1
00:00:02,720 --> 00:00:07,600
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:08,000 --> 00:00:10,319
Speaker 2: By from Davos, Switzerland to the World Economic Forum, The

3
00:00:10,400 --> 00:00:13,320
Speaker 2: Big Event, Ted Pick the Morgan Stanley Chairman.

4
00:00:13,160 --> 00:00:16,160
Speaker 3: And fantastic good. One year in the.

5
00:00:16,079 --> 00:00:19,119
Speaker 4: Seat, Yes, one year and three weeks. How does it

6
00:00:19,120 --> 00:00:20,280
Speaker 4: feel amazing?

7
00:00:20,480 --> 00:00:20,760
Speaker 3: Yeah?

8
00:00:20,880 --> 00:00:22,720
Speaker 4: You know, you come into this job and you you

9
00:00:22,800 --> 00:00:26,440
Speaker 4: want to do good. What you discover is the quality

10
00:00:26,440 --> 00:00:29,720
Speaker 4: of underlying franchise and the people, and it's a wonderful franchise.

11
00:00:29,720 --> 00:00:30,480
Speaker 3: I got the keys to.

12
00:00:30,440 --> 00:00:34,519
Speaker 4: A great car and the partnership is alive and well.

13
00:00:34,360 --> 00:00:35,600
Speaker 2: Now you've got to hit the ground running.

14
00:00:35,720 --> 00:00:35,920
Speaker 3: Yeah.

15
00:00:36,000 --> 00:00:39,440
Speaker 2: American bankers running around CEO very very very happy here

16
00:00:39,479 --> 00:00:42,000
Speaker 2: in Davas, Switzerland, the CEOs and American bankers and you

17
00:00:42,040 --> 00:00:44,240
Speaker 2: one of them. Are you optimistic about this year ahead?

18
00:00:44,360 --> 00:00:46,960
Speaker 2: And what is it about the incoming administration that gives

19
00:00:47,000 --> 00:00:48,040
Speaker 2: you that confidence?

20
00:00:48,440 --> 00:00:48,879
Speaker 3: Jonathan?

21
00:00:48,920 --> 00:00:52,000
Speaker 4: I am positive because it is definitely a change in tone.

22
00:00:52,120 --> 00:00:54,040
Speaker 3: It just feels like the overall.

23
00:00:53,680 --> 00:00:56,480
Speaker 4: Framework is one where's more interaction between the public and

24
00:00:56,480 --> 00:00:57,360
Speaker 4: the private sectors.

25
00:00:57,480 --> 00:00:58,440
Speaker 3: Where you guys are talking.

26
00:00:58,320 --> 00:01:00,840
Speaker 4: About last couple of minutes, it can't be state actors

27
00:01:00,840 --> 00:01:02,960
Speaker 4: alone and it can't be private companies alone.

28
00:01:03,000 --> 00:01:03,800
Speaker 3: So the fact that.

29
00:01:03,760 --> 00:01:07,000
Speaker 4: There's real dialogue building. I think that's a huge plus.

30
00:01:07,040 --> 00:01:09,759
Speaker 4: And on the European question, sort of interesting comment too,

31
00:01:09,800 --> 00:01:13,280
Speaker 4: because I think there may be some catalysts to some

32
00:01:13,440 --> 00:01:16,039
Speaker 4: now reflection. You know, there were the droggy papers and

33
00:01:16,080 --> 00:01:17,680
Speaker 4: people read it, they kind of read it, but there

34
00:01:17,720 --> 00:01:22,080
Speaker 4: was nothing capital markets, union, banking union, kind of European

35
00:01:22,360 --> 00:01:25,960
Speaker 4: sort of self strength. Maybe this is a catalyst some

36
00:01:26,000 --> 00:01:26,800
Speaker 4: real conversations.

37
00:01:26,840 --> 00:01:28,400
Speaker 3: So in that sense, I think it's positive too.

38
00:01:28,480 --> 00:01:32,080
Speaker 1: Are you hearing about actual business activities stemming from that

39
00:01:32,160 --> 00:01:34,039
Speaker 1: change in tone in Europe or is it just sort

40
00:01:34,040 --> 00:01:35,200
Speaker 1: of a conversation at this point.

