. So we looked around the world and thought: Where can we be that’s business-friendly… that’s in the right time zone, has great infrastructure, and where people actually want to come and live? And it’s just very hard to find a place that can compete with Dubai on all of those factors. And so, we have the amazing luxury of being able to recruit and retain just world-class talent that you’d find in London or New York or Singapore, Hong Kong, or anywhere.

So it’s a great place for us. I raised my two children there. They’re both in college in the US at this point. And so we’re, we’re very grateful for Dubai. 

Denver: Let me close with this, Mark. And I’ll go back to the beginning of the conversation where we mentioned you invest proprietary capital, you and your partners, and that gives you the ability to have the long view. And boy, that is something that is sorely missing in the nonprofit sector. So much of what goes on is from grant to grant. You try to get that short-term outcome so you can show your funder that you completed it and get more funding. Share with us, if you could, the mindset that goes along with a long view, and maybe perhaps even the way you define success, how that might change because of it.

Mark: Wow. OK. That’s a huge question. Well, in the investment space, here’s what the long view looks like. It looks like 2020 with Coronavirus. So Legatum was carrying a significant amount of cash coming into the year. Obviously, like everyone else, we had no idea what was coming down the pike, couldn’t have predicted what 2020 would look like.

But having the long view means kind of in March, when things looked really bleak and markets were cratering, and it just does not feel good. When you’re in our industry, and you come in and all of your Bloomberg screens are red, it is challenging, psychologically… and everyone’s having that challenge. So, at a certain point, when you are an investor like Legatum, who looks at the fundamentals and tries to assess the intrinsic value of companies, at some point, you look at the price and think “That’s the wrong price. And I’m not sure exactly how Coronavirus is going to play out. And I’m not sure when, but that’s definitely the wrong price today.” And when you can get there, you don’t have to have all of the information. You just have to have enough information. You have to have some boldness. But the key ingredient is that long-term perspective.

So when we looked at it, we thought: Well, we don’t know if the market’s going to go down another 10% or 20%. We just don’t know and can’t know it. But we’re willing to back our convictions today because over the next 3 years, 5 years, 10 years, this all should come right. That was our perspective. And so, we went all in around March 19 or 20 or something like that, which… it’s been said that being lucky is better than being smart. We were hopefully a little bit smart. We were certainly lucky. That was about the bottom of the market, and 2020 turned out to be one of our best years ever in terms of just investing in the financial markets. So that’s how a long-term perspective is applied practically in the moment.

And philanthropy is no different. In our investment business, one of the things that we’ve done as a discipline is gone back over every single investment that we’ve made over a decade and a half and looked at not only: When did we invest?  When did we exit the investment?  Did we make money?  Did we lose money?  But then, what happened after that? And what we tried to assess was: Are we applying the virtue of patience to our investments in a way that’s maximizing our returns? And the answer was: Not really. We’re great at finding investments. We’re great at allocating capital, but the one area of growth for us has been really maximizing our patience. And we’ve done that well, but we can do better. 

And I think in philanthropy, if you can have patience and a long-term perspective, and also trust in the leadership of organizations, our perspective, our philosophy, our belief is that you’ll get better returns and better results over the long-term.

So take a look at The END Fund. You’ve got to trust the leadership. Alan and the team are absolutely fantastic. You don’t have to use a lot of imagination because the runs are on the board. Like you see what they do. So our view is: Equip Alan and the team with the capital and let them do what they do.

Denver: It’s trust-based philanthropy, 

Mark: A trust-based philanthropy, and then sit back and be amazed in 10 years. 

Now, if your organization isn’t configured to do that, then it feels like an important conversation to have is: How can we get configured to do that? Because again, trust, plus patience, plus good decisions, collaborating with others… when you put it all together, you can have some outstanding results. And I think when you look at The END Fund, The Freedom Fund, Luminos… those are powerful case studies in putting those virtues together. 

Denver: And I’ll just add one thing that you’ve mentioned before — looking back. I don’t think many nonprofit organizations or philanthropies look back over the last 10 years. They’re all looking ahead, but there’s a lot of learning that can be done in terms of what you’ve done. Share with us your website, where people can go to check out some of these philanthropic initiatives that we’ve been discussing. 

Mark: Absolutely. So we just launched a new, fresh website. It’s And definitely, Denver, it’s been fantastic speaking with you. I hope that people find this useful and helpful and that they visit the website. But, yes, it’s been a real pleasure. 

Denver: Likewise here. You were absolutely great. Thanks so much for doing this, Mark.

Mark: Thank you, Denver. Take care.

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