1 00:00:00,080 --> 00:00:06,080 Speaker 1: M This is Mesters in Business with Very Renaults on 2 00:00:06,240 --> 00:00:10,119 Speaker 1: Bluebird Radio. This week on the podcast, I have an 3 00:00:10,119 --> 00:00:14,040 Speaker 1: extra special guest. Christine hurt Sellers is the CEO of 4 00:00:14,480 --> 00:00:18,160 Speaker 1: Investment Management. You may not know the name Voya that well. 5 00:00:18,560 --> 00:00:20,880 Speaker 1: They've been around for forty years, a lot of which 6 00:00:20,960 --> 00:00:24,440 Speaker 1: was spent as I n g um. They run about 7 00:00:24,480 --> 00:00:29,440 Speaker 1: two billion dollars. They do over seven billion dollars in revenue. 8 00:00:30,360 --> 00:00:34,720 Speaker 1: Christine Hurtsels has really a fascinating background. In addition to 9 00:00:34,840 --> 00:00:39,200 Speaker 1: being on all the most important, most influential lists, She's 10 00:00:39,200 --> 00:00:42,800 Speaker 1: worked in everything from structured product to fixed income to 11 00:00:43,159 --> 00:00:46,879 Speaker 1: the c i O of foy you before becoming the 12 00:00:46,880 --> 00:00:51,840 Speaker 1: CEO of Void Investment Management. Really very knowledgeable person about 13 00:00:51,960 --> 00:00:56,560 Speaker 1: all aspects of investing and one of the things that 14 00:00:56,680 --> 00:01:02,840 Speaker 1: Voya is best known for are there um defined contribution business. 15 00:01:03,080 --> 00:01:06,120 Speaker 1: Uh really, I just found this to be a fascinating, 16 00:01:06,160 --> 00:01:11,000 Speaker 1: fascinating conversation and I think you will also, so, with 17 00:01:11,040 --> 00:01:16,080 Speaker 1: no further ado, my conversation with Voya Investment Management CEO 18 00:01:16,840 --> 00:01:22,960 Speaker 1: Christine hurt Sellers. This is mesters in Business with Very 19 00:01:23,000 --> 00:01:28,240 Speaker 1: Renaults on Bluebird Radio. My special guest this week is 20 00:01:28,319 --> 00:01:33,080 Speaker 1: Christine hurt Sellers. She is the CEO of Voya Investment Management. 21 00:01:33,400 --> 00:01:36,319 Speaker 1: The firm manages over two hundred and forty five billion 22 00:01:36,360 --> 00:01:39,559 Speaker 1: dollars in assets and generates more than seven billion dollars 23 00:01:39,560 --> 00:01:44,200 Speaker 1: in revenue annually. Previously, she was the Chief Investment Officer 24 00:01:44,240 --> 00:01:46,920 Speaker 1: of the fixed Income group at Voya and has had 25 00:01:46,959 --> 00:01:52,400 Speaker 1: a number of interesting positions throughout her career. Hurt Sellers 26 00:01:52,400 --> 00:01:56,400 Speaker 1: has been named to numerous most Influential and finance lists. 27 00:01:56,760 --> 00:02:01,280 Speaker 1: Most recently, she was named Baron's Top ten most Influential 28 00:02:01,320 --> 00:02:06,200 Speaker 1: Women in Wealth Management. Christine Hert Sellers, Welcome to Bloomberg. 29 00:02:06,560 --> 00:02:09,520 Speaker 1: Thank you so much, Barry. So let's start out with 30 00:02:09,600 --> 00:02:11,680 Speaker 1: your current gig and then work our way back a 31 00:02:11,680 --> 00:02:16,920 Speaker 1: little bit. Your chief executive officer avoida investment management but 32 00:02:17,200 --> 00:02:21,119 Speaker 1: previously you were chief investment officer. How do you make 33 00:02:21,160 --> 00:02:24,080 Speaker 1: the leap from c i O to CEO. It seems 34 00:02:24,080 --> 00:02:27,720 Speaker 1: like it's a very different set of skills, very you know, 35 00:02:28,040 --> 00:02:30,560 Speaker 1: in some respects as different skills, but in a lot 36 00:02:30,600 --> 00:02:33,079 Speaker 1: of boys, very similar skills. And so what in the 37 00:02:33,120 --> 00:02:35,120 Speaker 1: world do I mean by that? You know, a lot 38 00:02:35,120 --> 00:02:38,160 Speaker 1: of what you need in the role of CEO is 39 00:02:39,080 --> 00:02:42,360 Speaker 1: good strategic thinking. So really being able to think about 40 00:02:42,360 --> 00:02:45,080 Speaker 1: where the markets, where's the business going out, you know, three, 41 00:02:45,360 --> 00:02:47,600 Speaker 1: three to five years from now. And so I've been 42 00:02:47,600 --> 00:02:49,919 Speaker 1: an investor most of my career, so when you think 43 00:02:49,919 --> 00:02:54,040 Speaker 1: about strategic thinking and reading the markets and opportunities, there's 44 00:02:54,040 --> 00:02:58,040 Speaker 1: a lot of similarity there as well, as you have 45 00:02:58,160 --> 00:03:04,240 Speaker 1: to have a team approach, really have good intuition and 46 00:03:04,440 --> 00:03:06,560 Speaker 1: figure out how are we going to set a strategy, 47 00:03:06,639 --> 00:03:08,880 Speaker 1: how are we going to get people excited and really 48 00:03:08,919 --> 00:03:12,040 Speaker 1: moving in this direction? And so what they call e 49 00:03:12,280 --> 00:03:16,120 Speaker 1: Q that emotional intelligence. Uh. You know, the more senior 50 00:03:16,200 --> 00:03:19,840 Speaker 1: you become over time, the more important that actually is, 51 00:03:19,880 --> 00:03:23,560 Speaker 1: and less so pure technical skills that you develop early 52 00:03:23,639 --> 00:03:27,360 Speaker 1: in your career. So really it was a pretty natural move. 53 00:03:27,840 --> 00:03:29,480 Speaker 1: But I will tell you Bury, the one thing that 54 00:03:29,520 --> 00:03:33,080 Speaker 1: I really miss, uh is my I miss being in 55 00:03:33,120 --> 00:03:36,120 Speaker 1: the markets for sure. I mean just the joy of 56 00:03:36,160 --> 00:03:40,360 Speaker 1: being with an investment team. That isn't my day job anymore. 57 00:03:40,400 --> 00:03:43,720 Speaker 1: But again, I love strategy, love working with people, and 58 00:03:43,760 --> 00:03:46,760 Speaker 1: so I think it's just a wonderful role for anybody 59 00:03:46,800 --> 00:03:51,480 Speaker 1: to have. So despite some pretty big challenges, Voya had 60 00:03:51,520 --> 00:03:55,280 Speaker 1: a pretty good tell us a little bit about last year. 61 00:03:55,400 --> 00:03:59,600 Speaker 1: How did you guys do so well. Wow, well, there's 62 00:03:59,720 --> 00:04:02,520 Speaker 1: no very I mean last year Judd started out in 63 00:04:02,600 --> 00:04:06,640 Speaker 1: such a crazy fashion, and I would say the way 64 00:04:06,680 --> 00:04:09,040 Speaker 1: that Voya did so well. I mean, number one, you know, 65 00:04:09,280 --> 00:04:13,560 Speaker 1: we have great customer relationships, um, and you know, really 66 00:04:13,600 --> 00:04:17,160 Speaker 1: differentiated products so much today you know, people are talking 67 00:04:17,160 --> 00:04:22,039 Speaker 1: about alternatives and private markets and seventy billion of the 68 00:04:22,200 --> 00:04:25,560 Speaker 1: assets that we manage are in that category. So number one, 69 00:04:25,800 --> 00:04:28,400 Speaker 1: you know, we we certainly have great products that our 70 00:04:28,440 --> 00:04:32,039 Speaker 1: clients want. But but more importantly, you know, it was 71 00:04:32,040 --> 00:04:35,800 Speaker 1: really leveraging our culture into a period of real uncertainty. 72 00:04:35,880 --> 00:04:39,520 Speaker 1: I mean, as you recall, the markets just completely froze 73 00:04:40,520 --> 00:04:43,679 Speaker 1: uh in the in the spring and uh and so 74 00:04:43,839 --> 00:04:45,880 Speaker 1: you know, what did we do as as things just 75 00:04:45,960 --> 00:04:49,760 Speaker 1: got so disconnected? It was leveraging the culture of of 76 00:04:49,800 --> 00:04:54,000 Speaker 1: just being transparent and and talking to our clients and 77 00:04:54,120 --> 00:04:58,360 Speaker 1: really walking them through. We did tons of webinars, uh, 78 00:04:58,480 --> 00:05:01,040 Speaker 1: talked about what was working, what was not, what was 79 00:05:01,080 --> 00:05:03,400 Speaker 1: in the portfolio, what were we doing, and what we're 80 00:05:03,400 --> 00:05:06,680 Speaker 1: our views and we got the feedback from clients. Hey, 81 00:05:06,800 --> 00:05:09,640 Speaker 1: not all asset managers are doing that, right, But at 82 00:05:09,640 --> 00:05:12,040 Speaker 1: the end of the day, we're in the trust business. 83 00:05:12,760 --> 00:05:14,800 Speaker 1: It's their money we're managing, and we want to be 84 00:05:14,880 --> 00:05:18,240 Speaker 1: that trusted partner. So how you behave and how your 85 00:05:18,279 --> 00:05:22,360 Speaker 1: people rallied together in times of stress, those are moments 86 00:05:22,400 --> 00:05:25,760 Speaker 1: in life and in careers that truly define you. So 87 00:05:26,120 --> 00:05:28,920 Speaker 1: couldn't be prouder of the team. As we work through 88 00:05:28,960 --> 00:05:31,520 Speaker 1: two thousand and twenty two push ahead through a lot 89 00:05:31,560 --> 00:05:37,360 Speaker 1: of uncertainty. So given how successful two thousand and twenty was, 90 00:05:37,800 --> 00:05:42,200 Speaker 1: did that momentum carry over to is things began to 91 00:05:42,240 --> 00:05:45,719 Speaker 1: open up and sort of return to normal? You know, 92 00:05:45,800 --> 00:05:48,240 Speaker 1: it has and a lot of the a lot of 93 00:05:48,240 --> 00:05:51,320 Speaker 1: the momentum that we continued to see just based on 94 00:05:51,360 --> 00:05:53,840 Speaker 1: where yields are in the world and what's going on 95 00:05:53,920 --> 00:05:56,719 Speaker 1: really are and some of those more private asset classes 96 00:05:56,800 --> 00:06:00,440 Speaker 1: that we managed, so I think commercial real estate or 97 00:06:00,480 --> 00:06:03,880 Speaker 1: you know, actually what we call private credit, meaning issuers 98 00:06:03,960 --> 00:06:06,680 Speaker 1: that don't come to a public credit market, and we 99 00:06:06,720 --> 00:06:09,760 Speaker 1: have a very strong business there. So as a result, 100 00:06:09,839 --> 00:06:11,960 Speaker 1: is people continue to struggle with where am I going 101 00:06:12,000 --> 00:06:14,600 Speaker 1: to put my money? I'm uncertain? You know, the yields 102 00:06:14,600 --> 00:06:16,760 Speaker 1: are really low. We tend to see quite a bit 103 00:06:16,800 --> 00:06:20,640 Speaker 1: of demand in those assets that we manage. Really kind 104 00:06:20,680 --> 00:06:23,680 Speaker 1: of interesting. So you guys are one of the larger 105 00:06:23,720 --> 00:06:29,240 Speaker 1: investment managers in the defined contribution space. But for your size, 106 00:06:29,320 --> 00:06:31,279 Speaker 1: you kind of fly a little bit onto the radar. 107 00:06:31,360 --> 00:06:34,440 Speaker 1: Tell us a little bit about that practice and how 108 00:06:34,480 --> 00:06:39,080 Speaker 1: you became as large as you have in that space. Yeah, 109 00:06:39,120 --> 00:06:42,080 Speaker 1: you know, voy overall, you're absolutely right, Verry. We are 110 00:06:42,160 --> 00:06:46,880 Speaker 1: one of the largest companies that work with define contribution 111 00:06:46,960 --> 00:06:50,640 Speaker 1: plans and managing them for employers and and really having 112 00:06:50,839 --> 00:06:54,919 Speaker 1: you know, good good tools really to engage employees and 113 00:06:54,960 --> 00:06:57,960 Speaker 1: to help them save. And so I would say, though, 114 00:06:58,200 --> 00:07:01,599 Speaker 1: as you say, you know, we ourselves small but mighty 115 00:07:01,640 --> 00:07:06,159 Speaker 1: as a company. We've got a great brand, great brand recognition, 116 00:07:06,200 --> 00:07:09,400 Speaker 1: and our brand is really only as Voia only about 117 00:07:09,440 --> 00:07:12,560 Speaker 1: I'm gonna say, seven years old, uh at this point. 118 00:07:12,880 --> 00:07:16,600 Speaker 1: And yet you know we're we're our brand recognition is 119 00:07:16,720 --> 00:07:20,720 Speaker 1: very attached to retirement. So going back over all, like 120 00:07:20,720 --> 00:07:24,000 Speaker 1: like how do we do this? And and again we're 121 00:07:24,040 --> 00:07:26,080 Speaker 1: kind of small and mighty, we like to think, and 122 00:07:26,440 --> 00:07:29,880 Speaker 1: it's actually true that we're more agile. We can pivot 123 00:07:29,960 --> 00:07:34,440 Speaker 1: more carefully or quickly actually than than other people. And 124 00:07:34,440 --> 00:07:36,800 Speaker 1: one of the things that we tell our clients are 125 00:07:37,200 --> 00:07:40,440 Speaker 1: when we engage on asset management specifically is we call 126 00:07:40,480 --> 00:07:43,760 Speaker 1: ourselves big enough to deliver, but small enough to care. 127 00:07:44,640 --> 00:07:47,800 Speaker 1: And when you think about that, uh, you know, what 128 00:07:47,880 --> 00:07:51,080 Speaker 1: do those two things mean? Because you know when you 129 00:07:51,120 --> 00:07:53,480 Speaker 1: wake up and you look at the newspaper today and 130 00:07:53,480 --> 00:07:55,840 Speaker 1: you say, oh my gosh, you know these asset managers 131 00:07:55,840 --> 00:07:59,960 Speaker 1: that call them between two hundred billion to a trillion 132 00:08:00,000 --> 00:08:03,320 Speaker 1: are just going to go away. Right. The industry is consolidating. 