1 00:00:02,720 --> 00:00:10,560 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,480 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:17,800 Speaker 1: Eastern on Apple Corplay and Android Auto with the Bloomberg 4 00:00:17,880 --> 00:00:21,000 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,320 --> 00:00:23,040 Speaker 1: or watch us live on YouTube. 6 00:00:23,880 --> 00:00:25,480 Speaker 2: Alex feel here alongside Paul sw We need this a 7 00:00:25,480 --> 00:00:28,600 Speaker 2: Bloomberg Intelligence Radio. We are broadcasting to live from a 8 00:00:28,600 --> 00:00:31,800 Speaker 2: Bloomberg Invest twenty twenty five conference in downtown Manhattan. A 9 00:00:31,920 --> 00:00:35,080 Speaker 2: lot of the action, though, is still in the economic data, 10 00:00:35,120 --> 00:00:38,280 Speaker 2: in particular ADP. We also got ism services and also 11 00:00:38,520 --> 00:00:41,000 Speaker 2: what's going to happen with trade policy. Earlier today, US 12 00:00:41,040 --> 00:00:44,199 Speaker 2: Commerce Secretary Howard Lutnick spoke with Bloomberg, saying maybe a 13 00:00:44,240 --> 00:00:47,000 Speaker 2: potential a potential shift in TEARFF policy. 14 00:00:47,920 --> 00:00:51,879 Speaker 3: The President is listening uh to the offers from Mexico 15 00:00:51,960 --> 00:00:55,040 Speaker 3: and Canada. He's thinking about trying to do something in 16 00:00:55,080 --> 00:00:57,920 Speaker 3: the middle. He's thinking about it. We're talking about it. 17 00:00:57,960 --> 00:00:59,760 Speaker 3: We're going to what I leave here, I'm going to 18 00:00:59,800 --> 00:01:01,400 Speaker 3: go to talk about it with him, and I think 19 00:01:01,680 --> 00:01:04,400 Speaker 3: early this afternoon or this afternoon, we expect to make 20 00:01:04,440 --> 00:01:07,640 Speaker 3: an announcement. And my thinking is it's going to be 21 00:01:07,680 --> 00:01:08,200 Speaker 3: somewhere in. 22 00:01:08,120 --> 00:01:12,000 Speaker 4: The middle, all right. That was Howard Ludnik. 23 00:01:12,000 --> 00:01:15,480 Speaker 2: We also are hearing from Peter Navarro on CNN talking 24 00:01:15,480 --> 00:01:17,880 Speaker 2: about trade as well, saying Trump is right, there's going 25 00:01:17,920 --> 00:01:19,720 Speaker 2: to be some kind of tear uf disturbance, and all 26 00:01:19,720 --> 00:01:21,640 Speaker 2: of this just means a little bit more uncertainty within 27 00:01:21,680 --> 00:01:26,120 Speaker 2: the market. Michael mcckeb Bloomberg Economic and Policy correspondent joins us. Now, Mike, 28 00:01:26,240 --> 00:01:27,840 Speaker 2: is that uncertainty showing up in some. 29 00:01:27,840 --> 00:01:29,520 Speaker 5: Of the data not yet? 30 00:01:30,200 --> 00:01:34,000 Speaker 6: Interestingly enough, we've had divergent data today. The ADP report 31 00:01:34,040 --> 00:01:37,000 Speaker 6: comes in a little light in terms of private sector jobs, 32 00:01:37,080 --> 00:01:40,400 Speaker 6: and the composition of jobs is a little strange in 33 00:01:40,520 --> 00:01:45,000 Speaker 6: that report. But the ISM services PMI comes in much 34 00:01:45,040 --> 00:01:48,600 Speaker 6: better than anticipated, and new orders were up, which is 35 00:01:48,680 --> 00:01:52,000 Speaker 6: the converse of what we saw in the ISM manufacturing number. 36 00:01:52,200 --> 00:01:55,440 Speaker 6: So a little reassurance for the markets, which sort of 37 00:01:55,560 --> 00:01:59,559 Speaker 6: have been bouncing around today, but in general have taken 38 00:01:59,600 --> 00:02:03,960 Speaker 6: a little encouragement from the idea that perhaps the economy 39 00:02:04,040 --> 00:02:05,400 Speaker 6: is not falling off a cliff. 40 00:02:07,880 --> 00:02:11,399 Speaker 7: Hey, Mike, I see the ISM services prices paid came 41 00:02:11,440 --> 00:02:13,880 Speaker 7: in higher than expected and higher than the last period. 42 00:02:13,919 --> 00:02:17,160 Speaker 7: Does that suggest maybe some inflation seeping in to the 43 00:02:17,200 --> 00:02:18,200 Speaker 7: economy there. 44 00:02:18,320 --> 00:02:22,679 Speaker 6: Well, maybe more inflation still in the economy as opposed 45 00:02:22,680 --> 00:02:23,840 Speaker 6: to seeping in now. 46 00:02:24,240 --> 00:02:26,240 Speaker 8: It's a little hard to separate out because we don't know. 47 00:02:26,760 --> 00:02:29,000 Speaker 6: This is a sentiment survey, and we don't know how 48 00:02:29,080 --> 00:02:32,240 Speaker 6: much that sentiment might have been influenced by all the 49 00:02:32,320 --> 00:02:36,960 Speaker 6: tariff talk. But tariffs generally don't hit services in the 50 00:02:37,000 --> 00:02:40,320 Speaker 6: same way they hit goods, and so this may be 51 00:02:40,480 --> 00:02:44,520 Speaker 6: just more reflection of the cost of raw materials, maybe 52 00:02:44,520 --> 00:02:48,800 Speaker 6: commodities that are out there now. We don't know, but 53 00:02:48,880 --> 00:02:53,120 Speaker 6: we have seen the ism services prices paid index up 54 00:02:53,160 --> 00:02:55,320 Speaker 6: for four months in a row, so it does seem 55 00:02:55,400 --> 00:02:57,560 Speaker 6: that we still have some inflation out there. 56 00:02:57,560 --> 00:02:59,480 Speaker 8: The Fen's going to have to address. 57 00:03:02,080 --> 00:03:03,960 Speaker 4: Yes, yes, inflation address. 58 00:03:03,960 --> 00:03:06,880 Speaker 2: And that brings us to your news making interview yesterday 59 00:03:07,240 --> 00:03:09,640 Speaker 2: of a New York Fed President John Williams talking about 60 00:03:09,760 --> 00:03:12,880 Speaker 2: how to address the inflationary impact from tariffs. 61 00:03:13,160 --> 00:03:15,359 Speaker 4: Can walk us through some of the highlights. 62 00:03:14,960 --> 00:03:17,320 Speaker 2: Here, because that was definitely one of the standouts yesterday 63 00:03:17,320 --> 00:03:17,600 Speaker 2: at Boom. 64 00:03:17,600 --> 00:03:18,160 Speaker 4: We're going to best. 65 00:03:18,560 --> 00:03:20,720 Speaker 6: The Fed's been waiting for quite some time to have 66 00:03:20,760 --> 00:03:23,480 Speaker 6: any kind of comment on what Trump's policies would be 67 00:03:23,480 --> 00:03:26,080 Speaker 6: because he didn't know what they were. But now that 68 00:03:26,120 --> 00:03:28,880 Speaker 6: we know, he's got these twenty five percent tariffs on 69 00:03:29,680 --> 00:03:32,800 Speaker 6: maybe some carve outs coming this afternoon and more coming. 70 00:03:32,960 --> 00:03:36,960 Speaker 6: As Secretary Lutnik emphasized over and over again this morning, 71 00:03:37,440 --> 00:03:42,080 Speaker 6: the FED feels a little more unconstrained. John Williams talking 72 00:03:42,080 --> 00:03:45,640 Speaker 6: about the fact that tariffs are inflationary. Now they don't 73 00:03:45,680 --> 00:03:49,960 Speaker 6: know how inflationary because they don't know how many tariffs 74 00:03:50,000 --> 00:03:52,280 Speaker 6: are going to end up being imposed, at what level 75 00:03:52,320 --> 00:03:55,760 Speaker 6: and over what period of time. But he did suggest 76 00:03:55,800 --> 00:03:59,560 Speaker 6: that that's reason for caution and that the Fed basically 77 00:03:59,600 --> 00:04:01,640 Speaker 6: needs to stay on hold for right now. 78 00:04:04,560 --> 00:04:06,760 Speaker 7: We're going to get some labor data MIC over the 79 00:04:06,760 --> 00:04:09,040 Speaker 7: next couple of days, with initial jobles claims tomorrow and 80 00:04:09,040 --> 00:04:13,640 Speaker 7: then nonfarm payrolls on Friday. Still too early to see 81 00:04:13,680 --> 00:04:16,800 Speaker 7: any effects of dose impacting the numbers. 82 00:04:17,120 --> 00:04:20,560 Speaker 6: Well, we might actually get some numbers this week because 83 00:04:20,680 --> 00:04:26,880 Speaker 6: the federal government employees have their own category within jobless claims. 84 00:04:26,920 --> 00:04:28,600 Speaker 8: It's funded separately, and so. 85 00:04:30,240 --> 00:04:32,960 Speaker 6: It's two weeks delayed in terms of its release and 86 00:04:33,400 --> 00:04:37,479 Speaker 6: should suggest that we are now at least getting some 87 00:04:37,680 --> 00:04:41,040 Speaker 6: jobless claims from federal workers who've been laid off, so 88 00:04:41,320 --> 00:04:44,520 Speaker 6: we would anticipate that. I wouldn't anticipate much of anything 89 00:04:44,880 --> 00:04:48,599 Speaker 6: showing up in the payrolls report on Friday, because that 90 00:04:48,800 --> 00:04:52,360 Speaker 6: encompasses the pay period that includes the twelfth of the month, 91 00:04:52,640 --> 00:04:56,159 Speaker 6: And it really was Valentine's Day, February fourteenth when the 92 00:04:56,240 --> 00:05:00,640 Speaker 6: layoffs really started. If you remember the late night time 93 00:05:00,720 --> 00:05:03,159 Speaker 6: from Elon Musk to so many federal. 94 00:05:02,880 --> 00:05:09,320 Speaker 2: Workers, Mike, before we let you go, my favorite question, 95 00:05:09,720 --> 00:05:11,760 Speaker 2: as most of you know, he always gets to send 96 00:05:11,800 --> 00:05:13,720 Speaker 2: me charts in the afternoon, like the one nerdy thing 97 00:05:13,720 --> 00:05:16,240 Speaker 2: that Mike's paying attention to. What's that one nerdy thing 98 00:05:16,240 --> 00:05:17,360 Speaker 2: you're going to be paying attention to. 99 00:05:17,960 --> 00:05:20,600 Speaker 6: Well, I'm looking at the ADP numbers, and it's unusual 100 00:05:20,640 --> 00:05:25,200 Speaker 6: that we see service industry jobs much lower than the 101 00:05:25,240 --> 00:05:28,120 Speaker 6: goods producing jobs. In this case, it's the goods producing. 102 00:05:28,160 --> 00:05:32,080 Speaker 6: That's very odd because we've been talking about how manufacturing 103 00:05:32,240 --> 00:05:35,680 Speaker 6: is suffering, and yet they had a big increase in 104 00:05:35,839 --> 00:05:39,719 Speaker 6: jobs during the month according to ADP, of eighteen thousand jobs, 105 00:05:39,720 --> 00:05:41,520 Speaker 6: and construction was up. 106 00:05:41,440 --> 00:05:42,679 Speaker 8: By twenty six thousand. 107 00:05:42,960 --> 00:05:45,720 Speaker 6: But what have we been hearing for weeks now about 108 00:05:45,760 --> 00:05:48,320 Speaker 6: how bad the weather was and how do you have 109 00:05:48,400 --> 00:05:51,280 Speaker 6: a lot of construction going on when the weather is 110 00:05:51,320 --> 00:05:55,360 Speaker 6: that bad, so some unusual numbers. Also, of educational health 111 00:05:55,400 --> 00:05:58,440 Speaker 6: services is usually the biggest job creator, and ADP found 112 00:05:58,640 --> 00:06:02,360 Speaker 6: a twenty eight thousand job loss there. So I'm not 113 00:06:02,440 --> 00:06:05,320 Speaker 6: sure about the makeup of the ADP numbers, but we'll 114 00:06:05,360 --> 00:06:09,120 Speaker 6: get a better clue on Friday. 115 00:06:09,760 --> 00:06:11,440 Speaker 4: All right, My thanks a lot, really appreciate it. 116 00:06:11,440 --> 00:06:14,320 Speaker 2: Michael mcke Boomberg Economic and Policy Corresponding, joining us now. 117 00:06:14,360 --> 00:06:17,160 Speaker 4: Looking for his nerde chart later on as well. 118 00:06:18,880 --> 00:06:22,599 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 119 00:06:22,680 --> 00:06:25,760 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 120 00:06:25,760 --> 00:06:29,080 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 121 00:06:29,120 --> 00:06:32,240 Speaker 1: you get your podcasts, or watch us live on YouTube. 