Blockchain based payments could revolutionize finance in the same way that internet companies transformed information and communications starting in the 1990s, according to technology investment pioneer Glenn Hutchins.
“Imagine if you can move anything of value … around the world at the speed of light at no cost,” Hutchins said Tuesday at the Reuters Global Investment Outlook 2020 Summit in New York.
“You might think I’m crazy, but one of the things that led to my investment career was (believing) people saying in the mid-1990s ‘we are going to move information around the world at the speed of light at no cost.’”
That career includes helping lead technology-focused private equity firm Silver Lake Partners, which he co-founded in 1999. Hutchins helped make the firm, launched during the dot-com boom, a giant of technology buyout investing through bets in 2000 on disk drive maker Seagate Technology and online brokerage Ameritrade and, in 2005, software maker SunGard Data Systems and stock exchange Nasdaq.
Blockchain companies that facilitate payments could be similarly prescient bets, Hutchins said.
“I can imagine that the financial services industry looks a lot more like sending an email today than it does like waiting in line at an ATM or a teller,” he said, noting the high fees and unnecessary time of both. “That’s what we’re driving for.”
Hutchins left now-$43 billion Silver Lake in 2018. He now makes private equity-style investments through family office North Island, which he runs with his son James Hutchins. North Island recently led an equity fundraising round for Digital Assets Data, a financial technology and data company focused on the crypto-asset industry.
Hutchins said the greatest opportunity in blockchain was not speculating on tokens but in building the virtual infrastructure of new payment systems, even if they were nascent technologies.
“If we get that right, we can build out companies that can fundamentally change important parts of the financial landscape,” he said.
Besides blockchain, Hutchins said he is betting on high growth outside the United States, especially emerging technology companies in China. Silver Lake bet on Alibaba Group Holding Ltd in 2011 and Hutchins said he is still an investor.
His broader portfolio also includes market-maker Virtu Financial, where he is a director, and the National Basketball Association’s Boston Celtics, which he co-owns.
Hutchins also sits on the board of the Federal Reserve Bank of New York, AT&T Inc, and the Obama Foundation. He is co-chairman of the Brookings Institution and anti-poverty charity CARE.