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Speaker 1: Hello, Welcome to the Credit Edge, a Wiki markets podcast.

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Speaker 1: My name is James Crumbye, I'm a seen It at

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Speaker 1: Its to a Bloomberg and.

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Speaker 2: I'm Arnold Kakuda, senior credit analyst covering banks at Bloomberg Intelligence.

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Speaker 2: So this week we're very pleased to welcome Aaron Kless,

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Speaker 2: CEO and CIO at Evolution and Credit Partners.

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Speaker 3: How are you doing, Aaron, great? Great, Thank you for

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Speaker 3: having me on. I'm excited great.

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Speaker 2: So prior to joining Andolution, Aaron held management roles in

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Speaker 2: private lending and equity at industry stalwarts like Apollo, Blackrock,

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Speaker 2: Merril Lynch. And what I found really interesting about Andolution

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Speaker 2: is its unique industry expertise in areas such as sports

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Speaker 2: and financial services and for the bank people out there,

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Speaker 2: their senior leadership includes the former head of the OCC

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Speaker 2: and current Flagstar CEO, Joe Adding. So there's a lot

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Speaker 2: of talk about James.

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Speaker 1: There is, indeed, and we'll get to the sports in

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Speaker 1: a bit, but before we do, credit markets are looking

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Speaker 1: ever more complacent, with junk bonds trading very tight as

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Speaker 1: demand for yield rises and net new supply of corporate

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Speaker 1: debt remains thin. Under the surface, there are signs of stress,

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Speaker 1: with investors moving to higher quality debt, structured finance, and

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Speaker 1: sectors that would appear to be less exposed to the

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Speaker 1: chaos caused by trade wars and volatile US policymaking. Investors

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Speaker 1: are also chasing higher returns in private markets, but there's

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Speaker 1: concern that lack of transparency and liquidity could lead to

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Speaker 1: problems there. So as we look ahead, Aaron, to the

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Speaker 1: second half, what are things in credit markets that we

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Speaker 1: should focus on? How are you positioning for the I mean,

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Speaker 1: I'm presuming there's going to be turbulence, but what are

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Speaker 1: you expecting?

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Speaker 3: No, no turbulence, I think is right. That's what everyone's expecting.

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Speaker 3: And certainly we are, in our end At and Illusion

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Speaker 3: Credit partners, we really are approaching the second half, and

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Speaker 3: really the foreseeable future for our funds, for our investors

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Speaker 3: is really that we focus on what we call the

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Speaker 3: core middle market, So we're really focused on borrowards with

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Speaker 3: say ten million of EBITDA up to fifty or sixty

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Speaker 3: million of EBITDA. We like to say that we focus

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Speaker 3: on main Street, not Wall Street. So while macroeconomic trends

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Speaker 3: are always front of mind, and as Arnold mentioned, you know,

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Speaker 3: Joseph Adding, former Comptrol of the Currency, head of the OCC,

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Speaker 3: is on our investment committee. Roger Ferguson, former Vice Chairman

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Speaker 3: of the Federal Reserve, former CEO of TIA, also on

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Speaker 3: our investment committee. You know, we get fantastic insights from

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Speaker 3: a macro perspective, certainly for a fund of our size

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Speaker 3: and our focus. So that focus on the core middle

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Speaker 3: market for us, that main Street, not Wall Street, keeping

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Speaker 3: in mind the macro, but focusing on the fundamentals is

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Speaker 3: really critical and core for us.

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Speaker 2: And then but what about like these high industries, right,

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Speaker 2: I guess maybe we'll get low interest rates soon, but

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Speaker 2: you know, the high interust rates pressure on you know,

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Speaker 2: cashloads and stuff like that. So how's that affecting kind

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Speaker 2: of these main street, you know, middle market firms versus

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Speaker 2: maybe some some other larger global players.

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Speaker 3: Yeah, for us, the interest burden or the fixed charge

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Speaker 3: burden on businesses, absolute leverage cost of debt, that for

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Speaker 3: us is a is a due diligence issue. Where we

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Speaker 3: have the fortune, I would say, in this particular environment

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Speaker 3: of being a relatively new manager, we're only about two

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Speaker 3: years old, just under two years old, so we've been

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Speaker 3: able to underwrite our portfolio to the current interest rate environment,

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Speaker 3: which has been a real blessing for us. You know,

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Speaker 3: they say, better to be lucky than good, although I

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Speaker 3: think we're pretty good too, But it's really nice to

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Speaker 3: be able to underwrite every deal that we do to

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Speaker 3: the cash flows of the business and their current state.

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Speaker 3: Of course, we're always we're credit investors, we're always looking

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Speaker 3: at downsides as well, but in the current interest rate environment,

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Speaker 3: I think where it's a lot of those challenges have

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Speaker 3: presented themselves are deals that we're done and underwritten perhaps

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Speaker 3: in a lower interest rate environment, or maybe those were

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Speaker 3: M and A transactions that were done in a frothier

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Speaker 3: M and A driven by potentially driven by interest rate

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Speaker 3: environment that now has to sort of live with the

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Speaker 3: interest burden of this higher rate environment. So for us,

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Speaker 3: it's really an opportunity really to be honest for our

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Speaker 3: investors as well, more than it is a challenge.

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Speaker 2: And then do you need we hear about some of

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Speaker 2: the you know, liquidity, I guess the potential for you know,

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Speaker 2: private credit to be greenlit for retail for one case,

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Speaker 2: I mean that that's a positive, I guess, But then

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Speaker 2: some of the liquidity issues of me more on the

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Speaker 2: private equity side of right, what about what about you know,

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Speaker 2: how can how can I get in and out right

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Speaker 2: for for some So can you talk about some of

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Speaker 2: these dynamics and how they might come into play.

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Speaker 3: Yeah, I think that's a very very hot topic. So

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Speaker 3: really two I think separate topics there. One is the

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Speaker 3: new and growing growth of private credit as a retail

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Speaker 3: investor asset class, you know, bringing for private credit to

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Speaker 3: four one case. I mean that's sort of you know,

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Speaker 3: the new horizon of really talk about main street. That's

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Speaker 3: you know, mom and pop investors, people's in their retirement savings.

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Speaker 3: So that's there's a real liquidity issue there for us,

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Speaker 3: at least at Andalusion. That's not really a market that

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Speaker 3: we're focused on in terms of retail investors. We really

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Speaker 3: do focus more on high net worth, ultra high networth

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Speaker 3: and institutional investors, where I think we can be a

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Speaker 3: little bit more transparent about the illiquid nature of the

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Speaker 3: asset class. The loans that we make are typically five

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Speaker 3: to six year contractual maturities. I think the lived experience,

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Speaker 3: certainly for us and the entire market is typically kind

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Speaker 3: of three and a half years, those loans are turning

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Speaker 3: over driven by refinancings, m and A things like that.

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Speaker 3: So from an ill liquidity perspective, you know, we try

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Speaker 3: to be really upfront and really transparent with our investors

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Speaker 3: about the illiquid nature of the underlying assets and therefore

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Speaker 3: the ill liquid nature of the fund investment that they're making.

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Speaker 3: But you are right, as the business as private credit

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Speaker 3: grows and expands, and a lot of that growth and

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Speaker 3: expansion as an industry is going to come through the

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Speaker 3: individual investor, the retail investor. Liquidity and mechanisms and mechanics

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Speaker 3: to create liquidity are going to become really critical and

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Speaker 3: really important developments.

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Speaker 1: As we've discussed a lot on this show, and the

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Speaker 1: private credits just ballooned very quickly, and it's on everyone's radar.

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Speaker 1: It's the hot new thing. Everyone's talking about it. But

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Speaker 1: the risks people just assume, because they can't see it,

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Speaker 1: that it's going to be a problem, and they point

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Speaker 1: to the smaller deals, They point to the new managers,

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Speaker 1: they point to all the stuff that you can't really

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Speaker 1: get a good handle on. So how do you overcome

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Speaker 1: that fear? You know, a new manager doing smaller deals

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Speaker 1: presume you get a lot of questions about how you

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Speaker 1: mark the risks, So how do you kind of overcome

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Speaker 1: those concerns.