122 00:06:32,880 --> 00:06:35,800 Speaker 7: Joining us now at the conference on site is Katie Fogerty, 123 00:06:35,839 --> 00:06:38,680 Speaker 7: chief financial officer of Shakeshack. Katie, thanks so much for 124 00:06:39,000 --> 00:06:42,640 Speaker 7: joining us here. Love to get a sense everybody's talking 125 00:06:42,680 --> 00:06:44,840 Speaker 7: about Harris and what it might do to economic growth, 126 00:06:44,839 --> 00:06:47,039 Speaker 7: what it might do to the consumer. Who is the 127 00:06:47,040 --> 00:06:49,680 Speaker 7: consumer shake check and what is that consumer telling you 128 00:06:49,720 --> 00:06:50,360 Speaker 7: these days? 129 00:06:50,720 --> 00:06:54,200 Speaker 9: Great? So you know who we think of as our consumer? 130 00:06:55,080 --> 00:06:57,400 Speaker 9: We have you know, went out there and we have 131 00:06:57,440 --> 00:07:00,720 Speaker 9: this amazing real estate strategy, real estates strategy, and what 132 00:07:00,720 --> 00:07:05,200 Speaker 9: we've done is we've put these great community gathering places 133 00:07:05,240 --> 00:07:07,919 Speaker 9: in a lot of these you know, great communities, and 134 00:07:08,279 --> 00:07:10,600 Speaker 9: where we have attracted is just really kind of more 135 00:07:10,600 --> 00:07:13,400 Speaker 9: of a I would say, you know, a more a 136 00:07:13,440 --> 00:07:16,280 Speaker 9: middle income to higher income guests, and we've seen that 137 00:07:16,360 --> 00:07:18,280 Speaker 9: guest be able to weather a lot more of the 138 00:07:18,320 --> 00:07:21,760 Speaker 9: economic headwinds than other, you know, than the low income 139 00:07:21,800 --> 00:07:25,440 Speaker 9: consumer has been facing. And you know, what we continue 140 00:07:25,440 --> 00:07:28,040 Speaker 9: to see is by leaning into our strength, which is 141 00:07:28,080 --> 00:07:31,280 Speaker 9: delivering a fine casual experience. So we think about kind 142 00:07:31,280 --> 00:07:34,880 Speaker 9: of bringing all those great guts of fine dining, elevated food, 143 00:07:35,240 --> 00:07:38,720 Speaker 9: premium ingredients, doing the things that you know, other you know, 144 00:07:39,040 --> 00:07:41,560 Speaker 9: fast casual and QSR just are not willing to do. 145 00:07:41,920 --> 00:07:46,440 Speaker 9: Putting that an amazing hospital or hospitable environment and getting 146 00:07:46,440 --> 00:07:49,560 Speaker 9: great guest service. That together has been a winning formula 147 00:07:49,600 --> 00:07:52,840 Speaker 9: to help us outpunch what has been you know, some 148 00:07:53,120 --> 00:07:55,760 Speaker 9: consumer headwinds that has been facing the industry. 149 00:07:56,040 --> 00:07:57,960 Speaker 4: And we are going to continue to lean into that. 150 00:07:58,440 --> 00:08:01,360 Speaker 9: It's it's helping us to different and kind of pull 151 00:08:01,400 --> 00:08:05,240 Speaker 9: apart from the pack, and it's it's been our strength. 152 00:08:05,520 --> 00:08:08,680 Speaker 4: Where are our samples? I know, I mean what is 153 00:08:08,720 --> 00:08:09,440 Speaker 4: this about? 154 00:08:09,760 --> 00:08:11,320 Speaker 2: Uh, you know, who doesn't want to burger at ten 155 00:08:11,360 --> 00:08:13,240 Speaker 2: am on a Wednesday so close to open? 156 00:08:13,320 --> 00:08:14,480 Speaker 7: So so who. 157 00:08:14,400 --> 00:08:16,560 Speaker 2: Are your competitors then? So if you're a middle and 158 00:08:16,640 --> 00:08:18,120 Speaker 2: high end consumer, who would. 159 00:08:17,960 --> 00:08:22,120 Speaker 9: You say as a competitor, Yeah, I mean we sell burgers, shakes, fries, 160 00:08:22,280 --> 00:08:24,440 Speaker 9: I think the best chicken sandwich out there in the business. 161 00:08:25,080 --> 00:08:28,160 Speaker 9: We view our competitors as being, you know, anybody who 162 00:08:28,600 --> 00:08:31,200 Speaker 9: you know you might consider having lunch at or dinner at. 163 00:08:31,720 --> 00:08:34,760 Speaker 9: So that is a pretty wide array and it also 164 00:08:34,840 --> 00:08:36,840 Speaker 9: can be you know, food at home. I mean that 165 00:08:36,880 --> 00:08:39,560 Speaker 9: can also be in you know, in an area where 166 00:08:39,559 --> 00:08:42,160 Speaker 9: you would have some share of stomach. So, you know, 167 00:08:42,440 --> 00:08:46,000 Speaker 9: for the vast amount of you know, of our restaurants 168 00:08:46,000 --> 00:08:48,520 Speaker 9: out there, we are competing with a lot of people. 169 00:08:48,600 --> 00:08:51,000 Speaker 9: Now we are differentiated and we are kind of in 170 00:08:51,000 --> 00:08:54,960 Speaker 9: that category of one in the fine casual sector. But 171 00:08:55,040 --> 00:08:57,040 Speaker 9: at the same time we know that, you know, people 172 00:08:57,080 --> 00:08:58,920 Speaker 9: have lots of different options where they can go out 173 00:08:58,960 --> 00:08:59,199 Speaker 9: to eat. 174 00:08:59,320 --> 00:09:02,840 Speaker 7: Okay, there's concern out there about inflation. If inflation were 175 00:09:02,960 --> 00:09:04,800 Speaker 7: to come into your business, where would you see it 176 00:09:04,920 --> 00:09:05,880 Speaker 7: and how do you plan for that? 177 00:09:06,160 --> 00:09:08,880 Speaker 9: So we actually have been navigating through inflationary pressures for 178 00:09:08,880 --> 00:09:12,160 Speaker 9: a number of years here and doing so quite successfully. 179 00:09:12,200 --> 00:09:15,640 Speaker 9: I'll say, you know, we've had wage inflationary pressures in COVID. 180 00:09:15,720 --> 00:09:17,599 Speaker 4: It was actually very hard to get. 181 00:09:17,679 --> 00:09:21,520 Speaker 9: Restaurant talent in our restaurants to staff and to deliver 182 00:09:21,679 --> 00:09:24,320 Speaker 9: our food. It was not a desirable job at the time, 183 00:09:24,440 --> 00:09:26,760 Speaker 9: and we had we raised wages and had a very 184 00:09:26,760 --> 00:09:30,800 Speaker 9: competitive and compelling opportunity for our team members. We also 185 00:09:30,840 --> 00:09:34,520 Speaker 9: introduced tips as a way to compensate our team members 186 00:09:34,520 --> 00:09:38,040 Speaker 9: as well and give them added benefit. And then last 187 00:09:38,120 --> 00:09:40,560 Speaker 9: year with you know, with California Fast Food Wage Act, 188 00:09:40,559 --> 00:09:43,280 Speaker 9: you know, we paced through that as well. We've also 189 00:09:43,400 --> 00:09:46,320 Speaker 9: had on the food side, you know, inflationary pressures that 190 00:09:46,320 --> 00:09:49,040 Speaker 9: have been we've been navigating for a number of years 191 00:09:49,080 --> 00:09:52,560 Speaker 9: as well. But through all of this through leaning in 192 00:09:52,640 --> 00:09:55,080 Speaker 9: on our strength, which is you know, again delivering that 193 00:09:55,320 --> 00:09:58,400 Speaker 9: elevated you know experience to guests, giving them that you know, 194 00:09:58,480 --> 00:10:02,320 Speaker 9: twenty five dollars you know, black truffle Burger that we 195 00:10:02,320 --> 00:10:04,440 Speaker 9: were actually selling for ten dollars and giving them that 196 00:10:04,520 --> 00:10:08,120 Speaker 9: great value. On that side, we've been able to both 197 00:10:08,160 --> 00:10:11,200 Speaker 9: grow sales and grow margins at a faster pace. Just 198 00:10:11,320 --> 00:10:14,200 Speaker 9: even last year, we expanded our margins in the fourth 199 00:10:14,280 --> 00:10:15,880 Speaker 9: quarter by three hundred basis points. 200 00:10:16,120 --> 00:10:18,280 Speaker 2: So I've never had Shakeshack but it looks I know, 201 00:10:18,320 --> 00:10:19,959 Speaker 2: I know, but it looks like I may be able 202 00:10:19,960 --> 00:10:20,760 Speaker 2: to now in Delta. 203 00:10:21,000 --> 00:10:21,200 Speaker 9: Yeah. 204 00:10:21,400 --> 00:10:24,240 Speaker 2: So, and this really also goes to your expansion plans. 205 00:10:24,440 --> 00:10:27,560 Speaker 2: Delta is going to offer Shakeshack Burgers on additional domestic 206 00:10:27,640 --> 00:10:31,079 Speaker 2: roots this year, and that could expand international flights next year. 207 00:10:31,120 --> 00:10:32,640 Speaker 4: Talk about these expansion kind of plans. 208 00:10:32,720 --> 00:10:34,839 Speaker 9: Yeah, I mean, if you look at Delta at its 209 00:10:34,840 --> 00:10:37,520 Speaker 9: core and what this does, you know, this is an 210 00:10:37,559 --> 00:10:41,400 Speaker 9: opportunity where we're able to surprise and delight our guests, 211 00:10:41,440 --> 00:10:43,840 Speaker 9: give them that thing that they weren't really expecting. You know, 212 00:10:43,920 --> 00:10:46,560 Speaker 9: you have your expectation for what airline food is like, 213 00:10:47,200 --> 00:10:50,520 Speaker 9: and you know this this opportunity to get a Shakeshack 214 00:10:50,559 --> 00:10:53,840 Speaker 9: burger and our great we have a special brownie that 215 00:10:53,880 --> 00:10:56,160 Speaker 9: we've made for Delta as well. 216 00:10:56,600 --> 00:10:57,440 Speaker 4: Through this program. 217 00:10:58,000 --> 00:11:00,880 Speaker 9: People are just absolutely elated at the opportunity to have 218 00:11:00,960 --> 00:11:03,400 Speaker 9: that on their flights, and so much so that it's 219 00:11:03,440 --> 00:11:05,240 Speaker 9: exceeded our internal expectations. 220 00:11:05,480 --> 00:11:07,000 Speaker 4: We're rolling it out to more airports. 221 00:11:07,000 --> 00:11:08,160 Speaker 9: You're going to be able to get it, you know, 222 00:11:08,240 --> 00:11:11,880 Speaker 9: New York, Atlanta, a number of airports, and that will 223 00:11:12,000 --> 00:11:15,080 Speaker 9: just you know, probably continue to grow. And you know, 224 00:11:15,080 --> 00:11:17,719 Speaker 9: if you look at that opportunity, and I can make 225 00:11:17,800 --> 00:11:21,920 Speaker 9: so many different parallels to how we've gone into an 226 00:11:22,040 --> 00:11:26,040 Speaker 9: area where the consumer had a certain expectation and we 227 00:11:26,200 --> 00:11:28,800 Speaker 9: just really raised the bar on it and out punched 228 00:11:28,840 --> 00:11:32,920 Speaker 9: above our weight and transformed what people were expecting from 229 00:11:33,040 --> 00:11:37,280 Speaker 9: you know, it's airline food, if it's roadside food, and 230 00:11:37,480 --> 00:11:38,559 Speaker 9: across the board. 