1 00:00:02,480 --> 00:00:09,480 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Mark, thank you for 2 00:00:09,560 --> 00:00:11,320 Speaker 1: doing this. Always a pleasure. 3 00:00:11,360 --> 00:00:13,880 Speaker 2: I'm just saying outside that when I just looked back 4 00:00:13,920 --> 00:00:17,640 Speaker 2: in twenty ten, you had around seventy billion in assets. Now, 5 00:00:18,120 --> 00:00:21,240 Speaker 2: as we said, closing in on a trillion. Just should 6 00:00:21,239 --> 00:00:23,079 Speaker 2: we start with kind of current affairs. You've got the 7 00:00:23,120 --> 00:00:27,680 Speaker 2: conflict in Iran. I suppose we talk about the geopolitics, 8 00:00:27,680 --> 00:00:29,920 Speaker 2: but on the basic question about what it's doing to 9 00:00:30,000 --> 00:00:32,080 Speaker 2: the markets and the economy, how do you look at that? 10 00:00:33,200 --> 00:00:34,000 Speaker 3: It's disruptive. 11 00:00:34,479 --> 00:00:37,199 Speaker 4: I mean we've had this, you know, our refrain on 12 00:00:37,240 --> 00:00:40,720 Speaker 4: this has been if you look at the numbers, things 13 00:00:40,720 --> 00:00:44,879 Speaker 4: are great. Everyone has a job. The capital spending is 14 00:00:45,040 --> 00:00:48,720 Speaker 4: off the charts and very conducive to future employment. Government 15 00:00:48,760 --> 00:00:51,560 Speaker 4: policy is very accommodati. If capital markets are wide open, 16 00:00:52,240 --> 00:00:55,320 Speaker 4: that's normally ninety five percent of what you need to 17 00:00:55,320 --> 00:00:59,680 Speaker 4: worry about. But now, as we've been saying, it's only 18 00:00:59,760 --> 00:01:01,360 Speaker 4: seven twy percent of what you need to worry about. 19 00:01:01,400 --> 00:01:06,440 Speaker 4: The other thirty percent is geopolitics, it's government borrowing its 20 00:01:06,840 --> 00:01:10,360 Speaker 4: excesses in capital markets, and it's technological change. 21 00:01:10,720 --> 00:01:13,640 Speaker 3: None of this is unexpected. It's just here. 22 00:01:14,160 --> 00:01:15,720 Speaker 2: How do you rate those I mean, do you worry 23 00:01:15,720 --> 00:01:18,640 Speaker 2: about the Iraan things say more than that all the 24 00:01:18,680 --> 00:01:20,039 Speaker 2: trade disruption. 25 00:01:21,400 --> 00:01:23,680 Speaker 3: Personally not really mean. 26 00:01:25,280 --> 00:01:28,759 Speaker 4: We always have an overreaction to the confrontation of problems. 27 00:01:29,400 --> 00:01:32,600 Speaker 4: But this is a problem that needed to be dealt with, 28 00:01:32,640 --> 00:01:35,000 Speaker 4: and if it were dealt with in other years, it 29 00:01:35,000 --> 00:01:38,320 Speaker 4: would have been more difficult, and so the notion that 30 00:01:38,520 --> 00:01:41,760 Speaker 4: it's being dealt with today in some ways is reassuring, 31 00:01:41,800 --> 00:01:43,920 Speaker 4: notwithstanding the current instability. 32 00:01:44,319 --> 00:01:46,399 Speaker 2: Just getting to that list of things you had, you 33 00:01:46,440 --> 00:01:50,680 Speaker 2: had government borrowing. Is that something that worries you particular 34 00:01:50,720 --> 00:01:51,480 Speaker 2: at the moment. 35 00:01:51,520 --> 00:01:53,919 Speaker 4: It's not something to worry about, but it is something 36 00:01:53,920 --> 00:01:58,600 Speaker 4: to watch. We have seen points in time when investors 37 00:01:58,720 --> 00:02:04,480 Speaker 4: have called countries to account for their fiscal picture. We 38 00:02:04,520 --> 00:02:07,480 Speaker 4: saw it most recently in the UK. It is trust, 39 00:02:07,640 --> 00:02:11,480 Speaker 4: the departure of Liz Trust. And we have pretty much 40 00:02:11,560 --> 00:02:15,400 Speaker 4: every government in the West spending more money than they 41 00:02:15,400 --> 00:02:18,359 Speaker 4: are bringing in with no sign that they are letting up, 42 00:02:18,840 --> 00:02:21,760 Speaker 4: and so there is nothing that says this will end soon. 43 00:02:21,960 --> 00:02:26,320 Speaker 4: Japan did it for nearly three decades, and so it's 44 00:02:26,320 --> 00:02:31,840 Speaker 4: just something to watch. Normally, that kind of borrowing is inflationary. Normally, 45 00:02:31,960 --> 00:02:34,959 Speaker 4: the restriction of the free flow of goods is inflationary. 46 00:02:35,360 --> 00:02:39,240 Speaker 4: Normally the restriction of the free flow of labor is inflationary, 47 00:02:39,280 --> 00:02:42,519 Speaker 4: but we just haven't seen it. Having said that, if 48 00:02:42,520 --> 00:02:46,840 Speaker 4: you're a credit investor wearing your credit hat, you don't 49 00:02:46,840 --> 00:02:50,600 Speaker 4: get paid other than your coupon and your principle, you 50 00:02:51,280 --> 00:02:53,240 Speaker 4: look at the surrounding facts. 51 00:02:52,880 --> 00:02:54,680 Speaker 3: And you say, this has been a good time for 52 00:02:54,840 --> 00:02:55,320 Speaker 3: risk off. 53 00:02:57,280 --> 00:03:00,560 Speaker 2: Yesterday Jamie Dimond talked about inflation being the skunk at 54 00:03:00,560 --> 00:03:01,000 Speaker 2: the party. 55 00:03:01,240 --> 00:03:03,640 Speaker 1: Is that the way that you look at it, not 56 00:03:03,680 --> 00:03:04,160 Speaker 1: so much as. 57 00:03:04,080 --> 00:03:04,960 Speaker 3: The skunk at the party. 58 00:03:05,000 --> 00:03:08,079 Speaker 4: But let's face it, we've had very accommodative capital markets, 59 00:03:08,480 --> 00:03:11,360 Speaker 4: notwithstanding the backdrop that I've mentioned of things that can 60 00:03:11,400 --> 00:03:14,200 Speaker 4: be inflationary. We've seen rates go down. We've actually seen 61 00:03:14,280 --> 00:03:18,360 Speaker 4: curve steepening to the extent we saw a tick up 62 00:03:18,400 --> 00:03:23,000 Speaker 4: in inflation that would probably handicap the fed'sibility to further 63 00:03:23,160 --> 00:03:24,080 Speaker 4: push rates down. 64 00:03:25,120 --> 00:03:26,840 Speaker 1: We just go into credit. 