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Speaker 3: Yeah, absolutely, we talk about that a lot. We have

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Speaker 3: that conversation a lot. You know, been in the private

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Speaker 3: credit industry a long time. As you mentioned in the intro,

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Speaker 3: the kind intro, you know, it's some pretty large firms

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Speaker 3: who were not new managers and not doing smalls. So

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Speaker 3: I've had the ability to and by the way, earlier

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Speaker 3: in my career, even at some of those larger managers,

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Speaker 3: private credit was still small and it was still really

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Speaker 3: a middle market business. I mean often I say to people,

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Speaker 3: you know, what's old is new again. Private credit was

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Speaker 3: born in the middle market. And as the industry has

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Speaker 3: grown so big, as you point out, so many of

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Speaker 3: those managers who started in the middle market have just

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Speaker 3: grown so large that they can't do those deals anymore.

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Speaker 3: And it's become a little bit of a self fulfilling

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Speaker 3: prophecy to say, oh, we can't do little deals anymore

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Speaker 3: because it's not a good return on time, we can't

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Speaker 3: deploy the money fast enough, so therefore we'll do bigger deals,

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Speaker 3: which is a better return on time. And then it's

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Speaker 3: kind of convenient to also just believe that those are

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Speaker 3: safer deals. I'm not sure that that's true. We focus

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Speaker 3: a lot on structure, We focus a lot on downside protection,

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Speaker 3: We focus a lot on you know, kind of primary

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Speaker 3: due diligence. Who are these borrowers, whether they're owned by

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Speaker 3: a private equity firm, a sponsor back borrower, or they're

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Speaker 3: an independent company, you know, family owned, founder, own a

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Speaker 3: non sponsored barer, which we also focus on. So so

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Speaker 3: I do do agree that private credit as an asset

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Speaker 3: class is hot, probably overheated, But I really do think

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Speaker 3: it comes down to, you know, really the structures that

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Speaker 3: you're investing in and the fundamental work that you're doing

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Speaker 3: right both through origination but most importantly through underwriting and

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Speaker 3: then critically through deal documentation execution. And by the way,

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Speaker 3: when that's done and your deals have covenants, you know

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Speaker 3: your job's not done. Now you need to monitor and

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Speaker 3: manage those deals, and you can't just wait for, you know,

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Speaker 3: a covenant report to come to you once a quarter.

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Speaker 3: You have to very proactive and stay on top of

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Speaker 3: the business or the sponsor depending on the structure, and

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Speaker 3: making sure you're really aware of what's going on inside

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Speaker 3: of those credits. And I think that's true for a

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Speaker 3: business with fifteen million of vibit DA, and it's true

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Speaker 3: for a business with one hundred and fifty million of EBITDA.

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Speaker 2: And you talk about you know, I think you mentioned

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Speaker 2: the word hot. You know this the sector is maybe

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Speaker 2: too hot. So what does that mean? Is it? Is

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Speaker 2: it kind of a step down? You know, you can't

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Speaker 2: continue to grow at whatever thirty forty percent a year.

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Speaker 2: Is it a step down in that? Or are you're

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Speaker 2: talking more about like kind of the stresses showing up,

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Speaker 2: Like what's what's you know?

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Speaker 3: Yeah, you're talking about there? Yeah, I like that. I

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Speaker 3: think it's actually both. But depending on where you operate

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Speaker 3: in function. So I think the stresses are real. And

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Speaker 3: if you're an investor and you're not invested with a

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Speaker 3: manager that's hyper focused on, as we like to say,

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Speaker 3: looking over the horizon, right, That's why we like having

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Speaker 3: covenants in our loans. It allows us to get a

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Speaker 3: peak as to what's coming, and if we don't like

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Speaker 3: what's coming, it gives us a chance to get our

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Speaker 3: hands dirty and get involved, versus cove light loans, which

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Speaker 3: is typically what you see in that larger part of

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Speaker 3: that upper part of the market where you might not

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Speaker 3: know what's coming, and when it comes there might not

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Speaker 3: be much you can do about it anyway. So I

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Speaker 3: do think it is the stress is And to your

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Speaker 3: point on growth, I do think that the market, at

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Speaker 3: certain parts of the private credit market, it is growth constrained.

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Speaker 3: And I think in the first half of the year

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Speaker 3: some managers have actually live that they've seen it, they've

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Speaker 3: proved it, and maybe they didn't want to, but they have.

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Speaker 3: As we've seen sponsor activity M and A activity, LBO

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Speaker 3: activity come way down. You know, we see it in

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Speaker 3: other credit managers, larger credit managers. You know, they're struggling

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Speaker 3: to find deals. They're struggling to find deals to deploy into.

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Speaker 3: So volumes are down. But because it goes hand in hand,

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Speaker 3: spreads are compressing, terms are loosening because everyone is chasing

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Speaker 3: those fewer and fewer deals. At certain parts of the market,

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Speaker 3: you know, where we're focused again, we call that core

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Speaker 3: middle market. They're fewer competitors in terms of other lenders

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Speaker 3: because so many of them have left the market to

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Speaker 3: go up market, and many of the new entrants have

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Speaker 3: not chosen to come into the core middle market, but

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Speaker 3: rather to try to chase the golden dream of being,

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Speaker 3: you know, the next biggest kid on the block. You know.

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Speaker 3: So I think some of those larger funds are growth constrained.

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Speaker 3: But what we see, and we see it in our pipeline,

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Speaker 3: we see it in our portfolio, we see it in

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Speaker 3: our origination relationships, is really a supply demand imbalance. Right,

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Speaker 3: there's more demand for loans in the middle market than

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Speaker 3: there are firms looking to provide them.

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Speaker 2: And then so I cover the banks, and then I

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Speaker 2: guess with with Trump two point zero, it's all about deregulation,

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Speaker 2: and I guess more for the bigger guys. But then,

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Speaker 2: you know, I think private credit the opportunity. A lot

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Speaker 2: of that I think has come from the increased regulation

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Speaker 2: right post financial crisis, you know, of these banks. But

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Speaker 2: now that we're seeing kind of a pullback of some

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Speaker 2: of this stuff, is it are you seeing more competition

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Speaker 2: from some of the bigger banks or maybe the regionals

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Speaker 2: and stuff. Is that a threat potentially or is this

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Speaker 2: still a safe space for you guys?

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Speaker 3: So you know, again, in the queer we are down

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Speaker 3: in the core middle market, we feel pretty safe. I

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Speaker 3: think again, bifurcating the big banks from the regional banks.

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Speaker 3: I think the big banks, including I think it was

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Speaker 3: an article today about one of the very big banks,

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Speaker 3: you know, kind of trying to find ways to push

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Speaker 3: hard into private credit. Again. I think that's a story

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Speaker 3: that belongs in that upper part of the market. You know,

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Speaker 3: we used to call it the BSL report placement market.

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Speaker 3: Maybe the bsls have already been replaced by that market,

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Speaker 3: but you know, that's I think where that battle is

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Speaker 3: going to play out, and that loosening of regulation is

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Speaker 3: going to allow those big banks to kind of fight

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Speaker 3: their way back into those deals and into those fee streams.

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Speaker 3: I think for us, what we're focused on in the

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Speaker 3: core middle market, it's a little bit more about the

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Speaker 3: regional banks and the commercial banks, and you know, I

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Speaker 3: think at the end of the day, there's room for both.

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Speaker 3: Market's quite large in the middle market. There's something like

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Speaker 3: two hundred and fifty thousand middle market companies in the

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Speaker 3: United States, something like twenty five or thirty thousand believe

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Speaker 3: it or not are owned by private equity firms. So

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Speaker 3: it's a big market, and you know, banks are still

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Speaker 3: need to do what you know, where the regulations stand today,

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Speaker 3: private credit is still able to do things that banks

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Speaker 3: aren't able to do, things around structure, amorganization, but also

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Speaker 3: pricing right, we get we get paid for it. So

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Speaker 3: even as commercial banks might get a little bit where

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Speaker 3: regional banks might get a little more active in the

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Speaker 3: middle market, I think the private credit is still offering

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Speaker 3: a product that middle market companies need that won't offer.