41
00:01:35,280 --> 00:01:38,039
Speaker 4: Well, I mean we're like, what twenty five basis points

42
00:01:38,120 --> 00:01:41,840
Speaker 4: into the new administration, right, We're just getting going. But yeah,

43
00:01:42,000 --> 00:01:44,160
Speaker 4: hell of a lot more than you would expected two

44
00:01:44,240 --> 00:01:45,039
Speaker 4: or three weeks ago.

45
00:01:45,520 --> 00:01:47,240
Speaker 3: One thing, it's you know, it's constructive.

46
00:01:47,400 --> 00:01:49,240
Speaker 1: One thing in your earnings that really stood out as

47
00:01:49,240 --> 00:01:51,760
Speaker 1: a stock trading revenues that really boomed. And I'm wondering

48
00:01:52,760 --> 00:01:55,600
Speaker 1: this has been a discussion about how risk on things

49
00:01:55,640 --> 00:01:58,680
Speaker 1: have been feeling, certainly at Davos, But through the last

50
00:01:58,880 --> 00:02:01,680
Speaker 1: couple of months, do you see that waning at all

51
00:02:01,840 --> 00:02:04,240
Speaker 1: or is it just continuing to amp up? In terms

52
00:02:04,320 --> 00:02:05,080
Speaker 1: of risk taking.

53
00:02:05,360 --> 00:02:08,320
Speaker 4: Well, you know, when you become a CEO, one thing

54
00:02:08,400 --> 00:02:11,000
Speaker 4: is for sure, all of your children are equally beautiful.

55
00:02:11,240 --> 00:02:13,720
Speaker 3: But our equities business is.

56
00:02:13,680 --> 00:02:17,200
Speaker 4: One of our more beautiful children that I adore. And yes,

57
00:02:17,520 --> 00:02:19,640
Speaker 4: they put up some great numbers, and I think that

58
00:02:19,720 --> 00:02:22,080
Speaker 4: is a reflection on just the quality the underlying franchise,

59
00:02:22,320 --> 00:02:25,000
Speaker 4: but also a sense that people want to allocate to

60
00:02:25,040 --> 00:02:27,800
Speaker 4: a little more risk, but importantly they kind of want to.

61
00:02:27,760 --> 00:02:28,760
Speaker 3: Get beyond the index level.

62
00:02:28,840 --> 00:02:30,320
Speaker 4: You guys talk about this a lot, right, sort of

63
00:02:30,440 --> 00:02:33,920
Speaker 4: index level equity risk premium relative to sectors. And I

64
00:02:33,960 --> 00:02:36,240
Speaker 4: think one of the positives here is we're talking about

65
00:02:36,240 --> 00:02:38,880
Speaker 4: the regulation the energy space and energy transition. We're talking

66
00:02:38,880 --> 00:02:41,400
Speaker 4: about the financial services space, and yes, you need to

67
00:02:41,400 --> 00:02:43,880
Speaker 4: own the six because they are money machines and great companies,

68
00:02:43,960 --> 00:02:45,679
Speaker 4: But how about the rest of the four hundred and

69
00:02:45,720 --> 00:02:47,640
Speaker 4: ninety three four hundred ninety four. And I think some

70
00:02:47,720 --> 00:02:50,720
Speaker 4: of that dispersion getting kind of allocated across teams and

71
00:02:50,760 --> 00:02:53,360
Speaker 4: sectors and around the world. I think that's a multi

72
00:02:53,440 --> 00:02:54,680
Speaker 4: year trend. I think we're early on.

73
00:02:54,639 --> 00:02:56,800
Speaker 2: That concentration is certainly a risk factor that a lot

74
00:02:56,840 --> 00:02:59,600
Speaker 2: of people are considering. Another one is the deficit and

75
00:02:59,720 --> 00:03:02,760
Speaker 2: the cost of interest payments for the US government, for you,

76
00:03:02,840 --> 00:03:05,160
Speaker 2: for the capital market business. Is that a risk more

77
00:03:05,200 --> 00:03:07,520
Speaker 2: generally that you've take even the team of focused on.