231 00:11:39,240 --> 00:11:41,600 Speaker 7: Katie, in terms of growth, how many locations do you 232 00:11:41,640 --> 00:11:44,079 Speaker 7: have today and what's your outlook for the next year 233 00:11:44,160 --> 00:11:44,400 Speaker 7: or two. 234 00:11:44,600 --> 00:11:47,400 Speaker 9: Yeah, we have, you know, across both our company operated 235 00:11:47,840 --> 00:11:51,840 Speaker 9: and our licensed business. We're you know, about five hundred 236 00:11:51,840 --> 00:11:54,720 Speaker 9: and fifty five hundred and seventy locations, but we are 237 00:11:54,760 --> 00:11:58,440 Speaker 9: growing very fast. We're going to add another forty five 238 00:11:58,679 --> 00:12:02,560 Speaker 9: domestic company operator shacks this year, and we're going to 239 00:12:02,600 --> 00:12:06,000 Speaker 9: open about thirty five to forty licensed shacks as well. 240 00:12:06,520 --> 00:12:09,840 Speaker 9: Those licensed shacks are ones that we operate, that our 241 00:12:09,840 --> 00:12:14,280 Speaker 9: partners operate. We have locations in the US, but most 242 00:12:14,320 --> 00:12:16,880 Speaker 9: of that is kind of outside of the US and Asia, 243 00:12:17,040 --> 00:12:21,200 Speaker 9: and and we have UK, the Middle East, Mexico and 244 00:12:21,360 --> 00:12:23,120 Speaker 9: most recently we opened up in Canada. 245 00:12:23,760 --> 00:12:25,480 Speaker 4: Well, great stuff. We really appreciate it. We know you 246 00:12:25,520 --> 00:12:26,240 Speaker 4: got to run, Katie. 247 00:12:26,280 --> 00:12:29,199 Speaker 2: Thank you very much, next time, snaxt Katie Muggerty, Chief 248 00:12:29,200 --> 00:12:31,160 Speaker 2: financial officer at shake Shack. 249 00:12:32,840 --> 00:12:36,559 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 250 00:12:36,640 --> 00:12:39,720 Speaker 1: weekdays at ten am Eastern on Apple Coarcklay and Android 251 00:12:39,720 --> 00:12:43,040 Speaker 1: Auto with the Bloomberg Business Up. Listen on demand wherever 252 00:12:43,080 --> 00:12:46,640 Speaker 1: you get your podcasts, or watch us live on YouTube. 253 00:12:47,080 --> 00:12:49,240 Speaker 7: Alex Steel, Paul Swiney live here in our Bloomberg invest 254 00:12:49,720 --> 00:12:52,840 Speaker 7: conference at Brookfield Place in Lower Manhattan. Lots of great 255 00:12:52,840 --> 00:12:54,280 Speaker 7: guests we're just grabbing. As soon as they get off 256 00:12:54,280 --> 00:12:56,000 Speaker 7: the stage, we grab and put them in the hot seat. 257 00:12:56,040 --> 00:12:58,280 Speaker 7: One of them is Chris Heisie, chief investment officer at 258 00:12:58,320 --> 00:13:01,760 Speaker 7: Bank of America Private Bank, and I love that branding 259 00:13:01,880 --> 00:13:04,040 Speaker 7: right there. Somebody thought of that, got you paid that 260 00:13:04,080 --> 00:13:07,199 Speaker 7: for that? Chris, talk to us about the market here. 261 00:13:07,280 --> 00:13:10,839 Speaker 7: There's a lot of cross winds coming in aside from 262 00:13:10,880 --> 00:13:13,640 Speaker 7: some of the economic data like we received today, aside 263 00:13:13,640 --> 00:13:15,240 Speaker 7: from some of the corporate earnings that we have to 264 00:13:15,280 --> 00:13:17,880 Speaker 7: deal with. A lot of cross winds coming out of Washington, 265 00:13:17,960 --> 00:13:20,080 Speaker 7: d C. How do you guys at the portfolio level 266 00:13:20,120 --> 00:13:20,480 Speaker 7: deal with. 267 00:13:20,400 --> 00:13:23,680 Speaker 10: That novel statement here I'm about to say, which is, 268 00:13:24,040 --> 00:13:27,520 Speaker 10: you know, market hates uncertainty. We've seen it. There's a 269 00:13:27,520 --> 00:13:30,360 Speaker 10: lot of uncertainty. It's across the board. It's geopolitical risk, 270 00:13:30,400 --> 00:13:33,720 Speaker 10: it's policy in general. It's now starting to seep into 271 00:13:33,880 --> 00:13:36,480 Speaker 10: the level of growth. You saw a little bit of 272 00:13:36,520 --> 00:13:40,560 Speaker 10: soft patch data. We believe it's a little exaggerated, frankly, 273 00:13:40,600 --> 00:13:42,280 Speaker 10: because a lot of it was weather induced. I know 274 00:13:42,320 --> 00:13:45,600 Speaker 10: it sounds like an excuse, but it's particularly true in 275 00:13:45,600 --> 00:13:48,480 Speaker 10: the Northeast. But when you're putting all this together, one 276 00:13:48,480 --> 00:13:50,840 Speaker 10: thing that hasn't changed is the fact that corporate earnings 277 00:13:50,880 --> 00:13:53,440 Speaker 10: are still going to be very attractive and above average. Frankly, 278 00:13:53,880 --> 00:13:56,160 Speaker 10: you could see double digits. Some of Wall Street has 279 00:13:56,200 --> 00:13:58,400 Speaker 10: been bringing them down, but that's pretty natural. 280 00:13:59,160 --> 00:14:00,480 Speaker 11: So overall, we're. 281 00:14:00,360 --> 00:14:05,120 Speaker 10: In a volatility pothole which is forcing some repricing, and 282 00:14:05,160 --> 00:14:07,839 Speaker 10: that's very healthy. And it's easy for me to say 283 00:14:07,880 --> 00:14:10,320 Speaker 10: because it's only a five percent pullback and it could 284 00:14:10,320 --> 00:14:12,040 Speaker 10: get to a ten percent correction, but that would be 285 00:14:12,080 --> 00:14:13,480 Speaker 10: a buying opportunity in our opinion. 286 00:14:13,720 --> 00:14:17,040 Speaker 2: So the narrative of maybe you want to be putting 287 00:14:17,080 --> 00:14:20,840 Speaker 2: money into areas that will be stimulative Europe, for example, 288 00:14:21,120 --> 00:14:23,960 Speaker 2: Germany most likely, China versus US. 289 00:14:24,600 --> 00:14:26,600 Speaker 11: Hold for you, it does. It does. 290 00:14:26,680 --> 00:14:28,920 Speaker 10: It's at the top of our watch list for one 291 00:14:29,080 --> 00:14:32,840 Speaker 10: very important reason. They are now serious about a level 292 00:14:32,840 --> 00:14:33,920 Speaker 10: of stimulus. 293 00:14:34,520 --> 00:14:35,760 Speaker 11: It wasn't the case. 294 00:14:35,600 --> 00:14:36,680 Speaker 7: Before both of them. 295 00:14:36,680 --> 00:14:38,520 Speaker 4: You can make the argument right both, Yeah. 296 00:14:38,280 --> 00:14:38,720 Speaker 11: That's right. 297 00:14:39,160 --> 00:14:42,160 Speaker 10: And when the US was providing the fiscal stimulus, you 298 00:14:42,160 --> 00:14:45,640 Speaker 10: saw what happened. Now, granted it created a deficit for sure, 299 00:14:45,920 --> 00:14:50,200 Speaker 10: but now you're starting to see easing financial conditions across Europe. 300 00:14:50,640 --> 00:14:52,880 Speaker 10: At the same time, you're seeing this willingness now to 301 00:14:53,000 --> 00:14:54,560 Speaker 10: add fiscal spend. 302 00:14:54,480 --> 00:14:57,400 Speaker 11: To get the growth. So it's a little bit of 303 00:14:57,400 --> 00:14:58,080 Speaker 11: a normalization. 304 00:14:58,120 --> 00:15:02,000 Speaker 10: I want to get two over enthusiastic about non dollar assets, 305 00:15:02,040 --> 00:15:02,720 Speaker 10: but certainly it's the. 306 00:15:02,640 --> 00:15:04,280 Speaker 11: Top of the watch list to upgrade. 307 00:15:04,520 --> 00:15:07,160 Speaker 7: Just breaking across the Bloomberg terminal right now, red headline 308 00:15:07,280 --> 00:15:11,640 Speaker 7: Canada won't end tariffs unless all US tariffs lifted. That 309 00:15:11,720 --> 00:15:14,080 Speaker 7: is according to an official. So again the news keeps 310 00:15:14,120 --> 00:15:18,080 Speaker 7: flowing here. So as we think about the US equity markets, 311 00:15:18,320 --> 00:15:21,080 Speaker 7: one of the risks that gets called out quite frequently 312 00:15:21,160 --> 00:15:23,680 Speaker 7: Chris is just this concentration risk. It's just too over 313 00:15:23,720 --> 00:15:26,000 Speaker 7: concentrated some of these big cap names. As you talk 314 00:15:26,040 --> 00:15:28,600 Speaker 7: to your portfolio managers, how did they deal with that? 315 00:15:29,800 --> 00:15:33,600 Speaker 10: Most portfolio managers cannot own up to the level of 316 00:15:33,600 --> 00:15:36,880 Speaker 10: what the index is in any one name. So when 317 00:15:36,880 --> 00:15:41,360 Speaker 10: people say portfolio managers are underperforming or active managers are underperformed, well, 318 00:15:41,440 --> 00:15:45,000 Speaker 10: they can't participate at the level that the index can't. 319 00:15:45,000 --> 00:15:49,400 Speaker 10: Now we're now switching into a marketplace that's rotating rebalancing. 320 00:15:50,200 --> 00:15:52,760 Speaker 10: I'd like to use the word rebalancing because the rotation 321 00:15:53,760 --> 00:15:56,480 Speaker 10: would make you think that it's going to happen with with. 322 00:15:56,440 --> 00:15:58,960 Speaker 11: A snap of a chalk line. It's from here to there. 323 00:15:59,120 --> 00:16:01,160 Speaker 2: It actually applies that you'd be like selling tech and 324 00:16:01,200 --> 00:16:01,800 Speaker 2: buying Europe. 325 00:16:01,960 --> 00:16:03,480 Speaker 4: It's the one for one exactly. 326 00:16:03,640 --> 00:16:06,200 Speaker 10: And I think it's just really portfolio construction. To your 327 00:16:06,200 --> 00:16:08,480 Speaker 10: point about what do you do with it? I think 328 00:16:08,560 --> 00:16:11,360 Speaker 10: you have to look for three things that have been 329 00:16:11,440 --> 00:16:15,240 Speaker 10: driving markets and it's now switching to other parts. It's 330 00:16:15,560 --> 00:16:18,560 Speaker 10: earnings momentum, price momentum, and news momentum. 331 00:16:18,720 --> 00:16:20,880 Speaker 11: Those three things hit together. Where are they hitting? 332 00:16:21,120 --> 00:16:24,400 Speaker 10: Some defensives and frankly, some cyclicals and away from the 333 00:16:24,400 --> 00:16:25,080 Speaker 10: big leaders. 334 00:16:26,080 --> 00:16:27,680 Speaker 11: I wouldn't be short the big leaders. 335 00:16:27,440 --> 00:16:31,840 Speaker 2: Though, so it's not short the big leaders. How do 336 00:16:31,920 --> 00:16:34,240 Speaker 2: you protect yourself from all the noise? 337 00:16:35,840 --> 00:16:38,200 Speaker 10: Very hard to do. You have to take emotion out. 338 00:16:38,680 --> 00:16:41,200 Speaker 10: You have to be disciplined. How do you be disciplined? 339 00:16:41,240 --> 00:16:42,800 Speaker 10: You have to have a process, you have to have 340 00:16:42,880 --> 00:16:45,840 Speaker 10: cash ready to reinvest and stick to your goals. I 341 00:16:45,880 --> 00:16:48,680 Speaker 10: know that sounds very simple and elementary, but it's the 342 00:16:48,720 --> 00:16:52,880 Speaker 10: only way to create a framework that takes the emotion out. Granted, 343 00:16:53,360 --> 00:16:56,040 Speaker 10: we just wrote a report recently. It talks about focus 344 00:16:56,120 --> 00:16:58,120 Speaker 10: on the trend lines, not the headlines. 345 00:16:58,360 --> 00:17:01,080 Speaker 11: Hard to do so to a. 346 00:17:01,000 --> 00:17:05,400 Speaker 10: Certain degree, trust your instincts about your goals and objectives 347 00:17:05,640 --> 00:17:09,159 Speaker 10: and be diversified. And it just doesn't always mean sixty forty. 348 00:17:09,240 --> 00:17:11,520 Speaker 10: It's whatever that appropriate mix is for you. 349 00:17:12,080 --> 00:17:13,960 Speaker 7: What are we doing in the fixed income world here? 350 00:17:14,560 --> 00:17:15,280 Speaker 7: Yield's coming down? 351 00:17:15,320 --> 00:17:18,280 Speaker 10: Actually, yeah, for a few people that have been around 352 00:17:18,359 --> 00:17:20,480 Speaker 10: the block a little bit, we're back to the nineteen 353 00:17:20,520 --> 00:17:23,840 Speaker 10: nineties again, and you're talking about four to five percent yields, 354 00:17:23,840 --> 00:17:26,800 Speaker 10: which are attractive for savers and fixed income investors. So 355 00:17:27,000 --> 00:17:30,280 Speaker 10: there's a reason why fixed income is called fixed income 356 00:17:30,680 --> 00:17:32,439 Speaker 10: and that's how we should think about it versus the 357 00:17:32,440 --> 00:17:35,080 Speaker 10: total return that occurred for better part of three decades. 