Perrin Quarshie, MBA ’16

Perrin Quarshie, MBA ’16, joins Christopher Reichert, MOT ’04, to discuss his career evolution from working as a civil engineer to becoming an entrepreneur in the financial services space. He is now the founder and CEO of RealBlocks, a technology platform that connects advisors and investors to the best alternative investment managers.

 

Christopher Reichert: Welcome to Sloanies Talking with Sloanies, a candid conversation with alumni and faculty about the MIT Sloan experience and how it influences what they're doing today.

So what does it mean to be a Sloanie? Over the course of this podcast, you'll hear from guests who are making a difference in their community, including our own very important one here at MIT Sloan.

Hi, I am your host, Christopher Reichert, and welcome to Sloanies Talking with Sloanies. My guest today is Perrin Quarshie. He is the founder and CEO of RealBlocks, and prior to that, he was with Barclays Investment Bank. He was an engineer at NAC International and is a 2016 graduate of Sloan MBA. Welcome, Perrin.

Perrin Quarshie: Thank you, Christopher. Good to be here.

Christopher Reichert: Excellent to have you. So you have a technical background. You went to Georgia Institute of Technology for civil and environmental engineering, and you worked in NAC International also as an engineer, and then you pivoted over to... So, tell me how that evolved into, into RealBlocks?

Perrin Quarshie: Sure, absolutely. So, as you mentioned, I come from an engineering background, so that mindset of looking at complex problems and being able to distill them down into solutions that tech could provide to bring efficiency, is really what drives my thinking and what really inspired me to create RealBlocks.

Basically, I spent several years in engineering, went to Sloan for business school, and then while I was there worked at Barclays and I was excited about the fact that private real estate and alternative investment product was being created for downmarket distribution, but unfortunately the tech was literally non-existent meaning -

Christopher Reichert: So, let me pause you there. Downmarket distribution, tell me more about that.

Perrin Quarshie: Oh yeah.

Christopher Reichert: I have a couple of questions. One of course is the whole blockchain and we could get into that in a minute. You've turned to real estate. It's kind of like the vehicle, as the subject matter for the RealBlocks vehicle. Right?

Perrin Quarshie: Well actually, our platform is an alternatives platform. Basically we focus on any strategies that are not traded, particularly private real estate, private equity and private credit.

Christopher Reichert: Interesting. Why you said that the not otherwise traded, is the market not big enough? Is it too fragmented? How did that not get securitized, I suppose?

Perrin Quarshie: Sure, absolutely. So basically these are private funds, private investment vehicles that are raised and deployed. So alternatives have been around for a while. Typically they're used by large institutions, like endowments and pension funds, and the nice thing about them is they provide consistent returns, without the market volatility of publicly traded securities. So that's where they sit in a prudent asset allocation.

Christopher Reichert: Interesting. So I just did a podcast and we talked about SPACs as a vehicle for going public. How does this relate... I know it's a very diverse capital markets, but where does this fit into that?

Perrin Quarshie: SPACs typically work to take private companies public through the merger of a shell company or a holding company, and RealBlocks sits on the side of the private companies. So we basically work with venture funds, private equity funds, private credit funds. They are the entities in the market that typically capitalize private companies. So what we're doing is that, previously, the big endowments were the only ones who had access, but with RealBlocks, we are now taking access to private companies, docked through the venture capital. We're taking that access downmarket to retail investors.

Christopher Reichert: Interesting. So the idea being that a retail investor who's not represented by a Credit Suisse or one of those, could now buy smaller chunks, but many more people are buying smaller chunks in these various assets?

Perrin Quarshie: Yes, that's exactly it. I'll give you an example here. RealBlocks, obviously we've got a team of 10. We now have our first large customers. One of them is an asset manager with over a $100 billion in AUM. The other's an asset manager with over $65 billion in AUM, and the large asset manager previously, has a private index fund that has performed very well, but it's only been able to be offered to large allocators, meaning those that can write a 25 or $50 million check.

Christopher Reichert: Your chunks, right?