65 00:03:27,000 --> 00:03:29,160 Speaker 2: You know, these big arguments, and it strikes me there's 66 00:03:29,200 --> 00:03:30,160 Speaker 2: kind of two levels of it. 67 00:03:30,320 --> 00:03:32,799 Speaker 1: The first question is do we. 68 00:03:32,720 --> 00:03:35,920 Speaker 2: Think that there is more kind of laxness in the 69 00:03:35,960 --> 00:03:40,920 Speaker 2: overall credit markets. That's what people Diamond talk about, Lloyd 70 00:03:40,920 --> 00:03:43,400 Speaker 2: blank Mine talking and then there's a particular question of 71 00:03:43,520 --> 00:03:46,440 Speaker 2: private credit. But just to look at those two, if 72 00:03:46,440 --> 00:03:49,440 Speaker 2: I first look at credit as a whole, how worried 73 00:03:49,480 --> 00:03:51,240 Speaker 2: you about that? I've seen you say that, actually the 74 00:03:51,320 --> 00:03:53,520 Speaker 2: numbers aren't too bad, But how do you look at it? 75 00:03:54,080 --> 00:03:56,840 Speaker 4: So I don't spend a lot of time worrying about it. 76 00:03:57,360 --> 00:04:00,880 Speaker 4: We are companies are in pretty good shape. Consumers are 77 00:04:00,880 --> 00:04:02,720 Speaker 4: in pretty good shape. This is not just in US. 78 00:04:02,800 --> 00:04:05,680 Speaker 4: This is pretty much around the world ironically right now, 79 00:04:05,720 --> 00:04:08,000 Speaker 4: it's governments that are not in good shape. 80 00:04:08,680 --> 00:04:09,800 Speaker 3: Having said that. 81 00:04:09,600 --> 00:04:14,200 Speaker 4: We're at the end potentially of a very long accombinative 82 00:04:14,200 --> 00:04:18,039 Speaker 4: cycleing credit. And in every cycle you have people who 83 00:04:18,080 --> 00:04:20,760 Speaker 4: move out on the risk curve, who ignore things that 84 00:04:20,839 --> 00:04:24,720 Speaker 4: are obvious, and it all feels good while it's happening, 85 00:04:24,720 --> 00:04:27,440 Speaker 4: and then it doesn't feel so good once it arrives. Well, 86 00:04:27,680 --> 00:04:30,640 Speaker 4: some of those changes have arrived, I mean low and behold, 87 00:04:31,240 --> 00:04:33,720 Speaker 4: we think that AI might impact software? 88 00:04:35,560 --> 00:04:36,119 Speaker 3: Is that news? 89 00:04:37,480 --> 00:04:41,000 Speaker 4: Did we just discover that two weeks ago? But apparently 90 00:04:41,000 --> 00:04:43,599 Speaker 4: two weeks ago we discovered that AI is going to 91 00:04:43,600 --> 00:04:46,479 Speaker 4: impact software, And we've been in a massive risk off mode, 92 00:04:46,839 --> 00:04:51,880 Speaker 4: and so software stocks are down almost seventy percent I 93 00:04:51,960 --> 00:04:55,320 Speaker 4: remind people that software first lean is senior to HYO 94 00:04:55,360 --> 00:04:57,840 Speaker 4: bonds and is senior to equity. So if you're going 95 00:04:57,839 --> 00:05:00,040 Speaker 4: to have a problem in software lending, you're going to 96 00:05:00,080 --> 00:05:02,320 Speaker 4: have a problem in equity, You're going to have a 97 00:05:02,360 --> 00:05:04,159 Speaker 4: problem in high yield, you're going to have a problem 98 00:05:04,200 --> 00:05:07,400 Speaker 4: in bank lending and broadly syndicated and everywhere else. Because 99 00:05:07,440 --> 00:05:10,320 Speaker 4: to your second point, credit is just credit. There are 100 00:05:10,320 --> 00:05:13,120 Speaker 4: good underwriters of credit and there are bad underwriters of credit. 101 00:05:13,320 --> 00:05:16,360 Speaker 2: Just on that point about tech is, as I read 102 00:05:16,400 --> 00:05:18,720 Speaker 2: it from what you've said, you are you You were 103 00:05:18,839 --> 00:05:23,000 Speaker 2: nervous about software before two weeks ago, on hand on 104 00:05:23,080 --> 00:05:24,760 Speaker 2: never hand in terms when it comes to kind of 105 00:05:24,800 --> 00:05:30,560 Speaker 2: digital infrastructure there you're still fairly you're less cautious. 106 00:05:30,920 --> 00:05:33,240 Speaker 4: So I'd say I'm going to give you a more 107 00:05:33,279 --> 00:05:36,360 Speaker 4: specific answer, because it doesn't it requires more specific answer. 108 00:05:36,480 --> 00:05:39,240 Speaker 4: In our private equity portfolio, which is not the subject 109 00:05:39,320 --> 00:05:43,479 Speaker 4: of this, we have zero software in our credit book 110 00:05:43,720 --> 00:05:45,280 Speaker 4: across the totality of the firm. 111 00:05:45,360 --> 00:05:47,039 Speaker 3: It's a fraction of assets. 112 00:05:47,640 --> 00:05:50,800 Speaker 4: We run a broadly diversified credit book that is not 113 00:05:51,240 --> 00:05:54,359 Speaker 4: concentrated in software. The problem with software is that it 114 00:05:54,440 --> 00:05:56,960 Speaker 4: was thirty percent of the levered buyout market. Therefore it 115 00:05:57,000 --> 00:05:59,839 Speaker 4: was thirty percent of the levered lending market, and therefore 116 00:06:00,160 --> 00:06:06,080 Speaker 4: is just overrepresented and subject to attack. But we should 117 00:06:06,080 --> 00:06:09,080 Speaker 4: not deny that change is coming, and change is not 118 00:06:09,160 --> 00:06:12,760 Speaker 4: coming just in data centers and AI. As a world, 119 00:06:12,880 --> 00:06:16,720 Speaker 4: we are building infrastructure, we're building energy, we're doing energy transmission, 120 00:06:17,279 --> 00:06:20,520 Speaker 4: we're building next gen manufacturing, we're ramping defense, and we're 121 00:06:20,520 --> 00:06:23,560 Speaker 4: doing this thing called AI and data. We're essentially spending 122 00:06:23,600 --> 00:06:25,600 Speaker 4: every dollar since the creation of fire. 123 00:06:25,400 --> 00:06:26,560 Speaker 3: And we're doing it all at once. 124 00:06:27,279 --> 00:06:29,359 Speaker 4: And whatever we're doing in the US, they want to 125 00:06:29,400 --> 00:06:31,159 Speaker 4: do in Europe and they're not as well prepared to it, 126 00:06:31,200 --> 00:06:32,840 Speaker 4: and they're doing in the Middle East, and they're doing it. 127 00:06:32,760 --> 00:06:34,080 Speaker 3: Elsewhere around the world. 