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Speaker 1: You are getting paid, as you say. Some of our

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Speaker 1: guests on this show talked about middle market returns in

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Speaker 1: the sort of what they're calling equity like returns, which

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Speaker 1: depends on your view of the actually marketing. But then

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Speaker 1: when pressed they say, mid teens. What's your view of

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Speaker 1: returns in this space?

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Speaker 3: Yeah, So you know, look, our strategy is really kind

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Speaker 3: of I call it low teens. And our goal and

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Speaker 3: our business model is to make good risk adjusted credit

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Speaker 3: decisions for our investors. So we're focused on senior lending

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Speaker 3: and we're not really trying to push the envelope to

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Speaker 3: bring those those returns up, either through excess leverage or

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Speaker 3: excess risk. So again we look at that market that

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Speaker 3: core middle market sponsor back deals, non sponsored deals, where

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Speaker 3: there's more spread and more alpha to be had. In

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Speaker 3: certain core end markets that we focus on, you know,

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Speaker 3: for for us, the Andalusion firm, the Andalusion brand, you know,

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Speaker 3: the core markets that we focus on. We talked about

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Speaker 3: financial services with with with Joseph and Roger, but sports

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Speaker 3: and media and entertainment are another important one for us,

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Speaker 3: and Illusion has a long and successful history around sports

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Speaker 3: as an asset class. We can get into that in

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Speaker 3: further detail. Media entertainment, certainly it's in its adjacencies to

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Speaker 3: sports are really important for us as well, you know,

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Speaker 3: but really it's it's an opportunity for us to focus

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Speaker 3: on risk adjusted returns. So we could stretch and produce

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Speaker 3: higher returns, but we think what's more appropriate for our

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Speaker 3: investors and the types of investors that we're looking to

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Speaker 3: attract to our business is performing credit you know, some

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Speaker 3: excess spread or excess return to other maybe more mid

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Speaker 3: or upper market strategies, but providing significant diversification in their portfolios.

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Speaker 1: So walk us through a deal though, and just so

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Speaker 1: our listeners can get it. I mean, you're talking about

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Speaker 1: companies with ten to fifty million dollars in ebitdow, which

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Speaker 1: really helps us kind of define but how big does

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Speaker 1: that make the actual loan. Sure, are you doing the

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Speaker 1: whole thing directly? What kind of margins are you seeing?

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Speaker 1: How does that compare to syndicated.

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Speaker 3: Yeah, so it's sort of all of the above. But

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Speaker 3: to be more specific, you know, if you think about

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Speaker 3: ten to fifty million of EBITDA senior lending sponsored and

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Speaker 3: non sponsored, that's kind of a matrix as we think

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Speaker 3: about it, you know, So a non sponsored deal that's

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Speaker 3: you know, a first lean senior secured loan. I mean,

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Speaker 3: most of what we're doing in that space is we're

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Speaker 3: talking about two to two and a half turns of leverage,

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Speaker 3: so pretty conservative from a leverage perspective, So those loans

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Speaker 3: can be quite small. Twenty twenty five, thirty thirty five

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Speaker 3: million dollars, okay. You know. The other end of the

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Speaker 3: spectrum is what we would call a unitronch loan, so

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Speaker 3: a deeper loan, still first lean, starting at the top,

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Speaker 3: but coming deeper to a sponsor back business, you know,

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Speaker 3: and that's going to be maybe double the amount of leverage.

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Speaker 3: Five turns of leverage. So at the at the outer

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Speaker 3: end of that range, fifty million dollar company five turns

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Speaker 3: of leverage, two hundred and fifty million dollars loan size,

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Speaker 3: and then we're really in those loans in every shape

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Speaker 3: and form. Some of the loans that we're the sole lender.

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Speaker 3: Some we're just you know, we're the agent with with

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Speaker 3: with a club. Some we're just one of the club

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Speaker 3: in the club. Some of the clubs are two or

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Speaker 3: three lenders. They don't get much larger than four, I

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Speaker 3: would say in our market. But it's very much a

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Speaker 3: club market, except for at that small end where people

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Speaker 3: will hold the whole thing.

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Speaker 1: Yeah, and you're buying to hold for what sort of

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Speaker 1: ten Yeah.

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Speaker 3: So again, most of our loans, which are all sort

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Speaker 3: of bilaterally negotiated, are typically five to six year maturities,

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Speaker 3: but our expectation is that there's going to be some

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Speaker 3: kind of refinancing event, generally within three to four years.

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Speaker 1: Okay, what kind of mudgins you say right now?

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Speaker 3: So again, splitting it out between sponsored and non sponsored,

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Speaker 3: you know, just you know, sort of easy, keep it

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Speaker 3: easiest or simplest, you know, for the not for sponsored

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Speaker 3: loans new LBOs, which there aren't a ton of these days.

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Speaker 3: But in our part of the market, you know, i'd

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Speaker 3: say the pricing sort of starts at so for five hundred, okay,

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Speaker 3: but generally between five hundred and five seventy five. And

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Speaker 3: then on the non sponsored side, you know, typically we

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Speaker 3: see about a hundred maybe one hundred and twenty five

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Speaker 3: basis points premium to that, So think, you know, six

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Speaker 3: hundred to six seventy five for a similar non sponsored business.

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Speaker 1: How are those margins changing given that there is such competition.

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Speaker 1: Are you seeing more like you know, bigger middle market

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Speaker 1: coming down into the smaller deals and that compresses the margin.

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Speaker 1: Is there a lot of pressure now on price?

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Speaker 3: So we are seeing some compression on the margin, not

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Speaker 3: as much, I think as being experienced in the upper

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Speaker 3: part of the market. Anecdotally, maybe once or twice, we've

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Speaker 3: seen some of the traditional kind of upper middle market

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Speaker 3: lenders coming down into the market in our market, but

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Speaker 3: I'd say that's been more on a specialized basis, not

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Speaker 3: on a broad basis. It might be an industry that

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Speaker 3: they know really well, it might be a sponsor that

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Speaker 3: they have a strong relationship with. I think really where

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Speaker 3: we're seeing more pressure on price are the are sort

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Speaker 3: of those long term players in our market. They have

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Speaker 3: the same pressures to deploy as everybody else, and they're

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Speaker 3: willing to you know, bring pricing in twenty five or

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Speaker 3: fifty basis points to win the deal.

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Speaker 1: Yeah, okay, you did mention the top that you were talking,

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Speaker 1: you know about mainstream rather than Wall Street, so you

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Speaker 1: have a good view into the firms and how they're operating.

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Speaker 1: You know, we've had these big trade war shocks, We've

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Speaker 1: got a lot of policy changes, and we still don't

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Speaker 1: know how that's affecting companies, particularly smaller companies that are

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Speaker 1: also exposed things like immigration reform. They're going to lose

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Speaker 1: some of their workers potentially. So there's all of these

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Speaker 1: stresses coming down. But you know, you wouldn't see it

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Speaker 1: by the looks of you know, if you're looking at

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Speaker 1: just the high yield spread, everything just looks great. You know,

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Speaker 1: good times are ahead. What are you saying on the ground, Aaron,

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Speaker 1: What what? What? What can you tell us about you know,

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Speaker 1: ground level main street America?

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Speaker 3: Yeah, No, I think it's it's a really important question

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Speaker 3: when we focus on again that concept of looking over

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Speaker 3: the horizon, what are those leading edge indicators. You know, interestingly,

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Speaker 3: we're not seeing a lot of employment pressure yet, in

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Speaker 3: other words, we're not seeing wage pressure. But what I

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Speaker 3: thought we would be seeing now because of your point

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Speaker 3: about immigration, businesses having a hard time finding workers, but

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Speaker 3: we haven't seen that yet. I'm still keeping a very

385
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Speaker 3: very closer eye on that at our portfolio, and our

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Speaker 3: strategy is very services centric, so we don't really have

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Speaker 3: a lot of exposure to businesses with long international supply chains.