Perrin Quarshie: Right. So, with RealBlocks, we've been able to take that fund for the first time mass market, and allow for private wealth managers to get their clients into it. So, we already had a great success in in January of this year and February is looking even larger in terms of that, but that's really how the value proposition is playing out. Where we're breaking down the access barrier and we're taking what were previously only private funds for institutions to the mass market.

Christopher Reichert: So, you mentioned on your profile on LinkedIn, that most alternative investment managers are limited to raising capital locally. How does that work from, I guess, from a regulatory perspective or is that not a factor, is it more just now down-market investors have access to a larger galaxy of opportunities?

Perrin Quarshie: Yeah. Great question. So, it is a regulatory consideration, and previously what would happen is, it's very expensive for a manager to raise capital outside of their home geography, because of all the manual processes associated with setting up sales teams, setting up feeder funds and setting up fund administration, and with RealBlocks, we've built the tech to deliver those services digitally in a compliant manner. So we are able to bring the costs down by 90% when a manager wishes to distribute internationally.

Christopher Reichert: That's hugely disruptive. How did you find that opportunity to... That must be scaring people who are enjoying the other 95% of funds.

Perrin Quarshie: It's funny. So the traditional fund administration platforms have actually asked us about using our technology on a white label basis, so that we could actually add that capability to their system. So you're right. It is scary for them, but rather than competing with us, they know that we've built the tech. So they find that we've built a great sort of pathway to connecting them, to investors all over the world.

Christopher Reichert: So is this... So back in the 1980s, I guess it was, IBM had the corner of the market on the IBM and invented the XT, the computer and the distribution model through Compaq and all those companies was... They own the stack, and they could charge what they wanted. Then along came Dell, which all of a sudden, really undercut the margins of all of these other players, and people just, sort of commoditize that. Do you see that same sort of action or dynamic in play here in the space that you are working in?

Perrin Quarshie: Yes, I do. In fact, placement agents typically have only distributed large funds, because the cost of distributing smaller funds to retail have been too high to be justifiable. With us, we've built a vertically integrated system to bring the cost down and then bring access up by breaking the geographic barrier, and what we're going to see is... Yes, ultimately at the end of the day, we see ourselves white labeling our technology so that we can be like the AT&T basically, in beating the infrastructure that other people can use.

Christopher Reichert: Right. What sort of trading patterns are you seeing typically on your platform as people get comfortable with it, particularly as investors who you were competing with and probably are still on some level, but as they adopt it?

Perrin Quarshie: So as a model portfolio, which is a standard structure used for private wealth management, we're seeing asset managers double their allocation to alternatives to RealBlocks, because they can use RealBlocks to get product, meaning higher quality products, more successful managers, at lower costs than they have been before, and then our platform also, because we do digitally issue the shares which is the blockchain component, we also allow for secondary trading functionality, thereby eliminating the long lockup issue, which is a big problem for the private wealth channel. So those two factors really allow us to have a unique value proposition that makes using alternatives much more attractive from the standpoint of a model portfolio that would be used in private wealth.

Christopher Reichert: Is this a vehicle that someone who wants to raise funds could use to sell their idea, their proposal of whatever their business idea?

Perrin Quarshie: Yes. That's exactly what's happening. So our first client is an asset manager. They have over $60 billion in AUM. They've only distributed in the U.S. through the large wirehouses, and they wanted to distribute internationally, but they didn't want to deal with the costs and operational burden. So they use RealBlocks to create a theater fund to also set up the sales relationships, and to manage the administration that was able to take them down-market, and in the last quarter of 2020, we took their KPI and we blew it out of the water by 6X. So that's exactly the value proposition playing out.

Christopher Reichert: So, let me see if I got my question right. Asking for a friend, let's say I want to raise three, four, five million to go buy real estate and do that sort of thing. Is this the kind of thing where I could approach RealBlocks and say, I want to do this, so obviously I need investors who will then give me the money, essentially, and is what RealBlocks does vetting, to get it onto the platform, to be able to be sold, or do you still use other qualifiers, be those organizations or individuals, who would vet?