78
00:03:07,840 --> 00:03:10,400
Speaker 4: Yeah, you've been talking about that a lot, and I'm

79
00:03:10,400 --> 00:03:12,959
Speaker 4: certain and I think it's important because if you don't

80
00:03:13,000 --> 00:03:14,959
Speaker 4: talk about it, it sort of says, you know, there's

81
00:03:14,960 --> 00:03:17,000
Speaker 4: no canary in the coal mine, right. But I do

82
00:03:17,040 --> 00:03:19,600
Speaker 4: think there is the fact that there has been so

83
00:03:19,680 --> 00:03:22,200
Speaker 4: much attention given to this, and you have folks like

84
00:03:22,280 --> 00:03:25,000
Speaker 4: fest and coming in who know the bond market, that

85
00:03:25,240 --> 00:03:27,400
Speaker 4: it has a sort of reaffirmation that we got to

86
00:03:27,440 --> 00:03:29,400
Speaker 4: look out on that Simpson bowls.

87
00:03:29,440 --> 00:03:31,200
Speaker 3: You know, here we are these years later that.

88
00:03:31,200 --> 00:03:34,639
Speaker 4: Hasn't even said, you know, term premium is still pretty narrow,

89
00:03:35,080 --> 00:03:38,360
Speaker 4: so like we haven't seen the long bond really move.

90
00:03:38,760 --> 00:03:41,800
Speaker 3: So there's an underlying confidence. I think the question is

91
00:03:41,840 --> 00:03:43,320
Speaker 3: what kind of growth can we generate.

92
00:03:43,480 --> 00:03:46,920
Speaker 4: I think so the conversation that one would have is

93
00:03:47,080 --> 00:03:50,000
Speaker 4: which comes first, sort of the potential inflationary effect of

94
00:03:50,080 --> 00:03:53,680
Speaker 4: tars or the positive deregulatory effect. And I think that's

95
00:03:53,680 --> 00:03:55,160
Speaker 4: going to be one of the things we know is

96
00:03:55,160 --> 00:03:58,400
Speaker 4: that there's going to be an ongoing dialectic you know

97
00:03:58,920 --> 00:04:02,280
Speaker 4: which policy function can be transmitted more quickly than the other.

98
00:04:02,480 --> 00:04:06,560
Speaker 4: And I think that pivoting and transitioning and important.

99
00:04:06,560 --> 00:04:09,280
Speaker 2: Do you think it holds back activity that degree of

100
00:04:09,360 --> 00:04:14,720
Speaker 2: uncertainty given how confident everyone is, and Lisa especially me too,

101
00:04:15,080 --> 00:04:17,480
Speaker 2: we get nervous when everyone in Davos gets ready.

102
00:04:17,440 --> 00:04:18,920
Speaker 3: Yes, contraindicator.

103
00:04:19,000 --> 00:04:22,320
Speaker 2: Does it hold back activity without having the clarity on

104
00:04:22,360 --> 00:04:23,760
Speaker 2: what these changes are going to look like?

105
00:04:24,200 --> 00:04:30,280
Speaker 4: I think part of the dilemma is that the vernacular

106
00:04:30,640 --> 00:04:34,960
Speaker 4: of whether we're really moving with animal spirits as whether

107
00:04:35,000 --> 00:04:37,000
Speaker 4: we see a bunch of M and A prints like

108
00:04:37,040 --> 00:04:38,360
Speaker 4: where are those M and announcements?

109
00:04:38,400 --> 00:04:39,280
Speaker 3: And the reality is.

110
00:04:39,240 --> 00:04:40,800
Speaker 4: Over the last number of years, we've had I think

111
00:04:40,839 --> 00:04:43,839
Speaker 4: two major uncertainties, right the end of financial oppressions zero

112
00:04:43,880 --> 00:04:44,359
Speaker 4: and zero.

113
00:04:44,680 --> 00:04:45,680
Speaker 3: Is that finally passes?