128 00:06:34,160 --> 00:06:38,120 Speaker 4: We will see the largest need for capital ever and 129 00:06:38,160 --> 00:06:40,000 Speaker 4: that's what we've seen so far this year. And so 130 00:06:40,080 --> 00:06:44,719 Speaker 4: now to your specific question, it's about underwriting. There are 131 00:06:45,800 --> 00:06:48,839 Speaker 4: a number of very strong US tech companies who run 132 00:06:48,880 --> 00:06:54,160 Speaker 4: diversified businesses Amazon, Google, Microsoft, who are interested in seeing 133 00:06:54,200 --> 00:06:57,320 Speaker 4: these centers built and are interested in not consolidating the 134 00:06:57,320 --> 00:06:59,520 Speaker 4: debt on their balance sheet, and to the extent they 135 00:06:59,520 --> 00:07:03,360 Speaker 4: are prepared to lend their credit. One can lend against 136 00:07:03,360 --> 00:07:08,080 Speaker 4: those types of things and make sensible underwriting decisions. There 137 00:07:08,080 --> 00:07:13,120 Speaker 4: are those who are more equity story oriented, where it's 138 00:07:13,160 --> 00:07:15,960 Speaker 4: maybe not as sensible or underwright, and good underwriters pick 139 00:07:16,000 --> 00:07:18,320 Speaker 4: good credits and bad underwriters pick everyone. 140 00:07:18,800 --> 00:07:21,080 Speaker 1: You and Ido have lived between us through a lot. 141 00:07:21,160 --> 00:07:24,840 Speaker 2: I think we're almost identical ages Rob Stringtion, but we've 142 00:07:24,960 --> 00:07:28,880 Speaker 2: lived through many iterations of credit coming and credit going. 143 00:07:28,960 --> 00:07:32,520 Speaker 2: So when you talk about these individual decisions, like you know, 144 00:07:32,640 --> 00:07:35,800 Speaker 2: is it good to be in digital infrastructure at the 145 00:07:35,840 --> 00:07:38,720 Speaker 2: moment or not, that matters, But so does the overall 146 00:07:38,760 --> 00:07:41,320 Speaker 2: picture and the one you just explained where you said 147 00:07:41,320 --> 00:07:44,760 Speaker 2: there's all this money going into energy, going into AI, 148 00:07:44,840 --> 00:07:48,200 Speaker 2: getting into all these different bits. Does the bill for 149 00:07:48,280 --> 00:07:51,600 Speaker 2: that either end up with taxpayers or does it end 150 00:07:51,680 --> 00:07:54,720 Speaker 2: up with banks and credit institutions. 151 00:07:55,760 --> 00:07:58,440 Speaker 4: So, again, a longer answer than you probably want here, 152 00:07:58,480 --> 00:08:03,680 Speaker 4: but the banking system is incredibly de levered and very diversified. 153 00:08:03,760 --> 00:08:05,440 Speaker 4: I think it's in the best shape I've ever seen 154 00:08:05,440 --> 00:08:09,560 Speaker 4: it in my forty two years of professional career. And 155 00:08:09,600 --> 00:08:12,680 Speaker 4: then we get to the so called public and private markets. 156 00:08:13,880 --> 00:08:18,200 Speaker 4: Private and public are just variations of the theme. The 157 00:08:18,360 --> 00:08:22,360 Speaker 4: vast majority of the private market is investment grade. There's 158 00:08:22,360 --> 00:08:25,560 Speaker 4: a forty trillion dollar market, and ninety nine percent of 159 00:08:25,600 --> 00:08:28,160 Speaker 4: the headlines are focused on a little slice of a 160 00:08:28,200 --> 00:08:31,440 Speaker 4: trillion and a half called levered lending. Levered lending is 161 00:08:31,440 --> 00:08:34,600 Speaker 4: a below investment grade activity. If you trace the history 162 00:08:34,640 --> 00:08:37,079 Speaker 4: of this. In two thousand and eight, levered lending was 163 00:08:37,120 --> 00:08:44,040 Speaker 4: on bank balance sheets post GFC. Banks distributed this credit. 164 00:08:44,280 --> 00:08:46,920 Speaker 4: On the one hand, you had the COLO market, which 165 00:08:46,960 --> 00:08:50,160 Speaker 4: took credit off bank balance sheets, particularly less than investment 166 00:08:50,160 --> 00:08:54,240 Speaker 4: grade credit, and distributed the risk to investment grade buyers 167 00:08:54,360 --> 00:08:56,760 Speaker 4: on a senior basis and to below investment grade buyers 168 00:08:56,800 --> 00:09:00,400 Speaker 4: how you'll buyers on a junior basis. Then it was 169 00:09:00,400 --> 00:09:04,920 Speaker 4: also distributed to private market BDCs. Banks again supported them, 170 00:09:05,160 --> 00:09:09,840 Speaker 4: but at a very safe tranch, and investors, private investors, 171 00:09:09,840 --> 00:09:15,920 Speaker 4: retail investors, institutional investors came in to support private BDCs. 172 00:09:16,640 --> 00:09:18,520 Speaker 4: And now we look at it and we say, well, 173 00:09:19,360 --> 00:09:22,040 Speaker 4: credit is going through a cycle. Is that good or bad? 174 00:09:22,280 --> 00:09:25,080 Speaker 4: And the answer is relative to what. And this is 175 00:09:25,120 --> 00:09:30,880 Speaker 4: the point that people often miss. Credit is the formation 176 00:09:30,960 --> 00:09:33,560 Speaker 4: of credit, particularly in these private BDCs, is a de 177 00:09:33,720 --> 00:09:38,240 Speaker 4: risking activity for the economy and for individuals. It's de 178 00:09:38,400 --> 00:09:40,360 Speaker 4: risking because it moved it off bank balance sheets and 179 00:09:40,440 --> 00:09:44,000 Speaker 4: essentially democratized it throughout our economy. And it's de risking 180 00:09:44,040 --> 00:09:47,720 Speaker 4: for individuals because people are not funding their investments in 181 00:09:47,760 --> 00:09:51,480 Speaker 4: these BDCs with their treasury portfolio. They're selling their equities. 