Perrin Quarshie: Yeah. So our platform does provide due diligence. So we are a broker dealer. We are responsible. We also are an RIA, and an exempt reporting advisor. So we do provide due diligence, but the use case is not what you described, where we're helping people down market raise capital to do what they want. We're actually going from the top, meaning the largest managers down, where we're helping smaller, independent RIAs and private wealth managers, who typically wouldn't have access to such a manager. We're helping them get access by bundling them together and giving them higher purchasing power. So that collectively there are 3, 4 or $5 million checks, can be a $50 million check and then get shelf space in the top managers fund.

Christopher Reichert: So, these are like family foundations who might go to a Fidelity to be donor advised in some way, or in investment, that way they can now participate in this larger pool?

Perrin Quarshie: Well, I wouldn't say that. It's really small RIAs and independent broker dealers and private wealth managers, who typically just don't have enough capital at their disposal because of their, disparate, fragmented nature to get any shelf space at the top five asset managers. So those top five asset managers come to RealBlocks and say, we want to go down market and pick these types of investors. We're going to use RealBlocks to offer custom share classes of our funds, so that not only can we get that in the hands of those investors, but they can use us from a technology standpoint to manage the operational concerns, and to make it seamless.

Christopher Reichert: Interesting. I think I got it. And so blockchain, I mean, Bitcoin being one of the most famous uses of blockchain technology, was that a natural path to go down in terms of managing the provenance of the process for you?

Perrin Quarshie: Yeah. It was a good path for us, and the reason why is that, at the end of the day, if you look at Bitcoin, obviously one nice thing about it is, it's ubiquitous, it's borderless. It can be held and traded by people outside of the confines of the traditional financial system. So we said, “okay, that's really awesome,” but unfortunately it's highly volatile. So if you take that from a functional standpoint and you apply that to something that is independently valued and verified, like shares of private funds from top managers, you could have something really powerful, because you can make shares of funds from top managers, ubiquitous and tradable by people all over the world, and you can, not only give the world better access to those managers, you can give those managers a better way to sell and increase their AUM. So it's a win-win for both sides. So we see this as the 2.0 version where now we're using the underlying functional attributes of the blockchain to deliver better value for existing financial instruments.

Christopher Reichert: So blockchain. Let's talk about that technology. I must admit that I was trying to get myself up to speed behind Bitcoin, and one thing that kind of intrigued me was that in a blockchain, I guess history for want of a better description, you can actually review the ledger, you can go back to the beginning of its existence all the way through until now. I got that right. Is that right?

Perrin Quarshie: Yes. It's a permanent ledger. Right.

Christopher Reichert: Doesn't that get huge and unwieldy?

Perrin Quarshie: It doesn't actually. So then the problem with many of those is that there are transaction limitations. So for high frequency trading, it doesn't really work so well, but for things like private funds where there's next to zero trading today, it's a quantum leap. So that's the unique place that we're applying it, and that's the unique value.

Christopher Reichert: So, you said high volume trading, because the amount of ledger load registering all of those entries and changes becomes unwieldy?

Perrin Quarshie: Right. At the end of the day, it's the process of... Ethereum and a lot of the other blockchains have scaling limitations. So because blocks are mined, so it's the scaling limitations that prevent it from being appropriate for the highest frequency, publicly traded items. But if you look at non-traded items, the latent or the standard hash rates for the Ethereum main net and other blockchains are actually more than adequate, and would represent a quantum leap from the sort of zero trading that occurs today. So that's why it's a good use in the alternative space.

Christopher Reichert: So, do you see blockchain... And we are going to see blockchain being used in at that sort of scale of transaction. Forget the high volume, but just in other areas, other parts of the economy that it hasn't permeated yet.

Perrin Quarshie: Yeah, absolutely. Look at fund administration and transfer agency, that business. Those firms are sitting on $10 trillion, seven, eight, nine. The largest one is sitting on $12 trillion of AUM, and that business literally hasn't changed in the last 30 years. It's still very manual, very paper heavy with people touching so many parts of the process. So that is ripe for disruption. However, the blockchain component doesn't have alone, the functions necessary for reporting, statements and all of the necessary items that are needed by the financial advisors and the custodians.

