WEBVTT - Global Business, Technology, Twitter & Amazon 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penel podcast on Paul Swing You. 0:00:05.360 --> 0:00:07.680 Along with my co host Lisa Brahma Waits, each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money, whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.959 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:21.600 at Bloomberg dot com. We're broadcasting live from with ham 0:00:21.680 --> 0:00:25.120 seventh Annual Global Summit at Events Space Second in New 0:00:25.200 --> 0:00:28.000 York City. This year's program features business leaders that are 0:00:28.000 --> 0:00:31.680 exploring past lessons, current trends in the future outlook for 0:00:31.800 --> 0:00:35.640 global business. Joinings right now are Jason Maria Rothenham, senior 0:00:35.680 --> 0:00:39.600 consultant at consulting firm h LB von Dal based in 0:00:39.640 --> 0:00:41.680 the Netherlands, but joining us on site here at the 0:00:41.680 --> 0:00:44.839 Withhem Global Summit. Jason, thanks so much for joining us. 0:00:44.840 --> 0:00:47.120 I know when your panel coming up you're gonna be 0:00:47.159 --> 0:00:52.159 covering the manufacturing industry and how technologies impacting business. Give 0:00:52.240 --> 0:00:54.560 us your sense as you talk to your clients around 0:00:54.560 --> 0:00:56.920 the world, you know kind of what are the big 0:00:57.000 --> 0:00:59.720 challenges that they are facing in terms of adapting to 0:01:00.000 --> 0:01:03.200 interest in technology great, Thanks Paul. I'm so happy to 0:01:03.200 --> 0:01:06.039 be here in New York City. It's a beautiful day outside, 0:01:06.080 --> 0:01:09.320 and I'm excited, excited to talk about technology and from Amsterdam. 0:01:09.480 --> 0:01:12.000 And Uh, we like to innovate, we like to change, 0:01:12.080 --> 0:01:14.240 and so do our clients. I keep saying this in 0:01:14.520 --> 0:01:17.320 presentations all around the world that unless you're Coca Cola 0:01:17.480 --> 0:01:22.160 or you're an old fashioned watchmaker, UH, technology is going 0:01:22.200 --> 0:01:24.520 to impact you. It's gonna change the way you do business, 0:01:24.600 --> 0:01:27.080 change the way you think. And we see that. UM. 0:01:27.120 --> 0:01:31.440 I'll just pick up one simple topic like logistics. Logistics 0:01:31.520 --> 0:01:35.160 is totally being impacted by technology, with AI, with robotics, 0:01:35.240 --> 0:01:38.160 with the big data. UM, it's all about how do 0:01:38.200 --> 0:01:40.400 I get my consumer how do I get my products 0:01:40.400 --> 0:01:43.280 to my own consumers as quick as possible and as 0:01:43.360 --> 0:01:46.959 cheap as possible. Um. We see robotics taking over in 0:01:47.160 --> 0:01:52.600 logistics centrums, tread printing. UM. What I would advise people, 0:01:52.600 --> 0:01:54.480 if you're listening and if you're a business leader, just 0:01:54.760 --> 0:01:57.680 just look at you all of your processes and think 0:01:57.960 --> 0:02:00.480 how can technology impact be and what kind of investments 0:02:00.520 --> 0:02:02.400 I need to make in there? Jason, do you feel 0:02:02.480 --> 0:02:05.960 like business leaders in general are aware of how radical 0:02:06.400 --> 0:02:10.000 the change is and how quickly they have to adapt. No, no, 0:02:10.160 --> 0:02:12.600 And I'll be very direct with that. I think only 0:02:12.720 --> 0:02:16.720 ten percent of the business community understands the changes that 0:02:16.760 --> 0:02:20.160 are coming into place UM and those ten percents are 0:02:20.240 --> 0:02:22.960 usually the big boys that are playing the Googles of 0:02:23.000 --> 0:02:26.600 this world, the facebooks. But the mid level, the small 0:02:26.600 --> 0:02:30.800 businesses is there is there a particular industry that's that's 0:02:30.919 --> 0:02:35.239 particularly behind UM. What we would see is the retail 0:02:35.280 --> 0:02:38.639 market is still a bit bigger problem. I've seen back 0:02:38.639 --> 0:02:40.320 home where I live. I live in a small town 0:02:40.320 --> 0:02:45.560 outside of Amsterdam. It's called hof