182 00:09:52,400 --> 00:09:55,880 Speaker 4: Last I looked firstly in debt is senior to equity. 183 00:09:55,920 --> 00:09:58,400 Speaker 4: They are making an intelligent decision that they can earn 184 00:09:58,440 --> 00:10:01,640 Speaker 4: equity like returns without equity like risk and take money 185 00:10:01,679 --> 00:10:02,320 Speaker 4: off the table. 186 00:10:02,640 --> 00:10:04,280 Speaker 3: That does not guarantee success. 187 00:10:04,600 --> 00:10:05,080 Speaker 1: You can have. 188 00:10:05,600 --> 00:10:08,520 Speaker 4: If you own software stocks, you're really unhappy. If you 189 00:10:08,600 --> 00:10:12,000 Speaker 4: own mostly software first lean, you're really unhappy. You're just 190 00:10:12,040 --> 00:10:14,880 Speaker 4: less unhappy than if you own the equity. We can't 191 00:10:14,960 --> 00:10:17,679 Speaker 4: legislate out of existence stupidity. 192 00:10:17,880 --> 00:10:21,280 Speaker 2: But the underlying system you're arguing is safer because it's 193 00:10:21,320 --> 00:10:24,640 Speaker 2: allocated in individual companies and it's not leaking back into 194 00:10:24,679 --> 00:10:26,720 Speaker 2: the fully leveraged part of banks. 195 00:10:27,120 --> 00:10:30,120 Speaker 4: And that's what in some ways we can say the 196 00:10:30,160 --> 00:10:34,120 Speaker 4: post regulatory reform of the GFC worked. It's doing exactly 197 00:10:34,120 --> 00:10:36,360 Speaker 4: what it was supposed to have do. It has socialized 198 00:10:36,360 --> 00:10:39,920 Speaker 4: this risk, It has given investors another thing to invest in, 199 00:10:40,240 --> 00:10:42,760 Speaker 4: which is actually de risking for them, and it has 200 00:10:42,840 --> 00:10:46,080 Speaker 4: moved it out of the levered government guaranteed portion of 201 00:10:46,080 --> 00:10:49,079 Speaker 4: our economy because we made a choice, and we've made 202 00:10:49,120 --> 00:10:53,040 Speaker 4: a choice going back to the formation of Drexel below, 203 00:10:53,080 --> 00:10:55,680 Speaker 4: investment grade companies have been a massive source of growth. 204 00:10:56,160 --> 00:10:58,520 Speaker 4: Private companies have been a massive source of growth eighty 205 00:10:58,520 --> 00:11:02,720 Speaker 4: percent of jobs. How are they financed? Well, they weren't 206 00:11:02,760 --> 00:11:06,400 Speaker 4: really financed. They were cast out from the marketplace. If 207 00:11:06,400 --> 00:11:09,280 Speaker 4: we want them to be financed, There's only two places 208 00:11:09,280 --> 00:11:11,720 Speaker 4: they can get financed. One is the banking system, the 209 00:11:11,760 --> 00:11:16,240 Speaker 4: second is the investment marketplace. If you're concerned about what's happening, 210 00:11:16,720 --> 00:11:18,640 Speaker 4: you don't want it in your banking system. You prefer 211 00:11:18,720 --> 00:11:21,840 Speaker 4: it in your investment marketplace where people can price the risk. 212 00:11:22,520 --> 00:11:24,600 Speaker 1: So it's an extent. There are problems in private credit. 213 00:11:24,640 --> 00:11:26,600 Speaker 2: You would argue it's a little bit more like that 214 00:11:27,000 --> 00:11:31,319 Speaker 2: Dot Com problems of years ago, where it's really an 215 00:11:31,360 --> 00:11:34,040 Speaker 2: equity play rather than a debt one. So there isn't 216 00:11:33,760 --> 00:11:37,280 Speaker 2: that gelig nite of leverage going through things. 217 00:11:37,880 --> 00:11:41,280 Speaker 4: Almost every investor is not a levered investor in the 218 00:11:41,320 --> 00:11:46,040 Speaker 4: private credit ecosystem. But we've also we have this habit 219 00:11:46,080 --> 00:11:48,640 Speaker 4: of throwing the baby out with the bathwater. All the 220 00:11:48,679 --> 00:11:51,760 Speaker 4: press is focused on this levered lending portion of the market. 221 00:11:52,040 --> 00:11:55,199 Speaker 4: As I sometimes remind my partners, as a deal shop, 222 00:11:55,200 --> 00:11:57,840 Speaker 4: we don't get to be that big because although we're 223 00:11:57,840 --> 00:12:01,280 Speaker 4: doing something from an efficiency point of view, we use 224 00:12:01,360 --> 00:12:04,120 Speaker 4: up a lot of social capital. On the other hand, 225 00:12:04,160 --> 00:12:07,600 Speaker 4: the vast majority of the market is private investment grade, 226 00:12:07,679 --> 00:12:10,880 Speaker 4: which is also called private credit and has almost nothing 227 00:12:10,920 --> 00:12:12,760 Speaker 4: to do with what we're talking about today. 228 00:12:13,240 --> 00:12:16,079 Speaker 3: So I think I try. 229 00:12:15,880 --> 00:12:18,600 Speaker 4: To be careful in using my language to make sure 230 00:12:18,679 --> 00:12:22,400 Speaker 4: that we understand. Most of the capital going into private 231 00:12:22,440 --> 00:12:25,439 Speaker 4: companies is actually going to finance this global industrial renaissance 232 00:12:25,440 --> 00:12:27,720 Speaker 4: which is taking place around the world. A lesser amount 233 00:12:27,760 --> 00:12:30,480 Speaker 4: of capital is going into the deal business, which is 234 00:12:30,520 --> 00:12:34,480 Speaker 4: primarily being funded by investors or by institutions who are 235 00:12:34,720 --> 00:12:38,600 Speaker 4: making a decision to sell their equity portfolio to invest 236 00:12:38,600 --> 00:12:40,960 Speaker 4: in credit because they offer about the same rates of return. 237 00:12:41,400 --> 00:12:43,920 Speaker 4: And by the way, we have ten companies that are 238 00:12:43,960 --> 00:12:47,160 Speaker 4: forty percent of the SMP. We're not even a quote 239 00:12:47,240 --> 00:12:49,679 Speaker 4: qualified market at this point. We're too concentrated. 240 00:12:50,520 --> 00:12:53,120 Speaker 1: There is this issue. There isn't other private people. 