133 00:08:03,880 --> 00:08:05,680 Speaker 1: But at the end of the day, I just don't 134 00:08:05,680 --> 00:08:08,600 Speaker 1: think clients want to wake up and and just have 135 00:08:08,680 --> 00:08:13,280 Speaker 1: a few select partners where they're gigantic and that customization 136 00:08:13,360 --> 00:08:17,640 Speaker 1: in that high touch isn't really available. And over half 137 00:08:17,640 --> 00:08:20,920 Speaker 1: of our assets that we manage barrier what we call customized, 138 00:08:21,000 --> 00:08:24,680 Speaker 1: meaning the client has specific needs that they need. It's 139 00:08:24,720 --> 00:08:27,680 Speaker 1: not just to what we call a generic benchmark in 140 00:08:27,720 --> 00:08:31,280 Speaker 1: the marketplace. So again that that's our brand, that's our value, 141 00:08:31,320 --> 00:08:35,040 Speaker 1: and it's really resonating with clients. And so we're growing 142 00:08:35,080 --> 00:08:38,200 Speaker 1: as a company, you know, despite the rhetoric around the 143 00:08:38,800 --> 00:08:42,120 Speaker 1: difficulty to compete in the in the trillion dollar club. 144 00:08:42,480 --> 00:08:45,440 Speaker 1: So let's talk a little bit about that customization. What 145 00:08:45,520 --> 00:08:48,839 Speaker 1: does a typical client look like and what do they 146 00:08:48,920 --> 00:08:54,600 Speaker 1: want beyond just a standard six or these days stock 147 00:08:54,679 --> 00:08:58,000 Speaker 1: and bond portfolio. Well, you know, we have a variety 148 00:08:58,040 --> 00:09:03,400 Speaker 1: of clients. But but on the institutional side, specifically, when 149 00:09:03,440 --> 00:09:08,160 Speaker 1: you think about insurance companies or some of the pension funds, Uh, 150 00:09:08,200 --> 00:09:13,240 Speaker 1: they have unique liabilities that they're managing assets against, so 151 00:09:13,240 --> 00:09:15,240 Speaker 1: so they need somebody that's going to engage them. And 152 00:09:15,280 --> 00:09:17,400 Speaker 1: then plus, when you look at the context of the 153 00:09:17,480 --> 00:09:20,560 Speaker 1: market and where the equity markets are and all the 154 00:09:20,600 --> 00:09:23,760 Speaker 1: liquidity in the world, more and more clients are nervous about, 155 00:09:24,600 --> 00:09:27,040 Speaker 1: you know, yields being so low, and where can I 156 00:09:27,080 --> 00:09:30,400 Speaker 1: really put things in terms of what asset classes offer 157 00:09:30,720 --> 00:09:34,600 Speaker 1: great returns? And so what does customization look like? Um, 158 00:09:34,679 --> 00:09:39,080 Speaker 1: let's just take a somewhat simple example in the fixed 159 00:09:39,120 --> 00:09:42,679 Speaker 1: income market. And so there's a there's a product or 160 00:09:42,720 --> 00:09:46,280 Speaker 1: a trend called l d I or liability you know, 161 00:09:46,320 --> 00:09:50,400 Speaker 1: sort of immunizing liabilities for pension funds, right, And so 162 00:09:50,480 --> 00:09:54,000 Speaker 1: as the equity markets have done well, so many of 163 00:09:54,240 --> 00:09:56,800 Speaker 1: the pension funds are saying, wow, I want to do 164 00:09:56,880 --> 00:10:01,160 Speaker 1: what I call immunize and actually move my overall pension 165 00:10:01,200 --> 00:10:05,200 Speaker 1: funds that I have as a corporation into more of 166 00:10:05,240 --> 00:10:11,160 Speaker 1: a fixed income laddered bond portfolio, so that that's essentially 167 00:10:11,760 --> 00:10:16,440 Speaker 1: what's happening. And yet that fixed income laddered bond portfolio, 168 00:10:16,640 --> 00:10:19,680 Speaker 1: there aren't a lot of corporate issuers out there, so 169 00:10:19,800 --> 00:10:24,680 Speaker 1: you end up taking trading equity volatility for concentrated credit risk. 170 00:10:24,800 --> 00:10:28,120 Speaker 1: So what do we do We actually blend in private 171 00:10:28,160 --> 00:10:32,280 Speaker 1: credit with public bonds for those clients to offer them 172 00:10:32,320 --> 00:10:35,920 Speaker 1: a unique solution where they can diversify some of the 173 00:10:36,000 --> 00:10:38,719 Speaker 1: exposure to the companies that they're invested in. So that 174 00:10:38,760 --> 00:10:41,920 Speaker 1: would just be one small example of how do we 175 00:10:42,040 --> 00:10:44,880 Speaker 1: customize something to help our clients come up with a 176 00:10:44,880 --> 00:10:48,960 Speaker 1: better solution. So that sounds not so much like you're 177 00:10:49,000 --> 00:10:53,680 Speaker 1: reaching for yield with different credit risk or higher credit risk, 178 00:10:54,080 --> 00:10:58,079 Speaker 1: but you're diversifying into yield that might be a little 179 00:10:58,080 --> 00:11:01,800 Speaker 1: more attractive because it's not yet part of the public market. 180 00:11:02,160 --> 00:11:06,200 Speaker 1: Absolutely right, Perry. Really intriguing. And you mentioned some of 181 00:11:06,200 --> 00:11:10,640 Speaker 1: your clients are big insurance companies and um pension plans. 182 00:11:11,280 --> 00:11:17,680 Speaker 1: They have very specific liabilities at specific future dates. How 183 00:11:17,720 --> 00:11:24,120 Speaker 1: do you manage towards that future you know date certain liability, Hey, 184 00:11:24,160 --> 00:11:27,959 Speaker 1: we're gonna have to have X in two You really 185 00:11:27,960 --> 00:11:30,640 Speaker 1: it's it's as you say, it's just that that dialogue 186 00:11:30,640 --> 00:11:33,840 Speaker 1: with the clients in terms of do they have specific 187 00:11:33,960 --> 00:11:37,800 Speaker 1: liquidity needs and impointant time that that they're looking to 188 00:11:37,920 --> 00:11:42,840 Speaker 1: us to help them deliver do a lot of the specifically, 189 00:11:42,880 --> 00:11:46,080 Speaker 1: some of these clients more and more asking how can 190 00:11:46,120 --> 00:11:50,719 Speaker 1: I get yield and maybe uh not need as much liquidity. 191 00:11:50,880 --> 00:11:53,080 Speaker 1: So when you think about when you think about the 192 00:11:53,080 --> 00:11:55,880 Speaker 1: markets today and really the growth of private markets, I 193 00:11:55,920 --> 00:11:58,480 Speaker 1: think that a lot of institutions are waking up and 194 00:11:58,559 --> 00:12:03,440 Speaker 1: saying is liquidity necessarily as necessary meaning that they can 195 00:12:03,600 --> 00:12:07,080 Speaker 1: quickly liquidate their bond portfolios right within a few days? 196 00:12:07,679 --> 00:12:10,520 Speaker 1: Or do I actually have opportunities in my business model 197 00:12:10,600 --> 00:12:13,640 Speaker 1: where I can have you know, long term investments and 198 00:12:13,679 --> 00:12:17,280 Speaker 1: tuck it away. So when you think about that, uh 199 00:12:17,280 --> 00:12:21,240 Speaker 1: and what we can do across floy a private credit 200 00:12:21,480 --> 00:12:24,160 Speaker 1: could be a great example. We also have what a 201 00:12:24,280 --> 00:12:29,240 Speaker 1: private equity business that focuses on what we call secondaries. 202 00:12:29,280 --> 00:12:34,560 Speaker 1: So think about buying secondary private equity investments in you know, 203 00:12:34,600 --> 00:12:38,600 Speaker 1: the marketplace at a at a very attractive kind of 204 00:12:38,640 --> 00:12:41,760 Speaker 1: going in investment level. So when you think about those things, 205 00:12:41,880 --> 00:12:45,000 Speaker 1: very those those really are opportunities where yes, you you 206 00:12:45,000 --> 00:12:48,880 Speaker 1: don't necessarily call void tomorrow tomorrow and say please liquidate 207 00:12:48,920 --> 00:12:52,480 Speaker 1: my real estate or my private equity portfolio. But if 208 00:12:52,520 --> 00:12:55,479 Speaker 1: your patients and you have a long run business strategy, 209 00:12:55,559 --> 00:12:58,720 Speaker 1: these can be some great opportunities to enhance your yield 210 00:12:58,760 --> 00:13:02,000 Speaker 1: in your return. So tradeoff is a little better yield 211 00:13:02,080 --> 00:13:05,160 Speaker 1: in exchange for less liquidity. But if you have that 212 00:13:05,240 --> 00:13:08,319 Speaker 1: future liability and you don't need it for a decade, 213 00:13:08,720 --> 00:13:14,040 Speaker 1: seems like a pretty reasonable trade off. Absolutely. And so again, 214 00:13:14,120 --> 00:13:15,960 Speaker 1: is we hear a lot of the rhetoric in the 215 00:13:16,000 --> 00:13:18,920 Speaker 1: market of oh, you know, our private assets, do people 216 00:13:18,960 --> 00:13:22,080 Speaker 1: really understand them? Or you know, is it a bubble 217 00:13:22,280 --> 00:13:24,480 Speaker 1: you know, with the growth of private assets? And again 218 00:13:24,480 --> 00:13:28,040 Speaker 1: I would say no. I mean, certainly there are risks 219 00:13:28,040 --> 00:13:31,800 Speaker 1: and opportunities within any broadbrush sector of the market. But 220 00:13:31,880 --> 00:13:35,400 Speaker 1: again it's highly logical just given the state of the 221 00:13:35,400 --> 00:13:39,400 Speaker 1: world and investment opportunities, that these types of asset classes 222 00:13:39,440 --> 00:13:44,480 Speaker 1: continue to grow. Let's talk a little bit about what 223 00:13:44,600 --> 00:13:49,600 Speaker 1: sort of challenges did you face managing Voya's investment management 224 00:13:49,600 --> 00:13:54,080 Speaker 1: group during the lockdown and the pandemic and work from home. 225 00:13:54,920 --> 00:13:58,120 Speaker 1: How did you work your way through that? Well, Barry, 226 00:13:58,600 --> 00:14:00,720 Speaker 1: we do all of us I think the industry right, 227 00:14:00,760 --> 00:14:03,559 Speaker 1: we didn't have a lot of answers. It was really surprising, 228 00:14:03,600 --> 00:14:06,040 Speaker 1: and in fact, I think at the beginning, you know, 229 00:14:06,080 --> 00:14:07,920 Speaker 1: if you would have asked me, hate Christine, how long 230 00:14:07,960 --> 00:14:10,000 Speaker 1: do you think the people are going to be working 231 00:14:10,080 --> 00:14:12,760 Speaker 1: from home as a result of this pandemic, I would 232 00:14:12,760 --> 00:14:16,120 Speaker 1: have told you six weeks. Uh, you know, the summer's coming, 233 00:14:16,160 --> 00:14:19,480 Speaker 1: things that are going to get better, and and and actually, uh, 234 00:14:19,520 --> 00:14:22,080 Speaker 1: you know, we've been at work from home for over 235 00:14:22,080 --> 00:14:24,600 Speaker 1: a year at this point, and we're still working from 236 00:14:24,640 --> 00:14:27,720 Speaker 1: home and won't be back until the fall. So so 237 00:14:27,760 --> 00:14:30,680 Speaker 1: what do we do? Um didn't have a playbook, but 238 00:14:30,720 --> 00:14:33,560 Speaker 1: a lot of listening. We were able from a technology 239 00:14:33,600 --> 00:14:36,640 Speaker 1: standpoint to move pretty seamlessly, you know, from in the 240 00:14:36,720 --> 00:14:39,200 Speaker 1: office to out of the office. But but then it 241 00:14:39,240 --> 00:14:41,600 Speaker 1: was a matter of how in the world, how in 242 00:14:41,680 --> 00:14:47,760 Speaker 1: the world do we keep our employees engaged. So we 243 00:14:47,960 --> 00:14:50,160 Speaker 1: tried a lot of different things. We did you know, 244 00:14:51,520 --> 00:14:54,720 Speaker 1: web tests where you know, I would I would talk about, 245 00:14:55,560 --> 00:14:58,560 Speaker 1: you know, how the business was doing, how the clients 246 00:14:58,600 --> 00:15:01,360 Speaker 1: were feeling. U We tried a lot of things with 247 00:15:01,400 --> 00:15:05,000 Speaker 1: our team. We do no meeting fridays in the summer 248 00:15:05,120 --> 00:15:07,560 Speaker 1: to try to give them some bandwidths because you know, 249 00:15:07,600 --> 00:15:11,960 Speaker 1: people are just plugged in all the time, and so 250 00:15:12,040 --> 00:15:15,000 Speaker 1: some of the issues really when I think about the business, 251 00:15:15,200 --> 00:15:19,200 Speaker 1: you know, the markets after the FED came in sort 252 00:15:19,240 --> 00:15:21,920 Speaker 1: of calmed down, right, So the real challenges once we 253 00:15:22,000 --> 00:15:25,920 Speaker 1: got through the spring really is keeping our employees healthy 254 00:15:26,000 --> 00:15:29,400 Speaker 1: as they were dealing with working from home, kids, kids 255 00:15:29,440 --> 00:15:32,800 Speaker 1: not in school, a feeling admit detached. So we spend 256 00:15:32,800 --> 00:15:35,080 Speaker 1: a lot of time and energy and we still do 257 00:15:35,240 --> 00:15:38,120 Speaker 1: on thinking about how can we be a good place 258 00:15:38,160 --> 00:15:41,200 Speaker 1: to work for employees in the world like we have today, 259 00:15:41,240 --> 00:15:44,920 Speaker 1: which is virtual. So let's jump right to that question. 