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Speaker 3: So the tariff story, while critically important because it's driving

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Speaker 3: not just the news cycle, but importantly the decision making

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Speaker 3: kind of cycle and process amongst CEOs and CFOs, Main

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Speaker 3: Street and Wall Street, capex expenditures, new contracts, et cetera.

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Speaker 3: Hasn't really had a direct impact on our portfolio, but

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Speaker 3: we are certainly seeing that CEOs and sponsors are very

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Speaker 3: cautious around growth expectations, cautious around capital expenditures. We've heard anecdotally,

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Speaker 3: not in our portfolio, but from some partners that we

396
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Speaker 3: have are lenders to other businesses, that in certain industries,

397
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Speaker 3: people are starting to see contracts being canceled. So I

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Speaker 3: think that the overall theme is uncertainty. The overall theme

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Speaker 3: is expectation of volatility, even though we're not seeing it yet,

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Speaker 3: and caution. So caution means slow down your hiring, slow

401
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Speaker 3: down your cap X and if you're thinking of entering

402
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Speaker 3: into a big, chunky contract, you might not want to

403
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Speaker 3: do that today. So today in our portfolio, we haven't

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Speaker 3: really seen any of those shocks yet, but we're keeping

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Speaker 3: a very close eye on it.

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Speaker 1: Does that ultimately lead to mold defaults and pick in

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Speaker 1: terms of the portfolio.

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Speaker 3: So again i'd separate out those two, you know, and

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Speaker 3: again in our market where there are covenants in our loans,

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Speaker 3: you know, we have a chance to really be ahead

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Speaker 3: of those defaults and work with the borrowers appropriately. You know,

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Speaker 3: some of these things as they impact these businesses might

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Speaker 3: be temporary in nature, and we can all laugh because

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Speaker 3: that means there could be a tweet or an X

415
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Speaker 3: or whatever tomorrow that undoes, you know, whatever burden they

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Speaker 3: were feeling. So I do think that now more than

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Speaker 3: ever as a lender, being an objective steward of capital

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Speaker 3: but also partnerly capital, I think is really really important,

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Speaker 3: rather than in some of these larger deals that are

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Speaker 3: more broadly held, where it's harder to sort of manage

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Speaker 3: the lender group and just saying hey, that's going to

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Speaker 3: be a default, like let's just tip this thing over

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Speaker 3: and you know, see where the cards fall. I think

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Speaker 3: in this particular environment that we're in, that's not going

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Speaker 3: to be a great strategy probably seven times out of ten, right,

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Speaker 3: So I think that's that's a really important thing in

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Speaker 3: terms of just thinking about where you know, where the

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Speaker 3: risk could lie.

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Speaker 2: We've had a few guests talk about kind of the

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Speaker 2: opportunity shifting. You know, US has always been great where

431
00:21:40,600 --> 00:21:43,520
Speaker 2: the most money is, capital is, but then maybe Europe

432
00:21:43,840 --> 00:21:46,359
Speaker 2: becoming more attractive. So but which which kind of view

433
00:21:46,400 --> 00:21:48,640
Speaker 2: are you? Do you think the US is still kind

434
00:21:48,640 --> 00:21:51,600
Speaker 2: of you know, the place to be or or you know,

435
00:21:51,640 --> 00:21:53,640
Speaker 2: are you studers starting to look more and more internationally?

436
00:21:54,080 --> 00:21:56,560
Speaker 3: So I guess our I mean, like our business is

437
00:21:56,600 --> 00:21:59,720
Speaker 3: very US centric, both our borrower base and our investor base,

438
00:22:00,160 --> 00:22:04,639
Speaker 3: so I'm biased. You know. Look, I think that again

439
00:22:04,680 --> 00:22:07,520
Speaker 3: in the middle market and the upper market. Frankly, I

440
00:22:07,520 --> 00:22:09,040
Speaker 3: think the US is still the place to be as

441
00:22:09,040 --> 00:22:13,000
Speaker 3: a lender. You have the most built out, sophisticated, tested

442
00:22:13,080 --> 00:22:15,800
Speaker 3: legal system in terms of making sure you know as

443
00:22:15,800 --> 00:22:17,879
Speaker 3: a lender what your rights are, whether you're a majority

444
00:22:18,080 --> 00:22:21,560
Speaker 3: lender or a minority lender. I think that the market

445
00:22:21,600 --> 00:22:24,880
Speaker 3: is the efficiencies in the market will take us will

446
00:22:24,920 --> 00:22:27,280
Speaker 3: carry us a long way despite a lot of the

447
00:22:27,400 --> 00:22:30,840
Speaker 3: volatility and noise that we're experiencing. I think for for

448
00:22:31,080 --> 00:22:33,280
Speaker 3: but then that's on the you know, my view on

449
00:22:33,359 --> 00:22:35,919
Speaker 3: the borrower or the lending market. I think as an

450
00:22:36,000 --> 00:22:39,080
Speaker 3: investor or an allocator, I think we are hearing what

451
00:22:39,119 --> 00:22:42,679
Speaker 3: you're saying. Also, right, a lot of institutional investors that

452
00:22:42,720 --> 00:22:46,320
Speaker 3: we speak to are really trying to think about, if

453
00:22:46,320 --> 00:22:49,320
Speaker 3: they're US investors, how can they get more exposure non US?

454
00:22:49,520 --> 00:22:52,080
Speaker 3: And if they're non US investors, asking the question of

455
00:22:52,160 --> 00:22:55,399
Speaker 3: do we really want to you know, be increasing our

456
00:22:55,480 --> 00:22:58,840
Speaker 3: allocations to US managers? And that's you know, that's that's

457
00:22:59,000 --> 00:23:02,159
Speaker 3: that's a whole other challenge and again for us, you know,

458
00:23:02,160 --> 00:23:04,439
Speaker 3: I bring it back to we focus on Main Street,

459
00:23:04,480 --> 00:23:09,960
Speaker 3: not Wall Street. These are fundamentally performing, strong, important businesses

460
00:23:10,040 --> 00:23:13,840
Speaker 3: that produce cash flow, important very importantly, you know, employ

461
00:23:13,960 --> 00:23:16,440
Speaker 3: real people and deliver real goods and services.

462
00:23:16,640 --> 00:23:19,639
Speaker 1: But we have seen Andalusian in European soccer.

463
00:23:20,720 --> 00:23:23,879
Speaker 3: That's true, that's true, absolutely.

464
00:23:23,280 --> 00:23:26,960
Speaker 1: Everton, Everton, Right, it's in you know, yet another big

465
00:23:26,960 --> 00:23:30,960
Speaker 1: football deal in Europe led by a US billionaire. Yeap,

466
00:23:31,160 --> 00:23:32,879
Speaker 1: When will the US invasion peak?

467
00:23:34,200 --> 00:23:38,000
Speaker 3: So you know Andalusian. You know, we're the credit business,

468
00:23:38,000 --> 00:23:40,560
Speaker 3: and we have an affiliated business, Assister business, that's a

469
00:23:40,600 --> 00:23:44,520
Speaker 3: sports advisory business. So the Everton deal is one of theirs.

470
00:23:44,560 --> 00:23:46,399
Speaker 3: Although we get we share an office, so we get

471
00:23:46,440 --> 00:23:48,560
Speaker 3: to have all the great little deal toys and trophies

472
00:23:48,760 --> 00:23:50,680
Speaker 3: lined up in our conference room, which is exciting.

473
00:23:50,760 --> 00:23:52,560
Speaker 1: Tickets to the games, tickets to the game.