So what RealBlocks has done is we've built a sort of parallel system that is a nice transition, meaning we bring the functionality, the advantage of secondary trading to those private assets, so that's the benefit we're bringing, and then we are still providing the traditional statements and reporting and fund administration and fund accounting through the traditional system. So we marry both systems, and that's how we're making it a nice on-ramp. Then someday when the world gets to a point when FINRA and the SEC, allow for those functions to be carried out on a distributed ledger function entirely, we will be ripe to take the market because we will have led the slow transition.

Christopher Reichert: So, what's the resistance there? Is it just that the wheels of change are slow in such a, if it goes wrong, it could go south pretty quickly?

Perrin Quarshie: Sure. It's actually custody. So basically FINRA hasn't provided guidance on the custody of digital assets. That's the real issue. So for example, if you buy shares even online, you have a traditional custodian who says that Christopher Reichert owns one share of security A, and he's bought that share, and then later on Christopher Reichert has sold one share of security A, and the processes in between of managing your statements, tax reportings, dividends, K-1s, etc., are all done. That process right now is very complex, and the SEC and FUNRA are not quite comfortable with that yet.

Christopher Reichert: So even though it's very easy on say, TD Ameritrade or Robinhood or any one of these online platforms to trade, it's really at the end of the day behind the scenes, it's still creaky and slow.

Perrin Quarshie: Yes. Exactly.

Christopher Reichert: So you guys are moving into that space, and ready to pounce when FINRA... Now again, FINRA, what does that stand for?

Perrin Quarshie: Financial Industry Regulatory Authority.

Christopher Reichert: Excellent.

So you went to Sloan, you were at NACA International for six years or so.

Perrin Quarshie: Yes.

Christopher Reichert: And what made you decide to go to business school, and how did you choose Sloan?

Perrin Quarshie: I had worked with many engineers, and what I saw consistently is, a lot of engineers just didn't possess the management skills necessary to be very effective when they were promoted in their jobs, and when they started managing teams and needing to take on more of a management function. I saw that as their big weakness. So I thought to myself, obviously I wanted to address that gap preemptively by getting that management skillset, and at one of the best schools in the country to do so. So I was specifically attracted to Sloan because it has, not only the very strong management skillset, but also a very strong technical focus given the broader MIT community, and with being an undergrad engineer, both of those things appealed strongly to me.

Christopher Reichert: Yeah. I can see that you probably would have been, when I look at your resume, Georgia Institute of Technology—seems like that's a good fit. Do you have any courses that you took that you could do a do-over with or classes that you missed that you wish you could go back and take?

Perrin Quarshie: Well, let's see. I think the Competitive Strategy course by Don Sull, that was a very good one. I very much enjoyed—there was an Entrepreneurial Strategy course as well that was really impactful. There was the Disciplined Entrepreneurship class by Bill Aulet, that was great, and I use a lot of that every day being an entrepreneur, and then there were some other courses that I took through the joint enrollment at the Harvard Kennedy school, that are focused on, like one of them Exercising Leadership, was especially helpful. So I really feel like Sloan provided a good broad education.

Christopher Reichert: Who taught that at the Kennedy school? Just out of curiosity.

Perrin Quarshie: That was professor Ron Heifetz.

Christopher Reichert: Oh yeah, sure. So the Leadership on the Line. I went to the Kennedy School, as well. I must admit that those lessons resonate still with me, many years later.

Perrin Quarshie: Yes.

Christopher Reichert: Painful though it may be, to kind of reflect. You were coming from an engineering background, obviously ambitious and you thought, "okay, I'm hopefully going to move into a management position." Did you think that you would go back to NAC International or back to an engineering side, and how did Sloan change your direction?

Perrin Quarshie: So, I definitely felt like I had worked long enough in engineering and I had naturally more of an inclination towards a management skillset, and more of a sales skillset, and a relationship management skillset. So I definitely had had my fill of engineering by the time I got to Sloan, but what I did like is the fact that the engineering and the technical mindset was incorporated into a lot of the courses there. Especially if you look at big tech, and if you look at the courses on entrepreneurship, that was highly appreciated.