260 00:15:45,320 --> 00:15:49,480 Speaker 1: Pensions and Investments named Void Investment Management one of the 261 00:15:49,480 --> 00:15:52,320 Speaker 1: best places to work in money management. I think it's 262 00:15:52,400 --> 00:15:54,360 Speaker 1: like your sixth year in a row on that list. 263 00:15:54,760 --> 00:15:58,920 Speaker 1: So what do you guys do that's different than the 264 00:15:59,000 --> 00:16:02,920 Speaker 1: average money manager as a as an employer that makes 265 00:16:02,920 --> 00:16:07,560 Speaker 1: it so attractive. Well, Barry, thank you for mentioning that, 266 00:16:07,640 --> 00:16:10,480 Speaker 1: and that's something you're absolutely right. We've we've been named 267 00:16:10,480 --> 00:16:14,320 Speaker 1: that buyer employees for six consecutive years and it's not 268 00:16:14,480 --> 00:16:17,240 Speaker 1: something that we take lightly. It's an honor and it's 269 00:16:17,280 --> 00:16:19,920 Speaker 1: something our employees vote on and and you know, in 270 00:16:19,920 --> 00:16:22,800 Speaker 1: the context overall as far as why are we um 271 00:16:22,800 --> 00:16:25,040 Speaker 1: winning this year after year? And then I'll pivot to 272 00:16:25,240 --> 00:16:29,040 Speaker 1: COVID specifically really as goes to two things that come 273 00:16:29,040 --> 00:16:32,440 Speaker 1: out from our employees consistently. They love the teamwork, you know, 274 00:16:32,960 --> 00:16:35,720 Speaker 1: the the approach, the open mindedness, and we spent a 275 00:16:35,760 --> 00:16:39,240 Speaker 1: lot of time investing in that and psychological safety and 276 00:16:39,280 --> 00:16:42,080 Speaker 1: different things as a company. So they love the teamwork, 277 00:16:42,080 --> 00:16:44,720 Speaker 1: and they also love the fact that that voys mission 278 00:16:44,800 --> 00:16:48,040 Speaker 1: driven and we give back to our communities and so 279 00:16:48,080 --> 00:16:51,480 Speaker 1: we have we give as an example, we give all 280 00:16:51,520 --> 00:16:54,840 Speaker 1: employees forty forty hours there a full week of paid 281 00:16:54,920 --> 00:16:58,000 Speaker 1: leave to go and go out and volunteer in the 282 00:16:58,040 --> 00:17:02,200 Speaker 1: community whatever cause that they want. And so that would 283 00:17:02,200 --> 00:17:04,119 Speaker 1: just be one small example of the things that we 284 00:17:04,200 --> 00:17:06,680 Speaker 1: do that make our employees really feel proud of what 285 00:17:06,880 --> 00:17:09,639 Speaker 1: Voya does and that we make the world better for 286 00:17:09,640 --> 00:17:12,800 Speaker 1: our communities and our our clients. But I would say 287 00:17:12,960 --> 00:17:17,800 Speaker 1: pivoting to two thousand and twenties specifically, uh, because you know, certainly, 288 00:17:17,800 --> 00:17:19,280 Speaker 1: I mean as a leader, I was like, I don't 289 00:17:19,280 --> 00:17:21,760 Speaker 1: know if we're gonna win this again, how are people doing? 290 00:17:22,040 --> 00:17:25,040 Speaker 1: And we're certainly surveying them and trying to stay connected 291 00:17:25,040 --> 00:17:27,399 Speaker 1: in a virtual world. But I think I think what 292 00:17:27,480 --> 00:17:31,719 Speaker 1: really resonated with the team in two thousand and twenty was, uh, 293 00:17:31,800 --> 00:17:36,560 Speaker 1: you know, just a transparency, the transparency of leadership um 294 00:17:36,600 --> 00:17:40,160 Speaker 1: of seeing them and you know, trying to say, well, 295 00:17:40,359 --> 00:17:42,560 Speaker 1: this is what I know, and this is what I 296 00:17:42,600 --> 00:17:44,680 Speaker 1: don't know, and and here's kind of what we're gonna 297 00:17:44,760 --> 00:17:47,080 Speaker 1: do about it, because again, when you think about it, times, 298 00:17:47,080 --> 00:17:49,960 Speaker 1: we're pretty uncertain last year, and so just being authentic 299 00:17:50,440 --> 00:17:55,000 Speaker 1: present Voya pivoted very quickly in terms of benefits and 300 00:17:55,040 --> 00:17:59,760 Speaker 1: trying to help people adjust through this more flexibility things 301 00:17:59,800 --> 00:18:02,399 Speaker 1: like that. And so when when employees really feel like 302 00:18:02,480 --> 00:18:05,920 Speaker 1: they they understand where you're coming from, that you're authentic, 303 00:18:05,960 --> 00:18:08,400 Speaker 1: that they believe you, and then also you see them 304 00:18:08,440 --> 00:18:12,200 Speaker 1: and you're becoming more flexible, expanding your mental health benefits. 305 00:18:12,240 --> 00:18:15,600 Speaker 1: As an example, as people were dealing with COVID, and 306 00:18:15,680 --> 00:18:20,640 Speaker 1: certainly as the summer continued and we had George Floyd, 307 00:18:20,720 --> 00:18:24,159 Speaker 1: the murder of George Floyd and the emotions associated with that, 308 00:18:24,480 --> 00:18:28,919 Speaker 1: and having conversations and really working towards how our employees 309 00:18:28,960 --> 00:18:31,320 Speaker 1: feeling about all of these different things are dealing with 310 00:18:31,359 --> 00:18:34,520 Speaker 1: I think those are the key things that that really 311 00:18:34,560 --> 00:18:38,200 Speaker 1: helped get us through two thousand and twenty and uh 312 00:18:38,240 --> 00:18:41,720 Speaker 1: and and so as a result, thankfully, our employees continued 313 00:18:41,800 --> 00:18:44,920 Speaker 1: to really be engaged and want to work with Folly 314 00:18:44,960 --> 00:18:50,000 Speaker 1: Investment Management. So we've been hearing from from some CEOs 315 00:18:50,119 --> 00:18:55,400 Speaker 1: of very large wealth managers like JP Morgan Chase and 316 00:18:55,600 --> 00:18:59,359 Speaker 1: Morgan Stanley, both talking about we want everybody back in 317 00:18:59,400 --> 00:19:01,760 Speaker 1: the office. It's time to go back to work. What 318 00:19:01,840 --> 00:19:04,280 Speaker 1: do you think is going to happen with work from 319 00:19:04,320 --> 00:19:06,479 Speaker 1: home in the future. Are we just going to go 320 00:19:06,600 --> 00:19:09,480 Speaker 1: straight back to pre pandemic offices or is it going 321 00:19:09,520 --> 00:19:13,040 Speaker 1: to be some different hybrid model in the future. And 322 00:19:13,240 --> 00:19:16,960 Speaker 1: what are you guys doing? Well, you know, it's so 323 00:19:17,080 --> 00:19:20,800 Speaker 1: interesting watching all of this unfolds as we learn very 324 00:19:20,920 --> 00:19:24,320 Speaker 1: so starting with with what we're doing and thinking about 325 00:19:24,320 --> 00:19:27,800 Speaker 1: it broadly, is you know, we're we're going to be 326 00:19:27,960 --> 00:19:30,600 Speaker 1: what's called hybrid. I mean, we don't think a hundred 327 00:19:30,600 --> 00:19:32,640 Speaker 1: percent in the office is right, nor do we think 328 00:19:32,680 --> 00:19:35,639 Speaker 1: a hundred percent virtual is right. And so we've gone 329 00:19:35,640 --> 00:19:39,880 Speaker 1: through very robust surveying of our people and thinking what's 330 00:19:39,920 --> 00:19:42,320 Speaker 1: the right thing to do? So why are JP Morgan 331 00:19:42,400 --> 00:19:45,560 Speaker 1: and Morgan Stanley going back, Um, you know, I would say, 332 00:19:45,800 --> 00:19:48,200 Speaker 1: you know, very real, you want to maintain your culture, 333 00:19:48,359 --> 00:19:51,400 Speaker 1: you want to maintain teamwork. And then the investment side, 334 00:19:51,440 --> 00:19:55,959 Speaker 1: particularly when you think about alpha an idea generating, you know, 335 00:19:56,000 --> 00:19:58,199 Speaker 1: being a part like this for so long can intact 336 00:19:58,280 --> 00:20:02,280 Speaker 1: your investment results because sort of those sidebar conversations where 337 00:20:02,320 --> 00:20:04,800 Speaker 1: you get good ideas as an investor from your people, 338 00:20:04,880 --> 00:20:07,720 Speaker 1: you know, you really can't replicate that on zoom or 339 00:20:07,760 --> 00:20:11,280 Speaker 1: with the telephone calls. So so, yes, you know people 340 00:20:11,320 --> 00:20:13,080 Speaker 1: need to come back. Do they need to be here 341 00:20:13,640 --> 00:20:16,320 Speaker 1: five days a week? Absolutely not. Do I think that 342 00:20:16,359 --> 00:20:21,639 Speaker 1: people should be mandating you have to be in you know, Tuesday, Wednesday, Thursday. No, 343 00:20:22,119 --> 00:20:26,560 Speaker 1: that's also not flexibility. So we're taking an in office 344 00:20:27,080 --> 00:20:30,479 Speaker 1: flexible approach and and bury it. I could go on 345 00:20:30,520 --> 00:20:32,600 Speaker 1: and on. I have so many views around this, but 346 00:20:32,640 --> 00:20:34,520 Speaker 1: you know what our employees telling us? And where am 347 00:20:34,520 --> 00:20:37,720 Speaker 1: I really concerned and where do I think people and 348 00:20:37,880 --> 00:20:41,440 Speaker 1: leaders may be missing it? It's it's our it's our 349 00:20:41,480 --> 00:20:46,320 Speaker 1: female employees particularly, and when you think about you know 350 00:20:46,400 --> 00:20:50,440 Speaker 1: what a female person is dealing with uniquely and all employees, 351 00:20:50,480 --> 00:20:53,280 Speaker 1: all employees. But when you think about you know, children 352 00:20:53,359 --> 00:20:57,160 Speaker 1: and balancing, and you look at the overall US statistics 353 00:20:57,200 --> 00:21:00,920 Speaker 1: about who's dropping out of the workforce, it's it's working mothers. 354 00:21:01,080 --> 00:21:04,560 Speaker 1: And so if you as an employer saying okay, you 355 00:21:04,720 --> 00:21:08,399 Speaker 1: have to come in, just as the industry is really 356 00:21:08,960 --> 00:21:11,960 Speaker 1: really an industry that has has not done well in 357 00:21:12,040 --> 00:21:15,720 Speaker 1: terms of diversity and inclusion with our employee population, and 358 00:21:15,800 --> 00:21:18,000 Speaker 1: now you're coming in and saying okay, well, you guys 359 00:21:18,080 --> 00:21:20,640 Speaker 1: all have to come into the office. I just think 360 00:21:20,680 --> 00:21:23,960 Speaker 1: that that could create some real challenges as that as 361 00:21:24,040 --> 00:21:27,159 Speaker 1: people are trying to work through more inclusion, more diversity. 362 00:21:27,440 --> 00:21:31,280 Speaker 1: So again, our choices, let's listen to our people, let's 363 00:21:31,280 --> 00:21:33,560 Speaker 1: figure out what's what works. We're going to learn as 364 00:21:33,600 --> 00:21:35,280 Speaker 1: we go. But we want to we want to be 365 00:21:35,280 --> 00:21:39,239 Speaker 1: an employer of choice for all of our employees. So 366 00:21:39,320 --> 00:21:43,280 Speaker 1: maybe this is an obvious observation slash question, but let 367 00:21:43,280 --> 00:21:47,159 Speaker 1: me ask in anyway, if you're flexible and you're offering 368 00:21:47,200 --> 00:21:50,680 Speaker 1: a hybrid model, is this going to help you in 369 00:21:50,800 --> 00:21:54,520 Speaker 1: terms of recruitment and retention? It seems like from a 370 00:21:55,560 --> 00:22:01,240 Speaker 1: employment strategic perspective, it's a big advantage. I agree with you, 371 00:22:01,440 --> 00:22:04,240 Speaker 1: I Verry, I think it is a big advantage. And 372 00:22:04,240 --> 00:22:07,199 Speaker 1: and listen, we don't have all the answers yet, but 373 00:22:07,480 --> 00:22:09,480 Speaker 1: some of the things that we're doing as far as 374 00:22:09,960 --> 00:22:13,080 Speaker 1: this hybrid world is is we're going through a whole 375 00:22:13,160 --> 00:22:17,479 Speaker 1: process as far as well, what different technology do we 376 00:22:17,520 --> 00:22:21,119 Speaker 1: need to be putting into people's homes, and how do 377 00:22:21,200 --> 00:22:23,919 Speaker 1: we change what our workplace looks like if it's a 378 00:22:23,960 --> 00:22:26,560 Speaker 1: little bit more of a hoteling space. So we're literally 379 00:22:26,600 --> 00:22:30,879 Speaker 1: renovating as we speak too, of our offices to accommodate that. 380 00:22:30,960 --> 00:22:33,439 Speaker 1: Our New York office, in our Atlanta office. So we 381 00:22:33,480 --> 00:22:35,440 Speaker 1: don't have all of the answers, but we're giving it 382 00:22:35,880 --> 00:22:37,879 Speaker 1: a lot of thought. And we do think that this 383 00:22:38,000 --> 00:22:41,240 Speaker 1: is going to make void Investment Management, you know, continue 384 00:22:41,240 --> 00:22:43,080 Speaker 1: to be the best places to work in a in 385 00:22:43,160 --> 00:22:46,720 Speaker 1: a place of choice. And again just going to flexibility, 386 00:22:46,800 --> 00:22:51,639 Speaker 1: going to workforce diversity, we've got to pivot, so you know, 387 00:22:51,680 --> 00:22:53,520 Speaker 1: and I'm very mindful of this. And this is a 388 00:22:53,520 --> 00:22:57,200 Speaker 1: little bit different to barry from from some of our competitors. 