241 00:12:53,200 --> 00:12:55,520 Speaker 2: Consumers are trying to get involved in this, and you've 242 00:12:55,520 --> 00:12:58,120 Speaker 2: pushed into kind of retail four oh one KSE things 243 00:12:58,160 --> 00:13:01,000 Speaker 2: like that which you know they aren't investment grade, that's 244 00:13:01,000 --> 00:13:04,040 Speaker 2: what they're looking at. Some people say that, you know, 245 00:13:04,200 --> 00:13:07,200 Speaker 2: Apollo was a buccaneering shop. You know, it was all 246 00:13:07,240 --> 00:13:10,600 Speaker 2: about taking being at the forefront. The more you get 247 00:13:10,679 --> 00:13:14,400 Speaker 2: pushed back into these investment grade debts and stuff like that, 248 00:13:14,520 --> 00:13:17,959 Speaker 2: or you might say, expanding into it, do you worry 249 00:13:17,960 --> 00:13:20,960 Speaker 2: that limits the kind of risk appetite of the kind. 250 00:13:20,880 --> 00:13:23,240 Speaker 1: Of people you want to bring in. I don't think so. 251 00:13:23,400 --> 00:13:25,200 Speaker 4: I think what happened in our market if you go 252 00:13:25,280 --> 00:13:28,120 Speaker 4: back again to the history, going to the eighties and 253 00:13:28,200 --> 00:13:30,960 Speaker 4: the formation of Drexel. Drexel created the high yo bond market. 254 00:13:31,040 --> 00:13:34,079 Speaker 4: It basically provided capital to these companies. So the banks 255 00:13:34,120 --> 00:13:38,320 Speaker 4: responded with levered lending. All of the brain power in 256 00:13:38,400 --> 00:13:42,800 Speaker 4: the financial marketplace left the investment grade market, and everyone 257 00:13:42,840 --> 00:13:45,079 Speaker 4: wanted to do levered lending and high yo bonds because 258 00:13:45,080 --> 00:13:47,200 Speaker 4: that's where the money was, that's where the excitement was, 259 00:13:48,200 --> 00:13:50,520 Speaker 4: and it didn't come back into the market. The investment 260 00:13:50,520 --> 00:13:54,520 Speaker 4: grade market is a drive by market with very low compensation, 261 00:13:54,679 --> 00:13:59,160 Speaker 4: with very low creativity. What we've done, starting seventeen years ago, 262 00:13:59,240 --> 00:14:02,840 Speaker 4: with the need to create investment grade for our captive 263 00:14:02,840 --> 00:14:06,160 Speaker 4: insurance Carrier Athene and for others in the insurance market, 264 00:14:06,520 --> 00:14:09,560 Speaker 4: was to put creativity and intelligence back in the investment 265 00:14:09,600 --> 00:14:10,200 Speaker 4: grade market. 266 00:14:11,040 --> 00:14:11,880 Speaker 3: No one is bored. 267 00:14:12,760 --> 00:14:14,680 Speaker 4: I can tell you that this is not now a 268 00:14:14,800 --> 00:14:18,760 Speaker 4: question of they're not no longer buccaneering, so they don't 269 00:14:18,960 --> 00:14:23,360 Speaker 4: enjoy being there. The ability to be creative in the 270 00:14:23,400 --> 00:14:26,360 Speaker 4: investment grade market is at a scale that's almost hard 271 00:14:26,360 --> 00:14:27,280 Speaker 4: to imagine. 272 00:14:27,520 --> 00:14:28,480 Speaker 1: So if you think. 273 00:14:28,320 --> 00:14:31,320 Speaker 4: Last year we originated a little over three hundred billion 274 00:14:31,360 --> 00:14:35,320 Speaker 4: dollars of new investments, mostly credit, eighty percent of that 275 00:14:35,400 --> 00:14:38,800 Speaker 4: was investment grade, I assure you no one is complaining 276 00:14:38,800 --> 00:14:40,760 Speaker 4: about the lack of buccaneering. 277 00:14:41,440 --> 00:14:43,400 Speaker 1: But there is there is one. 278 00:14:43,400 --> 00:14:45,440 Speaker 2: There's one good thing about what's happening out there is 279 00:14:45,480 --> 00:14:49,280 Speaker 2: you could argue that finance has moved into private private markets. 280 00:14:49,320 --> 00:14:50,400 Speaker 1: We have just a non bank. 281 00:14:50,680 --> 00:14:53,720 Speaker 2: What's happening is consumers are now getting a chance to participate. 282 00:14:54,400 --> 00:14:56,120 Speaker 2: But there is a kind of trade off, isn't there 283 00:14:56,160 --> 00:14:59,680 Speaker 2: that there is? This is bringing them, this is giving 284 00:14:59,680 --> 00:15:03,120 Speaker 2: them a ans to participate in these higher yielding areas 285 00:15:03,160 --> 00:15:06,040 Speaker 2: which you've pioneered. But some people will say there is 286 00:15:06,080 --> 00:15:08,120 Speaker 2: a degree of risk in that, and at some point 287 00:15:08,200 --> 00:15:10,400 Speaker 2: that could cause problems. 288 00:15:10,160 --> 00:15:12,840 Speaker 4: There's always a degree of risk. So I come back 289 00:15:12,880 --> 00:15:15,640 Speaker 4: and no investment offers you a free lunch. 290 00:15:15,680 --> 00:15:16,600 Speaker 3: There is no free launch. 291 00:15:16,640 --> 00:15:19,520 Speaker 4: You can take equity risk, you can take credit risk, 292 00:15:19,600 --> 00:15:21,160 Speaker 4: you can take duration risk, you can. 293 00:15:21,000 --> 00:15:23,800 Speaker 3: Take all sorts of risks. The question is what's appropriate. 294 00:15:24,120 --> 00:15:27,200 Speaker 4: But if you look around the world, every place that 295 00:15:27,320 --> 00:15:31,640 Speaker 4: private assets have been added to public portfolios, you've gotten 296 00:15:31,680 --> 00:15:34,200 Speaker 4: better outcomes. And if you go to the extreme and 297 00:15:34,240 --> 00:15:36,680 Speaker 4: you take retirees, for instance, in four oh one k 298 00:15:37,440 --> 00:15:41,600 Speaker 4: an extra percent compounded over the duration of how long 299 00:15:41,600 --> 00:15:44,120 Speaker 4: you're going to be in there is a fifty to 300 00:15:44,160 --> 00:15:48,280 Speaker 4: one hundred percent better outcome by having better investments. And 301 00:15:48,320 --> 00:15:50,640 Speaker 4: what are they invested in today, Well, they're invested in 302 00:15:50,760 --> 00:15:52,880 Speaker 4: daily liquid index funds for fifty years. 