474
00:23:52,600 --> 00:23:54,280
Speaker 3: Yeah, but yeah, if I want to fly over, they'll

475
00:23:54,280 --> 00:23:58,640
Speaker 3: they'll definitely host me, which is nice. And look, they've

476
00:23:58,680 --> 00:24:02,280
Speaker 3: been also incredibly busy in the US as well. So

477
00:24:02,760 --> 00:24:05,159
Speaker 3: the the in the US, you know, the story of

478
00:24:05,200 --> 00:24:08,640
Speaker 3: sports investing on the equity side has really really been

479
00:24:08,960 --> 00:24:14,040
Speaker 3: these minority stake investments, primarily into NFL teams really just

480
00:24:14,080 --> 00:24:16,000
Speaker 3: because the NFL is the one that you know recently

481
00:24:16,000 --> 00:24:18,480
Speaker 3: opened up to private equity. So that's been an area

482
00:24:18,480 --> 00:24:20,440
Speaker 3: where they've been very busy, and we see a lot

483
00:24:20,480 --> 00:24:23,560
Speaker 3: of that traction and activity. You know, the the US

484
00:24:23,560 --> 00:24:26,040
Speaker 3: invasion into other markets, I think, you know is just

485
00:24:26,080 --> 00:24:30,240
Speaker 3: getting started. You know, those as as we'll just call

486
00:24:30,280 --> 00:24:32,920
Speaker 3: them billionaires, right, can't are getting priced out? It is

487
00:24:32,920 --> 00:24:35,440
Speaker 3: crazy to say priced out of buying an NFL team

488
00:24:35,560 --> 00:24:37,720
Speaker 3: or an NBA team, you know, you got to start

489
00:24:37,760 --> 00:24:40,000
Speaker 3: looking at other markets for more affordable assets.

490
00:24:40,040 --> 00:24:41,960
Speaker 1: Is it just soccer? Are they moving into things that

491
00:24:42,000 --> 00:24:44,399
Speaker 1: I like, like rugby, cricket, all those other games that

492
00:24:44,440 --> 00:24:45,160
Speaker 1: we play over there.

493
00:24:45,440 --> 00:24:49,359
Speaker 3: Yeah, so cricket is a really hot one, right. Everyone

494
00:24:49,400 --> 00:24:51,560
Speaker 3: wants to talk about the I p L and how

495
00:24:51,600 --> 00:24:55,720
Speaker 3: that's remaking the cricket I think without I mean, we're

496
00:24:55,720 --> 00:24:58,280
Speaker 3: not I'm not giving anyway any confidences because we're not

497
00:24:58,440 --> 00:25:00,680
Speaker 3: making an investment. But I've had some time opportunity to

498
00:25:00,680 --> 00:25:05,280
Speaker 3: spend some time with Premiership Rugby over in the UK,

499
00:25:05,400 --> 00:25:07,639
Speaker 3: and I think they're gonna do some interesting things. I

500
00:25:07,640 --> 00:25:10,040
Speaker 3: think they've got a real roadmap ahead of them. And

501
00:25:10,080 --> 00:25:13,160
Speaker 3: I think you're going to I'm guessing peer speculation. You're

502
00:25:13,200 --> 00:25:15,359
Speaker 3: going to see some US people with money trying to

503
00:25:15,359 --> 00:25:17,280
Speaker 3: buy those teams becase it's gonna be some teams for sale.

504
00:25:18,200 --> 00:25:20,240
Speaker 3: You know, there's other interesting and we call them e

505
00:25:20,280 --> 00:25:23,639
Speaker 3: merging sports. You know, whether it's sale GP, which is

506
00:25:23,640 --> 00:25:28,160
Speaker 3: a professional sailing league that's quite international. There's a horse

507
00:25:28,240 --> 00:25:31,320
Speaker 3: racing league believe it or not, that's being launched or

508
00:25:31,359 --> 00:25:33,040
Speaker 3: is in the process of being launched. There was just

509
00:25:33,080 --> 00:25:35,080
Speaker 3: something in the press there I forgot who it was,

510
00:25:35,160 --> 00:25:38,000
Speaker 3: but someone a performer. I think a musician might have

511
00:25:38,080 --> 00:25:41,840
Speaker 3: bought a team or something, you know. So we have

512
00:25:42,000 --> 00:25:44,960
Speaker 3: the luxury, if you will, of seeing a lot of

513
00:25:44,960 --> 00:25:49,359
Speaker 3: that deal flow really through our affiliated business, and we

514
00:25:49,400 --> 00:25:51,639
Speaker 3: have the luxury of being able to pick and choose

515
00:25:51,640 --> 00:25:54,600
Speaker 3: where we think credit opportunities are presenting themselves. Most of

516
00:25:54,600 --> 00:25:58,000
Speaker 3: the time those emerging leagues are really equity opportunities and

517
00:25:58,040 --> 00:26:01,200
Speaker 3: not appropriate for our credit business. But every once in

518
00:26:01,240 --> 00:26:03,399
Speaker 3: a while, there there's a really interesting credit story to

519
00:26:03,440 --> 00:26:03,800
Speaker 3: tell too.

520
00:26:04,080 --> 00:26:06,000
Speaker 1: Where is it now, though, where's the next big credit

521
00:26:06,080 --> 00:26:08,440
Speaker 1: story for sports and globally?

522
00:26:08,720 --> 00:26:11,720
Speaker 3: Yeah, So, I mean our focus from a sports perspective,

523
00:26:12,440 --> 00:26:15,240
Speaker 3: and it's sort of you know, by being a credit investor,

524
00:26:15,359 --> 00:26:18,359
Speaker 3: it sort of makes sense, right is we're focused on

525
00:26:18,400 --> 00:26:22,080
Speaker 3: what we call sports adjacent businesses, So again sort think

526
00:26:22,160 --> 00:26:27,080
Speaker 3: services businesses whose end markets are professional sports, amateur sports,

527
00:26:27,080 --> 00:26:31,440
Speaker 3: and youth sports all have different dynamics and drivers behind them.

528
00:26:32,040 --> 00:26:34,800
Speaker 3: But at the end of the day, generally speaking, sports

529
00:26:34,800 --> 00:26:37,960
Speaker 3: have been quite recession resilient and when they have taken

530
00:26:38,200 --> 00:26:41,440
Speaker 3: you know, dips, they've come back fast. Obviously, professional sports

531
00:26:41,480 --> 00:26:45,600
Speaker 3: is primarily about media rights and media contracts and that

532
00:26:45,800 --> 00:26:49,520
Speaker 3: generating the cash flow. Amateur and youth sports is more

533
00:26:49,520 --> 00:26:56,160
Speaker 3: about engagement, fan engagement and participation. So those are separate dynamics,

534
00:26:56,200 --> 00:26:58,840
Speaker 3: but they sort of feed off of the same spirit,

535
00:26:58,880 --> 00:27:02,040
Speaker 3: if you will. Really we think that's where the opportunity is.

536
00:27:03,080 --> 00:27:05,520
Speaker 3: And it's not just you know, the things that are obvious.

537
00:27:05,560 --> 00:27:09,280
Speaker 3: There's a lot of technology being introduced into all three

538
00:27:09,320 --> 00:27:13,880
Speaker 3: of those verticals, you know, actual tech, but there's also

539
00:27:13,920 --> 00:27:16,680
Speaker 3: a lot of financial technology being introduced to all three

540
00:27:16,720 --> 00:27:20,560
Speaker 3: of those verticals, everything from ticket ticket financing right which

541
00:27:20,600 --> 00:27:24,399
Speaker 3: is becoming almost like an asset based asset class. You know,

542
00:27:24,480 --> 00:27:26,919
Speaker 3: really unique things are popping up that are really interesting

543
00:27:26,920 --> 00:27:27,640
Speaker 3: credit stories.

544
00:27:27,840 --> 00:27:30,439
Speaker 1: But other things adjacent what are they? Are they concessions?

545
00:27:30,480 --> 00:27:30,760
Speaker 1: Are they?

546
00:27:31,400 --> 00:27:33,879
Speaker 3: Like? Absolutely, so it would be all that. So, you know,

547
00:27:34,000 --> 00:27:37,639
Speaker 3: from the sort of esoteric to the less esoteric. It

548
00:27:37,680 --> 00:27:40,200
Speaker 3: can be things like ticketing finance, it can be certain

549
00:27:40,240 --> 00:27:43,280
Speaker 3: technologies that have to do with player health and safety.