389 00:22:57,200 --> 00:23:01,640 Speaker 1: So let me just tell you this is them. I've 390 00:23:01,640 --> 00:23:04,720 Speaker 1: heard some competitors say, well, you know, the senior people, 391 00:23:04,960 --> 00:23:07,560 Speaker 1: you know, we're going into the office. Um, we want 392 00:23:07,600 --> 00:23:11,879 Speaker 1: people to see us because you kind of lead by example, right. Well, 393 00:23:12,080 --> 00:23:16,040 Speaker 1: you know, Verry, I've I've had five children. I have 394 00:23:16,520 --> 00:23:18,880 Speaker 1: one of the things about me, I have five sons, right, 395 00:23:19,000 --> 00:23:22,960 Speaker 1: and one of my sons, um is on the autism spectrum, 396 00:23:23,000 --> 00:23:27,840 Speaker 1: which has its own unique challenges and opportunities. And I 397 00:23:27,840 --> 00:23:30,160 Speaker 1: think long and hard, how do I want to lead 398 00:23:30,160 --> 00:23:33,359 Speaker 1: by examples for really investment management in our people? And 399 00:23:33,400 --> 00:23:40,600 Speaker 1: it's with understanding flexibility and enabling them to succeed in 400 00:23:40,640 --> 00:23:43,119 Speaker 1: their careers. And so that's the approach we're taking. So 401 00:23:43,200 --> 00:23:46,040 Speaker 1: are you seeing Christine hurt Sellers every day in the 402 00:23:46,119 --> 00:23:49,680 Speaker 1: office even though we're still closed, hoping that people will 403 00:23:49,720 --> 00:23:54,720 Speaker 1: follow my example? Absolutely not. M that's really interesting and 404 00:23:55,560 --> 00:23:59,119 Speaker 1: we do a lot of research and preparation for these conversations. 405 00:24:00,040 --> 00:24:02,080 Speaker 1: I did not know any of that about you, and 406 00:24:02,119 --> 00:24:06,760 Speaker 1: that's really intriguing. It's more than just let me show 407 00:24:06,880 --> 00:24:09,680 Speaker 1: up and and pretend to be productive in the office. 408 00:24:10,520 --> 00:24:15,400 Speaker 1: You're living the actual life work balance that so many 409 00:24:15,400 --> 00:24:20,800 Speaker 1: employees aspired to. Yep, that's right, yeah, yeah, And I 410 00:24:20,840 --> 00:24:22,480 Speaker 1: and I know Barry. You know a lot of times 411 00:24:22,520 --> 00:24:26,000 Speaker 1: people will will say, oh, well, you know, who are you? 412 00:24:26,040 --> 00:24:28,719 Speaker 1: What's your role? And wouldn't expect that. I have raised 413 00:24:28,720 --> 00:24:32,280 Speaker 1: five children, including one with special needs. So yeah, so 414 00:24:32,320 --> 00:24:34,200 Speaker 1: you see, you're absolutely right. So that drives a lot 415 00:24:34,200 --> 00:24:37,159 Speaker 1: of my passion right when I think about the industry 416 00:24:37,200 --> 00:24:39,080 Speaker 1: and where we need to go and what can we 417 00:24:39,160 --> 00:24:42,199 Speaker 1: do differently and how can the legacy or the world. 418 00:24:42,920 --> 00:24:46,400 Speaker 1: You know that I leap behind you my story how 419 00:24:46,440 --> 00:24:48,760 Speaker 1: to make it a better place. So I do think 420 00:24:48,800 --> 00:24:52,440 Speaker 1: I bring a certain level of understanding and empathy as 421 00:24:52,440 --> 00:24:55,119 Speaker 1: far as how complex, uh, you know, the working world 422 00:24:55,160 --> 00:24:57,680 Speaker 1: can be to navigate. Well, thank you for sharing that. 423 00:24:57,680 --> 00:25:00,760 Speaker 1: That's really very very entry thing and I think a 424 00:25:00,760 --> 00:25:04,120 Speaker 1: lot of listeners are going to appreciate that. Let's talk 425 00:25:04,200 --> 00:25:07,439 Speaker 1: about Alliance Capital. What did you do for them in 426 00:25:07,560 --> 00:25:12,399 Speaker 1: terms of their securitized assets? Verry At Alliance I was 427 00:25:12,560 --> 00:25:15,360 Speaker 1: I was part of a team that really just focused 428 00:25:15,400 --> 00:25:20,119 Speaker 1: on mortgage mortgage product, mortgage derivatives way back in the 429 00:25:20,200 --> 00:25:23,040 Speaker 1: day it's such a bad word now post the g FC. 430 00:25:23,840 --> 00:25:26,680 Speaker 1: We actually managed sort of c d O s that's 431 00:25:26,680 --> 00:25:30,680 Speaker 1: they recalled. So think about you know, structured mortgage product. 432 00:25:30,720 --> 00:25:33,560 Speaker 1: It was a growing business at Alliance Capital. That again, 433 00:25:33,800 --> 00:25:36,400 Speaker 1: most of my career, you know, from the very beginning 434 00:25:36,480 --> 00:25:40,520 Speaker 1: has been was focused on really the housing market aspect 435 00:25:40,640 --> 00:25:43,800 Speaker 1: securities and and so that sort of was my original 436 00:25:44,240 --> 00:25:47,639 Speaker 1: task in in my love. So let's let's stay with that. 437 00:25:47,720 --> 00:25:50,199 Speaker 1: You were Freddie Mac for a while, right, I recall 438 00:25:50,280 --> 00:25:53,720 Speaker 1: reading your portfolio team had about six hundred and fifty 439 00:25:53,720 --> 00:25:56,760 Speaker 1: billion dollars in assets. Tell us a little bit about 440 00:25:56,800 --> 00:26:00,600 Speaker 1: your Freddy Mac experience. Yes, yes, Verry, I were Freddie 441 00:26:00,640 --> 00:26:05,080 Speaker 1: Mack and left there, uh right at the end of 442 00:26:05,080 --> 00:26:08,360 Speaker 1: two thousand and four, but but worked there and managed 443 00:26:08,400 --> 00:26:11,320 Speaker 1: a variety of assets there. So back in the day, 444 00:26:11,560 --> 00:26:14,879 Speaker 1: you know, pre g SC or Global Financial Crisis, you know, 445 00:26:14,880 --> 00:26:18,480 Speaker 1: they had these very large what they called retained portfolios, 446 00:26:18,560 --> 00:26:21,600 Speaker 1: and so kind of going into Freddy, I worked quite 447 00:26:21,600 --> 00:26:25,119 Speaker 1: a bit on what are called collateralized mortgage obligations or 448 00:26:25,160 --> 00:26:29,200 Speaker 1: cmos than what we call mortgage derivatives, so think really 449 00:26:29,400 --> 00:26:32,440 Speaker 1: esoteric product, uh you know, sort of what we call 450 00:26:32,520 --> 00:26:36,280 Speaker 1: interests only your principle only securities. So a lot of structuring, 451 00:26:36,640 --> 00:26:39,480 Speaker 1: just a lot of deep knowledge around the housing market. 452 00:26:39,800 --> 00:26:42,720 Speaker 1: Really interesting time in my career because at that point 453 00:26:42,760 --> 00:26:45,720 Speaker 1: in time, the g s s of Freddie and Fanny 454 00:26:45,800 --> 00:26:49,399 Speaker 1: were huge in terms of their participation in the mortgage market, 455 00:26:49,400 --> 00:26:51,879 Speaker 1: and they had these very large portfolios at the time. 456 00:26:52,680 --> 00:26:56,359 Speaker 1: So in the early days anyway, in the early two 457 00:26:56,400 --> 00:26:59,520 Speaker 1: thousands and throughout most of the nineties, the g s 458 00:26:59,800 --> 00:27:03,960 Speaker 1: s we're doing all um conforming mortgages. There were none 459 00:27:03,960 --> 00:27:07,520 Speaker 1: of the subprime or at least very very little subprime 460 00:27:07,560 --> 00:27:11,960 Speaker 1: all day no money down, no income check sort of stuff. 461 00:27:12,000 --> 00:27:16,359 Speaker 1: They were pretty safe mortgages. It was only later in 462 00:27:16,400 --> 00:27:19,200 Speaker 1: the cycle that and they were losing so much market 463 00:27:19,240 --> 00:27:22,959 Speaker 1: share to private banks that they dove into it. I 464 00:27:23,000 --> 00:27:26,040 Speaker 1: think you might have missed most of the crazy stuff 465 00:27:26,080 --> 00:27:29,800 Speaker 1: if you left Fanny in Freddie in two thousand and four, 466 00:27:30,200 --> 00:27:34,240 Speaker 1: tell us what your experience was like pre financial crisis 467 00:27:34,240 --> 00:27:37,760 Speaker 1: at Freddie Mack. It's sure berry and and this is 468 00:27:37,800 --> 00:27:40,560 Speaker 1: something you know when when you think about it. So 469 00:27:40,680 --> 00:27:44,280 Speaker 1: certainly Freddie and Fanny were prominent in the GFC right 470 00:27:44,320 --> 00:27:46,359 Speaker 1: as we went through the financial crisis in the US 471 00:27:46,440 --> 00:27:51,040 Speaker 1: housing market. So the seeds of the global financial crisis, 472 00:27:51,320 --> 00:27:54,359 Speaker 1: you know, began in the nineties. And uh, you know, 473 00:27:54,520 --> 00:27:57,280 Speaker 1: as the market screw and Freddie and Fanny got more 474 00:27:57,320 --> 00:28:01,080 Speaker 1: aggressive on what they were underwriting and compete against one another, 475 00:28:01,840 --> 00:28:06,000 Speaker 1: uh things, you know that that explains part of that journey. 476 00:28:06,080 --> 00:28:09,320 Speaker 1: But but again, you know, lessons learned though, you know, 477 00:28:09,359 --> 00:28:13,040 Speaker 1: they were highly levered institutions and they had no guaranteed 478 00:28:13,080 --> 00:28:16,560 Speaker 1: debt that then enabled them to lever. So so again, 479 00:28:16,680 --> 00:28:20,000 Speaker 1: lots of lots of crazy, you know, interesting things going 480 00:28:20,040 --> 00:28:23,800 Speaker 1: on at the time. You know, I did resigner, I 481 00:28:23,840 --> 00:28:26,359 Speaker 1: moved on to the company I'm now with, you know, 482 00:28:26,440 --> 00:28:30,440 Speaker 1: before the global financial crisis happened. But again a lot 483 00:28:30,480 --> 00:28:33,760 Speaker 1: of these things within broader housing and the financial markets 484 00:28:34,040 --> 00:28:36,199 Speaker 1: were many years in the making before it's sort of 485 00:28:36,200 --> 00:28:38,720 Speaker 1: all kind of imploded on us, if you will, in 486 00:28:39,080 --> 00:28:42,200 Speaker 1: two thousand and seven. So let's talk housing a little bit. 487 00:28:42,760 --> 00:28:46,840 Speaker 1: Housing prices have blown up over the past year, in 488 00:28:47,000 --> 00:28:50,560 Speaker 1: large part because there's almost no supply around. Whatever comes 489 00:28:50,560 --> 00:28:54,000 Speaker 1: out seems to get a just an overwhelming amount of bids. 490 00:28:54,400 --> 00:28:56,280 Speaker 1: What do you think of the state of the housing 491 00:28:56,360 --> 00:29:02,160 Speaker 1: market here and what's the likely out come going forward? Well, Bury, 492 00:29:02,240 --> 00:29:05,160 Speaker 1: just from a kind of an investor or a tactical view, 493 00:29:05,840 --> 00:29:08,080 Speaker 1: you know, when you think about asset classes and what 494 00:29:08,160 --> 00:29:13,480 Speaker 1: you recommend to your clients, um, housing related securities would 495 00:29:13,520 --> 00:29:16,560 Speaker 1: be really towards the bottom of the list. Um because 496 00:29:16,560 --> 00:29:20,520 Speaker 1: as you say, you know, house prices have gone very quickly. 497 00:29:21,560 --> 00:29:26,240 Speaker 1: That what the governments, the Federal Reserve has them buying securities, 498 00:29:26,280 --> 00:29:29,120 Speaker 1: you know, agency securities associated with housing. So you have 499 00:29:29,160 --> 00:29:32,960 Speaker 1: a combination of a sort of a federal push liquidity 500 00:29:33,000 --> 00:29:35,520 Speaker 1: event there as well as you've suddenly got all of 501 00:29:35,520 --> 00:29:38,080 Speaker 1: these people all over the place. You know, we're bidding 502 00:29:38,160 --> 00:29:40,400 Speaker 1: up the housing market. And in fact, you know, just 503 00:29:40,480 --> 00:29:43,960 Speaker 1: recently housing prices came up again and they continue to 504 00:29:44,000 --> 00:29:47,720 Speaker 1: skyrockets so so so thinking about but as a housing 505 00:29:47,760 --> 00:29:51,720 Speaker 1: market today within itself, uh, you know, enough to really 506 00:29:51,760 --> 00:29:55,520 Speaker 1: be the seeds of yet another financial crisis, I would 507 00:29:55,600 --> 00:29:58,280 Speaker 1: say no, I would say it's a little bit more 508 00:29:58,320 --> 00:30:03,320 Speaker 1: isolated now. Granted, houses are you know, the largest asset 509 00:30:03,400 --> 00:30:06,800 Speaker 1: for most Americans. It's a very important part of their 510 00:30:06,800 --> 00:30:09,600 Speaker 1: net worth, and so the housing market getting volatile on 511 00:30:09,720 --> 00:30:12,520 Speaker 1: us is not a good thing. I mean, however, as 512 00:30:12,560 --> 00:30:14,520 Speaker 1: you just referenced Verry, I think a lot of this 513 00:30:14,640 --> 00:30:18,160 Speaker 1: is a combination of low interest rates, uh, and it's 514 00:30:18,400 --> 00:30:21,920 Speaker 1: it's demands right now, we see even building houses is 515 00:30:21,960 --> 00:30:25,720 Speaker 1: getting more challenging based on commodity prices going up. So 516 00:30:25,720 --> 00:30:27,760 Speaker 1: so this is a period of time we're going through. 