358 00:17:35,160 --> 00:17:37,919 Speaker 10: So we're looking across the curve. We're right on duration 359 00:17:38,240 --> 00:17:41,000 Speaker 10: right now. We think at some point up to five 360 00:17:41,040 --> 00:17:43,440 Speaker 10: percent of the ten year yield, it's important to. 361 00:17:43,080 --> 00:17:44,199 Speaker 11: Extend duration a little bit. 362 00:17:44,200 --> 00:17:45,480 Speaker 10: A lot of people don't like to do that because 363 00:17:45,480 --> 00:17:48,080 Speaker 10: they're getting four percent at the short end. That's fine 364 00:17:49,119 --> 00:17:50,840 Speaker 10: at the end of the day. I would say in 365 00:17:50,880 --> 00:17:53,800 Speaker 10: terms of segments within fixed income, real quickly, we want 366 00:17:53,800 --> 00:17:55,840 Speaker 10: to be neutral across the board. There's not a unit 367 00:17:56,000 --> 00:17:58,399 Speaker 10: of risk out there that's going to give you extra 368 00:17:58,480 --> 00:18:01,399 Speaker 10: return that is more attractive than any of the space. 369 00:18:01,480 --> 00:18:04,199 Speaker 2: What about corporate credit, for example, because we finally to 370 00:18:04,200 --> 00:18:05,760 Speaker 2: see a little bit of a widening in the investment 371 00:18:05,760 --> 00:18:06,400 Speaker 2: grade market. 372 00:18:06,840 --> 00:18:10,520 Speaker 10: In addition to international equities being at the top of 373 00:18:10,520 --> 00:18:12,959 Speaker 10: the watch list, it's also corporate credit. They're at spreads now, 374 00:18:12,960 --> 00:18:15,199 Speaker 10: they're a little bit more attractive both high yield and 375 00:18:15,320 --> 00:18:18,200 Speaker 10: investment grade, and I would consider. 376 00:18:17,880 --> 00:18:19,000 Speaker 11: That an upgrade potential. 377 00:18:19,520 --> 00:18:21,600 Speaker 7: So one of the topics we hear a lot about 378 00:18:21,640 --> 00:18:23,480 Speaker 7: at this conference and a lot of conferences over the 379 00:18:23,560 --> 00:18:26,199 Speaker 7: last couple of years is alternative investments, not just private credit, 380 00:18:26,320 --> 00:18:29,439 Speaker 7: I mean private equity and hedge funds, but also private credit. 381 00:18:29,640 --> 00:18:32,480 Speaker 7: How do you and your private clients at Bava Meryl, 382 00:18:32,520 --> 00:18:33,439 Speaker 7: how do you guys think about that? 383 00:18:33,840 --> 00:18:36,119 Speaker 10: Well, we think of it as an alternative piece of 384 00:18:36,160 --> 00:18:39,120 Speaker 10: credit right and at the same time, right now where 385 00:18:39,160 --> 00:18:43,840 Speaker 10: it is in the cycle, stay high quality. Don't reach 386 00:18:43,880 --> 00:18:46,200 Speaker 10: for the lower quality end of private credit right now. 387 00:18:46,640 --> 00:18:48,200 Speaker 10: Even though you're going to get a little bit of 388 00:18:48,720 --> 00:18:51,399 Speaker 10: pickup in yield, you can do that in the normal 389 00:18:51,520 --> 00:18:52,440 Speaker 10: high yield market. 390 00:18:52,600 --> 00:18:54,560 Speaker 11: We don't see any big default cycle coming. 391 00:18:54,880 --> 00:18:57,920 Speaker 10: We're kind of through the hornet's nest of that recycle 392 00:18:58,160 --> 00:19:01,520 Speaker 10: of going from zero percent inturates restraights sharply up to 393 00:19:01,600 --> 00:19:04,440 Speaker 10: five percent. So we look at private credit as an 394 00:19:04,480 --> 00:19:07,240 Speaker 10: alternative source of credit as a part of a build 395 00:19:07,240 --> 00:19:09,480 Speaker 10: out of a portfolio on the private side. 396 00:19:09,640 --> 00:19:11,560 Speaker 2: Okay, So if we were looking at the sixty forty 397 00:19:11,640 --> 00:19:13,320 Speaker 2: or like, just don't think of it like that is it? 398 00:19:13,680 --> 00:19:15,760 Speaker 2: What percent is equity is what is fixed income? And 399 00:19:15,840 --> 00:19:19,200 Speaker 2: in fixed income what would be your traditional stuff versus 400 00:19:19,200 --> 00:19:19,919 Speaker 2: a private credit. 401 00:19:20,119 --> 00:19:21,680 Speaker 10: So you start with the role it's going to play 402 00:19:21,840 --> 00:19:24,240 Speaker 10: if you're looking for it to be in a yield 403 00:19:24,720 --> 00:19:28,320 Speaker 10: or a yield enhancing strategy for you that comes from 404 00:19:28,320 --> 00:19:29,960 Speaker 10: fixed income. If you're going to pick up a little 405 00:19:29,960 --> 00:19:32,080 Speaker 10: bit of the equity, which some parts of private credit 406 00:19:32,119 --> 00:19:34,000 Speaker 10: can do, then it's a little bit of a combination 407 00:19:34,080 --> 00:19:38,000 Speaker 10: of both. We don't have any one particular allocation to 408 00:19:38,200 --> 00:19:40,960 Speaker 10: private credit. It kind of depends on the individual. But 409 00:19:41,040 --> 00:19:42,320 Speaker 10: at the end of the day, I think you're going 410 00:19:42,359 --> 00:19:44,960 Speaker 10: to consistently see this. It's gone from an assa class 411 00:19:45,000 --> 00:19:48,080 Speaker 10: so basically had nothing in it to two trillion. Ultimately, 412 00:19:48,080 --> 00:19:50,240 Speaker 10: they're probably increasing that over the course of the next 413 00:19:50,320 --> 00:19:52,680 Speaker 10: decade for sure, so we're going to constantly be adding 414 00:19:52,720 --> 00:19:52,959 Speaker 10: to it. 415 00:19:53,320 --> 00:19:56,800 Speaker 7: We talked a little bit about Europe earlier. There's actually 416 00:19:56,840 --> 00:19:59,439 Speaker 7: been some pretty good performance out of Europe in this 417 00:19:59,480 --> 00:20:02,159 Speaker 7: first quarter visa VI the US, and that has not 418 00:20:02,440 --> 00:20:05,200 Speaker 7: been the case for a long time. Does that change 419 00:20:05,200 --> 00:20:08,479 Speaker 7: your allocation? I mean, do you risk kind of chasing 420 00:20:08,520 --> 00:20:09,240 Speaker 7: this performance? 421 00:20:10,680 --> 00:20:14,639 Speaker 10: The US reached seventy percent of the world market cap extraordinary. 422 00:20:15,720 --> 00:20:18,040 Speaker 10: I remember in the nineteen nineties it barely broke the 423 00:20:18,080 --> 00:20:21,200 Speaker 10: fifty two percent level and everybody got excited. Now you're 424 00:20:21,200 --> 00:20:24,680 Speaker 10: talking seventy percent, and it makes sense for everything that's 425 00:20:24,680 --> 00:20:26,760 Speaker 10: going on in the last, you know, twenty plus years. 426 00:20:27,920 --> 00:20:29,240 Speaker 11: We think it's a little excessive. 427 00:20:29,720 --> 00:20:33,720 Speaker 10: We don't believe that America dominance from an equity market standpoint, 428 00:20:33,880 --> 00:20:37,360 Speaker 10: is over, but we think people should reassess their allocation 429 00:20:37,480 --> 00:20:43,040 Speaker 10: overseas and not overseas investing. Typically the window opens and 430 00:20:43,119 --> 00:20:47,040 Speaker 10: it closes, and usually it closes because they can't compete 431 00:20:47,040 --> 00:20:49,919 Speaker 10: on growth, they can't compete on yields, and ultimately the 432 00:20:50,000 --> 00:20:53,359 Speaker 10: dollar doesn't stay weak, it ultimately strengthens again. 433 00:20:53,760 --> 00:20:55,760 Speaker 11: You're starting to see winds of change there. 434 00:20:56,040 --> 00:20:58,680 Speaker 10: So this is a great time to reassess and put 435 00:20:58,680 --> 00:21:00,840 Speaker 10: that at the top of your watchlift for potential upgrade. 436 00:21:00,960 --> 00:21:03,359 Speaker 2: And I'm assuming you're talking about the fiscal break kind 437 00:21:03,359 --> 00:21:05,480 Speaker 2: of coming off the boil in Germany, so like this 438 00:21:05,600 --> 00:21:07,479 Speaker 2: time it maybe actually is different. 439 00:21:08,280 --> 00:21:12,479 Speaker 10: It seems it seems like that, And there's a lot 440 00:21:12,520 --> 00:21:15,800 Speaker 10: of investors who think the international markets didn't participate in 441 00:21:15,800 --> 00:21:16,880 Speaker 10: that narrow leadership. 442 00:21:17,000 --> 00:21:17,400 Speaker 11: They did. 443 00:21:18,200 --> 00:21:20,879 Speaker 10: A lot of the companies that lead the market even 444 00:21:20,960 --> 00:21:23,520 Speaker 10: now in this year, particularly in Europe, thin get most 445 00:21:23,560 --> 00:21:26,159 Speaker 10: of their revenues outside of Europe. They're just happened to 446 00:21:26,160 --> 00:21:30,000 Speaker 10: be domiciled there. But you're going to pick up value 447 00:21:30,160 --> 00:21:32,920 Speaker 10: and it doesn't mean you go from growth to value. 448 00:21:33,040 --> 00:21:34,320 Speaker 11: You have a broad mix of both. 449 00:21:34,880 --> 00:21:37,240 Speaker 7: How am I back here in the US valuation? What's 450 00:21:37,280 --> 00:21:40,639 Speaker 7: the valuation call? Here? Earnings have been good, but are 451 00:21:40,680 --> 00:21:41,359 Speaker 7: they good enough? 452 00:21:41,840 --> 00:21:43,919 Speaker 10: This is where it gets interesting, right The whole second 453 00:21:43,920 --> 00:21:48,320 Speaker 10: derivative argument is slowing down and the first mover when 454 00:21:48,320 --> 00:21:51,639 Speaker 10: the second derivative is going up higher velocity, get higher 455 00:21:51,640 --> 00:21:52,359 Speaker 10: earnings growth. 456 00:21:53,160 --> 00:21:55,040 Speaker 11: You start early, you benefit from that. 457 00:21:55,119 --> 00:21:56,879 Speaker 10: Now you start to see a little cresting of that 458 00:21:56,960 --> 00:21:59,440 Speaker 10: second derivative. You're slowing down, but earning's growth should still 459 00:21:59,440 --> 00:22:04,359 Speaker 10: be okay. A Our view is pretty simple valuation. If 460 00:22:04,560 --> 00:22:08,639 Speaker 10: billions of investors feel comfortable paying twenty times forward earnings. 461 00:22:08,600 --> 00:22:12,679 Speaker 11: Who are we to argue with that? Until something changes? 462 00:22:12,720 --> 00:22:13,520 Speaker 11: What's that something? 463 00:22:13,560 --> 00:22:16,520 Speaker 10: We have to see earnings growth fade and ultimately go 464 00:22:16,640 --> 00:22:21,200 Speaker 10: down to almost zero three to two percent keeping with inflatial, 465 00:22:21,240 --> 00:22:24,520 Speaker 10: We don't see that, So we are comfortable with valuation 466 00:22:24,600 --> 00:22:27,240 Speaker 10: right now. We understand it's at premium. But our last 467 00:22:27,240 --> 00:22:30,800 Speaker 10: point on this is pretty simple. If the leaders have 468 00:22:30,960 --> 00:22:34,080 Speaker 10: been and the leaders of tomorrow are going to consistently 469 00:22:34,119 --> 00:22:37,240 Speaker 10: be asset light, they have high cash rich, they have 470 00:22:37,280 --> 00:22:41,040 Speaker 10: good balance sheets, they have low fixed labor. Why shouldn't 471 00:22:41,040 --> 00:22:43,840 Speaker 10: they have premium valuations? And that's how we see the 472 00:22:43,880 --> 00:22:46,399 Speaker 10: market moving in the next ten years. It's going to 473 00:22:46,400 --> 00:22:49,960 Speaker 10: become increasingly asset light, which keeps valuations a little higher 474 00:22:50,040 --> 00:22:51,760 Speaker 10: than what we've come to know in the last thirty 475 00:22:51,760 --> 00:22:52,320 Speaker 10: forty years. 