Top Retail. Bricky motor 0:02:45.639 --> 0:02:48.359 stores are closing down by the day, and yet you 0:02:48.440 --> 0:02:50.600 still see business owners saying, oh yeah, I've got a 0:02:50.639 --> 0:02:52.320 bit of cash lying around, so let's just go and 0:02:52.320 --> 0:02:54.760 open up another shop. Again. They make the same mistake 0:02:54.760 --> 0:02:56.840 again and again and again. And they got to ask 0:02:56.840 --> 0:02:58.680 yoursel why do they do that? Let you do that? 0:02:58.760 --> 0:03:01.320 Because because they have fit the past, and they're making 0:03:01.320 --> 0:03:03.840 the decisions based on the past, not of the future. 0:03:04.200 --> 0:03:06.320 And they thought, oh, my well, my dad did it, 0:03:06.360 --> 0:03:08.639 my my uncle did it, so I should do it too. 0:03:08.880 --> 0:03:12.120 They're not learning from the future. So for some of these. 0:03:12.320 --> 0:03:15.680 You know, I get the big companies, the technology oriented companies, 0:03:15.680 --> 0:03:19.320 obviously they have a better familiarity with with change and evolution. 0:03:19.600 --> 0:03:21.360 But when you go to see some of your smaller 0:03:21.400 --> 0:03:24.280 and mid size clients, how do you get them to 0:03:24.360 --> 0:03:27.760 really start thinking about their business models and how they 0:03:27.760 --> 0:03:29.799 may need to adapt. Right, So what we do with 0:03:29.960 --> 0:03:32.280 at FANDAL is we try to expose our clients to 0:03:32.360 --> 0:03:34.480 our logic clients, try to get them to think a 0:03:34.480 --> 0:03:38.280 bit differently. UM mandate almost that you have to read 0:03:38.280 --> 0:03:40.800 a book a day. I'll pick up once a week 0:03:40.840 --> 0:03:44.440 at least, spend some sessions in the morning, UM reading 0:03:44.760 --> 0:03:47.800 How We've got a little program where we teach our 0:03:48.400 --> 0:03:51.880 staff to actually learn the code to be more relatable 0:03:51.920 --> 0:03:55.440 to UM clients. UM getting them used to familiar with 0:03:56.400 --> 0:03:59.760 UH Internet websites will be surprised, we've we've still got 0:03:59.760 --> 0:04:02.080 client so don't even have a website. And that and 0:04:02.120 --> 0:04:04.400 that is and that is a big problem. That's a problem. Well, 0:04:04.440 --> 0:04:06.520 you know, when you say technology, it's a pretty broad 0:04:06.720 --> 0:04:10.560 sweep of things. Artificial intelligence logistics, while they can be 0:04:10.640 --> 0:04:14.160 paired together, are distinct and can be applied in different ways. 0:04:14.560 --> 0:04:16.640 So how do you go about determining. I mean for 0:04:16.680 --> 0:04:19.679 the retailers, for example, what should they be doing, because 0:04:19.720 --> 0:04:22.880 it's not just simply abandoned brick and mortar, How should 0:04:22.880 --> 0:04:28.040 they be thinking in this technological era. That's an excellent question. Um. 0:04:28.200 --> 0:04:30.840 What they should be looking at at is how do 0:04:30.880 --> 0:04:35.000 I bring in AI, bring in big data into understanding 0:04:35.000 --> 0:04:37.120 who my clients are. So I'll tell you a little 0:04:37.160 --> 0:04:39.159 story of a client of mind. What they do is 0:04:39.279 --> 0:04:43.920 they inside small little chips in the in the hangars, 0:04:44.040 --> 0:04:46.760 and they know how many times a piece of clothing 0:04:46.839 --> 0:04:48.680 is taken off a hangar, how many times to put back? 0:04:48.720 --> 0:04:51.320 And then that gives you a lot of information if 0:04:51.960 --> 0:04:54.839 to give some perspective, if I have a customer that 0:04:54.880 --> 0:04:57.520 comes in or several customers that come in and pick 0:04:57.600 --> 0:05:00.200 up the same uh piece of clothing and if put 0:05:00.200 --> 0:05:02.120 it back, that tells you a lot about Maybe I'm 0:05:02.120 --> 0:05:04.960 pricing it wrong, maybe it's the wrong color, maybe it's 0:05:04.960 --> 0:05:07.560 not but something is good about it. But I don't 0:05:07.560 --> 0:05:09.760 know why my clients are not buying it. So you 0:05:09.760 --> 0:05:12.800 can flow through from where it was picked up