517 00:30:28,200 --> 00:30:31,800 Speaker 1: Plus finally, you know, millennials are forming housing finally or 518 00:30:31,880 --> 00:30:34,880 Speaker 1: households quicker than ever as a result of COVID. So 519 00:30:35,200 --> 00:30:38,600 Speaker 1: I would call this more of a tactical risk, if 520 00:30:38,600 --> 00:30:41,720 Speaker 1: you will, not a systemic risk like the global financial 521 00:30:41,760 --> 00:30:45,160 Speaker 1: crisis was. There's just not enough leverage in the system. Yeah. 522 00:30:45,160 --> 00:30:49,000 Speaker 1: That that household formation data is fascinating because it fell 523 00:30:49,040 --> 00:30:53,000 Speaker 1: off a cliff after the financial crisis. The first i 524 00:30:53,000 --> 00:30:56,640 Speaker 1: don't know, five or seven years was way below average, 525 00:30:56,680 --> 00:30:59,800 Speaker 1: and then over the past two years it really seems 526 00:30:59,840 --> 00:31:04,800 Speaker 1: to tick up. How closely do you pay attention to 527 00:31:05,000 --> 00:31:08,240 Speaker 1: data points like household formation? Yeah, we we watch it 528 00:31:08,720 --> 00:31:12,560 Speaker 1: pretty closely. And I think you know, we've we've always 529 00:31:12,560 --> 00:31:15,520 Speaker 1: had a big you know, a big level of assets 530 00:31:15,600 --> 00:31:19,560 Speaker 1: and securitized product. We're very good at it avoid investment management, 531 00:31:19,560 --> 00:31:21,280 Speaker 1: and we do watch it. It's a little bit of 532 00:31:21,320 --> 00:31:25,400 Speaker 1: a slower moving train. Berry. But I think what what 533 00:31:25,520 --> 00:31:30,160 Speaker 1: people had often forgotten about the millennials is this is 534 00:31:30,160 --> 00:31:32,600 Speaker 1: that they would say, well, you know, they're different. They 535 00:31:32,680 --> 00:31:35,120 Speaker 1: want to travel, they want to do X, Y and Z, 536 00:31:35,200 --> 00:31:37,160 Speaker 1: and they don't want houses. And we've had the theme 537 00:31:37,240 --> 00:31:40,520 Speaker 1: that no, no, you just forget these these people are 538 00:31:40,520 --> 00:31:43,200 Speaker 1: going to live until they're one hundreds, right, So you 539 00:31:43,360 --> 00:31:46,600 Speaker 1: just they're growing up slower, they're doing things slowly. But 540 00:31:46,680 --> 00:31:51,880 Speaker 1: ultimately our millennials, is house holformation going to happen? Absolutely 541 00:31:51,960 --> 00:31:55,080 Speaker 1: it is, and these are important demographic trends to watch. 542 00:31:55,280 --> 00:31:58,640 Speaker 1: So I think COVID just accelerated it as uh as 543 00:31:58,720 --> 00:32:01,240 Speaker 1: people were, you know, work in apartments as well as 544 00:32:01,560 --> 00:32:04,400 Speaker 1: it's certainly the work flexibility of being able to work 545 00:32:04,440 --> 00:32:07,080 Speaker 1: in the suburbs and not commune as accelerated. But this 546 00:32:07,160 --> 00:32:10,360 Speaker 1: is just an acceleration of a very natural trend that 547 00:32:10,400 --> 00:32:15,160 Speaker 1: we see. M quite interesting. So I've always found that 548 00:32:15,360 --> 00:32:22,120 Speaker 1: fixed income people approach stocks generally, but investing and risk 549 00:32:22,200 --> 00:32:26,240 Speaker 1: management different than the folks who kinda grew up on 550 00:32:26,240 --> 00:32:29,240 Speaker 1: the equity side of the street. Tell us a little bit, 551 00:32:29,280 --> 00:32:35,120 Speaker 1: how did your background prepare you for your current job? Well, Barry, 552 00:32:35,560 --> 00:32:37,600 Speaker 1: you know, first of all, as you say, with with 553 00:32:37,720 --> 00:32:40,680 Speaker 1: fixed income versus equity investors, now you know I get 554 00:32:40,680 --> 00:32:43,479 Speaker 1: to work with with both. Is your absolutely right? Just 555 00:32:43,520 --> 00:32:46,400 Speaker 1: to start out? You know, fixed income investors tend to 556 00:32:46,400 --> 00:32:49,120 Speaker 1: be cynical or more cynical because you know, for them, 557 00:32:49,200 --> 00:32:53,160 Speaker 1: successes par right, like get every dollar that you invested, 558 00:32:53,200 --> 00:32:55,360 Speaker 1: and you have you know, all kinds of downside risk. 559 00:32:55,440 --> 00:32:58,080 Speaker 1: So I got a dollar back from coupon. Yeah, I 560 00:32:58,080 --> 00:32:59,840 Speaker 1: got a dollar back in a little bit of coupon 561 00:33:00,640 --> 00:33:04,480 Speaker 1: or I love you know, uh what we call or 562 00:33:04,600 --> 00:33:07,680 Speaker 1: fifty or points, you know, like high yield. So so 563 00:33:07,760 --> 00:33:12,000 Speaker 1: that sort of explains to everybody. Whereas equity they're optimistic, right, 564 00:33:12,040 --> 00:33:14,560 Speaker 1: Oh this company is going, isn't Loos wonderful? And so 565 00:33:14,600 --> 00:33:17,720 Speaker 1: even in our employees, you do see a mindset difference, 566 00:33:17,760 --> 00:33:20,840 Speaker 1: and so kind of going back to your your question 567 00:33:20,880 --> 00:33:25,640 Speaker 1: though of of how did fixed income prepare me for 568 00:33:25,720 --> 00:33:29,200 Speaker 1: this role, I would say, uh, you know, certainly a 569 00:33:29,240 --> 00:33:33,800 Speaker 1: certain level of of um really focused on the facts, right, 570 00:33:34,200 --> 00:33:37,680 Speaker 1: But but also I would say, uh, you know, for 571 00:33:37,840 --> 00:33:40,760 Speaker 1: my career specifically, you know, I spent most of it 572 00:33:40,920 --> 00:33:44,080 Speaker 1: in what we call structured products, as we were talking about, 573 00:33:44,560 --> 00:33:47,240 Speaker 1: And I think that that is a great market because 574 00:33:47,240 --> 00:33:49,760 Speaker 1: you can kind of combine the discipline of the fixed 575 00:33:49,760 --> 00:33:54,640 Speaker 1: income investor also with the enthusiasm of of the housing 576 00:33:54,720 --> 00:33:58,040 Speaker 1: market and interesting things going on in the world. But overall, 577 00:33:58,320 --> 00:34:00,640 Speaker 1: I think coming out of it, you know, just balance 578 00:34:00,960 --> 00:34:04,040 Speaker 1: of as a leader. As a leader, I like to 579 00:34:04,160 --> 00:34:06,920 Speaker 1: use this this phrase with people when you lead people, 580 00:34:07,160 --> 00:34:11,000 Speaker 1: you need to have what I call authentic optimism. And 581 00:34:11,000 --> 00:34:14,040 Speaker 1: why is that It's like you have to believe that 582 00:34:14,080 --> 00:34:16,400 Speaker 1: the world is a better place than that. Your strategy 583 00:34:16,520 --> 00:34:20,239 Speaker 1: is going to deliver and you're adding value, but you 584 00:34:20,320 --> 00:34:23,800 Speaker 1: have to, you know, face things authentically because also employees 585 00:34:23,840 --> 00:34:25,600 Speaker 1: don't want you to just be telling the stuff that 586 00:34:25,719 --> 00:34:28,400 Speaker 1: isn't true. Right, So so it's kind of that balance 587 00:34:28,600 --> 00:34:33,480 Speaker 1: as investors or as leaders is what I call authentic optimism. 588 00:34:33,480 --> 00:34:37,160 Speaker 1: That's really intriguing. So you mentioned, um when we were 589 00:34:37,160 --> 00:34:41,880 Speaker 1: talking about housing and mortgage backed securities, the Federal Reserve 590 00:34:42,040 --> 00:34:45,359 Speaker 1: was a big buyer. They're keeping rates low. What other 591 00:34:45,440 --> 00:34:48,480 Speaker 1: reasons are there for rates being so low? We really 592 00:34:48,520 --> 00:34:53,680 Speaker 1: we know the central banks can affect short term bond yields, 593 00:34:53,719 --> 00:34:56,680 Speaker 1: but even the long term yields are are way down. 594 00:34:57,360 --> 00:35:00,640 Speaker 1: What's the driver of today's UH lower eights? Is it 595 00:35:01,320 --> 00:35:05,279 Speaker 1: inflation price and sensitive buyers, just demand for yield or 596 00:35:05,320 --> 00:35:10,560 Speaker 1: something else? Entirely, very certainly one contribution, as you say, 597 00:35:10,680 --> 00:35:14,200 Speaker 1: is really the Federal reserves buying program, right, so they 598 00:35:14,239 --> 00:35:18,600 Speaker 1: continue to buy lots of treasury securities UH and certainly 599 00:35:18,600 --> 00:35:21,360 Speaker 1: mortgage backed securities as well. So that's an effect. But 600 00:35:21,440 --> 00:35:23,239 Speaker 1: when you when you peel it back, why is the 601 00:35:23,320 --> 00:35:27,399 Speaker 1: long run bond market or those ten uere yields still 602 00:35:27,440 --> 00:35:30,680 Speaker 1: anchored is so low? It's it's we think about it. 603 00:35:30,680 --> 00:35:33,919 Speaker 1: It's it's telling you what does the world believe what 604 00:35:33,960 --> 00:35:37,880 Speaker 1: we call terminal FED funds really is. And so when 605 00:35:37,920 --> 00:35:40,200 Speaker 1: you think about that, what does that mean? That's like 606 00:35:40,280 --> 00:35:44,879 Speaker 1: the real rate where FED funds can be in order 607 00:35:44,920 --> 00:35:48,399 Speaker 1: to sort of have economic growth, and it's it's pretty low. 608 00:35:48,920 --> 00:35:51,880 Speaker 1: So the market is still telling you, yeah, they're going 609 00:35:51,960 --> 00:35:55,759 Speaker 1: to be some inflation risks potentially, but long run, you know, 610 00:35:55,920 --> 00:35:58,680 Speaker 1: lots of people around the world are aging. Uh, so 611 00:35:58,800 --> 00:36:01,040 Speaker 1: you think about China, you think about you know, the 612 00:36:01,120 --> 00:36:05,600 Speaker 1: United States and productivity, what's it going to be? But 613 00:36:05,719 --> 00:36:07,239 Speaker 1: at the end of the day, you know, people are 614 00:36:07,280 --> 00:36:09,640 Speaker 1: telling you we don't think that real growth is really 615 00:36:09,680 --> 00:36:12,480 Speaker 1: going to be that that that's strong or that robust. 616 00:36:12,560 --> 00:36:15,719 Speaker 1: And so really that is the reasoning behind why are 617 00:36:15,760 --> 00:36:19,759 Speaker 1: long term rates still so low? Tides of growth rates. 618 00:36:19,800 --> 00:36:23,720 Speaker 1: So so when I look around, um, the spectrum of 619 00:36:23,960 --> 00:36:27,839 Speaker 1: credit quality, seven year junk bonds were just trading at 620 00:36:27,880 --> 00:36:31,520 Speaker 1: two point five percent, actually a touch under that. That 621 00:36:31,600 --> 00:36:36,400 Speaker 1: seems to be unthinkable that something relatively risky is paying 622 00:36:36,480 --> 00:36:39,560 Speaker 1: so little yield. Tell us a little bit about the 623 00:36:39,640 --> 00:36:44,000 Speaker 1: dynamics behind that. Why would I want to buy a 624 00:36:44,120 --> 00:36:51,800 Speaker 1: high risk piece of supposedly safe investment with so little yield? Well, Barry, 625 00:36:51,840 --> 00:36:54,080 Speaker 1: we call high yield, you know. One of the things 626 00:36:54,120 --> 00:36:56,239 Speaker 1: we say is we call it the asset class and 627 00:36:56,800 --> 00:37:01,799 Speaker 1: you know, formally known as as high yield. And you're 628 00:37:01,800 --> 00:37:04,360 Speaker 1: absolutely right right that that is what we call it. 629 00:37:04,400 --> 00:37:06,680 Speaker 1: And as you say, you know, it's it's been challenged 630 00:37:07,280 --> 00:37:10,080 Speaker 1: for quite some time, and so what what really is 631 00:37:10,200 --> 00:37:13,440 Speaker 1: going on inside of there? And it goes back to, 632 00:37:14,640 --> 00:37:17,520 Speaker 1: you know, the issue you were raising is that treasury 633 00:37:17,600 --> 00:37:20,279 Speaker 1: rates or interest rates are so low. So when we 634 00:37:20,360 --> 00:37:25,040 Speaker 1: think about high yields specifically, we kind of divided up 635 00:37:25,040 --> 00:37:27,640 Speaker 1: into two things, and we think about the risk premium 636 00:37:28,200 --> 00:37:30,680 Speaker 1: versus treasuries are sort of the spread and when you 637 00:37:30,719 --> 00:37:33,960 Speaker 1: look at you know, say, the higher quality high yield 638 00:37:34,239 --> 00:37:38,800 Speaker 1: um they're all, you know, called a hundred and sixty 639 00:37:38,800 --> 00:37:42,439 Speaker 1: basis points over treasuries. Is that's not the tightest they've 640 00:37:42,480 --> 00:37:45,359 Speaker 1: ever been. Um, you know, they have been narrower, right, 641 00:37:45,400 --> 00:37:47,600 Speaker 1: believe it or not. If you look at spread relative 642 00:37:47,680 --> 00:37:49,840 Speaker 1: to the risk free rate, and plus you know, you 643 00:37:49,880 --> 00:37:53,320 Speaker 1: have good economic momentum and you have you know, the market. 