So when I was there, I knew I liked financial services and I knew that I wanted to be an entrepreneur, and I had had that bent ever since I was a young 10 year old and my growing up. So I took all those courses, and then after having done my summer, I decided that I didn't want to recruit traditionally. I wanted to actually just pursue my startup right out of the gate. So I did, and then we built an MVP that did well, and then we got into Techstars. Then after Techstars raised a seed round led by a venture fund here in New York, and then we've just raised our Series A in October led by Crosslink. That's the evolution.

Christopher Reichert: Congratulations. That's great.

Perrin Quarshie: Thank you.

Christopher Reichert: Tell me about how you met your founder and how you came together to choose this as the path forward.

Perrin Quarshie: Sure. I met our founder Naman [Srivastava], through a course at Sloan that he was taking when he was at Harvard, and we both were doing similar research on the implications of technology in the financial service sector, and also on income inequality and how investment tools and access to investment advice and wealth management could address that. So we both took our research and saw what was happening in the world, and we thought, not only is there an opportunity for technology to solve it, we could be very impactful given the timing. So we decided to join forces while we were in school, and work together and we're still working together today.

Christopher Reichert: That's great. I love the stories of founders who met at Sloan and created something great.

What's the growth... How has it been this past year with COVID in terms of how the business is run? Has it made any huge impact given the technology that you're using? I don't know how much face-to-face that was before or whether that really changed.

Perrin Quarshie: Yeah. Well it's funny. The first impact of the business when COVID started in mid-March, we were waiting on our broker dealer application to be approved by FINRA, and they still mail things. Snail mail. So that process took longer. It was more drawn out, and then getting our RIA registered took longer, and then we started a 40 act tender offer fund for our second client, which also took longer than we expected, but it went well. Those are some items that were challenging. Then also we were growing the team and adding new employees. So being able to continue to build and grow the company and to foster a good culture for mentoring and training and developing employees, that was certainly a challenge.

What accelerated the business is the fact that obviously there was volatility in the broader public equities markets. So more institutions on the large endowment side, and as well as the smaller what we call the private wealth side, were more interested in alternatives and RealBlocks is a catalyst there.

So that actually got us moving very quickly with our first two clients, because the industry had all of a sudden seen a strong need for alternatives, and there was a need for technology that would do it digitally and would eliminate manual processes, which in COVID times are important. So that really helped to accelerate the business last year.

Christopher Reichert: And how's it been going... Now, what about 20 employees and how's that growth been for you as a leader, going from a startup, pushing the initial idea, to now managing people to maintain and advance the whole idea?

Perrin Quarshie: We have got 10 employees here in New York, 10 full timers, and we are very excited about the progress I would say that we've had, in terms of the track, some of our first two customers, and we're now bringing on four more, so having to grow the team and to do that in a COVID environment, has been challenging, but what I'd say is that, it really has been a phenomenal experience. I'm not a parent yet, but having read about parents, I would feel would be akin to a parent, watching a child grow up from infancy, and it's been incredibly rewarding to do that and to see our customers use our technology and to hear the phenomenal feedback we've gotten from them, and know that this was just an idea a few years ago, literally on a napkin. And to get an email from the COO of alternatives at one of the clients that we have to talk about how excited he is about our tech, and the good feedback has gotten everywhere along the value chain is really the most humbling and the most powerful experience I've ever had. So I'm very grateful for that.

Christopher Reichert: It's great to get that affirmation. So what do you see as the biggest challenges, say in the next 12 to 18 months for RealBlocks?

Perrin Quarshie: I'd say that the biggest challenges are going to be continuing to grow the firm aggressively and add the right team members, and to build the right culture in a remote environment. That's still going to be something that will be challenging. Also as we manage more funds for asset managers and as we create more vehicles, there's going to be a need for more regulatory and compliance oversight. So currently we have one full-time series 24. We're going to need to add more of those. We're going to need to add more compliance team members. Then on the technical side, as the firm grows, and as our workload grows, we're going to start incurring technical debt and having to manage that and having to be aware of that, and to architect the platform a way that allows for us to keep that in a manageable level. So those are some of the challenges, the main ones that I see.