right 0:05:12.880 --> 0:05:16.560 to the checkout counter and see whether there's a good 0:05:16.560 --> 0:05:19.240 flow through their Apart from that, you can set up 0:05:19.279 --> 0:05:21.279 senses all the way around your store. You can tell 0:05:21.600 --> 0:05:24.560 which part of my stars are underutilized. There's a lot 0:05:24.560 --> 0:05:27.000 of stuff you can do with AI. That sounds like 0:05:27.720 --> 0:05:30.200 it costs some money. How about somebody smaller and mid 0:05:30.240 --> 0:05:32.719 sized companies do they have the capital to make these 0:05:32.720 --> 0:05:34.880 investments in technology? Right? So we've got two parts of 0:05:34.880 --> 0:05:38.200 the market. One is a very conservative part. In speak 0:05:38.240 --> 0:05:41.040 for Europe, a lot of our clients are sitting on money. 0:05:41.440 --> 0:05:42.960 They're sitting on money, they don't want to invest, they 0:05:42.960 --> 0:05:45.919 don't know what's coming up ahead. I heard uh recently 0:05:45.960 --> 0:05:48.040 that in the US that that there is no such 0:05:48.080 --> 0:05:50.359 thing as a recession. That I heard that, But in 0:05:50.400 --> 0:05:52.640 Europe we still very conservative over that we don't know 0:05:52.680 --> 0:05:55.880 what's coming around, so we allow U sit and to 0:05:56.000 --> 0:05:59.440 answer your question, Uh, that costs a lot of money. Well, 0:05:59.520 --> 0:06:01.560 if you take get in small steps, baby steps, it 0:06:01.600 --> 0:06:05.039 shouldn't cost you a lot. Jason Maria Rathenom, thank you 0:06:05.080 --> 0:06:07.680 so much for being with us. UH, senior consultant at 0:06:07.839 --> 0:06:11.080 h l V von Dala, which is based in Amsterdam, 0:06:11.160 --> 0:06:14.120 but is here with us on site in New York 0:06:14.160 --> 0:06:16.880 City at with him seventh Annual Global Summit. Thank you 0:06:16.920 --> 0:06:19.480 so much, so interesting. I love the idea of these sensors. 0:06:19.800 --> 0:06:22.120 I mean, I love them, and I also wonder what 0:06:22.200 --> 0:06:23.919 else you can do with all of that data, you know, 0:06:23.960 --> 0:06:26.240 I mean that's the other issue. But at a certain point, 0:06:26.320 --> 0:06:28.680 people have to be aware that we live in a 0:06:28.720 --> 0:06:32.160 technological era and people are looking to use the facilities 0:06:32.160 --> 0:06:49.440 they have to the best advantage possible. We are broadcasting 0:06:49.520 --> 0:06:52.400 live from with him seventh Annual Global Summit in New 0:06:52.520 --> 0:06:55.760 York City. A big topic of discussion is logistics and 0:06:55.800 --> 0:06:59.800 how technology is transforming, UH, the way that goods move 0:07:00.040 --> 0:07:03.320 around the world. Joining us now Michael Kaminski, chief operating 0:07:03.360 --> 0:07:07.200 officer at h M t X Industries, which is a 0:07:07.279 --> 0:07:10.040 global l v T manufacturer. I had to look up 0:07:10.040 --> 0:07:12.120 what l v T was, ask Michael what that is. 0:07:12.200 --> 0:07:14.840 It's luxury vinyl tile because I actually googled it. But 0:07:15.600 --> 0:07:18.240 luxury vinyl tile. Looking you can look at the different 0:07:18.280 --> 0:07:23.080 layers here. So, Michael, from a moving things around perspective, 0:07:23.160 --> 0:07:26.560 how crucial is that to what you do every day? Well, 0:07:26.560 --> 0:07:29.360 it's the essence of what I do every day. Where 0:07:29.400 --> 0:07:32.800 we sell over seven million dollars of product l v 0:07:32.920 --> 0:07:37.400 T UH, most of its manufactured. It is manufactured in 0:07:37.520 --> 0:07:40.000 China and we sell it throughout the world, although about 0:07:40.040 --> 0:07:43.240 eighty plus percent is sold in the United States. So 0:07:43.360 --> 0:07:47.920 getting those goods from China into the United States and 0:07:47.960 --> 0:07:51.440 then out into the distribution centers, then into the local community, 0:07:51.440 --> 0:07:57.120 and then ultimately to customers homes is all about logistics. So, uh, 0:07:57.320 --> 0:07:59.320 we've been talking a little bit about this China trade 0:07:59.360 --> 0:08:01.800 thing here in