114
00:04:45,720 --> 00:04:47,120
Speaker 4: And do we kind of know where rates are going

115
00:04:47,160 --> 00:04:49,120
Speaker 4: to be and we can focus on the detail of

116
00:04:49,120 --> 00:04:51,159
Speaker 4: whether they'll be you know, one or two moves or

117
00:04:51,160 --> 00:04:53,880
Speaker 4: none at all, But at least we generally know that

118
00:04:54,000 --> 00:04:56,520
Speaker 4: for the next period of time, the US restory rate

119
00:04:56,600 --> 00:04:58,520
Speaker 4: is somewhere in the mid forest, and then you can

120
00:04:58,560 --> 00:05:01,080
Speaker 4: apply discount rates for risk and the company and the

121
00:05:01,120 --> 00:05:01,840
Speaker 4: rest of it, so.

122
00:05:01,839 --> 00:05:04,320
Speaker 3: That's kind of pass us. So that's an uncertainty that's.

123
00:05:04,200 --> 00:05:06,280
Speaker 4: Taken off the table if you're a CFO and you're

124
00:05:06,279 --> 00:05:08,560
Speaker 4: a board room. The second set of uncertainty has been

125
00:05:08,560 --> 00:05:10,080
Speaker 4: around sort of the end of the end of history,

126
00:05:10,080 --> 00:05:12,359
Speaker 4: which is the resumption of nation states and the like.

127
00:05:12,480 --> 00:05:14,400
Speaker 4: And one could argue, well, there's a lot of uncertainty

128
00:05:14,400 --> 00:05:16,680
Speaker 4: in the world. I would argue the combination of having

129
00:05:16,760 --> 00:05:19,480
Speaker 4: some sense of a rate framework and having some sense

130
00:05:19,520 --> 00:05:23,320
Speaker 4: that things are going to happen in the US, in Europe,

131
00:05:23,480 --> 00:05:27,000
Speaker 4: around the world. I think it galvanizes the corporate community.

132
00:05:27,040 --> 00:05:29,320
Speaker 4: And so the question is how much does the market

133
00:05:29,320 --> 00:05:31,359
Speaker 4: discount of that? How fast will that be? And I

134
00:05:31,400 --> 00:05:34,320
Speaker 4: do think important catalysts to this will be there are

135
00:05:34,360 --> 00:05:36,839
Speaker 4: the better part of nineteen hundred companies in the private

136
00:05:36,880 --> 00:05:40,720
Speaker 4: equity space that have a billion of aggregate value five

137
00:05:40,800 --> 00:05:42,080
Speaker 4: years of life on average.

138
00:05:42,200 --> 00:05:44,480
Speaker 3: Those companies need to move so at some.

139
00:05:44,680 --> 00:05:47,880
Speaker 4: Level, I couldn't tell you exactly the pacing of that activity,

140
00:05:48,080 --> 00:05:49,880
Speaker 4: but we've been below trend line in the M and

141
00:05:49,960 --> 00:05:51,560
Speaker 4: A market. We talked a couple of years from now.

142
00:05:51,720 --> 00:05:53,240
Speaker 4: I think we'll be a trend line or higher. I'm

143
00:05:53,240 --> 00:05:53,839
Speaker 4: pretty confident.

144
00:05:53,800 --> 00:05:54,840
Speaker 1: I think it's going to be M and A. I

145
00:05:54,880 --> 00:05:57,000
Speaker 1: think it's going to be IPOs and everything.

146
00:05:57,200 --> 00:05:58,480
Speaker 3: I think we've been talking about.

147
00:05:58,520 --> 00:06:00,640
Speaker 4: You've talked about so much of the surf paucity of

148
00:06:00,680 --> 00:06:04,000
Speaker 4: investable names, especially when you get past the Big seven

149
00:06:04,040 --> 00:06:07,200
Speaker 4: companies and they're sort of small cap orphans without research.

150
00:06:07,560 --> 00:06:09,640
Speaker 3: I think there's a Yes, it.