476 00:22:52,400 --> 00:22:55,040 Speaker 2: Before we let you go, thoughts and comments on a 477 00:22:55,040 --> 00:22:57,639 Speaker 2: potential recession in the US, what are you guys modeling 478 00:22:57,680 --> 00:22:58,080 Speaker 2: right now? 479 00:22:58,600 --> 00:22:59,320 Speaker 11: Very low level. 480 00:23:00,040 --> 00:23:02,879 Speaker 10: Obviously, if tariffs stay and they stick, and they're across 481 00:23:02,880 --> 00:23:06,320 Speaker 10: the board and ultimately becomes a tax on growth, we 482 00:23:06,359 --> 00:23:07,879 Speaker 10: would have to reset. 483 00:23:07,480 --> 00:23:10,320 Speaker 4: And stay in stick means like forever tariffs. 484 00:23:09,760 --> 00:23:12,439 Speaker 10: Forever tariffs at least, or if they just stay and 485 00:23:12,480 --> 00:23:15,280 Speaker 10: stick through the year and into next year, it could harm. 486 00:23:15,200 --> 00:23:17,560 Speaker 11: Growth pretty aggressively. So we'll be watching that closely. 487 00:23:17,600 --> 00:23:19,880 Speaker 10: But we have a very low probability on any recession 488 00:23:19,960 --> 00:23:21,720 Speaker 10: risk in the in the foreseeable future. 489 00:23:22,320 --> 00:23:25,800 Speaker 7: Villanova basketball tough loss at Georgetown last night, eighteen and 490 00:23:25,920 --> 00:23:28,240 Speaker 7: thirteen on the year. What's going on down Philly? 491 00:23:28,320 --> 00:23:30,920 Speaker 10: I don't even want to talk about last night's Let's 492 00:23:30,960 --> 00:23:33,560 Speaker 10: talk about humble and hungry, which is who we are. 493 00:23:33,600 --> 00:23:35,000 Speaker 11: And we're going to move on and we're going to 494 00:23:35,640 --> 00:23:36,280 Speaker 11: do really well. 495 00:23:36,280 --> 00:23:38,639 Speaker 7: Are they having a hard time adjusting to the nil 496 00:23:38,720 --> 00:23:40,840 Speaker 7: and every trans for a portfolio kind of thing. 497 00:23:40,960 --> 00:23:43,639 Speaker 10: Everybody is Yeah, it's a whole new state out there. 498 00:23:44,000 --> 00:23:46,679 Speaker 10: But at the end of the day, it is what 499 00:23:46,720 --> 00:23:49,280 Speaker 10: it is. We like friendly competition. We're going to look 500 00:23:49,320 --> 00:23:51,320 Speaker 10: forward to the Big East. It's gonna be very very 501 00:23:51,320 --> 00:23:53,840 Speaker 10: fun and Big East is back. 502 00:23:53,720 --> 00:23:56,040 Speaker 7: Big East is backward. Bettina's back. See smug in a 503 00:23:56,040 --> 00:23:58,560 Speaker 7: little bit. Did Villanova people. They're very passionate about their who. 504 00:23:58,640 --> 00:24:01,720 Speaker 4: Hey, man, I support sports, so I support you supporting sports. 505 00:24:01,760 --> 00:24:04,560 Speaker 7: My father was all set to go to Villanova and 506 00:24:04,560 --> 00:24:07,280 Speaker 7: then the Japanese bomb Pearl Harbor change in plans for 507 00:24:07,359 --> 00:24:09,920 Speaker 7: him and like a lot of people, so soft spot 508 00:24:09,960 --> 00:24:11,600 Speaker 7: in the heart for you. Ye, fair enough, fair enough, 509 00:24:11,680 --> 00:24:13,520 Speaker 7: Chris Heisei, thanks so much for joining us. Chris Hesei, 510 00:24:13,560 --> 00:24:16,119 Speaker 7: Chief Investment Officer, Bank of America Private Bank, and Merril 511 00:24:16,600 --> 00:24:19,120 Speaker 7: here at our Bloomberg inst conference. A lot of smart 512 00:24:19,119 --> 00:24:20,119 Speaker 7: people running around here. 513 00:24:20,200 --> 00:24:20,960 Speaker 4: Yeah, it's really great. 514 00:24:21,000 --> 00:24:23,200 Speaker 2: Actually, I mean all these people that you see through 515 00:24:23,240 --> 00:24:25,000 Speaker 2: the screens and now they're real and you're talking and 516 00:24:25,040 --> 00:24:26,160 Speaker 2: you get lots of time to chat. 517 00:24:27,880 --> 00:24:31,600 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 518 00:24:31,680 --> 00:24:34,719 Speaker 1: weekdays at ten am Eastern on Apple Coarclay, and Android 519 00:24:34,760 --> 00:24:38,080 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 520 00:24:38,119 --> 00:24:41,240 Speaker 1: you get your podcasts, or watch us live on YouTube. 521 00:24:42,480 --> 00:24:45,640 Speaker 2: Alex Steel alongside Pops we Need. This is Bloomberg Intelligence Radio. 522 00:24:45,680 --> 00:24:48,760 Speaker 2: We are broadcasting to live from Bloomberg invest conference in 523 00:24:48,800 --> 00:24:51,119 Speaker 2: downtown at Manhattan. We talked to all the top names 524 00:24:51,400 --> 00:24:54,359 Speaker 2: in business, really asset managers, private credit, private equity, even 525 00:24:54,359 --> 00:24:57,160 Speaker 2: pension funds. And for that we are joined now by Yupkim, 526 00:24:57,400 --> 00:25:01,520 Speaker 2: a chief investment officer at Texas Municipal Retirement System managing 527 00:25:01,720 --> 00:25:05,840 Speaker 2: forty plus billion dollars in pension fund today. Do a 528 00:25:05,960 --> 00:25:10,159 Speaker 2: long history in funds, right, you previously ran private equity 529 00:25:10,200 --> 00:25:13,159 Speaker 2: over at CalPERS. You also were senior portfolio manager at 530 00:25:13,200 --> 00:25:15,959 Speaker 2: the Alaska Permanent Fund Corporation, so you've been through this 531 00:25:16,000 --> 00:25:20,399 Speaker 2: for a long time. What is the best allocation that 532 00:25:20,440 --> 00:25:22,560 Speaker 2: you can think of right now in this very strange, 533 00:25:22,600 --> 00:25:23,600 Speaker 2: difficult environment. 534 00:25:24,200 --> 00:25:28,120 Speaker 12: Yeah, it's you know, I think on a very holistic basis, 535 00:25:28,520 --> 00:25:31,640 Speaker 12: we are long term investors, and so our long term 536 00:25:31,680 --> 00:25:35,360 Speaker 12: strategy remains unchanged. You know, it's really predicated upon three 537 00:25:35,400 --> 00:25:39,960 Speaker 12: pillars number one, attract higher and retain the best talent possible, 538 00:25:40,480 --> 00:25:43,560 Speaker 12: and also attract and partner with the world class investment 539 00:25:43,600 --> 00:25:49,080 Speaker 12: managers around the globe. Secondly, it's really about taking a 540 00:25:49,119 --> 00:25:53,560 Speaker 12: low cost, public markets benchmark aligned approach to investing. 541 00:25:53,600 --> 00:25:56,159 Speaker 13: I do think we all recognize. 542 00:25:55,640 --> 00:25:59,240 Speaker 12: Going forward there are more alph opportunities and beta might 543 00:25:59,280 --> 00:26:01,720 Speaker 12: be you know, there might some headwinds to to beta 544 00:26:01,800 --> 00:26:04,600 Speaker 12: going forward. So I do think increasing the share of 545 00:26:04,600 --> 00:26:07,639 Speaker 12: active management and public markets will be a critical a 546 00:26:07,680 --> 00:26:11,440 Speaker 12: critical approach. And lastly, really endeavoring to generate a lot 547 00:26:11,480 --> 00:26:15,040 Speaker 12: of the upperformance going forward in private markets will be 548 00:26:15,560 --> 00:26:18,840 Speaker 12: absolutely critical. And you know, and so I do think 549 00:26:18,920 --> 00:26:21,000 Speaker 12: kind of with the you know, with the confluence of 550 00:26:21,040 --> 00:26:23,480 Speaker 12: a lot of market volatility, it's it's easy to be 551 00:26:23,560 --> 00:26:26,119 Speaker 12: swayed left and right. But I do think kind of 552 00:26:26,160 --> 00:26:30,119 Speaker 12: sticking to your core long term strategy is you know, 553 00:26:30,280 --> 00:26:31,480 Speaker 12: very important in this environment. 554 00:26:31,680 --> 00:26:34,200 Speaker 7: How does an asset allocation work for you guys down 555 00:26:34,240 --> 00:26:37,800 Speaker 7: in Austin stocks, bonds, alternatives, Let's you hold it with 556 00:26:37,880 --> 00:26:39,080 Speaker 7: alternatives playing. 557 00:26:39,160 --> 00:26:44,520 Speaker 12: Absolutely Look, I think when you think about alternatives, the 558 00:26:44,560 --> 00:26:48,000 Speaker 12: delta between a media and manager and a top five 559 00:26:48,000 --> 00:26:52,159 Speaker 12: percentile manager in alternatives and privates can be upwards of 560 00:26:52,200 --> 00:26:55,800 Speaker 12: fifteen hundred to eighteen hundred basis points. That equivalent number 561 00:26:55,800 --> 00:26:58,040 Speaker 12: in public markets is two hundred fifty to three hundred 562 00:26:58,040 --> 00:27:02,240 Speaker 12: basis points. And so you are really compensated for good 563 00:27:02,240 --> 00:27:05,240 Speaker 12: manager selection but also a good deal selection. And so 564 00:27:05,480 --> 00:27:07,919 Speaker 12: I do think there's still you know, when you think 565 00:27:07,960 --> 00:27:09,760 Speaker 12: about the next ten years, there's a lot of equity 566 00:27:09,840 --> 00:27:12,399 Speaker 12: value creation that will occur in the private markets, and 567 00:27:12,480 --> 00:27:15,480 Speaker 12: so it really you know, kind of provides that long 568 00:27:15,560 --> 00:27:18,160 Speaker 12: term you know, kind of alp engine to the overall portfolio. 569 00:27:18,280 --> 00:27:20,600 Speaker 2: I mean, so surprise that you did private equity in 570 00:27:20,760 --> 00:27:22,520 Speaker 2: your last job, and then now we're taking over at 571 00:27:22,560 --> 00:27:25,879 Speaker 2: the Texas Pension fund. Correct, How how well funded are 572 00:27:25,880 --> 00:27:26,680 Speaker 2: pensions right now? 573 00:27:27,119 --> 00:27:31,680 Speaker 12: Yes, and so pension funds are definitely better funded kind 574 00:27:31,680 --> 00:27:35,520 Speaker 12: of really on the backs of two incredible years in 575 00:27:35,680 --> 00:27:37,879 Speaker 12: you know, the equity public markets. And and I do 576 00:27:37,960 --> 00:27:42,600 Speaker 12: think public pensions typically have higher allocations to public equities, 577 00:27:42,600 --> 00:27:46,399 Speaker 12: since that's that's certainly helped. At Texas, we're you know, 578 00:27:46,440 --> 00:27:50,239 Speaker 12: above ninety percent funded and so and just given that 579 00:27:50,280 --> 00:27:53,399 Speaker 12: we serve cities that are growing, you know, you know, 580 00:27:53,480 --> 00:27:56,040 Speaker 12: our net cash out flow for the past two years 581 00:27:56,080 --> 00:27:58,200 Speaker 12: has been less than a percent, and so that really 582 00:27:58,600 --> 00:28:01,679 Speaker 12: empowers us to harvest, you know, the ilquided premium of 583 00:28:01,720 --> 00:28:05,240 Speaker 12: our private market book, but also really helps us risk 584 00:28:05,280 --> 00:28:06,600 Speaker 12: manage on the liquidity side. 585 00:28:07,400 --> 00:28:10,760 Speaker 7: How do you feel about just the opportunities today? Where 586 00:28:10,800 --> 00:28:13,120 Speaker 7: do you guys see the best opportunities? 