303 00:15:54,240 --> 00:15:55,280 Speaker 3: Is that risk free? 304 00:15:55,720 --> 00:15:55,800 Speaker 1: No? 305 00:15:56,320 --> 00:15:59,720 Speaker 4: We have ten companies that dominate the SMP. We've essentially, 306 00:15:59,760 --> 00:16:02,200 Speaker 4: as I sometimes show, we've levered the entirety of the 307 00:16:02,240 --> 00:16:03,200 Speaker 4: retirement system of. 308 00:16:03,200 --> 00:16:06,520 Speaker 3: The US to navidia. So far, that's been good. 309 00:16:07,280 --> 00:16:10,280 Speaker 4: It's not always going to be good. Public is not 310 00:16:11,480 --> 00:16:14,280 Speaker 4: safe or risky. Private is not safe or risky. They're 311 00:16:14,280 --> 00:16:16,800 Speaker 4: both safe for risky, they're just different degrees of liquidity. 312 00:16:16,840 --> 00:16:19,760 Speaker 2: I suppose It's this is that traditionally, this kind of 313 00:16:20,240 --> 00:16:23,160 Speaker 2: slightly riskier on the face of it, lending has been 314 00:16:23,520 --> 00:16:26,280 Speaker 2: outsourced to professionals like you and too, people who know 315 00:16:26,320 --> 00:16:28,360 Speaker 2: what they're doing. The worry is that suddenly you're now 316 00:16:28,360 --> 00:16:32,360 Speaker 2: getting in Bush and weekle On Tagata coming into these markets. 317 00:16:32,920 --> 00:16:33,840 Speaker 1: We're more worrying. 318 00:16:33,960 --> 00:16:36,560 Speaker 4: Look, we're going to have a correction, but it's no 319 00:16:36,640 --> 00:16:38,800 Speaker 4: different than the correction that happening in banking. If you 320 00:16:38,840 --> 00:16:42,280 Speaker 4: look in banking, the dominant banking institutions of today were 321 00:16:42,320 --> 00:16:45,400 Speaker 4: not as dominant pre crisis. Those that sat out the 322 00:16:45,440 --> 00:16:50,120 Speaker 4: subprime lending have arisen and become magnified in terms of 323 00:16:50,160 --> 00:16:52,720 Speaker 4: their fortress, balance sheeted market share because they were good 324 00:16:52,720 --> 00:16:55,520 Speaker 4: managers of risk, and good managers is of underriding. I 325 00:16:55,560 --> 00:16:58,200 Speaker 4: believe the same thing is going to happen in investment markets. 326 00:16:58,720 --> 00:17:02,800 Speaker 4: Investment markets made choices. If you wanted a higher dividend, 327 00:17:03,320 --> 00:17:05,479 Speaker 4: you could take more risk, you could lend to smaller companies, 328 00:17:05,520 --> 00:17:07,719 Speaker 4: you could do more pick, you can invest in equity 329 00:17:07,720 --> 00:17:09,520 Speaker 4: and preferred not just first lean, and you could run 330 00:17:09,520 --> 00:17:12,080 Speaker 4: with a lot of leverage. That felt really good on 331 00:17:12,119 --> 00:17:14,120 Speaker 4: the way up. That's not going to feel so good 332 00:17:14,160 --> 00:17:16,920 Speaker 4: on the way down. And there are companies of which 333 00:17:16,920 --> 00:17:19,280 Speaker 4: we are one, but not the only one, who went 334 00:17:19,400 --> 00:17:22,159 Speaker 4: all first lean, who went almost all cash pay, who 335 00:17:22,200 --> 00:17:26,520 Speaker 4: went large companies, who worked with low leverage. I like 336 00:17:26,560 --> 00:17:31,080 Speaker 4: where we sit, and Jamie Diamond said it. There's always 337 00:17:31,119 --> 00:17:33,560 Speaker 4: going to be fraud, There's always going to be underwriting mistakes. 338 00:17:34,240 --> 00:17:36,080 Speaker 4: But the question is who's a good risk manager and 339 00:17:36,080 --> 00:17:38,040 Speaker 4: who's not a good risk manager. If thirty percent of 340 00:17:38,040 --> 00:17:41,560 Speaker 4: your portfolio is in one industry and that one industry 341 00:17:41,800 --> 00:17:45,080 Speaker 4: is being impacted by technology, you have not been a 342 00:17:45,119 --> 00:17:45,920 Speaker 4: good risk manager. 343 00:17:46,440 --> 00:17:48,240 Speaker 2: I think that I just looked at Blue Oul I 344 00:17:48,240 --> 00:17:51,680 Speaker 2: think was seventy percent in different versions of tech. There 345 00:17:51,720 --> 00:17:53,880 Speaker 2: is a parallel, though, isn't it. The way you described 346 00:17:53,920 --> 00:17:56,720 Speaker 2: the banking industry, it has consolidated, particularly at the top. 347 00:17:57,359 --> 00:18:00,480 Speaker 2: That would imply the industry you're in is going to 348 00:18:00,480 --> 00:18:03,359 Speaker 2: consolidate as well, that you will end up with fewer people, 349 00:18:03,840 --> 00:18:06,720 Speaker 2: because as you said, there is a reckoning coming. Some 350 00:18:06,800 --> 00:18:09,320 Speaker 2: of those people will have to We have fewer people. 351 00:18:09,400 --> 00:18:11,879 Speaker 4: I mean you started, I mean we were the whole, 352 00:18:11,960 --> 00:18:14,119 Speaker 4: the entirety of the companies that you see that are 353 00:18:14,160 --> 00:18:17,080 Speaker 4: public today. Everyone was forty billion in two thousand eight. 354 00:18:17,960 --> 00:18:21,120 Speaker 4: We're now close to a trillion Blackstone more KKR. 355 00:18:20,720 --> 00:18:21,320 Speaker 3: A little less. 356 00:18:21,760 --> 00:18:25,400 Speaker 4: This is not good management, or not solely good management. 357 00:18:25,560 --> 00:18:28,760 Speaker 4: This is a function of structural change in our marketplace, 358 00:18:29,359 --> 00:18:32,600 Speaker 4: and that structural change is continuing, and the reward for 359 00:18:32,680 --> 00:18:35,480 Speaker 4: good work is actually more work. In our case, it's 360 00:18:35,520 --> 00:18:39,320 Speaker 4: managing more money. And I think that is where we're heading. 