tariffs and all that kind of thing, 0:08:01.800 --> 0:08:04.080 and it's been the talk of the markets really for 0:08:04.120 --> 0:08:08.840 the last six months or so. How has tariffs impacted 0:08:09.160 --> 0:08:13.800 your business? Well, it's a significant issue. Uh. It takes 0:08:13.880 --> 0:08:17.240 up a huge amount of my time and senior executive 0:08:18.000 --> 0:08:22.280 of the company time. The tariffs on our products ten 0:08:22.360 --> 0:08:27.160 percent tariffs started on September two, eighteen. Uh, there were 0:08:27.200 --> 0:08:30.720 threats to go up to that kept on happening and 0:08:30.760 --> 0:08:34.600 actually in June did rise the t So that's an 0:08:35.040 --> 0:08:40.160 enormous amount of money placed on our goods. Um it's 0:08:40.280 --> 0:08:42.319 it's the topic who bears the cost of that. You 0:08:42.360 --> 0:08:45.280 pass that along to your customers or do you as 0:08:45.320 --> 0:08:47.839 a company eat it, or is a little bit of both. Well, 0:08:47.880 --> 0:08:50.400 there's a certain gentleman who thinks the Chinese are paying 0:08:50.400 --> 0:08:54.720 for it. Um, he's wrong. Uh. The costs are paid 0:08:54.760 --> 0:08:57.360 by a variety of different people in the global supply chain. 0:08:58.080 --> 0:09:04.440 First and foremost, we've negotiated prices with our factories. We 0:09:04.520 --> 0:09:08.280 have eaten a percentage of the the higher costs, We've 0:09:08.320 --> 0:09:12.560 passed on a percentage of those costs to our customers, 0:09:12.640 --> 0:09:15.400 and then our customers have passed on a percentage of 0:09:15.440 --> 0:09:18.679 those costs to the consumers. So the truth and matter 0:09:18.760 --> 0:09:23.120 is worn by many different people and it hurts many 0:09:23.160 --> 0:09:25.840 different people throughout the chain. Some people have said, well, 0:09:26.280 --> 0:09:28.520 just changed the supply chain, and when you talk about 0:09:28.520 --> 0:09:32.400 the factories, uh and sort of replacing them, etcetera. There 0:09:32.480 --> 0:09:36.040 there's an issue with that. But logistically, how challenging would 0:09:36.040 --> 0:09:40.719 it be to uh completely rejigger the supply chain? I mean, 0:09:40.800 --> 0:09:44.240 simply put, it couldn't be done. Uh. The investment and 0:09:44.280 --> 0:09:49.280 the factories are manufacturing partners in Asia have invested tens 0:09:49.320 --> 0:09:52.400 and tens of millions of dollars into their facilities. They 0:09:52.440 --> 0:09:56.040 backed over a hundred million dollars in certain instances. Uh, 0:09:56.200 --> 0:09:59.520 you just can't replicate that. First from a from a 0:09:59.559 --> 0:10:01.760 cost point of view. Uh. In fact, one of our 0:10:01.800 --> 0:10:05.720 biggest competitors over the last few years is invested almost 0:10:05.720 --> 0:10:09.640 a billion dollars to create a manufacturing facility in the 0:10:09.679 --> 0:10:13.600 United States that would be capable of producing the product 0:10:13.640 --> 0:10:16.440 that we make, and they've been unsuccessful. It's not a 0:10:16.520 --> 0:10:20.040 simple product to make um. And second of all, who 0:10:20.040 --> 0:10:22.760 would invest that kind of money unless you felt that 0:10:22.800 --> 0:10:25.120 you could make a good product and and go to 0:10:25.160 --> 0:10:29.760 get a good return on it. So um our supply 0:10:29.880 --> 0:10:33.880 chain is embedded, and it starts with our manufacturing facilities 0:10:33.880 --> 0:10:37.800 in China, and then across the board. Each element of 0:10:37.800 --> 0:10:40.160 it has to react to it. You just can't pick 0:10:40.240 --> 0:10:43.079 up a factory, move it and and start afresh. What's 0:10:43.080 --> 0:10:47.080 your primary UM I guess transportation method or route of 0:10:47.160 --> 0:10:49.400 bringing the product from China to the U S. You 0:10:49.440 --> 0:10:52.080 just slap on one of those big monster container ships 0:10:52.080 --> 0:10:56.400 and it goes to Long Beach or something like that. Yes, okay. 0:10:56.640 --> 0:11:02.600 So we ship approximately two thousand containers a month. Almost 0:11:02.640 --> 0:11:05.760 all of that comes out of the Shanghai port starts. Actually, 0:11:05.960 --> 0:11:09.199 our manufacturing partners are in jiang Jigon, China, which is 0:11:09.280 --> 0:11:12.439 up the Yellow Yankcee River a few hours from Shanghai. 