587 00:28:13,200 --> 00:28:13,480 Speaker 13: Sure? 588 00:28:13,600 --> 00:28:16,480 Speaker 12: Sure, you know, like I think, maybe three things I'll 589 00:28:16,480 --> 00:28:20,040 Speaker 12: share there is, you know, number one, the core building 590 00:28:20,080 --> 00:28:25,239 Speaker 12: blocks on why people were excited about this US exceptionalism. 591 00:28:25,400 --> 00:28:28,520 Speaker 12: The core building blocks have not changed. Right when I 592 00:28:28,560 --> 00:28:31,320 Speaker 12: talk to my peers in Asia and Europe and the 593 00:28:31,320 --> 00:28:35,400 Speaker 12: Middle East, the US continues to be the top destination, 594 00:28:35,680 --> 00:28:38,560 Speaker 12: you know, for their investment capital. You have the top 595 00:28:38,600 --> 00:28:44,000 Speaker 12: academic institutions in the United States, presumably with the greatest founders, 596 00:28:44,160 --> 00:28:45,719 Speaker 12: the most tenured management teams. 597 00:28:45,800 --> 00:28:47,360 Speaker 13: You have access to cheap energy. 598 00:28:47,840 --> 00:28:53,200 Speaker 12: You have really a risk taking culture that's celebrated that's 599 00:28:53,200 --> 00:28:55,560 Speaker 12: really not found in many parts of the world. And 600 00:28:55,640 --> 00:28:58,880 Speaker 12: so I do think when we think, the question we 601 00:28:58,920 --> 00:29:01,680 Speaker 12: ask is not how do we performs in twenty twenty five, 602 00:29:02,240 --> 00:29:04,880 Speaker 12: but how do we generate outperforms in the next decade. 603 00:29:05,280 --> 00:29:08,520 Speaker 12: And we do view the US to continue to take 604 00:29:08,560 --> 00:29:11,680 Speaker 12: an asymantic share of that equity, you know, value creation 605 00:29:11,840 --> 00:29:13,080 Speaker 12: in our total portfolio. 606 00:29:13,400 --> 00:29:16,280 Speaker 2: How do you deal with liquidity when it comes to 607 00:29:16,320 --> 00:29:18,040 Speaker 2: different parts of the market. Being in the public market, 608 00:29:18,040 --> 00:29:19,800 Speaker 2: obviously it is easier, but then the more you go 609 00:29:19,840 --> 00:29:21,240 Speaker 2: to alternatives as harder it as. 610 00:29:21,080 --> 00:29:25,680 Speaker 12: A get Yeah, absolutely, liquidity is absolutely critical. I do think, 611 00:29:25,800 --> 00:29:29,440 Speaker 12: you know, as I shared before, given that our net 612 00:29:29,440 --> 00:29:32,400 Speaker 12: cash off flow annually is less than a percent, we're 613 00:29:32,520 --> 00:29:35,320 Speaker 12: very well covered by our public equities book and our 614 00:29:35,320 --> 00:29:38,880 Speaker 12: public credit book to meet those annual you know, liability streams. 615 00:29:39,120 --> 00:29:42,720 Speaker 12: The situation you really want to avoid is having to 616 00:29:42,800 --> 00:29:46,040 Speaker 12: sell your private market assets at a grave discount right 617 00:29:46,080 --> 00:29:48,960 Speaker 12: to satisfy that that liability stream. And so we feel 618 00:29:49,080 --> 00:29:52,560 Speaker 12: very very fortunate, you know, from a liquidity standpoint. 619 00:29:53,200 --> 00:29:56,160 Speaker 7: Texans would say that they are unique. Their Texans first, 620 00:29:57,280 --> 00:30:00,560 Speaker 7: really strong strong belief in that not often comes into 621 00:30:00,600 --> 00:30:03,560 Speaker 7: the investment themes as well, kind of leading the way 622 00:30:03,720 --> 00:30:06,680 Speaker 7: with maybe an alternative view of ESG investing several years ago, 623 00:30:06,760 --> 00:30:10,840 Speaker 7: allocating towards energy versus people who don't have heat towards energy. 624 00:30:10,840 --> 00:30:13,720 Speaker 7: How does that impact running the state pension fund? Yeah? 625 00:30:13,760 --> 00:30:16,880 Speaker 12: Look, I think I think Austin is a wonderful place 626 00:30:16,960 --> 00:30:19,480 Speaker 12: to be an allocator. Right, there are a number of 627 00:30:20,000 --> 00:30:23,440 Speaker 12: very large LPs you know, in town, and all the 628 00:30:23,480 --> 00:30:26,560 Speaker 12: CIOs we convene together and you know, we share share, 629 00:30:27,120 --> 00:30:28,440 Speaker 12: you know, kind of our views of the world, and 630 00:30:28,440 --> 00:30:30,600 Speaker 12: so I think that's that's super helpful, you know, Like 631 00:30:30,760 --> 00:30:34,440 Speaker 12: I think thematically, we're really excited about you know, five 632 00:30:34,520 --> 00:30:38,520 Speaker 12: big mega trends, right. Number one obviously around you know, 633 00:30:38,600 --> 00:30:44,120 Speaker 12: digital transformation. So we're talking about just industry transforming AI applications, 634 00:30:44,560 --> 00:30:47,440 Speaker 12: vertical software, cybersecurity, and data centers. 635 00:30:48,000 --> 00:30:50,240 Speaker 13: In healthcare innovation, we're really focused on. 636 00:30:50,960 --> 00:30:54,719 Speaker 12: Next generation pre clinical biotech platforms and also just opportunities 637 00:30:54,720 --> 00:30:59,560 Speaker 12: across the biotech and pharma value chain. On industrial resilience, 638 00:30:59,640 --> 00:31:05,239 Speaker 12: really around robotics AI, and also aerospace and defense. And 639 00:31:05,280 --> 00:31:08,200 Speaker 12: then kind of the last two areas, it's really around energy, 640 00:31:08,200 --> 00:31:11,640 Speaker 12: monetization and financial empowerment, so opportunities in fintech and also 641 00:31:12,000 --> 00:31:15,240 Speaker 12: asset light insurance, brokerage and so look, I do think 642 00:31:15,960 --> 00:31:18,040 Speaker 12: the next fifteen years will look very different from the 643 00:31:18,120 --> 00:31:21,720 Speaker 12: last fifteen and so really digging deep on these mega 644 00:31:21,760 --> 00:31:25,160 Speaker 12: trends and understanding how the world is moving, how these 645 00:31:25,160 --> 00:31:28,200 Speaker 12: industries are transforming, will be critical to long term OWT performance. 646 00:31:28,320 --> 00:31:30,280 Speaker 2: Here's an entirely unfair question you have to answer now 647 00:31:30,280 --> 00:31:32,560 Speaker 2: in thirty seconds. Okay, do you think the US should 648 00:31:32,560 --> 00:31:33,600 Speaker 2: have a sovereign well fund? 649 00:31:35,720 --> 00:31:37,200 Speaker 13: I do think that. 650 00:31:39,360 --> 00:31:41,560 Speaker 12: I do think we have the best investment talent in 651 00:31:41,600 --> 00:31:43,960 Speaker 12: the world residing here in the United States. I do think, 652 00:31:44,400 --> 00:31:46,360 Speaker 12: you know, a lot of our federal sources of capital 653 00:31:46,640 --> 00:31:50,320 Speaker 12: has not been compounding at endowment or pension like returns, 654 00:31:50,360 --> 00:31:53,840 Speaker 12: and so I think there is great opportunity to bring 655 00:31:53,880 --> 00:31:58,120 Speaker 12: the best of America's investment management and apply it to 656 00:31:58,520 --> 00:32:00,360 Speaker 12: you know, different forms of federal funds. 657 00:32:00,920 --> 00:32:04,080 Speaker 7: Great stuff. I really appreciate it. They're getting some thoughts 658 00:32:04,160 --> 00:32:07,360 Speaker 7: on these markets. Yep Kim, Chief Investment Officer, Texas Municipal 659 00:32:07,400 --> 00:32:10,440 Speaker 7: Retirement System based in Austin, Texas. 660 00:32:10,440 --> 00:32:15,479 Speaker 1: Credit you're listening to the Bloomberg Intelligence Podcast. Catch us 661 00:32:15,520 --> 00:32:18,960 Speaker 1: live weekdays at ten am Eastern on Applecarclay, and Android 662 00:32:18,960 --> 00:32:22,280 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 663 00:32:22,360 --> 00:32:26,320 Speaker 1: you get your podcasts, or watch us live on YouTube Alex. 664 00:32:26,360 --> 00:32:29,600 Speaker 2: You here alongside Paul Sweeney the Bloomberg invest Conference twenty 665 00:32:29,600 --> 00:32:32,040 Speaker 2: twenty five downtown in Lower Manhattan. 666 00:32:32,080 --> 00:32:33,440 Speaker 4: Now, obviously, when you. 667 00:32:33,360 --> 00:32:36,920 Speaker 2: Get together wealth managers private equity bankers, private credit guys. 668 00:32:36,920 --> 00:32:39,360 Speaker 2: They're all talking about alternative assets, but what have you 669 00:32:39,480 --> 00:32:41,520 Speaker 2: already been in that space for decades? 670 00:32:41,560 --> 00:32:42,320 Speaker 4: What do you do there? 671 00:32:42,560 --> 00:32:45,479 Speaker 2: While joining us now is a Pernima PII. She's governing 672 00:32:45,520 --> 00:32:50,040 Speaker 2: partner and portfolio manager for public credit at HPS Investment Partners, 673 00:32:50,080 --> 00:32:52,200 Speaker 2: which was founded back in twenty to two thousand and 674 00:32:52,240 --> 00:32:55,360 Speaker 2: seven to focus on credit and guess what longer dated, 675 00:32:55,720 --> 00:32:59,840 Speaker 2: less liquid investment opportunities, which it feels like that's the world. 676 00:32:59,520 --> 00:33:01,080 Speaker 4: That everyone is chasing right now. 677 00:33:01,760 --> 00:33:03,760 Speaker 2: You guys ended twenty twenty four with one hundred and 678 00:33:03,760 --> 00:33:06,000 Speaker 2: forty nine billion dollars in assets under management. 679 00:33:06,360 --> 00:33:07,760 Speaker 4: Where are your biggest opportunities? 680 00:33:08,840 --> 00:33:13,640 Speaker 14: Yeah, So when we started the business, the regulatory environment 681 00:33:13,720 --> 00:33:15,760 Speaker 14: changed pretty quickly thereafter, and it really gave us the 682 00:33:15,760 --> 00:33:20,080 Speaker 14: opportunity to get involved in the private credit business. And 683 00:33:20,120 --> 00:33:24,280 Speaker 14: at the time, private credit was more levered companies in 684 00:33:24,320 --> 00:33:27,680 Speaker 14: the high market or a substitute for broadly syndicated loans. 685 00:33:28,160 --> 00:33:30,000 Speaker 2: Like I can't get funding for my regular banks, I 686 00:33:30,000 --> 00:33:30,400 Speaker 2: got to go to. 687 00:33:30,440 --> 00:33:31,000 Speaker 4: You and pay up. 688 00:33:31,080 --> 00:33:33,360 Speaker 14: And there were moments of dislocation in the marketplace, and 689 00:33:33,400 --> 00:33:34,840 Speaker 14: so the banks might not have been there at that 690 00:33:34,880 --> 00:33:37,880 Speaker 14: moment in time regulatory environment changed and that opened up 691 00:33:37,880 --> 00:33:40,600 Speaker 14: the sort of I would say, that opened up the 692 00:33:40,640 --> 00:33:44,560 Speaker 14: marketplace for people to be an alternative provider of capital 693 00:33:44,600 --> 00:33:46,960 Speaker 14: to companies that needed at different moments in time. And 694 00:33:47,040 --> 00:33:49,000 Speaker 14: so what we used to be, you know, oh, was 695 00:33:49,040 --> 00:33:52,040 Speaker 14: when the capital markets were shifting. It actually transitioned a lot. 696 00:33:52,120 --> 00:33:54,959 Speaker 14: Like our business for example, we invest not just in 697 00:33:55,000 --> 00:33:58,760 Speaker 14: sponsor deals. We invest in we provide capital to owners 698 00:33:58,800 --> 00:34:01,400 Speaker 14: as well on a regular base. So over time the 699 00:34:01,440 --> 00:34:03,240 Speaker 14: market's evolved a lot. I would say, the market is 700 00:34:03,280 --> 00:34:06,120 Speaker 14: really bifurcated. There's a whole host of folks in private credit. 