644 00:37:53,560 --> 00:37:56,440 Speaker 1: When you think about how yield there these credit rating 645 00:37:56,480 --> 00:37:59,359 Speaker 1: agencies right that rate the debt and we're seeing more 646 00:37:59,480 --> 00:38:02,600 Speaker 1: upgrade then downgrades, meaning the credit you know, the balance 647 00:38:02,640 --> 00:38:05,960 Speaker 1: sheets to repairing, and so the economy is helping the sector. 648 00:38:06,080 --> 00:38:10,399 Speaker 1: So near term it's logical that the yields are this low, 649 00:38:10,600 --> 00:38:14,160 Speaker 1: but you know it's certainly longer run. This isn't our 650 00:38:14,160 --> 00:38:17,120 Speaker 1: call for today. The longer run when the economy gives 651 00:38:17,120 --> 00:38:19,600 Speaker 1: a hiccup and things get choppy. We've seen this before. 652 00:38:19,640 --> 00:38:22,359 Speaker 1: These these assets yields, if you will, can go from 653 00:38:22,400 --> 00:38:26,880 Speaker 1: two fifty to north of six percent in a heartbeat. 654 00:38:26,960 --> 00:38:30,919 Speaker 1: So a little treacherous, but yes, I mean you saw 655 00:38:31,000 --> 00:38:34,280 Speaker 1: this kind of activity actually really in in the spring 656 00:38:34,320 --> 00:38:37,480 Speaker 1: of two thousand and twenty. I mean just prices gapped 657 00:38:37,480 --> 00:38:40,080 Speaker 1: out so wide. So people do need to be mindful 658 00:38:40,200 --> 00:38:44,920 Speaker 1: that emotion and fragility can you know, certainly affect this sector, 659 00:38:44,960 --> 00:38:47,040 Speaker 1: and that's why it was called high yield, not your 660 00:38:47,040 --> 00:38:50,640 Speaker 1: best quality. But again for now, logical words price just 661 00:38:50,680 --> 00:38:53,880 Speaker 1: given how low interest rates are and how many clients 662 00:38:53,880 --> 00:38:56,640 Speaker 1: and business models really need higher yields in order to 663 00:38:57,600 --> 00:38:59,640 Speaker 1: you know, to have the savings or hit their targets. 664 00:39:00,160 --> 00:39:04,000 Speaker 1: That's really fascinating and it raises again an obvious question, 665 00:39:04,760 --> 00:39:08,319 Speaker 1: how do you run a big fixed income portfolio as 666 00:39:08,320 --> 00:39:11,760 Speaker 1: a manager when yields are this low, when the spread 667 00:39:11,840 --> 00:39:16,200 Speaker 1: is this tight, and when investors are not necessarily getting 668 00:39:16,280 --> 00:39:20,920 Speaker 1: paid for taking risk there? Yeah, you have to you know, 669 00:39:21,000 --> 00:39:24,160 Speaker 1: you can't. The cost of sitting in cash berry or 670 00:39:24,719 --> 00:39:27,760 Speaker 1: is also quite high, right, so call return on cash 671 00:39:27,760 --> 00:39:30,920 Speaker 1: and zero U. So you've got to come up with 672 00:39:30,920 --> 00:39:33,400 Speaker 1: with some things you know to do for your clients. 673 00:39:33,480 --> 00:39:36,120 Speaker 1: And so as you say, you know, what do you do? Uh, 674 00:39:36,680 --> 00:39:41,440 Speaker 1: you flail, You fly a little closer to you know, 675 00:39:41,520 --> 00:39:44,799 Speaker 1: sort of your lower risk budget. So you don't want 676 00:39:44,800 --> 00:39:46,880 Speaker 1: to be over your skis in terms of the overall 677 00:39:46,960 --> 00:39:50,320 Speaker 1: risk that you would take, because the opportunity to stretch 678 00:39:50,680 --> 00:39:52,880 Speaker 1: just isn't there in many of the sectors that you 679 00:39:52,920 --> 00:39:55,280 Speaker 1: and I've been talking about. So you gotta be careful. 680 00:39:55,320 --> 00:39:58,359 Speaker 1: You've got to be super super diligent as far as 681 00:39:58,640 --> 00:40:02,640 Speaker 1: what areas makes sense, what securities do you really believe? 682 00:40:03,000 --> 00:40:07,000 Speaker 1: And try to keep some dry powder to react. But 683 00:40:07,120 --> 00:40:09,759 Speaker 1: you know, when when is this going to happen. You know, 684 00:40:09,800 --> 00:40:12,320 Speaker 1: you wake up every day and early in my career, 685 00:40:12,480 --> 00:40:15,160 Speaker 1: very for for people that might be listening that are earliest, 686 00:40:15,920 --> 00:40:19,440 Speaker 1: is this axiom is that it always feels terrible at 687 00:40:19,440 --> 00:40:22,600 Speaker 1: the lows, and it always feels great at the top 688 00:40:22,640 --> 00:40:25,200 Speaker 1: of the market. Right you're at the top of the market. 689 00:40:25,360 --> 00:40:27,440 Speaker 1: It's like, of course, the economy is great, you know, 690 00:40:27,520 --> 00:40:29,760 Speaker 1: life is good, and that's when it all falls apart. 691 00:40:29,840 --> 00:40:32,600 Speaker 1: So you've got to be mindful. Are we there yet? No? 692 00:40:33,080 --> 00:40:36,480 Speaker 1: But as the FED starts to over the next year 693 00:40:36,600 --> 00:40:40,120 Speaker 1: or two drain liquidity, they have been doing massive support 694 00:40:40,200 --> 00:40:42,560 Speaker 1: of risk assets. Uh, you know, things are going to 695 00:40:42,640 --> 00:40:46,040 Speaker 1: get choppy, so we're trying to be very diligent. Look 696 00:40:46,080 --> 00:40:49,200 Speaker 1: at what we're doing. But keep some dry powder. That's 697 00:40:49,280 --> 00:40:54,319 Speaker 1: pretty Uh, that's pretty interesting. Another silly question, are we 698 00:40:54,360 --> 00:40:56,959 Speaker 1: ever going to see rates on the tenure over four 699 00:40:57,600 --> 00:41:02,040 Speaker 1: in our lifetime or is this U And I know 700 00:41:02,239 --> 00:41:06,719 Speaker 1: that this is a classic magazine cover indicator. We'll never 701 00:41:06,760 --> 00:41:10,480 Speaker 1: see rates back to normal in our lifetime, but it 702 00:41:10,560 --> 00:41:14,440 Speaker 1: feels like rates are stuck down here for at least 703 00:41:14,440 --> 00:41:17,760 Speaker 1: the foreseeable future. What are your what are your views 704 00:41:17,800 --> 00:41:20,920 Speaker 1: on I know this is a ridiculous question. Hey, where's 705 00:41:20,920 --> 00:41:29,319 Speaker 1: the tenure likely to be in one? Yeah, and so 706 00:41:29,680 --> 00:41:33,839 Speaker 1: ten year tenure? Um? Well, you know what, that's right? 707 00:41:34,000 --> 00:41:36,240 Speaker 1: That is a That is a that is a great 708 00:41:36,560 --> 00:41:41,080 Speaker 1: question because you've got to balance very the ingenuity and 709 00:41:41,120 --> 00:41:45,000 Speaker 1: the productivity of the human spirit, which is pro growth 710 00:41:45,040 --> 00:41:48,360 Speaker 1: and very exciting, which is some of these these natural 711 00:41:48,480 --> 00:41:53,320 Speaker 1: headwinds of you know, and and an aging world people 712 00:41:53,400 --> 00:41:57,080 Speaker 1: needing yield. I remember sort of conventional wisdom is like, oh, 713 00:41:57,160 --> 00:41:59,120 Speaker 1: you know, you know when people age are actually going 714 00:41:59,200 --> 00:42:02,799 Speaker 1: to start draining assets and that's going to be inflationary. 715 00:42:02,840 --> 00:42:06,320 Speaker 1: I don't really believe that. So so it's a good question. 716 00:42:06,480 --> 00:42:09,080 Speaker 1: Can we get back to you know, four percent ten 717 00:42:09,160 --> 00:42:11,680 Speaker 1: year and real growth being stronger than where we are 718 00:42:11,719 --> 00:42:14,520 Speaker 1: to day ten years from now if we have you know, 719 00:42:14,600 --> 00:42:17,520 Speaker 1: Tesla has automatic cars and all kinds of wonderful things 720 00:42:17,560 --> 00:42:20,040 Speaker 1: are happening, Yes we can. Is it going to happen 721 00:42:20,080 --> 00:42:24,919 Speaker 1: near term? If it is, it's an investment opportunity for folks. Um, 722 00:42:24,960 --> 00:42:28,080 Speaker 1: and so you should jump on board if yields really rise, 723 00:42:28,239 --> 00:42:33,760 Speaker 1: because people may over index right now on inflationary pressures. 724 00:42:33,800 --> 00:42:37,000 Speaker 1: But you know, can the economy the way that I'm 725 00:42:37,040 --> 00:42:40,719 Speaker 1: looking at it sustain you know, a real growth rate 726 00:42:41,080 --> 00:42:45,560 Speaker 1: this year's different, a real growth rate that high, particularly 727 00:42:45,640 --> 00:42:50,279 Speaker 1: given challenges with immigration and labor force. No, so if 728 00:42:50,440 --> 00:42:52,520 Speaker 1: yields sort to go high due to inflation, it would 729 00:42:52,560 --> 00:42:56,560 Speaker 1: be very damaging, more of the stagflation event and again 730 00:42:56,680 --> 00:42:59,920 Speaker 1: not good for real growth. So very is is an 731 00:43:00,040 --> 00:43:02,600 Speaker 1: much as I think, Oh gosh, this is consensus. Am 732 00:43:02,600 --> 00:43:06,279 Speaker 1: I still saying that treasuries are going to stay low? Yeah? 733 00:43:06,320 --> 00:43:08,920 Speaker 1: I do. I just think it's really challenging to get 734 00:43:08,960 --> 00:43:12,640 Speaker 1: what we call escape velocity out of this low growth 735 00:43:12,680 --> 00:43:16,400 Speaker 1: world structurally that we're living in right now. And you know, 736 00:43:16,480 --> 00:43:19,120 Speaker 1: the massive amount of debt that the US I mean, 737 00:43:19,200 --> 00:43:21,320 Speaker 1: just a lot of things you know, could could point 738 00:43:21,320 --> 00:43:22,919 Speaker 1: you to say not. It's going to be really hard 739 00:43:22,960 --> 00:43:26,160 Speaker 1: to believe the FED can completely walk away from the 740 00:43:26,200 --> 00:43:29,680 Speaker 1: markets in terms of everything they've done. Uh, and that this, 741 00:43:30,000 --> 00:43:32,800 Speaker 1: you know, the world economy, to US economy is strong 742 00:43:32,920 --> 00:43:36,400 Speaker 1: enough on its own without intervention to support those types 743 00:43:36,400 --> 00:43:39,359 Speaker 1: of YELD levels. I don't see it. So speaking of 744 00:43:39,400 --> 00:43:42,160 Speaker 1: the FED, let me give you a promotion and put 745 00:43:42,239 --> 00:43:45,240 Speaker 1: you in the role of Jerome Powell. Is FED share, 746 00:43:46,000 --> 00:43:48,640 Speaker 1: what do you think you would do? What should the 747 00:43:48,680 --> 00:43:54,840 Speaker 1: FED be doing given the current circumstances. Yeah, I think actually, 748 00:43:55,040 --> 00:43:58,840 Speaker 1: I think Jerome pal is exceptional, as was Janet Yellen, 749 00:43:59,160 --> 00:44:04,520 Speaker 1: and I would do what he's doing, and it's communicate, communicate, 750 00:44:04,560 --> 00:44:06,760 Speaker 1: because there's a lot of risk in the market, given 751 00:44:06,840 --> 00:44:11,240 Speaker 1: that the FED does have so much that they're doing 752 00:44:11,320 --> 00:44:14,799 Speaker 1: in terms of unconventional support of the markets, and they're 753 00:44:14,840 --> 00:44:18,359 Speaker 1: they're being very slow, they're communicating, being very careful, and 754 00:44:18,400 --> 00:44:21,200 Speaker 1: so all this. You know, sometimes market participants will say, oh, 755 00:44:21,239 --> 00:44:23,240 Speaker 1: my gosh, you know that FED us behind the curve 756 00:44:23,280 --> 00:44:26,000 Speaker 1: and inflate. They're gonna lose control of the market. Well 757 00:44:26,040 --> 00:44:28,399 Speaker 1: as if you're the Federal Reserve. It's like fool me once, 758 00:44:28,440 --> 00:44:30,759 Speaker 1: foolmy twice. You know, we sort of believe that, you know, 759 00:44:30,840 --> 00:44:33,200 Speaker 1: growth was strong and inflation was strong, and kind of 760 00:44:33,200 --> 00:44:35,799 Speaker 1: got worried, you know, in taper tantrum or you know, 761 00:44:35,840 --> 00:44:37,840 Speaker 1: fill in the blank of different things that have happened 762 00:44:37,840 --> 00:44:40,279 Speaker 1: in the market. Uh, And they're like, well, you know what, 763 00:44:40,360 --> 00:44:42,440 Speaker 1: we're gonna be judicious, we're gonna be careful, we're going 764 00:44:42,520 --> 00:44:45,320 Speaker 1: to be slow, and and I believe absolutely it's the 765 00:44:45,400 --> 00:44:48,320 Speaker 1: right thing to do. And I think what market participants 766 00:44:48,320 --> 00:44:52,359 Speaker 1: are missing right now. Some that that talk a lot 767 00:44:52,400 --> 00:44:57,439 Speaker 1: about this, I think they're still underestimating how important all 768 00:44:57,480 --> 00:45:00,360 Speaker 1: of the stimulation has been to the calm, to the 769 00:45:00,400 --> 00:45:02,759 Speaker 1: markets and the growth that we have in addition to 770 00:45:03,520 --> 00:45:06,799 Speaker 1: in addition to fiscal So again, I think the room 771 00:45:06,840 --> 00:45:10,040 Speaker 1: pulse and in the governors are spot on in in 772 00:45:10,080 --> 00:45:13,880 Speaker 1: what they're doing, and I fully support, you know, everything 773 00:45:13,920 --> 00:45:17,240 Speaker 1: that they've done. So let's stay with that, and and 774 00:45:17,760 --> 00:45:22,080 Speaker 1: stay with the concept of the taper tantrum and the 775 00:45:22,120 --> 00:45:27,040 Speaker 1: ability to get off of emergency footing forget four. I'm 776 00:45:27,040 --> 00:45:32,440 Speaker 1: with you that that isn't happening anytime soon barring some catastrophe. 