0:11:12.520 --> 0:11:15.720 So they go from the manufacturing facility in Jang Jigan 0:11:16.240 --> 0:11:18.640 on river boats down to the port of China, which 0:11:18.640 --> 0:11:21.920 is Shanghai, by far the largest port in the world. 0:11:22.480 --> 0:11:25.719 Two thousand containers a month get put on those very 0:11:25.800 --> 0:11:28.839 very large boats that you see out there. Uh. Some 0:11:28.920 --> 0:11:30.640 of them go to the port of Long Beach and 0:11:30.920 --> 0:11:34.600 Los Angeles. Some come through the Panama Canal and go 0:11:34.720 --> 0:11:37.920 to the port of Savannah, which is actually the third 0:11:38.000 --> 0:11:41.000 largest port for these kinds of containers in the in 0:11:41.040 --> 0:11:46.760 the country. And then we have distribution facilities in Compton, California, 0:11:47.000 --> 0:11:50.160 in rinkin Georgia, which is a little bit outside of Savannah, 0:11:50.480 --> 0:11:54.680 and from there we then ship them throughout the United States. 0:11:54.920 --> 0:11:58.520 Just quickly here, I'm wondering whether there are new technologies 0:11:58.600 --> 0:12:01.680 that would facilitate some of the logistics around this that 0:12:01.800 --> 0:12:06.240 you're hesitant to invest in right now due to the uncertainties. Well, 0:12:07.000 --> 0:12:10.480 you know, it's very very hard in this uncertain environment 0:12:10.480 --> 0:12:14.080 to make long term strategic decisions. We happen to be 0:12:14.240 --> 0:12:16.720 very lucky in the fact that we have a product 0:12:16.720 --> 0:12:20.480 that the consumer is clamoring for and so we are 0:12:20.559 --> 0:12:23.920 selling even in the face of these tariffs. We're doing 0:12:24.040 --> 0:12:27.560 very very well. So we're not going to stop investing 0:12:27.600 --> 0:12:30.640 in our businesses because of the uncertainty, but but it 0:12:30.679 --> 0:12:34.360 makes it more difficult. We've invested UH. Two years ago 0:12:34.400 --> 0:12:37.800 we opened a new facility in outside of Savannah, invested 0:12:37.880 --> 0:12:41.840 eleven million dollars in robotics and in a new facility. 0:12:42.280 --> 0:12:45.120 So we're doing that all the time, understood. Michael Commitskey, 0:12:45.160 --> 0:12:47.120 thanks so much for joining us. We appreciate you stopping 0:12:47.160 --> 0:12:50.760 by here. Michael's the CEO of h mt X Industries, 0:12:51.280 --> 0:12:54.360 joining us here at the with them seventh Annual Global 0:12:54.440 --> 0:12:58.240 Summit at second in New York City. Veraging with logistic 0:12:58.280 --> 0:13:01.600 discussions and really important to get that view in terms 0:13:01.720 --> 0:13:04.360 of on the ground, how realistic it is to shift 0:13:04.400 --> 0:13:08.840 around your entire UH supply chain exactly, not very easy. 0:13:08.840 --> 0:13:27.760 This is Bloomberg. We are so lucky to have with 0:13:27.840 --> 0:13:30.559 us Tom Angel, who is the practice leader with him's 0:13:30.559 --> 0:13:35.080 Financial Services Group. He has decades of experience with private 0:13:35.080 --> 0:13:38.920 equity and venture capital firms in particular, which is incredibly topical. 0:13:39.559 --> 0:13:41.679 Just this morning, Mark Wiseman of black Rocks that that 0:13:41.720 --> 0:13:44.959 almost half of Black Rocks institutional clients plan to increase 0:13:44.960 --> 0:13:49.360 their allocation to private asset classes. So Tom, thank you 0:13:49.400 --> 0:13:52.200 so much for being here, can you talk about that 0:13:52.320 --> 0:13:55.440 shift and sort of what you're seeing among your clients 0:13:55.640 --> 0:13:58.840 in terms of the just massive amount of money flooding 0:13:58.880 --> 0:14:00.800 into that There is a lot of capital coming into 0:14:00.840 --> 0:14:04.360 the market, and especially for the private equity venture capital 0:14:04.400 --> 0:14:07.800 funds UM. So if you take a look at Cowper's 