151
00:06:09,640 --> 00:06:12,240
Speaker 4: Can be painful starbox for a young company to be public,

152
00:06:12,480 --> 00:06:16,400
Speaker 4: but you get enduring long term value from shareholders that

153
00:06:16,480 --> 00:06:19,480
Speaker 4: actually can also add some value, and you can use

154
00:06:19,520 --> 00:06:22,840
Speaker 4: that currency to make other acquisitions. I think the IPO

155
00:06:23,120 --> 00:06:26,080
Speaker 4: product is alive well. And I think importantly what's happened

156
00:06:26,200 --> 00:06:28,840
Speaker 4: is a sort of financialization of the markets. Is the

157
00:06:29,400 --> 00:06:32,240
Speaker 4: intersection of private and public that's come of age. So

158
00:06:32,279 --> 00:06:35,000
Speaker 4: maybe you don't go public in the classic Nasdaq and

159
00:06:35,240 --> 00:06:37,920
Speaker 4: New York IPO at the first. Maybe you do some

160
00:06:38,200 --> 00:06:40,520
Speaker 4: hybrid capital for a while, and then you go public

161
00:06:40,560 --> 00:06:43,160
Speaker 4: alla over with a full capital structure.

162
00:06:43,200 --> 00:06:46,120
Speaker 1: One area that you've brought in one of your babies

163
00:06:46,160 --> 00:06:48,240
Speaker 1: that's very beautiful that I'm sure you talk about is

164
00:06:48,279 --> 00:06:50,920
Speaker 1: your wealth management unit and SIS a big baby.

165
00:06:50,960 --> 00:06:52,599
Speaker 3: It's a big baby, big beautiful baby.

166
00:06:53,200 --> 00:06:55,800
Speaker 1: One of the drivers of revenues for a very long time.

167
00:06:56,440 --> 00:07:00,480
Speaker 1: What's been the challenge in accumulating assets and the wealth

168
00:07:00,480 --> 00:07:03,560
Speaker 1: management growing assets to degree that you really have wanted to?

169
00:07:04,040 --> 00:07:08,080
Speaker 4: Well, you have a massive denominator, right, and I think

170
00:07:08,080 --> 00:07:12,560
Speaker 4: what's happened is we're now the better part of a

171
00:07:12,760 --> 00:07:16,240
Speaker 4: trillion of aum between wealth and investment manager. And if

172
00:07:16,240 --> 00:07:18,640
Speaker 4: you look at sort of point to point, what if

173
00:07:18,720 --> 00:07:23,120
Speaker 4: assets done and obviously markets higher markets health, the assets.

174
00:07:22,800 --> 00:07:24,960
Speaker 3: In one year went up by a trillion three.

175
00:07:25,040 --> 00:07:28,520
Speaker 4: So people say, okay, you raise two fifty, Well that's

176
00:07:28,520 --> 00:07:31,200
Speaker 4: a huge number. And for me at LEASTA, what's really

177
00:07:31,280 --> 00:07:34,000
Speaker 4: important is how is our funnel working? Like think about

178
00:07:34,000 --> 00:07:36,440
Speaker 4: our wealth business is sort of having three parts self

179
00:07:36,480 --> 00:07:36,920
Speaker 4: directed E.

180
00:07:37,000 --> 00:07:37,200
Speaker 3: Trade.

181
00:07:37,200 --> 00:07:40,080
Speaker 4: We're seeing transaction activity really kicking up. That's clearly a

182
00:07:40,120 --> 00:07:42,400
Speaker 4: positive signal part of what you're asking about. In the

183
00:07:42,920 --> 00:07:46,000
Speaker 4: sort of pure equity space, we have this workplace business.

184
00:07:46,040 --> 00:07:47,920
Speaker 4: I want your stock plan business because then I can

185
00:07:47,960 --> 00:07:50,840
Speaker 4: do factory floor to CEO and then the fee based

186
00:07:50,880 --> 00:07:54,400
Speaker 4: advisor fifty based points per annum, and the fee based

187
00:07:54,440 --> 00:07:57,320
Speaker 4: advisory growth is quite impressive, quite impressive, and it's going

188
00:07:57,360 --> 00:07:59,800
Speaker 4: to continue for years to come, especially if clients need

189
00:07:59,880 --> 00:08:01,400
Speaker 4: to allocate across sectors.

190
00:08:01,560 --> 00:08:04,360
Speaker 1: You've made a lot of acquisitions in the past, any

191
00:08:04,560 --> 00:08:07,880
Speaker 1: in the pipeline planning any further types of tie ups yourself.