777 00:45:32,600 --> 00:45:37,759 Speaker 1: But um, how far can can interest rates rise without 778 00:45:37,800 --> 00:45:41,319 Speaker 1: disrupting the equity markets? Can we see a two and 779 00:45:41,320 --> 00:45:45,360 Speaker 1: a half percent ten year without the equity markets freaking out? 780 00:45:46,239 --> 00:45:49,960 Speaker 1: How do we get back to normal, whatever normal might 781 00:45:50,000 --> 00:45:55,759 Speaker 1: be these days. Yeah, And I think it's we're in 782 00:45:55,800 --> 00:45:59,279 Speaker 1: a tricky spot right as Barry is. You know, the 783 00:45:59,280 --> 00:46:02,320 Speaker 1: FED starts to remove the support of the bond market 784 00:46:02,320 --> 00:46:06,160 Speaker 1: through purchases, and you said, can we at what level 785 00:46:06,160 --> 00:46:09,040 Speaker 1: on the tenure does it start to disrupt the growth? 786 00:46:09,280 --> 00:46:12,120 Speaker 1: I think you hit on a really important theme early on, 787 00:46:12,600 --> 00:46:14,840 Speaker 1: it really goes a lot down to the housing market. 788 00:46:15,080 --> 00:46:17,680 Speaker 1: You know, again that is the most important asset that 789 00:46:17,719 --> 00:46:20,640 Speaker 1: most Americans have. And so if you get you get 790 00:46:20,680 --> 00:46:23,759 Speaker 1: ten years, uh, you know, up to say two and 791 00:46:23,800 --> 00:46:26,000 Speaker 1: a quarter two and a half, I think that really 792 00:46:26,040 --> 00:46:30,440 Speaker 1: starts to create some potential challenges for for the equity 793 00:46:30,480 --> 00:46:34,480 Speaker 1: market because it does housing start to roll over. So 794 00:46:34,560 --> 00:46:37,960 Speaker 1: that reduces the momentum at what level. If you going 795 00:46:38,040 --> 00:46:41,279 Speaker 1: back to our conversation about high yield earlier on, so 796 00:46:41,360 --> 00:46:45,680 Speaker 1: let's just say to ourselves, okay, uh, you know, ten 797 00:46:45,719 --> 00:46:48,840 Speaker 1: year interest rates go up two and a half you know, say, 798 00:46:49,280 --> 00:46:53,160 Speaker 1: excuse me, say that the you know how you'll spread 799 00:46:53,760 --> 00:46:57,160 Speaker 1: you know, to a tenure treasury. Let's just call it um, 800 00:46:57,200 --> 00:47:01,040 Speaker 1: you know, two percent or two and a half percent. 801 00:47:01,200 --> 00:47:04,280 Speaker 1: So if you get some of these competing asset classes 802 00:47:04,320 --> 00:47:07,640 Speaker 1: that attractive yields relative to equities where you're like, huh, 803 00:47:07,719 --> 00:47:09,480 Speaker 1: I can clip the coupon and I can earn four 804 00:47:09,480 --> 00:47:12,239 Speaker 1: and a half five again, I think that's where things 805 00:47:12,280 --> 00:47:15,520 Speaker 1: get pretty challenging for the equity market. So a long 806 00:47:15,560 --> 00:47:17,839 Speaker 1: way of saying, I think once you get to like 807 00:47:17,880 --> 00:47:19,319 Speaker 1: two and a quarter or two and a half, it's 808 00:47:19,320 --> 00:47:21,240 Speaker 1: going to take the air out of the bond balloon, 809 00:47:21,360 --> 00:47:24,239 Speaker 1: so we've got to be very careful. And that is 810 00:47:24,280 --> 00:47:28,160 Speaker 1: not that far away, although I guess in terms of 811 00:47:28,160 --> 00:47:33,000 Speaker 1: of interest rate increases, I guess it's a a good 812 00:47:33,000 --> 00:47:35,919 Speaker 1: couple of years away. Let's let's stick with the Fed 813 00:47:36,000 --> 00:47:39,080 Speaker 1: for a bit. You know, the consensus seems to be 814 00:47:39,200 --> 00:47:42,480 Speaker 1: we're not going to see any increases this year and 815 00:47:42,640 --> 00:47:47,759 Speaker 1: probably no increases into late two. Do you think the 816 00:47:47,840 --> 00:47:51,239 Speaker 1: consensus is spot on or or is this really going 817 00:47:51,280 --> 00:47:54,759 Speaker 1: to be subject to new economic data and that will 818 00:47:54,880 --> 00:47:59,600 Speaker 1: impact the FEDS thought process. It's certainly very you know, 819 00:47:59,640 --> 00:48:02,719 Speaker 1: the Fed is going to watch data, so they're you know, 820 00:48:02,760 --> 00:48:05,280 Speaker 1: they're mindful of all of that. But again I would 821 00:48:05,280 --> 00:48:09,480 Speaker 1: say the set also loves to not loves that has 822 00:48:09,640 --> 00:48:14,040 Speaker 1: learned right as post global financial crisis to try not 823 00:48:14,120 --> 00:48:17,799 Speaker 1: to surprise the market and to move slowly. So so typically, 824 00:48:18,320 --> 00:48:21,719 Speaker 1: you know, they announced that they're thinking about tapering, and 825 00:48:21,760 --> 00:48:24,960 Speaker 1: then they start to give you more details and so realistically, 826 00:48:25,160 --> 00:48:29,200 Speaker 1: what's the soonest that they're probably gonna really back office 827 00:48:29,239 --> 00:48:32,920 Speaker 1: from some of their initial support. Uh call that early 828 00:48:33,000 --> 00:48:36,359 Speaker 1: next year, so early twenty two. And then once they 829 00:48:36,400 --> 00:48:38,239 Speaker 1: do that, we've learned from them. They're going to wait 830 00:48:38,280 --> 00:48:40,960 Speaker 1: at least another year eighteen months most likely before they 831 00:48:41,000 --> 00:48:43,680 Speaker 1: actually try to raise the rate. So the market is 832 00:48:43,719 --> 00:48:47,400 Speaker 1: pricing in I believe called a hundred basis points in 833 00:48:47,440 --> 00:48:50,239 Speaker 1: twenty three. You know, is the market wrong in this? 834 00:48:50,520 --> 00:48:52,920 Speaker 1: I think no. I think that it's gonna be a while. 835 00:48:53,040 --> 00:48:55,239 Speaker 1: I think they're gonna be, you know, very slow. I 836 00:48:55,280 --> 00:48:58,320 Speaker 1: think what will happen is the market even a hundred 837 00:48:58,560 --> 00:49:01,319 Speaker 1: is pretty aggressive in that time frame. You know, they 838 00:49:01,360 --> 00:49:03,520 Speaker 1: think the FET is going to then start raising rates 839 00:49:03,520 --> 00:49:06,600 Speaker 1: and move quickly. So again I think that the market 840 00:49:06,680 --> 00:49:10,800 Speaker 1: is probably going to get ahead of itself and forcecasting 841 00:49:10,880 --> 00:49:14,680 Speaker 1: too many FET increases and what actually is delivered. But 842 00:49:14,800 --> 00:49:16,800 Speaker 1: for now, you know that that part of the market, 843 00:49:16,840 --> 00:49:18,520 Speaker 1: that part of the curve, what the FET is doing, 844 00:49:18,560 --> 00:49:22,239 Speaker 1: move slow seems pretty logical to me. So I hope 845 00:49:22,280 --> 00:49:25,120 Speaker 1: this isn't too silly of a question. But but it 846 00:49:25,160 --> 00:49:28,319 Speaker 1: comes up from time to time. So you're responsible for 847 00:49:28,440 --> 00:49:33,360 Speaker 1: billions of dollars in bonds, and yet investors are looking 848 00:49:33,440 --> 00:49:36,960 Speaker 1: for more yield. Do you want to see rates rise? 849 00:49:37,280 --> 00:49:42,760 Speaker 1: It arguably hurts your existing positions, but when you're laddered, 850 00:49:43,200 --> 00:49:46,640 Speaker 1: it generates more yield on the back end, What are 851 00:49:46,680 --> 00:49:50,480 Speaker 1: your thoughts as a fixed income manager about the possibility 852 00:49:50,680 --> 00:49:55,640 Speaker 1: of of yields going higher from here? Yeah, very you know, 853 00:49:56,800 --> 00:50:01,080 Speaker 1: with our client's eyes in the world eyes on, you know, 854 00:50:01,280 --> 00:50:04,080 Speaker 1: higher rates would be a good thing, right if you 855 00:50:04,160 --> 00:50:08,960 Speaker 1: think that real growth justicies it. And also there are 856 00:50:09,000 --> 00:50:11,440 Speaker 1: a lot of business models, a lot of our clients, 857 00:50:11,480 --> 00:50:15,200 Speaker 1: whether it's pension funds or insurance companies, where their business 858 00:50:15,239 --> 00:50:19,239 Speaker 1: models are really struggling to work, right given how low 859 00:50:19,360 --> 00:50:21,600 Speaker 1: rates are. And what do I mean by that? You know, 860 00:50:22,120 --> 00:50:25,680 Speaker 1: pensions that need a certain level of return in the 861 00:50:25,760 --> 00:50:29,439 Speaker 1: market in order to deliver the pension benefits to their employees. 862 00:50:29,520 --> 00:50:33,359 Speaker 1: An insurance company that may be sold an annuity UH 863 00:50:33,400 --> 00:50:36,080 Speaker 1: to its clients that now needs higher yields in order 864 00:50:36,160 --> 00:50:39,080 Speaker 1: to make the profit margins and build capital that they need. 865 00:50:39,120 --> 00:50:40,600 Speaker 1: So again, there are a lot of parts of the 866 00:50:40,600 --> 00:50:44,520 Speaker 1: world and no retirees who need rely on income and 867 00:50:44,560 --> 00:50:47,400 Speaker 1: so as low as rates are, this creates you know, 868 00:50:47,520 --> 00:50:52,520 Speaker 1: societal and business challenges. So again, higher rates from where 869 00:50:52,520 --> 00:50:55,239 Speaker 1: we are today is a good thing now if it 870 00:50:55,280 --> 00:50:59,960 Speaker 1: were some sort of disruptive stagflation quick thing, And certainly 871 00:51:00,040 --> 00:51:02,960 Speaker 1: we've seen fragility in markets in the last ten years 872 00:51:03,040 --> 00:51:06,279 Speaker 1: that I think are concerning. But as long as it's 873 00:51:06,400 --> 00:51:11,200 Speaker 1: a natural outcome, gradual and as a result of real growth, 874 00:51:11,480 --> 00:51:13,840 Speaker 1: then it's a good thing for clients and for the 875 00:51:13,960 --> 00:51:18,000 Speaker 1: United States in the world. Really interesting. I know, I 876 00:51:18,040 --> 00:51:21,480 Speaker 1: only have you for a finite amount of time, so 877 00:51:21,600 --> 00:51:26,080 Speaker 1: let's jump to our favorite questions. We ask all our guests, 878 00:51:26,680 --> 00:51:29,360 Speaker 1: starting with tell us about what you're streaming these days. 879 00:51:29,400 --> 00:51:32,960 Speaker 1: Give us your favorite uh work from home, Netflix and 880 00:51:33,120 --> 00:51:38,560 Speaker 1: Amazon Prime shows? Okay, you verry. One of my favorites 881 00:51:38,640 --> 00:51:42,360 Speaker 1: that I met recommending is a show on HBO Max 882 00:51:42,480 --> 00:51:46,920 Speaker 1: called ted Lasso, and so I highly recommended to viewers. 883 00:51:47,120 --> 00:51:48,560 Speaker 1: Why do I like it, I'll just give you in 884 00:51:48,560 --> 00:51:52,200 Speaker 1: a nutshell, it's a it's a funny, funny series, and 885 00:51:52,280 --> 00:51:56,359 Speaker 1: it's about an American football coach from a college who's 886 00:51:56,440 --> 00:52:00,160 Speaker 1: hired by a major soccer franchise in the UK to 887 00:52:00,200 --> 00:52:03,960 Speaker 1: be their coach. And he's kind of this goofy Southern person, 888 00:52:04,160 --> 00:52:07,400 Speaker 1: you know, he's, uh, he's and I live in the South, 889 00:52:07,440 --> 00:52:10,359 Speaker 1: so I didn't mean anything by that, but he's just 890 00:52:10,480 --> 00:52:14,919 Speaker 1: really you know, wonderful and in overs his head and 891 00:52:15,200 --> 00:52:17,560 Speaker 1: people should just watch it because it's sort of one 892 00:52:17,600 --> 00:52:21,120 Speaker 1: of these things where you're in over your head, you've 893 00:52:21,120 --> 00:52:23,880 Speaker 1: got to pivot. But the qualities of the human being, 894 00:52:24,239 --> 00:52:28,120 Speaker 1: you know, his his compassion, his ability to motivate and 895 00:52:28,160 --> 00:52:31,520 Speaker 1: communicate as a leader are actually they shine through in 896 00:52:31,560 --> 00:52:34,840 Speaker 1: the series. It's funny. And so when you think about leading, 897 00:52:34,880 --> 00:52:37,920 Speaker 1: and you think about leading through COVID nineteen and everything, right, 898 00:52:38,000 --> 00:52:40,640 Speaker 1: it goes back to just trying to have a sense 899 00:52:40,640 --> 00:52:44,360 Speaker 1: of humor and to really care about your people. And 900 00:52:44,440 --> 00:52:47,000 Speaker 1: so even though it's a comedy about soccer, I find 901 00:52:47,000 --> 00:52:50,000 Speaker 1: that it has a lot of good messages as far 902 00:52:50,080 --> 00:52:52,680 Speaker 1: as how to lead. Well, yeah, it's a it's a 903 00:52:52,760 --> 00:52:56,080 Speaker 1: charming series. I believe it's Apple Plus or Apple TV. 904 00:52:56,840 --> 00:53:01,040 Speaker 1: And I know season two starts, uh last week in July, 905 00:53:01,200 --> 00:53:05,040 Speaker 1: so I'm looking forward to seeing that. Also, tell us 906 00:53:05,080 --> 00:53:08,000 Speaker 1: about some of your early mentors who helped to shape 907 00:53:08,160 --> 00:53:13,480 Speaker 1: your career. Well, one of my early mentors was Rob Compito, 908 00:53:13,600 --> 00:53:17,120 Speaker 1: who's president Black Rock and uh, kind of funny story. 