550
00:27:44,320 --> 00:27:47,280
Speaker 3: But then the less esoteric stuff is concession and catering,

551
00:27:48,119 --> 00:27:54,680
Speaker 3: parking and security, you know, live event, live event production, equipment, apparel,

552
00:27:55,119 --> 00:27:56,960
Speaker 3: and then also all the things that are taking place

553
00:27:56,960 --> 00:27:59,960
Speaker 3: around i P and IP rights management, not just at

554
00:28:00,119 --> 00:28:02,240
Speaker 3: the professional amateur and youth level, but now at the

555
00:28:02,240 --> 00:28:05,679
Speaker 3: collegiate level. So a lot of really interesting businesses that

556
00:28:05,760 --> 00:28:10,439
Speaker 3: are either developing or have already developed around that that trend.

557
00:28:10,680 --> 00:28:14,080
Speaker 1: The biggest, seemingly multiply might playing costs. I mean, I'm

558
00:28:14,080 --> 00:28:16,080
Speaker 1: not a huge sports fan, but I see the massive

559
00:28:16,119 --> 00:28:19,520
Speaker 1: salaries that are being paid to the sports players, particularly

560
00:28:19,520 --> 00:28:22,200
Speaker 1: in European soccer. So is that becoming an area where

561
00:28:22,320 --> 00:28:24,919
Speaker 1: finance is becoming, you know, getting involved? You are you

562
00:28:24,960 --> 00:28:25,880
Speaker 1: figuring out how to.

563
00:28:27,160 --> 00:28:30,000
Speaker 3: Yeah, it's different in every league, so a lot of

564
00:28:30,119 --> 00:28:32,320
Speaker 3: not ivery, but most of the US leagues have you know,

565
00:28:32,400 --> 00:28:36,920
Speaker 3: salary caps or or mechanisms that function like a salary cap,

566
00:28:37,280 --> 00:28:40,400
Speaker 3: so while those numbers are quite large, the overall aggregate

567
00:28:40,480 --> 00:28:43,080
Speaker 3: number is capped and knowable, so it's less of an issue.

568
00:28:43,400 --> 00:28:46,239
Speaker 3: In European football, you see a lot more of that,

569
00:28:46,320 --> 00:28:49,800
Speaker 3: and there's a pretty pretty developed market in Europe for

570
00:28:50,080 --> 00:28:52,240
Speaker 3: It's like I guess I would call it an ancillary topic,

571
00:28:52,320 --> 00:28:55,320
Speaker 3: which is player transfer finance. So the teams sort of

572
00:28:55,400 --> 00:28:57,960
Speaker 3: own the players and they can buy and sell them

573
00:28:58,000 --> 00:29:00,880
Speaker 3: or rent them or lease them, and that's an active

574
00:29:01,200 --> 00:29:02,040
Speaker 3: financing market.

575
00:29:02,240 --> 00:29:04,120
Speaker 1: Credit financing, Is that something you're involved in.

576
00:29:04,560 --> 00:29:06,520
Speaker 3: We've looked at it a few times, you know, in

577
00:29:06,520 --> 00:29:10,719
Speaker 3: different contexts. You know, I'm a big believer that if

578
00:29:10,920 --> 00:29:13,200
Speaker 3: you know you're you're in a different geography than the

579
00:29:13,240 --> 00:29:14,840
Speaker 3: sort of core of the market, you're sort of by

580
00:29:14,880 --> 00:29:19,560
Speaker 3: definition being adversely selected. So for us, we've looked at

581
00:29:19,640 --> 00:29:22,120
Speaker 3: it from a platform perspective. Is there a team who

582
00:29:22,160 --> 00:29:25,120
Speaker 3: does this well that sits in London, you know, that

583
00:29:25,160 --> 00:29:27,600
Speaker 3: could manage this for us? That's how we've sort of

584
00:29:27,960 --> 00:29:29,000
Speaker 3: thought about approaching it.

585
00:29:29,120 --> 00:29:31,360
Speaker 1: And as of now that's yeah, not yet.

586
00:29:31,480 --> 00:29:33,520
Speaker 3: I mean, I think the opportunity is real. I think

587
00:29:33,520 --> 00:29:36,920
Speaker 3: it's attractive. It's just you know, finding the right match, right.

588
00:29:37,320 --> 00:29:39,680
Speaker 1: What's the next big sports deal and what's what's coming up?

589
00:29:39,680 --> 00:29:41,560
Speaker 1: Can you do anything anything about the New York Giants?

590
00:29:42,640 --> 00:29:45,240
Speaker 3: Nothing that I can nothing that I can disclose. But

591
00:29:45,320 --> 00:29:46,640
Speaker 3: you know, I think there'll be you'll see in the

592
00:29:46,640 --> 00:29:48,720
Speaker 3: press there are going to be more announcements around these

593
00:29:48,840 --> 00:29:53,560
Speaker 3: NFL minority deals. I think you'll see other major league

594
00:29:53,600 --> 00:29:57,160
Speaker 3: teams in the US trade and I think really the

595
00:29:57,200 --> 00:29:59,320
Speaker 3: big one, which which to be honest, we're not involved

596
00:29:59,360 --> 00:30:02,680
Speaker 3: in at all, at least that I'm aware of, because

597
00:30:02,760 --> 00:30:05,760
Speaker 3: you know, what what our affiliated businesses do aren't doesn't

598
00:30:05,760 --> 00:30:10,040
Speaker 3: always translate across the platform. Is going to be something

599
00:30:10,040 --> 00:30:13,440
Speaker 3: around collegiate sports, right, You've heard a lot of investors

600
00:30:13,480 --> 00:30:16,880
Speaker 3: and managers talking about, you know, some big deal getting done.

601
00:30:17,200 --> 00:30:20,560
Speaker 3: You know, one of the big collegiate leagues conference league

602
00:30:20,600 --> 00:30:23,560
Speaker 3: conferences did hire you know, an investment bank to go

603
00:30:23,600 --> 00:30:26,640
Speaker 3: out and run a full process. So that's going to happen.

604
00:30:26,800 --> 00:30:28,320
Speaker 3: I don't know when, and I don't know who, but

605
00:30:28,400 --> 00:30:29,160
Speaker 3: it's going to happen.

606
00:30:29,600 --> 00:30:31,720
Speaker 1: How lucrative though, is all of this stuff, you know,

607
00:30:31,800 --> 00:30:34,480
Speaker 1: sports media, all that stuff. I mean, it's fun, and

608
00:30:34,640 --> 00:30:37,160
Speaker 1: you know, the billionaires love to be involved. But I

609
00:30:37,200 --> 00:30:39,800
Speaker 1: mean presumably they're not that worried about the costs because

610
00:30:39,840 --> 00:30:43,200
Speaker 1: you know, it's fun. So yeah, you're getting less return

611
00:30:43,280 --> 00:30:43,880
Speaker 1: because of the fun.

612
00:30:44,040 --> 00:30:46,200
Speaker 3: So that's really like the vanity play, right, And that's

613
00:30:46,240 --> 00:30:48,760
Speaker 3: always a danger when I think you're doing sports media

614
00:30:48,760 --> 00:30:52,640
Speaker 3: and entertainment investing. But it's a bigger danger for the

615
00:30:52,760 --> 00:30:54,720
Speaker 3: equity investors. Right at the end of the day, we're

616
00:30:54,760 --> 00:30:57,800
Speaker 3: credit investors. That's why we're focused on what we call

617
00:30:57,840 --> 00:31:01,080
Speaker 3: those sports adjacent businesses. And if those sports, if those

618
00:31:01,080 --> 00:31:06,360
Speaker 3: adjacent businesses had end markets, that were you know, widget manufacturing,

619
00:31:06,640 --> 00:31:08,320
Speaker 3: you know, there'd be no vanity play to it. So

620
00:31:08,400 --> 00:31:11,640
Speaker 3: we stick to our knitting. We focus on fundamentals, which

621
00:31:11,680 --> 00:31:16,520
Speaker 3: is for us, cash flow, structure, downside protection, and you know,

622
00:31:16,560 --> 00:31:18,840
Speaker 3: we're not getting kind of caught up in the vanity

623
00:31:18,880 --> 00:31:20,840
Speaker 3: play of it. The free tickets we get those from

624
00:31:20,880 --> 00:31:23,800
Speaker 3: our our affiliates. You know, I'm sorry our our colleagues.