701 00:34:06,160 --> 00:34:07,720 Speaker 14: You say to yourself, there's been a ton of funds 702 00:34:07,720 --> 00:34:10,800 Speaker 14: that have been raised. We tend to traffic in I 703 00:34:10,800 --> 00:34:14,279 Speaker 14: would say, Number one, bigger businesses. Number Two, we tend 704 00:34:14,360 --> 00:34:17,480 Speaker 14: to we tend to provide larger sources of capital. Three, 705 00:34:17,520 --> 00:34:19,840 Speaker 14: we have flexible capital in terms of the top and bottom 706 00:34:19,880 --> 00:34:22,120 Speaker 14: of the structure, so we do we are able to 707 00:34:22,160 --> 00:34:24,239 Speaker 14: sort of think about where our solution might make sense 708 00:34:24,280 --> 00:34:27,600 Speaker 14: for a company. So that competitive landscape I think is 709 00:34:27,640 --> 00:34:29,880 Speaker 14: a little bit smaller in terms of the folks that 710 00:34:29,920 --> 00:34:32,000 Speaker 14: are trafficking there. The other thing I would say is 711 00:34:32,040 --> 00:34:34,920 Speaker 14: private credits expanding dramatically now because you're seeing it with 712 00:34:35,640 --> 00:34:37,960 Speaker 14: I think Joe Bay was just speaking, you know, private 713 00:34:38,000 --> 00:34:41,359 Speaker 14: ig that's a whole other sector that there's a whole 714 00:34:41,400 --> 00:34:43,520 Speaker 14: need of financing for all these mega trends that are 715 00:34:43,520 --> 00:34:46,279 Speaker 14: happening in the US. So that could be infrastructure, that 716 00:34:46,280 --> 00:34:49,520 Speaker 14: can be AI, that can be energy transition and that, 717 00:34:49,680 --> 00:34:53,800 Speaker 14: and that opportunity set is sort of ripe for folks 718 00:34:54,000 --> 00:34:56,080 Speaker 14: like ourselves and others to take advantage of. 719 00:34:56,320 --> 00:34:58,640 Speaker 7: What's a typical deal size for you guys? And how 720 00:34:58,640 --> 00:34:59,960 Speaker 7: has that changed over the year. 721 00:35:00,560 --> 00:35:02,920 Speaker 14: Well, it's changed a lot because the market's changed a lot. 722 00:35:03,040 --> 00:35:05,839 Speaker 14: So several years ago you did not have a lot 723 00:35:05,880 --> 00:35:09,640 Speaker 14: of private credit tranches that were you know, call it 724 00:35:09,719 --> 00:35:11,040 Speaker 14: much greater than three hundred. 725 00:35:10,840 --> 00:35:12,000 Speaker 5: Million dollars of size. 726 00:35:12,120 --> 00:35:14,560 Speaker 14: There are many now, I'll give you an example in 727 00:35:14,560 --> 00:35:17,200 Speaker 14: the marketplace today. There are three deals I can think 728 00:35:17,239 --> 00:35:20,640 Speaker 14: of that are refinancing in the broadly syndicated loan private credit. 729 00:35:21,000 --> 00:35:24,080 Speaker 14: One of them is a four to five billion dollar 730 00:35:24,200 --> 00:35:25,160 Speaker 14: deal size. 731 00:35:25,600 --> 00:35:26,520 Speaker 5: That's one trunch. 732 00:35:26,880 --> 00:35:29,759 Speaker 14: Another is, you know, three billion on the first lane, 733 00:35:29,840 --> 00:35:32,800 Speaker 14: nine hundred million second lane. That's a trunch, And another's 734 00:35:32,800 --> 00:35:34,680 Speaker 14: two and a half billion so like now you're starting 735 00:35:34,680 --> 00:35:38,400 Speaker 14: to see billion dollar deals. Wow, you don't have tons 736 00:35:38,440 --> 00:35:39,920 Speaker 14: of people that can traffic in two and a half 737 00:35:39,960 --> 00:35:42,680 Speaker 14: billion dollar deal sizes there, But there's guys out there 738 00:35:42,719 --> 00:35:44,200 Speaker 14: that can. You know, we think there's five or six 739 00:35:44,239 --> 00:35:46,520 Speaker 14: people who do that on a regular basis every single day. 740 00:35:47,760 --> 00:35:49,920 Speaker 5: But that's a smaller, smaller pool of competition. 741 00:35:49,960 --> 00:35:54,040 Speaker 2: I think, are you seeing the distress market grow pick up? 742 00:35:54,280 --> 00:35:56,120 Speaker 2: Is that the catastrophe we all thought it was going 743 00:35:56,160 --> 00:35:57,239 Speaker 2: to be five years ago or no? 744 00:35:58,120 --> 00:36:00,920 Speaker 14: I mean I would say, no, Oh, I don't think there. 745 00:36:01,239 --> 00:36:03,279 Speaker 14: I mean this was like the default cycle that never was. 746 00:36:03,640 --> 00:36:06,200 Speaker 14: So it was a variant on the distress cycle, which 747 00:36:06,280 --> 00:36:08,520 Speaker 14: is that you guys have talked about this, I'm sure, 748 00:36:08,560 --> 00:36:11,080 Speaker 14: but all the liability management stuff and sort of structured 749 00:36:11,080 --> 00:36:13,720 Speaker 14: transactions to kick the can a little bit and figure 750 00:36:13,760 --> 00:36:15,960 Speaker 14: out if you had time, especially in the in the 751 00:36:16,000 --> 00:36:18,760 Speaker 14: world of rising interest rates where balance sheets got stressed. 752 00:36:20,200 --> 00:36:23,600 Speaker 14: But we haven't really seen a distress cycle. And in fact, 753 00:36:25,040 --> 00:36:28,520 Speaker 14: if you talk to my partners who run our private 754 00:36:28,560 --> 00:36:32,719 Speaker 14: credit business, they would say they were surprised by how 755 00:36:32,760 --> 00:36:35,239 Speaker 14: well a lot of companies did over this period of time. 756 00:36:35,680 --> 00:36:37,560 Speaker 7: I started my career at the Chasement, Heaton Bank, and 757 00:36:37,560 --> 00:36:41,480 Speaker 7: the Leverage Lending Group lending five six times that the EBITTA. 758 00:36:41,840 --> 00:36:44,160 Speaker 7: We took a big fee up front, We syndicate, syndicated 759 00:36:44,200 --> 00:36:45,640 Speaker 7: all the risk off our balance sheet. It was a 760 00:36:45,680 --> 00:36:47,880 Speaker 7: great business. I would never allow you to come in 761 00:36:47,920 --> 00:36:49,840 Speaker 7: and take one of my clients. What are the banks 762 00:36:49,880 --> 00:36:51,680 Speaker 7: doing here? Why are they letting this business go to 763 00:36:51,719 --> 00:36:53,200 Speaker 7: people like you and others? 764 00:36:54,960 --> 00:36:55,200 Speaker 5: Wow? 765 00:36:55,239 --> 00:36:58,239 Speaker 14: So so one is that there's a regulatory environment shift right, 766 00:36:58,400 --> 00:37:00,400 Speaker 14: that changed a lot from when you started and frankly 767 00:37:00,400 --> 00:37:01,840 Speaker 14: when I started, and all that kind of stuff. 768 00:37:01,880 --> 00:37:02,680 Speaker 5: So that's number one. 769 00:37:02,800 --> 00:37:06,480 Speaker 14: Number two, there's different reasons companies go to private credit lenders, 770 00:37:06,560 --> 00:37:09,560 Speaker 14: right because banks, by and large, I think, just take 771 00:37:09,560 --> 00:37:12,120 Speaker 14: the body syndicated loan market, right, That bodily syndicated loan 772 00:37:12,160 --> 00:37:14,000 Speaker 14: market is sixty plus percent colos. 773 00:37:14,239 --> 00:37:16,080 Speaker 5: Colo is like a box. There's a box. 774 00:37:16,120 --> 00:37:18,480 Speaker 14: You want a reading, you want a certain amount of leverage, 775 00:37:18,520 --> 00:37:20,640 Speaker 14: you need a certain amount of diversity. It's great business, 776 00:37:20,719 --> 00:37:23,319 Speaker 14: by the way, but the things that are straight down 777 00:37:23,360 --> 00:37:25,320 Speaker 14: the fairway nicely fit into a colo. 778 00:37:25,680 --> 00:37:27,959 Speaker 5: So all of a sudden, if your reading's. 779 00:37:27,680 --> 00:37:31,200 Speaker 14: Constrained and maybe something's the minus, that market may or 780 00:37:31,280 --> 00:37:33,359 Speaker 14: may not be available to at a given moment in time. 781 00:37:33,400 --> 00:37:35,719 Speaker 14: So why do people go why do issuers go to 782 00:37:35,719 --> 00:37:38,440 Speaker 14: private credit folks? Well, they'll go because maybe they need 783 00:37:38,480 --> 00:37:41,560 Speaker 14: flexibility in picking for a period of time. 784 00:37:42,040 --> 00:37:43,040 Speaker 5: Okay, that could be one. 785 00:37:43,239 --> 00:37:47,040 Speaker 14: Maybe it's because the americket feels pretty saturated in particular industries. 786 00:37:47,280 --> 00:37:47,919 Speaker 5: That could be two. 787 00:37:48,160 --> 00:37:51,840 Speaker 14: Maybe it's because people need a delay draw facility because 788 00:37:51,880 --> 00:37:53,960 Speaker 14: businesses aren't static and they grow over time, and you 789 00:37:53,960 --> 00:37:56,000 Speaker 14: want to have that funding sort of lined up and 790 00:37:56,080 --> 00:37:58,640 Speaker 14: ready to roll if it's a roll up or something 791 00:37:58,680 --> 00:38:00,640 Speaker 14: like that, or you have a capback plan or something 792 00:38:00,680 --> 00:38:03,960 Speaker 14: like that. So that could be the third reason. And 793 00:38:04,000 --> 00:38:06,239 Speaker 14: then four, I think that you know, what we've seen, 794 00:38:06,280 --> 00:38:08,799 Speaker 14: certainly in some of our buckets of capital is that 795 00:38:08,840 --> 00:38:12,759 Speaker 14: as businesses grow, sometimes they'd like to have one or 796 00:38:12,760 --> 00:38:14,160 Speaker 14: two relationship providers. 797 00:38:15,320 --> 00:38:17,160 Speaker 7: Interesting, it's great business. 798 00:38:16,760 --> 00:38:19,160 Speaker 4: What what do you not want to touch right now 799 00:38:19,200 --> 00:38:20,360 Speaker 4: at the tem football. 800 00:38:21,480 --> 00:38:23,319 Speaker 5: Well, I think you mean, I'm sure you've heard this 801 00:38:23,360 --> 00:38:24,000 Speaker 5: from everybody. 802 00:38:24,040 --> 00:38:25,920 Speaker 14: You know, we don't know what's going on with tariffs, 803 00:38:26,280 --> 00:38:30,000 Speaker 14: and tariffs have both short term implications and longer term applicatdications. 804 00:38:30,080 --> 00:38:31,680 Speaker 5: The longer term implications. 805 00:38:31,239 --> 00:38:34,480 Speaker 14: Are trickier to underwrite because trade wars are very difficult 806 00:38:34,480 --> 00:38:37,480 Speaker 14: to underwrite, and that can really that coupled with the 807 00:38:37,520 --> 00:38:39,440 Speaker 14: other sort of things as part of the puzzle. 808 00:38:40,400 --> 00:38:41,800 Speaker 5: Immigration, slower growth. 809 00:38:41,600 --> 00:38:44,840 Speaker 14: Et cetera, affect a whole, but will affect everyone's portfolio. 810 00:38:44,880 --> 00:38:49,439 Speaker 14: Everybody's portfolio, every company. Shorter term. Maybe there's a band 811 00:38:49,480 --> 00:38:52,120 Speaker 14: you can underwrite on tariffs. So there's sort of the obvious, 812 00:38:52,200 --> 00:38:56,279 Speaker 14: which are you know, industrial manufacturing, retail or certain things 813 00:38:56,280 --> 00:38:59,759 Speaker 14: in the consumer space which get trickier to trickier to underwrite. 