909 00:53:17,160 --> 00:53:20,160 Speaker 1: I met him years and years ago giving a kind 910 00:53:20,160 --> 00:53:24,200 Speaker 1: of a talk at a at a conference, and uh, 911 00:53:24,360 --> 00:53:27,480 Speaker 1: why was he an important mentor to me? Uh? He 912 00:53:27,520 --> 00:53:30,000 Speaker 1: said to me, I was working in Ohio at the time, 913 00:53:30,280 --> 00:53:33,080 Speaker 1: and he said, Christine, you got to get out of 914 00:53:33,080 --> 00:53:35,400 Speaker 1: Ohio and moved to the East coast for your career. 915 00:53:35,719 --> 00:53:39,280 Speaker 1: And uh, I had three kids at the time. Uh so, 916 00:53:39,280 --> 00:53:41,560 Speaker 1: so not the most obvious thing, but you know, I 917 00:53:41,600 --> 00:53:45,160 Speaker 1: listened to him and he gave me great advice over 918 00:53:45,200 --> 00:53:47,600 Speaker 1: that period of time in my career, and I moved 919 00:53:47,640 --> 00:53:51,400 Speaker 1: east and I never looked back. Let's talk about reading 920 00:53:51,440 --> 00:53:53,279 Speaker 1: in books. What are some of your favorites and what 921 00:53:53,320 --> 00:53:56,319 Speaker 1: are you reading right now? Well, you know, right now 922 00:53:56,360 --> 00:54:01,400 Speaker 1: I'm reading of The Handmaid's Tale is going to uh, 923 00:54:01,440 --> 00:54:03,840 Speaker 1: you know, shows and series and things that you stream. 924 00:54:03,920 --> 00:54:06,160 Speaker 1: I thought, wow, you know, I've I've actually never read 925 00:54:06,200 --> 00:54:09,239 Speaker 1: anything by Margaret Atwood and books are always better than 926 00:54:09,440 --> 00:54:12,880 Speaker 1: than TV, and so I'm reading that one thing. It's 927 00:54:12,920 --> 00:54:16,200 Speaker 1: it's funny. You know, people in my lives, whether it's 928 00:54:16,239 --> 00:54:19,799 Speaker 1: team members or whatever, will give me gift me, you know, 929 00:54:19,840 --> 00:54:23,480 Speaker 1: the latest nonfiction book about you know, leadership or markets 930 00:54:23,480 --> 00:54:26,000 Speaker 1: and things. And you know what, Barry, I almost never 931 00:54:26,040 --> 00:54:29,160 Speaker 1: read that kind of stuff now, so if you were 932 00:54:29,200 --> 00:54:32,120 Speaker 1: to look at my reading list, it's all fiction. It 933 00:54:32,160 --> 00:54:35,279 Speaker 1: has nothing to do with finance. But again, I think, 934 00:54:35,360 --> 00:54:37,880 Speaker 1: you know, when you look back over the years. I 935 00:54:37,880 --> 00:54:40,239 Speaker 1: think to be a good investor, and and advice for 936 00:54:40,360 --> 00:54:44,080 Speaker 1: young people that are thinking about it is to really 937 00:54:44,160 --> 00:54:48,120 Speaker 1: push the way that your brain works through creativity, through 938 00:54:48,160 --> 00:54:52,480 Speaker 1: reading fiction, through music. Those are the things qualities in 939 00:54:52,600 --> 00:54:55,359 Speaker 1: a highly technical world that I think are underrated. As 940 00:54:55,400 --> 00:54:57,560 Speaker 1: far as what to do to be a good investor, 941 00:54:57,880 --> 00:55:00,560 Speaker 1: you want to give us a couple of titles. Oh 942 00:55:00,680 --> 00:55:03,959 Speaker 1: as far as um my favorite books that I've read? 943 00:55:04,120 --> 00:55:06,200 Speaker 1: Oh yeah, I would say, you know, one of my 944 00:55:06,320 --> 00:55:09,920 Speaker 1: very favorite books I love. I love Steinbeck, going back 945 00:55:09,960 --> 00:55:13,560 Speaker 1: to being sort of a dark fixed income investor. If 946 00:55:13,560 --> 00:55:16,160 Speaker 1: you read something like Grapes of Wrath, you absolutely want 947 00:55:16,160 --> 00:55:18,480 Speaker 1: to jump out a window. But one of my favorite 948 00:55:18,520 --> 00:55:21,520 Speaker 1: books is East of Eden and I and by Steinbeck, 949 00:55:21,560 --> 00:55:24,799 Speaker 1: And again I just love you know, nonfiction that has 950 00:55:24,880 --> 00:55:28,120 Speaker 1: you study human nature and human interaction. Those are the 951 00:55:28,160 --> 00:55:32,600 Speaker 1: types of things that that I absolutely love. What sort 952 00:55:32,600 --> 00:55:35,760 Speaker 1: of advice would you give to a recent college grad 953 00:55:35,960 --> 00:55:41,440 Speaker 1: who was interested in a career in investment management or finance. Well, 954 00:55:41,480 --> 00:55:45,000 Speaker 1: you know, certainly expand your mind in creative ways, as 955 00:55:45,080 --> 00:55:48,520 Speaker 1: we just talked about. But also I would say, you know, 956 00:55:49,080 --> 00:55:52,960 Speaker 1: for for our young talent, I always remind them, don't 957 00:55:53,480 --> 00:55:58,400 Speaker 1: don't specialize too quickly. Take some risks with your career 958 00:55:58,520 --> 00:56:01,760 Speaker 1: as you go into finance. There's so many great people 959 00:56:01,800 --> 00:56:04,759 Speaker 1: that you can learn from, so make sure that you 960 00:56:04,880 --> 00:56:08,600 Speaker 1: start building relationships early on. And the thing that I find, 961 00:56:08,719 --> 00:56:12,759 Speaker 1: you know, sometimes on the investment side, senior investors can 962 00:56:12,760 --> 00:56:14,879 Speaker 1: be kind of scary. You know, sometimes you get these 963 00:56:14,880 --> 00:56:17,120 Speaker 1: like big personalities or whatever. But you find, you know, 964 00:56:17,239 --> 00:56:20,080 Speaker 1: human nature with people if you catch them at the 965 00:56:20,160 --> 00:56:23,239 Speaker 1: right time. People love to share, they love to give back, 966 00:56:23,320 --> 00:56:25,200 Speaker 1: They love to explain to you why did I do 967 00:56:25,280 --> 00:56:27,600 Speaker 1: this trade? Why am I thinking about this way? So 968 00:56:27,760 --> 00:56:30,160 Speaker 1: just for our young talent to not be shy to 969 00:56:30,239 --> 00:56:33,200 Speaker 1: find those manners to create those relationships, and and to 970 00:56:33,239 --> 00:56:35,279 Speaker 1: make sure that you try a lot of different things 971 00:56:35,360 --> 00:56:38,319 Speaker 1: early in your career. And then after that point in 972 00:56:38,360 --> 00:56:41,120 Speaker 1: time and you find your true genius or passion, that's 973 00:56:41,120 --> 00:56:44,000 Speaker 1: when you actually start to specialize and go a little deeper. 974 00:56:45,000 --> 00:56:48,560 Speaker 1: Really interesting, and our final question, what do you know 975 00:56:48,640 --> 00:56:51,959 Speaker 1: about the world of investing today? You wish you knew 976 00:56:52,640 --> 00:56:55,560 Speaker 1: thirty plus years ago when you were first getting started. 977 00:56:56,360 --> 00:56:59,719 Speaker 1: I would say, oh, that's such a great question, Terry. 978 00:57:00,239 --> 00:57:05,240 Speaker 1: One of the things is um uh, get comfortable being wrong, 979 00:57:05,920 --> 00:57:09,120 Speaker 1: and so you know, and and what I tell you, 980 00:57:09,200 --> 00:57:13,439 Speaker 1: why why do I say that is UM Back when 981 00:57:13,480 --> 00:57:18,240 Speaker 1: I was running fixed income, I put UM a picture 982 00:57:19,120 --> 00:57:21,040 Speaker 1: out on the training floor and it was a picture 983 00:57:21,040 --> 00:57:24,200 Speaker 1: of a deer in the headlights. And why I had 984 00:57:24,240 --> 00:57:27,880 Speaker 1: that is I would everybody every day look at that 985 00:57:28,320 --> 00:57:31,080 Speaker 1: and say, am I being that deer in the headlights? 986 00:57:31,280 --> 00:57:33,560 Speaker 1: Because as much as you know you can say in 987 00:57:33,600 --> 00:57:36,240 Speaker 1: the investment game, oh, it's like six of the time 988 00:57:36,240 --> 00:57:37,840 Speaker 1: you're right, in the rest of you the wrong. People 989 00:57:37,960 --> 00:57:41,800 Speaker 1: don't like to be wrong, and sometimes we're naturally risk averse. 990 00:57:41,880 --> 00:57:43,840 Speaker 1: And so what I would do I kept that deer 991 00:57:43,880 --> 00:57:46,680 Speaker 1: in the headlight photo right on my desk. And one 992 00:57:46,720 --> 00:57:48,480 Speaker 1: thing that I would say to the team, and I 993 00:57:48,560 --> 00:57:50,840 Speaker 1: continue to say to myself, and advice that I would 994 00:57:50,880 --> 00:57:54,160 Speaker 1: give you as far as investments in career, I always 995 00:57:54,200 --> 00:57:57,760 Speaker 1: tell people to and this would go to UM markets 996 00:57:57,800 --> 00:58:03,680 Speaker 1: from oil, don't doubt in the darkness things you decided 997 00:58:03,960 --> 00:58:06,720 Speaker 1: in the light. And what do I mean by that 998 00:58:07,360 --> 00:58:10,440 Speaker 1: is that there are dark times where the markets go crazy. 999 00:58:11,720 --> 00:58:14,360 Speaker 1: You know, certainly Spring of two thousand and twenty was 1000 00:58:14,520 --> 00:58:17,440 Speaker 1: one of those examples. But the decisions that you make 1001 00:58:17,520 --> 00:58:20,280 Speaker 1: in the light are when you're thinking about the facts, 1002 00:58:20,880 --> 00:58:23,680 Speaker 1: when you're kind of meditating and you have a calm mind, 1003 00:58:24,560 --> 00:58:28,280 Speaker 1: because that's where people make mistakes. They get over overly emotional, 1004 00:58:28,560 --> 00:58:32,800 Speaker 1: they react, they panic, things happen. So again, are you 1005 00:58:32,960 --> 00:58:36,360 Speaker 1: being a deer in the headlights and don't doubt decisions 1006 00:58:36,400 --> 00:58:38,400 Speaker 1: she's made when you were calm and in the light 1007 00:58:39,080 --> 00:58:43,040 Speaker 1: when things give ros h Google tells me a version 1008 00:58:43,120 --> 00:58:46,840 Speaker 1: of that is Raymond's Edmund But I've never heard that 1009 00:58:46,960 --> 00:58:51,360 Speaker 1: quote before. Very very intriguing. Christine, Thank you so much 1010 00:58:51,440 --> 00:58:54,720 Speaker 1: for being so generous with your time. We have been 1011 00:58:54,840 --> 00:58:58,640 Speaker 1: speaking with Christine Hurt Sellers. She is the CEO of 1012 00:58:58,760 --> 00:59:02,440 Speaker 1: OIA Investment Managed Man, which runs about two hundred and 1013 00:59:02,520 --> 00:59:06,280 Speaker 1: forty five billion dollars in assets. If you don't know 1014 00:59:06,440 --> 00:59:10,120 Speaker 1: the void in name, there have been around forty years. 1015 00:59:10,480 --> 00:59:14,160 Speaker 1: But their previous name was I N G U S. 1016 00:59:14,240 --> 00:59:17,480 Speaker 1: And and that might be uh, how you might be 1017 00:59:17,560 --> 00:59:21,280 Speaker 1: more familiar with them. If you enjoyed this conversation, well 1018 00:59:21,560 --> 00:59:25,320 Speaker 1: check out all of our previous interviews. You can find 1019 00:59:25,400 --> 00:59:30,440 Speaker 1: them at iTunes, Spotify, wherever finer podcasts are sold. We 1020 00:59:30,600 --> 00:59:34,080 Speaker 1: love your comments, feedback and suggestions. Right to us at 1021 00:59:34,800 --> 00:59:37,520 Speaker 1: m IB podcast at Bloomberg dot net. Give us a 1022 00:59:37,600 --> 00:59:41,439 Speaker 1: review at Apple iTunes UH. You can sign up from 1023 00:59:41,480 --> 00:59:45,160 Speaker 1: my daily reading list at rit Halts dot com. Check 1024 00:59:45,200 --> 00:59:48,600 Speaker 1: out my weekly column on Bloomberg dot com slash Opinion. 1025 00:59:49,160 --> 00:59:52,720 Speaker 1: Follow me on Twitter at rit Halts. I would be 1026 00:59:52,800 --> 00:59:55,560 Speaker 1: remiss if I did not thank the crack staff that 1027 00:59:55,680 --> 00:59:59,880 Speaker 1: helps put these conversations together each week. Paris Wald is 1028 01:00:00,080 --> 01:00:04,560 Speaker 1: my producer, Atika val Bronn is my project manager. Tim 1029 01:00:04,640 --> 01:00:08,000 Speaker 1: Harrow is my audio engineer. Michael Batnick is my head 1030 01:00:08,040 --> 01:00:12,320 Speaker 1: of research. I'm Barry Ridults. You've been listening to Masters 1031 01:00:12,360 --> 01:00:14,480 Speaker 1: in Business on Bloomberg Radio