625
00:31:24,440 --> 00:31:26,360
Speaker 3: We get to do some pretty cool things because then

626
00:31:26,360 --> 00:31:28,120
Speaker 3: with them, but it really has nothing to do with

627
00:31:28,160 --> 00:31:29,280
Speaker 3: the investment that we're doing.

628
00:31:29,360 --> 00:31:31,840
Speaker 2: How much of this you know? So I think in

629
00:31:31,840 --> 00:31:34,080
Speaker 2: a global world, right, I think that kind of makes

630
00:31:34,120 --> 00:31:36,680
Speaker 2: more sense where you're looking outside of your kind of

631
00:31:36,720 --> 00:31:39,440
Speaker 2: home country to kind of increase the sporting presence. But

632
00:31:39,960 --> 00:31:41,239
Speaker 2: I guess, you know, we'll bring it back to these

633
00:31:41,280 --> 00:31:43,800
Speaker 2: tariffs and stuff like that what we've heard about. All right,

634
00:31:43,880 --> 00:31:46,080
Speaker 2: let's let's you know, maybe maybe it's more of a

635
00:31:46,280 --> 00:31:48,880
Speaker 2: domestic focus from now on. So do you see that

636
00:31:48,920 --> 00:31:50,320
Speaker 2: at all in the sporting world or do you think

637
00:31:50,320 --> 00:31:53,240
Speaker 2: it's continued kind of global You know, everybody's going to

638
00:31:53,560 --> 00:31:57,160
Speaker 2: be more interested in something else. You got the internet online, right,

639
00:31:57,360 --> 00:32:00,440
Speaker 2: people can track things very rapidly, So yeah, yeah, I.

640
00:32:00,480 --> 00:32:03,080
Speaker 3: Mean I think our view has been that, you know,

641
00:32:03,800 --> 00:32:07,760
Speaker 3: tariffs are not really a sports issue for the most part.

642
00:32:08,520 --> 00:32:11,960
Speaker 3: You know, there's some second and third effects, like we

643
00:32:12,000 --> 00:32:15,760
Speaker 3: talked about earlier in international investors being reticent or at

644
00:32:15,840 --> 00:32:19,360
Speaker 3: least thinking about the question of additional exposure to the US.

645
00:32:19,680 --> 00:32:22,920
Speaker 3: So I think that does have an impact. Other second

646
00:32:22,920 --> 00:32:25,600
Speaker 3: and third order effects. We talked about immigration policy and

647
00:32:25,640 --> 00:32:29,240
Speaker 3: that impact on labor that could lead to rising costs,

648
00:32:29,320 --> 00:32:32,520
Speaker 3: inflation that could lead to a recession or at least

649
00:32:32,560 --> 00:32:34,880
Speaker 3: slowing of growth. And then are are you really going

650
00:32:34,960 --> 00:32:36,920
Speaker 3: to go and spend you know, a couple hundred dollars

651
00:32:36,960 --> 00:32:40,040
Speaker 3: on that NFL ticket? Are you going to spend you know,

652
00:32:40,080 --> 00:32:43,920
Speaker 3: seventy five dollars on that new you know, soccer uniform

653
00:32:44,040 --> 00:32:46,680
Speaker 3: for your seven year old? You know, So there's real

654
00:32:46,840 --> 00:32:49,040
Speaker 3: kind of risk. I do think that come from the

655
00:32:49,280 --> 00:32:52,960
Speaker 3: general volatility, you know, period of volatility that we're in.

656
00:32:53,320 --> 00:32:56,360
Speaker 3: But I think the fundamental asset class that is sports

657
00:32:56,840 --> 00:33:00,000
Speaker 3: is pretty immune from a lot of this today.

658
00:33:00,040 --> 00:33:03,160
Speaker 2: And it's not a lot of well, it seems like,

659
00:33:03,200 --> 00:33:04,840
Speaker 2: at least for the NBA, a lot of the kind

660
00:33:04,880 --> 00:33:07,080
Speaker 2: of growth was or let's go to China, right like

661
00:33:07,120 --> 00:33:10,160
Speaker 2: that that was it and then obviously relationships aren't really

662
00:33:10,160 --> 00:33:13,120
Speaker 2: getting better there, So how much is that, you know,

663
00:33:13,400 --> 00:33:15,320
Speaker 2: is the rest of the kind of global kind of

664
00:33:15,600 --> 00:33:18,760
Speaker 2: growth in sports kind of relying on on that relationship.

665
00:33:18,840 --> 00:33:20,720
Speaker 3: But it's a it's a good it's a it's a

666
00:33:20,720 --> 00:33:22,720
Speaker 3: good when the NBA is a good topic too, because

667
00:33:22,760 --> 00:33:25,479
Speaker 3: they they are of the big four leagues, and as

668
00:33:25,520 --> 00:33:28,000
Speaker 3: we call it in the US, they're the one that's

669
00:33:28,080 --> 00:33:31,680
Speaker 3: probably the most international, and I think that that's certainly

670
00:33:31,720 --> 00:33:34,320
Speaker 3: been true from an IP perspective. Right you can walk

671
00:33:34,360 --> 00:33:36,880
Speaker 3: in almost any country and see a Lakers jersey or

672
00:33:37,080 --> 00:33:39,640
Speaker 3: something like that. So I think that it is really

673
00:33:39,640 --> 00:33:42,360
Speaker 3: become an international brand, which has opened up an opportunity

674
00:33:42,400 --> 00:33:45,880
Speaker 3: for them to not just grow their presence as a

675
00:33:45,920 --> 00:33:48,720
Speaker 3: playing league in China, but also Europe. There that's another

676
00:33:49,040 --> 00:33:53,360
Speaker 3: real big initiative of THEIRS, and I think to some extent,

677
00:33:53,720 --> 00:33:57,360
Speaker 3: while it's you obviously it's a US league, it's probably

678
00:33:57,520 --> 00:34:00,640
Speaker 3: beginning to transcend just being a US league and really

679
00:34:00,640 --> 00:34:05,120
Speaker 3: becoming an international brand. So I think that they're pretty

680
00:34:05,120 --> 00:34:08,960
Speaker 3: well positioned. You know, the NFL is increasingly playing regular

681
00:34:09,040 --> 00:34:13,440
Speaker 3: season games overseas. They played a game last year in Brazil,

682
00:34:13,440 --> 00:34:17,479
Speaker 3: They're playing another game in Brazil this coming season. They've

683
00:34:17,480 --> 00:34:20,160
Speaker 3: been playing in London, you know, pretty regularly for quite

684
00:34:20,160 --> 00:34:22,880
Speaker 3: a while now. They played last year in Germany, So

685
00:34:23,000 --> 00:34:25,799
Speaker 3: the NFL is also pushing into that market, but more

686
00:34:25,920 --> 00:34:28,400
Speaker 3: of an extension of the US brand.

687
00:34:28,800 --> 00:34:31,600
Speaker 2: Then you talked about college sports, and I think I

688
00:34:31,640 --> 00:34:34,759
Speaker 2: heard you talk about maybe the even more reshuffling of

689
00:34:34,760 --> 00:34:38,160
Speaker 2: these conferences or so we're not done with if the conference.

690
00:34:38,400 --> 00:34:39,640
Speaker 3: Yeah, no, I don't think. I don't know if the

691
00:34:39,640 --> 00:34:42,759
Speaker 3: conference is going to reshuffle, but but I do know

692
00:34:42,920 --> 00:34:47,480
Speaker 3: that there are individual, you know, large programs universities that

693
00:34:47,560 --> 00:34:50,560
Speaker 3: are engaged in conversations with you know, what we would

694
00:34:50,560 --> 00:34:53,000
Speaker 3: call private equity, right, or some or some form of

695
00:34:53,040 --> 00:34:58,040
Speaker 3: private capital to help them create liquidity to be able

696
00:34:58,080 --> 00:35:00,200
Speaker 3: to afford to keep their players. Right. I mean, it

697
00:35:00,320 --> 00:35:03,080
Speaker 3: used to be you gave them a scholarship and they

698
00:35:03,120 --> 00:35:06,759
Speaker 3: played for four years or five years and created a

699
00:35:06,800 --> 00:35:09,799
Speaker 3: lot of value for the school and didn't really get

700
00:35:09,840 --> 00:35:11,760
Speaker 3: much in turn for it. In fact, if they got anything,

701
00:35:11,800 --> 00:35:14,080
Speaker 3: they could get punished pretty hard for it. So I

702
00:35:14,120 --> 00:35:16,279
Speaker 3: think the pendulum was you know, way over there, and

703
00:35:16,320 --> 00:35:18,360
Speaker 3: now it's sort of swung away in the other direction,

704
00:35:18,840 --> 00:35:21,560
Speaker 3: where some of these collegiate athletes are being paid, you know,

705
00:35:21,840 --> 00:35:25,040
Speaker 3: sometimes millions of dollars, and they have an opportunity to

706
00:35:25,239 --> 00:35:29,480
Speaker 3: leave that program, you know, twice a year, and that's expensive,

707
00:35:29,560 --> 00:35:33,080
Speaker 3: and that's a big burden on these conferences and universities.