0:14:08.040 --> 0:14:11.080 Texas T Shirt Union, a lot of the pensions stated 0:14:11.280 --> 0:14:14.880 of sovereign funds they are looking a ways to make 0:14:14.920 --> 0:14:18.839 returns because they have to pay their retirees and typically 0:14:18.920 --> 0:14:21.240 you're trying to look at a seven eight percent return 0:14:21.320 --> 0:14:25.160 depending on what they're um what the amount is that 0:14:25.200 --> 0:14:27.680 they need to return in order to be able to 0:14:27.680 --> 0:14:30.520 make those payments. So UM, they can't make it in 0:14:30.520 --> 0:14:33.480 the market UM over a long period of time. But 0:14:34.440 --> 0:14:37.560 I think in the least twenty years, UH, the private 0:14:37.600 --> 0:14:41.720 market has significantly outperformed the public market. And those studies 0:14:41.720 --> 0:14:45.240 are out and so they're doing much more allocations to 0:14:45.320 --> 0:14:50.720 private private equity, venture capital. Real estate could be dead funds, 0:14:51.000 --> 0:14:52.680 a lot of private dead funds that are out there, 0:14:53.160 --> 0:14:56.800 and in order to generate those returns that they need, 0:14:56.920 --> 0:15:00.400 they're allocating dollars to that. Since the christ this back 0:15:00.400 --> 0:15:02.720 in two thousand and eight, two thousand nine. You know, 0:15:02.800 --> 0:15:05.120 so we've been going almost ten a little more years, 0:15:05.120 --> 0:15:07.440 and that you keep wondering, well, when is that going 0:15:07.480 --> 0:15:09.440 to stop? Because all that capital keeps coming in, how 0:15:09.480 --> 0:15:13.240 they're going to deploy it? But places like Cowper's and 0:15:13.560 --> 0:15:16.920 the others, they're not on a short term window. So actually, 0:15:16.960 --> 0:15:21.520 some of the larger institutions like Blackstone and Carlisle, they're 0:15:21.520 --> 0:15:23.880 looking at doing twenty year funds set a ten year 0:15:23.920 --> 0:15:26.480 typical private equity funds ten ure because they have a 0:15:26.520 --> 0:15:29.440 longer term horizon and so they want to generate more returns, 0:15:30.480 --> 0:15:32.840 higher returns over a longer period of time. So they're 0:15:32.840 --> 0:15:36.400 not worried about market dips or even even a recession 0:15:36.520 --> 0:15:39.920 because at a recession point, they think they have an 0:15:39.960 --> 0:15:42.240 opportunity to buy in at a lower price and get 0:15:42.280 --> 0:15:45.400 better value. So, Tom, one of the issues that kind 0:15:45.440 --> 0:15:48.720 of I think came to the market's head this year, 0:15:48.720 --> 0:15:51.600 which maybe it's too much money chasing too few deals 0:15:51.600 --> 0:15:54.120 in the venture community and maybe even the private equity community. 0:15:54.360 --> 0:15:56.480 You know, maybe the greatest example that would be we 0:15:56.560 --> 0:15:59.400 work where in the venture private world, and you could 0:15:59.400 --> 0:16:02.720 even say were lift that, you know, the valuations that 0:16:02.760 --> 0:16:05.200 were getting in the private market just we're too high. 0:16:05.280 --> 0:16:08.400 Then they get really unmasked. I guess when they came 0:16:08.440 --> 0:16:11.200 to the public markets. Are some are your clients worried 0:16:11.240 --> 0:16:14.960 about too much money, tasting too few deals and driving 0:16:15.040 --> 0:16:17.800 valuations to you know, crazy levels. Yeah, you'll talk to 0:16:17.880 --> 0:16:20.520 a lot of our our funds and and they're looking 0:16:20.560 --> 0:16:23.520 at what they're paying in terms of maybe on the 0:16:23.560 --> 0:16:27.200 private equity side, in terms of um EBA on multiples, 0:16:27.240 --> 0:16:29.840 they're definitely going up, and you know they're looking at 0:16:29.880 --> 0:16:33.040 that and maybe being too frothy. But um if you 0:16:33.080 --> 0:16:36.000 say to them, hey, what are you worried you're gonna 0:16:36.000 --> 0:16:38.120 be holding the bag when the recession turns around, that 0:16:38.200 --> 0:16:41.800 you have all these investments and they have capital that 0:16:41.880 --> 0:16:44.040 they have to deploy that they've