192
00:08:08,200 --> 00:08:11,440
Speaker 4: You know, it's interesting we see stuff, but I really

193
00:08:11,520 --> 00:08:14,160
Speaker 4: love the durable growth organically that we have the two

194
00:08:14,160 --> 00:08:16,760
Speaker 4: majors major business in the investment bank and the wealth

195
00:08:16,800 --> 00:08:19,560
Speaker 4: and investment manager. But over time we'll continue to look

196
00:08:19,560 --> 00:08:21,160
Speaker 4: at stuff as we a Cree Capital.

197
00:08:21,360 --> 00:08:23,480
Speaker 2: You've got one minute left on this place this in

198
00:08:23,520 --> 00:08:28,280
Speaker 2: Have you spoke into the president? I have not, not recently, right,

199
00:08:28,480 --> 00:08:30,840
Speaker 2: if you have the opportunity too, and Dabas will today

200
00:08:31,040 --> 00:08:33,360
Speaker 2: to throw a question at the incoming president, the current president,

201
00:08:33,440 --> 00:08:34,880
Speaker 2: Donald Trump? What would you ask him?

202
00:08:35,080 --> 00:08:38,320
Speaker 4: I like the I like the quality of the questioners

203
00:08:38,400 --> 00:08:39,800
Speaker 4: you have I do.

204
00:08:39,960 --> 00:08:41,640
Speaker 3: I like the quality of the question was.

205
00:08:41,640 --> 00:08:43,400
Speaker 2: In the mix and you had one, what would that

206
00:08:43,480 --> 00:08:43,920
Speaker 2: question think?

207
00:08:45,760 --> 00:08:48,760
Speaker 4: I think the question I would ask is one where

208
00:08:48,840 --> 00:08:50,960
Speaker 4: it would give him the opportunity to sort of speak

209
00:08:51,000 --> 00:08:54,800
Speaker 4: to the possibility that he's thinking about a lot of

210
00:08:54,800 --> 00:08:57,959
Speaker 4: different possibilities on a lot of different issues, something along

211
00:08:58,000 --> 00:09:01,400
Speaker 4: the lines of are you open to taking idea flow

212
00:09:01,679 --> 00:09:03,079
Speaker 4: around a whole.

213
00:09:02,800 --> 00:09:04,679
Speaker 3: Bunch of different spaces and give examples?

214
00:09:04,800 --> 00:09:06,679
Speaker 4: And I think my guess is the answer that he

215
00:09:06,720 --> 00:09:09,120
Speaker 4: would give is yes, and I'll give you examples of that.

216
00:09:09,160 --> 00:09:11,560
Speaker 4: And the reason that's important is because I think we're

217
00:09:11,640 --> 00:09:14,199
Speaker 4: so early in this administration, people are trying to sort

218
00:09:14,200 --> 00:09:17,960
Speaker 4: of weigh how much is tactical versus how much is baked.

219
00:09:18,160 --> 00:09:20,559
Speaker 4: I think there's a lot of discussion and people it

220
00:09:20,559 --> 00:09:22,880
Speaker 4: wouldn't be so much for him, but people understanding this

221
00:09:23,160 --> 00:09:26,200
Speaker 4: is a real conversation taking place on a whole bunch

222
00:09:26,240 --> 00:09:28,120
Speaker 4: of important issues and we're only five days in.

223
00:09:28,400 --> 00:09:31,440
Speaker 3: I think people hearing that will give confidence.

224
00:09:30,880 --> 00:09:34,199
Speaker 4: That we are in the early stages of the dialectic and.

225
00:09:34,120 --> 00:09:34,800
Speaker 3: There's more to come.

226
00:09:35,120 --> 00:09:37,400
Speaker 2: I appreciate your time. Thank you so much for having me. Guys,

227
00:09:37,440 --> 00:09:39,280
Speaker 2: thank you sir. Safe travels back to.

228
00:09:39,320 --> 00:09:41,040
Speaker 3: Neo an avid listener and watcher, and.

229
00:09:41,040 --> 00:09:43,200
Speaker 1: We appreciate that you got to come on again soon.

230
00:09:43,400 --> 00:09:45,559
Speaker 2: NICs, I'd pick the channel to see of Mop and

231
00:09:45,600 --> 00:09:45,920
Speaker 2: Standing