814 00:39:00,080 --> 00:39:02,160 Speaker 7: But just real quickly, thirty seconds. Your market is open, 815 00:39:02,160 --> 00:39:03,759 Speaker 7: today's miss. There's three deals in the market. 816 00:39:04,200 --> 00:39:07,920 Speaker 14: The broadly syndicated liquid loan market is open. Yes, you know, 817 00:39:07,960 --> 00:39:10,840 Speaker 14: there's been one hundred and sixty billion dollars of COLO 818 00:39:10,920 --> 00:39:13,400 Speaker 14: growth demand and the markets in twenty twenty one, the 819 00:39:13,480 --> 00:39:15,080 Speaker 14: lever lone market has changed by fifty billion. 820 00:39:15,280 --> 00:39:16,800 Speaker 5: There's a lot of people who want paper. 821 00:39:16,880 --> 00:39:19,560 Speaker 2: Yep, there you go, all right, Really great to get 822 00:39:19,600 --> 00:39:23,280 Speaker 2: your perspective up from Prairie joining us from HPS Investment Partners. 823 00:39:23,320 --> 00:39:25,759 Speaker 4: Also Feller in Northwestern grad and now you're going up 824 00:39:25,800 --> 00:39:28,120 Speaker 4: on me. They are good to know, they are good Western. 825 00:39:28,280 --> 00:39:29,120 Speaker 4: It was really cold. 826 00:39:29,760 --> 00:39:31,760 Speaker 7: It was very cool, Chicago. 827 00:39:32,640 --> 00:39:35,000 Speaker 4: Yeah, but you know it's because you're not like you don't. 828 00:39:34,760 --> 00:39:37,520 Speaker 2: Have big towers, because you're kind of allot to win. 829 00:39:37,600 --> 00:39:38,719 Speaker 7: All you have got that win. 830 00:39:39,160 --> 00:39:40,200 Speaker 4: Yes, and it's cold. 831 00:39:40,560 --> 00:39:43,200 Speaker 7: Yeah, I went to Virginia in North Carolina. 832 00:39:43,239 --> 00:39:46,200 Speaker 4: I'm not so many layers. All right, I thank very much. 833 00:39:46,200 --> 00:39:49,239 Speaker 2: We really appreciate it's great to talk to you. 834 00:39:49,239 --> 00:39:52,919 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 835 00:39:53,000 --> 00:39:56,120 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 836 00:39:56,120 --> 00:39:59,400 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 837 00:39:59,440 --> 00:40:02,600 Speaker 1: you get your or watch us live on YouTube. 838 00:40:03,200 --> 00:40:05,319 Speaker 7: Let's get to our next guest, Stephen Meyer, New York 839 00:40:05,360 --> 00:40:08,880 Speaker 7: City Retirement Systems Asset Management CIO and he's deputy controller 840 00:40:09,520 --> 00:40:12,480 Speaker 7: for the city. Steve, thanks so much for joining us here. 841 00:40:12,560 --> 00:40:14,719 Speaker 7: Now you just jumped off a panel. We appreciate it. 842 00:40:15,320 --> 00:40:19,239 Speaker 7: How are you guys navigating the last six, seven, eight 843 00:40:19,280 --> 00:40:21,719 Speaker 7: weeks with all the cross current of news coming out. 844 00:40:21,760 --> 00:40:23,560 Speaker 7: How does that impact the way you manage your pension? 845 00:40:23,719 --> 00:40:27,879 Speaker 15: Well, it's certainly been interesting, and we try to do 846 00:40:27,920 --> 00:40:30,960 Speaker 15: those adhere to a long term strategic plan. So a 847 00:40:31,000 --> 00:40:33,480 Speaker 15: lot for us, a lot of this is noise in 848 00:40:33,600 --> 00:40:35,480 Speaker 15: terms of what's going on in the change of policy 849 00:40:35,719 --> 00:40:38,239 Speaker 15: in Washington. So we're really trying to stick to our 850 00:40:38,280 --> 00:40:41,360 Speaker 15: north star, which is our strategic ass allocation. Again, we 851 00:40:41,400 --> 00:40:46,080 Speaker 15: have multi generational liabilities that we're trying to satisfy. So again, 852 00:40:46,120 --> 00:40:49,160 Speaker 15: a long term investment horizon and a long term discipline. Now, 853 00:40:49,160 --> 00:40:52,480 Speaker 15: having said that, our trustees and our beneficiaries and our 854 00:40:52,520 --> 00:40:55,360 Speaker 15: participants do call. We have the privilege of servicing eight 855 00:40:55,480 --> 00:40:58,960 Speaker 15: hundred thousand public workers here in the City of New 856 00:40:59,040 --> 00:41:01,799 Speaker 15: York their concerns. So we need to stay on top 857 00:41:01,840 --> 00:41:05,520 Speaker 15: of it in terms of increasing the information flow of 858 00:41:05,560 --> 00:41:08,400 Speaker 15: how our assets are diversified and they continue to perform 859 00:41:08,440 --> 00:41:09,120 Speaker 15: as expected. 860 00:41:09,200 --> 00:41:12,200 Speaker 2: So how are they like forty sixty or sixty forty 861 00:41:12,320 --> 00:41:14,200 Speaker 2: maybe a thing of the past. There's different mix in there, 862 00:41:14,320 --> 00:41:16,080 Speaker 2: especially when it comes to alternative assets. 863 00:41:16,120 --> 00:41:16,839 Speaker 4: What's the best mix. 864 00:41:17,040 --> 00:41:19,759 Speaker 15: We're about thirty five percent and alternative assets at this point. 865 00:41:19,960 --> 00:41:24,360 Speaker 15: That's a lot, yeah, yeah, yeah, And that includes private equity, infrastructure, 866 00:41:24,680 --> 00:41:28,480 Speaker 15: private credit, some small exposure to hedge funds in real estate. 867 00:41:29,400 --> 00:41:33,080 Speaker 15: Of this other sixty five percent were about almost forty 868 00:41:33,120 --> 00:41:36,960 Speaker 15: percent of that is in equity, dominated by US equity, 869 00:41:36,960 --> 00:41:40,799 Speaker 15: about eighty five percent US large cap in particular, and 870 00:41:40,800 --> 00:41:43,520 Speaker 15: then an allocation to develop market xually US and emerging market. 871 00:41:43,600 --> 00:41:46,480 Speaker 15: So we're balanced. We're balanced from a private perspective, we're 872 00:41:46,480 --> 00:41:50,200 Speaker 15: balanced from a public perspective, and again I think that's 873 00:41:50,200 --> 00:41:51,479 Speaker 15: going to benefit us over time. 874 00:41:51,680 --> 00:41:54,560 Speaker 7: With the increase in volatility, have you changed your views 875 00:41:54,640 --> 00:41:57,680 Speaker 7: on the economy out of the US economy or global 876 00:41:57,719 --> 00:41:59,839 Speaker 7: economy given some of these trade tensions that are coming 877 00:41:59,840 --> 00:42:00,680 Speaker 7: into the marketplace. 878 00:42:00,840 --> 00:42:03,640 Speaker 15: Well, we're concerned about inflation, and we do think we 879 00:42:03,680 --> 00:42:06,960 Speaker 15: have some natural hedges against inflation and our portfolio in 880 00:42:07,000 --> 00:42:10,520 Speaker 15: terms of a real asset allocation, real estate, infrastructure. I 881 00:42:10,520 --> 00:42:13,120 Speaker 15: think our public equities will actually perform well over time 882 00:42:13,200 --> 00:42:18,160 Speaker 15: in a higher inflationary environment. So we're not necessarily overly concerned. 883 00:42:18,719 --> 00:42:22,720 Speaker 15: We did expect to see some uplift in inflation expectations 884 00:42:22,840 --> 00:42:29,120 Speaker 15: given concerns about the imposition of tariffs, the mass deportations 885 00:42:29,120 --> 00:42:32,320 Speaker 15: that were talked about anyway in terms of potentially impact 886 00:42:32,320 --> 00:42:33,320 Speaker 15: in the price of labor. 887 00:42:33,719 --> 00:42:35,400 Speaker 7: So again, haven't really changed. 888 00:42:35,200 --> 00:42:36,920 Speaker 15: What we're doing or how we're doing it, but we're 889 00:42:36,960 --> 00:42:39,719 Speaker 15: certainly mindful and we continue to monitor the situations. 890 00:42:40,520 --> 00:42:44,000 Speaker 2: We do have a headline carousing right now the US 891 00:42:44,080 --> 00:42:45,960 Speaker 2: is now weighing a one month delay of Canada and 892 00:42:45,960 --> 00:42:49,799 Speaker 2: Mexico tariffs on autos, so looking for those exemptions, those 893 00:42:49,800 --> 00:42:52,520 Speaker 2: little carve outs. But potentially we could hear more about 894 00:42:52,520 --> 00:42:55,640 Speaker 2: that from the White House later on this afternoon. Before 895 00:42:55,640 --> 00:42:58,839 Speaker 2: we let you go, you mentioned thirty five percent in alternatives. 896 00:42:58,840 --> 00:43:01,160 Speaker 4: Seems like a lot. Is there a liquidity issue there? 897 00:43:01,440 --> 00:43:04,440 Speaker 15: Not really compared to some of our peers, And I know, 898 00:43:04,320 --> 00:43:07,760 Speaker 15: you know other institutional investors were just under three hundred 899 00:43:07,760 --> 00:43:10,279 Speaker 15: billion dollars in assets, So I understand that there are 900 00:43:10,280 --> 00:43:13,480 Speaker 15: other managers out there that have forty forty five fifty 901 00:43:13,480 --> 00:43:16,400 Speaker 15: percent allocation to alternatives. We have ample liquidity through the 902 00:43:16,440 --> 00:43:19,920 Speaker 15: sixty five percent in public markets. Again, we're disciplined in 903 00:43:20,040 --> 00:43:22,320 Speaker 15: terms of putting them work money to work over time, 904 00:43:22,640 --> 00:43:27,040 Speaker 15: we're benefiting from vintage your diversification. We've actually been putting 905 00:43:27,040 --> 00:43:29,520 Speaker 15: more money to work in private assets over the last 906 00:43:29,520 --> 00:43:32,160 Speaker 15: two years with a change of our strategic as allocation, 907 00:43:32,560 --> 00:43:34,839 Speaker 15: which has been beneficial as others have pulled away from 908 00:43:34,880 --> 00:43:37,400 Speaker 15: the markets. We've been actually putting money to work, getting 909 00:43:37,400 --> 00:43:41,280 Speaker 15: better economics, better access to the top manager's co investment 910 00:43:41,320 --> 00:43:43,240 Speaker 15: as well to average down the fees and expense. 911 00:43:43,719 --> 00:43:45,239 Speaker 7: All right, Steve, thank you so much for joining us. 912 00:43:45,239 --> 00:43:48,120 Speaker 7: Really appreciate you. Stee my New York City Retirement System 913 00:43:48,120 --> 00:43:52,640 Speaker 7: Asset Management CIO and Deputy Comptroller for the great City 914 00:43:52,719 --> 00:43:55,000 Speaker 7: of New York that does it for us here at 915 00:43:55,200 --> 00:43:58,560 Speaker 7: Umberg Invest twenty twenty five here at the Convene Conference 916 00:43:58,560 --> 00:44:00,160 Speaker 7: Center down here in the world financial centers. In a 917 00:44:00,200 --> 00:44:01,960 Speaker 7: great couple of days, some great guests. 918 00:44:01,960 --> 00:44:03,200 Speaker 4: Yeah, amazing guests, yep. 919 00:44:03,440 --> 00:44:05,960 Speaker 2: And it's great to get all different perspectives, right, Like 920 00:44:06,800 --> 00:44:08,400 Speaker 2: that's how you make a market at the end of 921 00:44:08,440 --> 00:44:08,759 Speaker 2: the day. 922 00:44:09,719 --> 00:44:14,400 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 923 00:44:14,600 --> 00:44:18,040 Speaker 1: and anywhere else you get your podcasts. Listen live each 924 00:44:18,080 --> 00:44:21,840 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 925 00:44:21,960 --> 00:44:25,520 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 926 00:44:25,920 --> 00:44:28,800 Speaker 1: You can also watch us live every weekday on YouTube 927 00:44:29,239 --> 00:44:31,480 Speaker 1: and always on the Bloomberg terminal.