gotten in, and so 0:16:44.120 --> 0:16:47.840 they're looking at that downturn as a possible um value 0:16:47.920 --> 0:16:50.640 by at that point. So you know, they may start 0:16:50.720 --> 0:16:52.520 to get hurt on some of these valuations, but they're 0:16:52.560 --> 0:16:56.040 going to make up on those valuations after the recession 0:16:56.080 --> 0:17:00.160 if you know one is coming. Um So, I think 0:17:00.240 --> 0:17:02.320 the returns have been there and they have continued to 0:17:02.360 --> 0:17:05.879 be there. Uh So on the venture side, you know 0:17:05.920 --> 0:17:08.760 you brought up good points in terms of things that 0:17:08.840 --> 0:17:13.960 have But there's only public companies where ten fifteen years 0:17:14.000 --> 0:17:16.840 ago there were seven thousand. There's there's really no place 0:17:16.840 --> 0:17:20.040 to put put the capital now that those particular examples 0:17:20.040 --> 0:17:23.800 you're brought up weren't profitable, and nobody's worried about profitability. 0:17:23.800 --> 0:17:25.720 They were more worried about growth on the private side. 0:17:26.119 --> 0:17:29.560 Once they become public, everybody's looking at, well, one is 0:17:29.600 --> 0:17:31.639 a profit going to turn around? I mean, if you 0:17:31.640 --> 0:17:34.440 look at what happened with Amazon years ago, similar type 0:17:34.440 --> 0:17:36.119 of thing, it took a while before they kind of 0:17:36.200 --> 0:17:39.600 hit their stride. So the question is uber is lift 0:17:40.000 --> 0:17:43.160 good public companies or good companies that are eventually turn 0:17:43.200 --> 0:17:45.840 it around and they were in large growth mode and 0:17:45.880 --> 0:17:49.320 now they're going to try and become profitable. Uh. I 0:17:49.359 --> 0:17:51.760 think that's where the way you have to look at 0:17:51.760 --> 0:17:54.600 it as opposed to this is just a bad model 0:17:54.640 --> 0:17:57.439 and it's not working right now. I think it's fascinating 0:17:57.520 --> 0:18:00.320 that some private equity firms are moving to twenty year 0:18:00.359 --> 0:18:02.679 fund models. That's new, right, I mean that does that 0:18:02.720 --> 0:18:06.040 have a precedent pre crisis, No, So this is new 0:18:06.119 --> 0:18:10.800 because again they have certain institutional investors that are looking 0:18:10.800 --> 0:18:13.080 more long term. So if you got a ten year 0:18:13.080 --> 0:18:15.200 fund and your investment period is your first three or 0:18:15.240 --> 0:18:19.480 four years, UM, then after that you're kind of carrying it. 0:18:19.720 --> 0:18:22.600 So how much higher are some of the returns on 0:18:22.880 --> 0:18:25.760 say a twenty year fund versus a ten year fund. 0:18:25.960 --> 0:18:29.040 They've only been um launched in the last few years, 0:18:29.440 --> 0:18:33.919 so UM. We don't have statistics on that yet, but 0:18:34.160 --> 0:18:36.840 I would think that you have more of an opportunity 0:18:36.840 --> 0:18:38.639 of when to sell as opposed to your coming to 0:18:38.680 --> 0:18:40.560 the end of the fund and now you have to 0:18:40.600 --> 0:18:44.720 liquidate those positions. So um. And there were only for 0:18:45.080 --> 0:18:49.400 you know, those larger institutional types of investors, retirement plans, 0:18:49.440 --> 0:18:53.359 state funds, um that don't need the money you know 0:18:53.600 --> 0:18:56.560 immediately if you're high net worth individual and these are 0:18:56.680 --> 0:18:59.000 investments you want to get some cash back within ten years. 0:18:59.080 --> 0:19:02.560 These more worried about future payments for all the pensioneers 0:19:02.640 --> 0:19:04.800 over a period of time. Let switch gears real quickly 0:19:04.840 --> 0:19:06.440 to hedge funds. I saw just news I think the 0:19:06.520 --> 0:19:09.080 last there so that Jeffrey Vinneck, the former star hedge 0:19:09.080 --> 0:19:11.600 fund manager of Fidelity madgellan and who ran a long 0:19:11.680 --> 0:19:16.320 time hedge fund, actually closed shop because he couldn't raise funds. 