361 00:18:39,359 --> 00:18:41,399 Speaker 4: I think this will be a shakeout. I don't think 362 00:18:41,480 --> 00:18:43,840 Speaker 4: it is going to be short term. I think the 363 00:18:43,880 --> 00:18:49,960 Speaker 4: thirty percent overhang of geopolitics, inflation, technological change is now here. 364 00:18:51,119 --> 00:18:54,240 Speaker 4: It was foreseeable, not maybe exactly how it occurred, but 365 00:18:54,320 --> 00:18:57,600 Speaker 4: it was foreseeable, it was predictable. And all you can 366 00:18:57,640 --> 00:19:00,800 Speaker 4: do is have been a good run underwriter. Risk manager 367 00:19:01,119 --> 00:19:04,439 Speaker 4: have done a small number of stupid things, and by 368 00:19:04,480 --> 00:19:08,560 Speaker 4: the way, we've lived an environment of tight spread. If 369 00:19:08,600 --> 00:19:11,080 Speaker 4: you were a good risk manager, you were going to 370 00:19:11,119 --> 00:19:14,919 Speaker 4: make more money this year and next year if it continues, 371 00:19:15,119 --> 00:19:17,560 Speaker 4: than you ever have before because you've been risk off. 372 00:19:18,760 --> 00:19:23,359 Speaker 4: And so that's always the bifurcation of minds. First, you 373 00:19:23,400 --> 00:19:25,360 Speaker 4: want to play defense and make sure in fact you've 374 00:19:25,400 --> 00:19:28,200 Speaker 4: done what you think you have done, which has managed 375 00:19:28,240 --> 00:19:28,680 Speaker 4: good risk. 376 00:19:29,040 --> 00:19:30,159 Speaker 3: And then you want to play offense. 377 00:19:30,800 --> 00:19:32,520 Speaker 2: Do you think, though you're going to end up with 378 00:19:32,800 --> 00:19:35,879 Speaker 2: mega mergers in the bit, I mean that that's what 379 00:19:35,960 --> 00:19:37,280 Speaker 2: happened in banks at some point. 380 00:19:37,720 --> 00:19:40,440 Speaker 4: I don't think so, because I think that we are 381 00:19:40,480 --> 00:19:46,080 Speaker 4: limited by two other factors. I think our business is 382 00:19:46,119 --> 00:19:48,520 Speaker 4: not at the will not in the long term be 383 00:19:48,600 --> 00:19:52,040 Speaker 4: limited by capital raising. It will be limited by our 384 00:19:52,080 --> 00:19:56,840 Speaker 4: capacity to find good investments and by culture. So unlike 385 00:19:56,880 --> 00:20:00,800 Speaker 4: a public asset manager who can buy anything any day, 386 00:20:00,960 --> 00:20:03,680 Speaker 4: we can only grow as fast as we can originate 387 00:20:03,720 --> 00:20:05,840 Speaker 4: good risk we actually create. 388 00:20:06,760 --> 00:20:09,800 Speaker 3: And therefore, if we grow too fast, we. 389 00:20:09,720 --> 00:20:12,440 Speaker 4: Start commoditizing our business because we're forced to take things 390 00:20:12,520 --> 00:20:18,000 Speaker 4: we don't want. And so judging our industry should be 391 00:20:18,040 --> 00:20:20,800 Speaker 4: judged by our capacity to originate good investments, not by 392 00:20:20,800 --> 00:20:23,760 Speaker 4: our capacity to raise money. But the second piece of this, 393 00:20:23,880 --> 00:20:27,399 Speaker 4: and they're directly related, is culture. We are, at the 394 00:20:27,480 --> 00:20:31,600 Speaker 4: end of the day, an origination driven organization. Whether our 395 00:20:31,640 --> 00:20:34,800 Speaker 4: peers say this or not, they are origination driven organizations. 396 00:20:35,240 --> 00:20:38,200 Speaker 4: Often we're doing the first of everything. It's very hard 397 00:20:38,280 --> 00:20:40,600 Speaker 4: to feed the first of everything into a model and 398 00:20:40,640 --> 00:20:41,560 Speaker 4: get the right answer. 399 00:20:42,040 --> 00:20:44,159 Speaker 3: We will be more efficient because it will not. 400 00:20:45,840 --> 00:20:51,080 Speaker 4: We will not ignore us technology technological change, but the 401 00:20:51,160 --> 00:20:53,720 Speaker 4: ability to attract the best people, have them want to 402 00:20:53,720 --> 00:20:55,800 Speaker 4: come to work, have them spend their whole careers at 403 00:20:55,800 --> 00:20:58,480 Speaker 4: Apollo is the primary job that I have. 404 00:21:00,920 --> 00:21:02,440 Speaker 2: It strikes me if you look at all the things 405 00:21:02,440 --> 00:21:06,760 Speaker 2: we've talked about. You're lending money, you're trading private credit assets. 406 00:21:06,800 --> 00:21:08,080 Speaker 1: We just saw the headlight up there. 407 00:21:08,400 --> 00:21:11,480 Speaker 2: You're building a kind of retail business. At some point 408 00:21:11,520 --> 00:21:15,080 Speaker 2: you begin to look very like a bank, with the 409 00:21:15,080 --> 00:21:18,520 Speaker 2: one exception that you're not taking deposits. Is is not 410 00:21:18,600 --> 00:21:20,359 Speaker 2: really what it's coming down to in the end. 411 00:21:20,400 --> 00:21:21,320 Speaker 3: Not really. 412 00:21:21,520 --> 00:21:24,320 Speaker 4: I mean what you look at as a bank works 413 00:21:24,359 --> 00:21:27,920 Speaker 4: with a government guarantee, they take deposits, they do maturity transformation, 414 00:21:28,440 --> 00:21:31,199 Speaker 4: and they primarily make money from the capacity of their 415 00:21:31,200 --> 00:21:34,960 Speaker 4: own balance sheet. We do two or three different things. 416 00:21:35,040 --> 00:21:36,760 Speaker 4: One is we don't take deposits. We don't have a 417 00:21:36,800 --> 00:21:42,840 Speaker 4: government guarantee, but we originated investments and we distribute them. 418 00:21:43,080 --> 00:21:45,760 Speaker 4: And for a small portion of the investments generally, as 419 00:21:45,800 --> 00:21:47,919 Speaker 4: I say, sometimes twenty five percent of everything, at one 420 00:21:47,960 --> 00:21:50,879 Speaker 4: hundred percent of nothing, we keep on our balance sheet 421 00:21:51,359 --> 00:21:54,000 Speaker 4: to match with our retirement obligations. 422 00:21:54,040 --> 00:21:55,639 Speaker 2: Thanks to a lot of those sort of things, they 423 00:21:55,640 --> 00:21:58,600 Speaker 2: will originate loans, and then distribute them. It's not that different. 