Christopher Reichert: And how did you kick that off, from the back of an envelope, to having an actual platform that people can log into and start trading? How did you go from there to the version one? I don't know what you're up to now, maybe version three or four

Perrin Quarshie: More like 400th! Yeah, great question. So really what it starts off with is, knowing the market opportunity in terms of the market size, the market segmentation, and then the opportunity annually for the market share that we wanted to capture, and then having an MVP built that could be shown to prospective clients. Then it went to signing a term sheet with one client that fleshed out our unit economics and that fleshed out the features and functionality, and then really working closely with the clients to understand their business and their needs, not only now, but in the next five and 10 years, and how those needs met with the needs of the industry.

So we really co-developed the platform with our first two large clients, who've been very successful in this business, but who didn't have any technology. So that's something I'd really recommend that entrepreneurs do, stay very close to clients, be a very active listener, take feedback, ask questions, and really focus on understanding the needs of the client and building toward that and involving them in as much of it as possible, because that's what's going to allow you as an entrepreneur to deliver something at the end of the day that really delights the customer.

Christopher Reichert: Right, and gets to your second and third on there. It's easy to let that slip away and think you have all the answers. Right?

Perrin Quarshie: Exactly, and then also, not only does it get you your second and third, but it gets you more and more zeros at the ends of each contract. So getting you those land and expand opportunities.

Christopher Reichert: That's great. So here you are five years into it, right? Four years into it. Four plus. What's your definition of success?

Perrin Quarshie: I think the definition of success is having delivered a value proposition that we promised, and having done so effectively, having done so at the pricing and with the regulatory considerations that are important to the client. Then seeing expansion in terms of not only of our first two clients, who started off with one fund working to use us across their entire business, and for their employee deferred compensation plans, but we're seeing, the top, I'd say seven asset managers, now quickly flock to us for our technology and wanting to white label it. So that's when we knew that we've done well. Not only have we gotten success with the early clients, but it's really heralding a shift in the overall market, that's causing the other firms who weren't our clients to come to us and to want to use it. So that's how I would really characterize.

Christopher Reichert: I love the idea that you've started with a product, then you're pivoting to both a product and a platform. Do you see them kind of competing with each other or is there always going to be some who want to use the product side and some will want to white label and use the platform side?

Perrin Quarshie: I would say that they shouldn't be competing with each other, because we have permissions that allow for, basically ring fencing within the platform. So if an advisor wants to only sell one product or an asset manager wants to only sell one product to clients that they source, they can do that without a fear of cannibalization, but I think the platform is actually better because what you're seeing now is the model portfolio side of the business, and J.P. Morgan acquired a company recently doing that. They've been a lot of acquisitions and it's been very active. Advisors want to get more of their clients into alternatives. The DOL previously published guidance, and finally in June of last year provided definitive guidance for putting 401k clients into alternatives.

So, this is a shift that we've been waiting for a while, and the government is finally now providing the rails to allow. I think that the platform focus is a broader offering that would better position us to deliver on a number of fronts to serve the needs of not only the asset manager, but also the allocator or the wealth manager. I think that the platform approach is the right approach, but it starts with first having the product and then building toward that incrementally.

Christopher Reichert: Interesting. So, you mentioned that while you were at Sloan, you took a course up the river at the Kennedy School. Did you also take other courses across the MIT ecosystem?

Perrin Quarshie: Let's see. During some breaks, I took some engineering courses during some of those IAP breaks. So, I took a couple of those, engineering and some data science and other courses there that I thought were very interesting.

Christopher Reichert: I must admit that this COVID, it was a shame... I did IAP last year, I guess it was February 20 just before COVID hit, and it was amazing. I was in a class with EMBAs and it just reminded me of the intense discussions you can quickly get to with really smart people and how fulfilling that is.

Perrin Quarshie: Right. You very much miss that.

Christopher Reichert: So, what do you think is your, before Sloan, after Sloan, what's your biggest takeaway of attending Sloan and MIT?

Perrin Quarshie: I think Steve Jobs says it best: “Your time is limited. Don't waste it living someone else's life. Have the courage to follow your heart and intuition. They somehow already know what you want to become.” I feel like the education that I got at Sloan, and the broader MIT community, really does deliver on that. I'm very proud and excited to be an alumnus of the program and to have been able to benefit from that.