0:19:16.640 --> 0:19:19.760 Is it that hard to raise money today? It's difficult, 0:19:19.840 --> 0:19:21.840 especially on the hedge fund side. The e t fs 0:19:21.840 --> 0:19:25.600 have really um hurt the hedge fund industry because the 0:19:25.640 --> 0:19:28.680 fees are a lot less UM. So that's really brought 0:19:28.720 --> 0:19:30.879 it down. I think I saw a week or so 0:19:31.040 --> 0:19:34.840 or ago where UM dollars into e t f's first 0:19:35.080 --> 0:19:38.199 for the first time exceeded dollars into hedge funds or 0:19:38.240 --> 0:19:41.920 manage funds. So there was more capital going to those 0:19:42.280 --> 0:19:44.639 uh e t f s, and and you know, you 0:19:44.720 --> 0:19:47.760 need the right manager. So it's not everybody that can 0:19:48.000 --> 0:19:50.399 um come in there. And you know back in the 0:19:50.400 --> 0:19:52.240 old days where everybody would set up a fund and 0:19:52.320 --> 0:19:55.440 invest in it, that's not happening anymore. Yeah. I guess 0:19:55.440 --> 0:19:57.520 which shocked me is Jeff Vinick. I mean, you don't 0:19:57.520 --> 0:20:00.440 get a bigger name. Well, there's a large a lot 0:20:00.480 --> 0:20:04.000 of large like Leon Cooperman became a family office. There 0:20:04.040 --> 0:20:06.359 were a lord a lot of large institutional head funds 0:20:06.440 --> 0:20:09.800 that basically shut up, shutdown shop, gave all the money back, 0:20:09.840 --> 0:20:13.600 and now they have a family office instead. Right exactly. Uh, 0:20:13.680 --> 0:20:16.640 let's see here we are here, we're broadcasting life from 0:20:16.640 --> 0:20:20.119 with him Seventhaniel Global Summit and second in New York City. 0:20:20.480 --> 0:20:23.040 Tom Angel Practice Leader with him Financial Services script. Thanks 0:20:23.040 --> 0:20:26.040 so much for joining us. We appreciate your comments on 0:20:26.040 --> 0:20:27.960 the financial service indust You have a great conference today. 0:20:28.000 --> 0:20:44.720 Thank you well. Twitter reported results last night and the 0:20:44.800 --> 0:20:47.960 market did not like those results. The stock is trading 0:20:48.000 --> 0:20:51.879 off about nineteen percent today, stocks around thirty one a share. 0:20:52.200 --> 0:20:54.000 To get the latest on what happened there and also 0:20:54.160 --> 0:20:56.120 week a little preview of Amazon, we welcome our good 0:20:56.119 --> 0:20:59.000 friend to Tender Warral. He's a senior Internet annalyst for 0:20:59.040 --> 0:21:02.960 Bloomberg INTELLGM. He joined us from our San Francisco studio, Tender, 0:21:03.000 --> 0:21:04.919 thank you so much for joining us. First, give us 0:21:04.920 --> 0:21:07.879 a sense of what happened at Twitter. They were on 0:21:07.920 --> 0:21:09.280 a little bit of a run there. Looked like they 0:21:09.320 --> 0:21:12.119 were turning things around. What happened, Yeah, you're right, it was. 0:21:12.200 --> 0:21:14.959 It was a disappointing quote on Twitter has just walked 0:21:15.000 --> 0:21:18.000 a few steps back in its recovery story here. I mean, first, 0:21:18.000 --> 0:21:21.639 it was a quarter with a lot of bugs in 0:21:21.720 --> 0:21:25.760 their mobile app promotions product. That's sort of like impacting 0:21:25.840 --> 0:21:29.520 the at targeting aspect and hence the revenue that's coming 0:21:29.600 --> 0:21:32.320 from that product. But the bigger concern here was the 0:21:32.359 --> 0:21:35.720 seasonality that they were experiencing two months in the quarter. 0:21:36.280 --> 0:21:38.880 Uh And it's interesting, but the seasonality was around events. 0:21:39.200 --> 0:21:41.440 So basically, there are a lot of events happening, there's 0:21:41.440 --> 0:21:44.679 content flowing around that, the air product launches happening, you know, 0:21:44.720 --> 0:21:47.159 the your revenues go up. But if that doesn't happen, 0:21:47.280 --> 0:21:50.439 then suddenly you see a lull that's happening. And this 0:21:50.440 --> 0:21:53.399 this is a problem in terms of long term growth 0:21:53.480 --> 0:21:55.719 visibility because you know, if they're not able to maintain 0:21:55.720 --> 0:21:59.720 a steady scheme of advertisers, that it becomes difficult to 0:21:59.720 --> 0:22:02.240