424 00:22:00,000 --> 00:22:02,199 Speaker 2: Take the comparison slightly differently for you. If you're a 425 00:22:02,200 --> 00:22:05,320 Speaker 2: public asset manager, you come in every day and you 426 00:22:05,359 --> 00:22:08,880 Speaker 2: make a decision to buy something, and then you distribute 427 00:22:08,880 --> 00:22:11,600 Speaker 2: it amongst the accounts that you manage, and then you 428 00:22:11,640 --> 00:22:14,960 Speaker 2: go home. We kind of do the same thing, except 429 00:22:15,000 --> 00:22:16,840 Speaker 2: we don't get to buy something in the public market. 430 00:22:16,880 --> 00:22:18,800 Speaker 2: We have to go find it in the private market. 431 00:22:19,320 --> 00:22:23,600 Speaker 2: We structure it, we originate it, we distribute it amongst 432 00:22:23,600 --> 00:22:26,280 Speaker 2: the accounts that we manage, and then we go home. 433 00:22:27,000 --> 00:22:27,400 Speaker 3: And so. 434 00:22:29,119 --> 00:22:32,720 Speaker 4: Everyone in the financial market, if you're not solely a trader, 435 00:22:33,080 --> 00:22:33,920 Speaker 4: you're an investor. 436 00:22:34,200 --> 00:22:35,840 Speaker 3: That's what we are at the end of the day. 437 00:22:36,440 --> 00:22:38,960 Speaker 4: And in the broadest sense, if you think about the 438 00:22:39,040 --> 00:22:41,679 Speaker 4: drivers of our business today, there are two drivers of 439 00:22:41,680 --> 00:22:45,840 Speaker 4: our business. One global retirement crisis. Everywhere in the world 440 00:22:45,880 --> 00:22:50,320 Speaker 4: we are short retirement income guaranteed lifetime income. Retirement income 441 00:22:50,600 --> 00:22:54,199 Speaker 4: is a fixed income obligation. On the one hand, we 442 00:22:54,280 --> 00:22:56,520 Speaker 4: need to produce retirement income. On the other hand, we 443 00:22:56,560 --> 00:23:01,440 Speaker 4: have this global industrial renaissance primarily taking place investment grade companies, 444 00:23:01,920 --> 00:23:03,399 Speaker 4: and we find ourselves in the middle. 445 00:23:04,320 --> 00:23:05,359 Speaker 3: We originate risk. 446 00:23:06,480 --> 00:23:09,560 Speaker 4: We put some of it on our insurance company balance sheet, 447 00:23:09,680 --> 00:23:12,199 Speaker 4: and we distribute the rest to investors and source it 448 00:23:12,240 --> 00:23:18,320 Speaker 4: for them without maturity, transformation, without government guarantees. And I 449 00:23:18,400 --> 00:23:22,399 Speaker 4: believe we are playing a more important and a different 450 00:23:22,520 --> 00:23:25,960 Speaker 4: role than most people perceive. And it's not just Apollo. 451 00:23:26,119 --> 00:23:28,520 Speaker 4: This is the private market firms who have gotten to 452 00:23:28,520 --> 00:23:31,399 Speaker 4: be sized. You don't get to be sizable in the 453 00:23:31,400 --> 00:23:34,320 Speaker 4: deal business. The deal business can only get so big. 454 00:23:34,600 --> 00:23:37,280 Speaker 4: You have to serve some fundamental public good otherwise you 455 00:23:37,280 --> 00:23:37,800 Speaker 4: don't get. 456 00:23:37,640 --> 00:23:38,080 Speaker 1: To be big. 457 00:23:38,520 --> 00:23:40,840 Speaker 2: You talked about culture, and as you know, Apollo is 458 00:23:40,880 --> 00:23:44,479 Speaker 2: being drawn into the Epstein thing because your fellow founder, 459 00:23:44,680 --> 00:23:47,439 Speaker 2: Leon Black, who left in twenty twenty one. 460 00:23:48,880 --> 00:23:49,600 Speaker 1: As part of it. 461 00:23:49,720 --> 00:23:53,520 Speaker 2: Polo's done an investigation, said everything was to do with him, 462 00:23:54,040 --> 00:23:56,240 Speaker 2: And I'm sure this eats up and lots of your time. 463 00:23:56,440 --> 00:23:59,520 Speaker 2: Just as a general question for you, well, a strange 464 00:23:59,520 --> 00:24:02,800 Speaker 2: one if we look back at that whole period because 465 00:24:02,840 --> 00:24:06,960 Speaker 2: of individual meetings and things. When you look back now 466 00:24:07,119 --> 00:24:10,080 Speaker 2: looking to what would you have done differently other than 467 00:24:10,080 --> 00:24:13,040 Speaker 2: perhaps not having had Leon as a partner. 468 00:24:13,359 --> 00:24:16,879 Speaker 4: Look, Leon made his own decisions and will I will 469 00:24:17,040 --> 00:24:20,760 Speaker 4: not do that. But the answer is nothing. This is 470 00:24:21,040 --> 00:24:25,080 Speaker 4: whether through good, good judgment, or good fortune. This is 471 00:24:25,119 --> 00:24:27,720 Speaker 4: not someone I built a personal or business relationship with. 472 00:24:27,800 --> 00:24:29,800 Speaker 3: It's not someone that Apollo did business with. 473 00:24:30,880 --> 00:24:34,000 Speaker 4: If a relationship is, you know, one meeting over twenty 474 00:24:34,080 --> 00:24:38,000 Speaker 4: years and a couple of unreturned emails, then that's a relationship. 475 00:24:38,640 --> 00:24:42,920 Speaker 4: But other than he was Leon's tax advisor. We ran 476 00:24:42,960 --> 00:24:45,760 Speaker 4: a tax We ran a partnership, not a company. Back then, 477 00:24:46,480 --> 00:24:50,480 Speaker 4: Leon's tax position was relevant to my tax position. Other 478 00:24:50,520 --> 00:24:55,040 Speaker 4: than that, I'm very sorry and didn't see what Jeff 479 00:24:55,160 --> 00:24:58,520 Speaker 4: was doing me. I didn't like him for my own reasons. 480 00:24:58,560 --> 00:25:01,080 Speaker 4: He wasted my time and. 481 00:25:01,040 --> 00:25:04,360 Speaker 2: Now but now it does occupy time and questions as well. 482 00:25:04,520 --> 00:25:06,240 Speaker 3: Even from the grave, he's wasting my time. 483 00:25:08,640 --> 00:25:11,840 Speaker 1: Maroon, thank you very very much for talking to us. 484 00:25:12,000 --> 00:25:13,159 Speaker 3: Thank you, thank you for having me. 485 00:25:13,240 --> 00:25:13,680 Speaker 1: Thank you