Christopher Reichert: And what was the last thing you really geeked out about? It's hard to imagine you're not geeking out all the time with what you're doing. What's a shiny object that distracted you and you geeked out about?

Perrin Quarshie: It's funny. Geeking out about... I would say that Jan Yellen is very interesting in her very technical approach to looking at the labor market and looking at the broader economy, and her approach to, you hear a lot of obviously wrangling and discussions and banter on Washington about policy, but she comes in with a very informed perspective on data and on full employment and on what she wants the labor market to do, and how that will impact the overall economy. With very interesting statistical analysis historically, and with her experience, across a variety of facets. I really have been very excited by that.

I've been excited by some data on, at the end of the day, income inequality, which is a big problem for the US. It's accelerating and the world, and this is going to be the fundamental issue of our lifetime. And I feel like firms like ours, who helped to break these barriers that prevent the best investments sometimes from getting to the mass market audiences where they could really help to stem this is trend.

I feel like that is really something that is exciting to me. So that, and then a couple of other Supreme Court cases as well. So there was plan sponsor lawsuits on the use of alternatives that was thrown out, and it was just interesting to work. We've been working with Groom Law on that, who did the work with the DOL and in issuing that letter. So, just some areas, and I guess this is an extension of the MIT education. We had the technical, we had the management, we have public policy. So kind of been nerding out on things myself that span across those areas.

Christopher Reichert: That's excellent. What was the case about, just briefly, there's the Supreme court case?

Perrin Quarshie: Sure. This one was about Intel being sued. Intel is a plan sponsor, and the CIO was sued for using alternatives in a defined contribution plan for the employees. The issue was that initially the use of alternatives is not part of a prudent allocation. It was thrown out and it was cut back, and the guidance said that the use of alternatives can be prudent if the investments themselves are deemed to be prudent by the plan sponsor. So that's actually a huge win, because that case and when that lawsuit was initially filed, basically put the brakes on the use of alternatives across all of the defined contribution, 401k and 403(b)Plans. So this brought that guidance in line with the current guidance that says that provided you've done the homework and provided you feel the returns are justified and the risk is justified. It is appropriate to use them. So I thought that that was an interesting court case, that set a precedent, and that kind of reversed some industry concern and trepidation around that issue.

Christopher Reichert: So basically, the alternatives as an asset class, can stand shoulder to shoulder with other more traditional asset classes which is a huge. It breaks down areas, as you say, had no foundation in reality, right?

Perrin Quarshie: Yes, exactly.

Christopher Reichert: Excellent. So I'm just looking at the time here, and I just want to see if you had any parting advice for prospective Sloanies?

Perrin Quarshie: I think I would say “stay hungry, stay foolish.” I'd say that a lot of the people who are thinking and weighing a variety of career paths, I would say that if you feel passionate about something, build it. You have very little to lose, and there's no time like the present. Though what your initial idea or concept might not be the winning one, but it will give you perspective and allow you to gain experience that will move you towards something that eventually will generate success. So, I tell them to jump in.

Christopher Reichert: That's great. I think it's so true, because you don't want to turn at the end of your life and look back with regrets. Right?

Perrin Quarshie: Right.

Christopher Reichert: Well, thank you very much for our talk today with Perrin Quarshie, on Sloanies Talking with Sloanies. Thanks for doing it today.

Perrin Quarshie: Alright. Thank you, Christopher. It was good to be here.

Christopher Reichert: My pleasure.

Sloanies Talking with Sloanies is produced by the Office of External Relations at MIT Sloan School of Management. You can subscribe to this podcast by visiting our website, mitsloan.mit.edu/alumni, or wherever you find your favorite podcasts. Support for this podcast comes in part from the Sloan Annual Fund, which provides a central flexible funding to ensure that our community can pursue excellence. Make your gift today by visiting giving.mit.edu/sloan. To support this show, or if you have an idea for a topic or a guest you think we should feature, drop us a note at sloanalumni@mit.edu.