708
00:35:33,080 --> 00:35:36,880
Speaker 3: So they're looking to private capital markets to find ways

709
00:35:36,880 --> 00:35:41,080
Speaker 3: to help them create liquidity and financing tools to tract

710
00:35:41,280 --> 00:35:45,040
Speaker 3: and then retain the best athletic talent to keep their

711
00:35:45,040 --> 00:35:46,040
Speaker 3: programs at the top.

712
00:35:46,400 --> 00:35:48,960
Speaker 1: How much do you worry about the sustainability of the

713
00:35:48,960 --> 00:35:51,200
Speaker 1: fundamentals of it in terms of, you know, the demand

714
00:35:51,320 --> 00:35:55,440
Speaker 1: side in that you know, it's very expensive, as you mentioned,

715
00:35:55,560 --> 00:35:58,719
Speaker 1: to get a ticket, it's very expensive to buy concessions

716
00:35:58,800 --> 00:36:01,520
Speaker 1: or whatever else. For a lot of people, it's just

717
00:36:01,600 --> 00:36:05,200
Speaker 1: unaffordable and you kind of need to I think, have

718
00:36:05,280 --> 00:36:07,239
Speaker 1: a have a mass fan base that you know, go

719
00:36:07,400 --> 00:36:10,480
Speaker 1: through generations and we'll live with with the team and

720
00:36:10,480 --> 00:36:12,520
Speaker 1: support the team. But if you're if you're ultimately making

721
00:36:12,560 --> 00:36:15,359
Speaker 1: it too expensive for them, then it can't be sustained, right,

722
00:36:15,360 --> 00:36:17,400
Speaker 1: I mean, do you worry at all that that's a

723
00:36:17,480 --> 00:36:19,480
Speaker 1: long term problem for the industry.

724
00:36:19,600 --> 00:36:22,000
Speaker 3: Yeah, I don't. I don't. I don't, be honest. I

725
00:36:22,000 --> 00:36:24,160
Speaker 3: think that's one of the attractive things on the professional

726
00:36:24,160 --> 00:36:26,000
Speaker 3: sports side. I think that's one of the really attractive

727
00:36:26,000 --> 00:36:29,839
Speaker 3: things about it is the passion of the fan base. Right,

728
00:36:29,840 --> 00:36:33,239
Speaker 3: there aren't a lot of products, uh that that that

729
00:36:33,320 --> 00:36:35,440
Speaker 3: as an investor you can invest in, as a lender

730
00:36:35,480 --> 00:36:38,480
Speaker 3: you can lead to that are really built around sometimes

731
00:36:38,480 --> 00:36:42,680
Speaker 3: to your point, multi generational passion. And my you know,

732
00:36:42,960 --> 00:36:46,560
Speaker 3: my son who's a teenager. Yesterday he went over to

733
00:36:46,560 --> 00:36:48,520
Speaker 3: the MetLife State and MetLife Stadium in New Jersey to

734
00:36:48,520 --> 00:36:52,759
Speaker 3: watch the Chelsea PSG game. Right, So it's international, it's

735
00:36:52,840 --> 00:36:58,080
Speaker 3: multi generational, it's multi lingual, and that and that passion

736
00:36:58,480 --> 00:37:01,040
Speaker 3: is a pretty unique thing to be able to invest behind.

737
00:37:01,719 --> 00:37:05,279
Speaker 3: And so far, I think it's proven, particularly with what

738
00:37:05,320 --> 00:37:08,239
Speaker 3: we saw in COVID and how fast the attraction to

739
00:37:08,320 --> 00:37:12,160
Speaker 3: attending live events, particularly live sporting events, came back, that

740
00:37:13,160 --> 00:37:16,000
Speaker 3: consumers are are really that passion will will take them

741
00:37:16,000 --> 00:37:18,960
Speaker 3: a long way. You know, there are different ways to

742
00:37:19,080 --> 00:37:22,719
Speaker 3: access different price points. A ticket to an MLS game

743
00:37:22,880 --> 00:37:25,000
Speaker 3: is very different than a ticket to an NBA game

744
00:37:25,080 --> 00:37:27,360
Speaker 3: or an NFL game. But you know, but but but

745
00:37:27,440 --> 00:37:30,239
Speaker 3: at some point, you know, the there will be a

746
00:37:30,280 --> 00:37:33,000
Speaker 3: breaking point where the tickets will be too expensive, you know,

747
00:37:33,040 --> 00:37:35,600
Speaker 3: the hot dog or the popcorn will be too expensive.

748
00:37:36,160 --> 00:37:38,040
Speaker 3: But I think we're a far It seems like we're

749
00:37:38,040 --> 00:37:38,920
Speaker 3: a far away from that.

750
00:37:39,080 --> 00:37:42,040
Speaker 1: Okay, So there are some pretty high yeelds out there,

751
00:37:42,160 --> 00:37:44,200
Speaker 1: given base rates that's so high, and maybe we'll stay

752
00:37:44,280 --> 00:37:47,040
Speaker 1: high for for a while, and the margins, as you've

753
00:37:47,040 --> 00:37:49,360
Speaker 1: talked about, pretty wide. But you get to see a

754
00:37:49,360 --> 00:37:50,920
Speaker 1: lot of stuff out and I'm wondering, you know, when

755
00:37:51,000 --> 00:37:53,520
Speaker 1: you look around you and you kind of differentiate yourself

756
00:37:53,960 --> 00:37:56,120
Speaker 1: and there's a lot of competition, what's your edge? How

757
00:37:56,120 --> 00:37:57,439
Speaker 1: do you kind of you know, where do you see

758
00:37:57,520 --> 00:37:59,080
Speaker 1: value that maybe others aren't seeing it?

759
00:37:59,440 --> 00:38:01,640
Speaker 3: Yeah? I think for us, you know, in addition to

760
00:38:01,719 --> 00:38:04,120
Speaker 3: that bed and Illusion credit partners, in addition to that

761
00:38:04,239 --> 00:38:06,480
Speaker 3: focus our focus on that, we call it the core

762
00:38:06,520 --> 00:38:12,080
Speaker 3: middle market, which is less competitive. Like I said, competitors

763
00:38:12,120 --> 00:38:14,920
Speaker 3: are really more like partners. In addition to that, the

764
00:38:14,960 --> 00:38:18,680
Speaker 3: fact that we're actively doing both non sponsored and sponsor

765
00:38:18,719 --> 00:38:21,799
Speaker 3: back lending, I think is a real differentiator. You have

766
00:38:21,880 --> 00:38:26,440
Speaker 3: obviously most direct lenders who are primarily focused on sponsor finance,

767
00:38:27,360 --> 00:38:30,719
Speaker 3: and then a handful, very very small handful of lenders

768
00:38:31,040 --> 00:38:33,920
Speaker 3: who really just want to be focused on non sponsored

769
00:38:35,400 --> 00:38:38,200
Speaker 3: and I think that's a tough business to scale. It's

770
00:38:38,200 --> 00:38:40,359
Speaker 3: a tough business to scale in the way that we

771
00:38:40,440 --> 00:38:43,160
Speaker 3: want to and are scaling it, which is more you know,

772
00:38:43,239 --> 00:38:46,879
Speaker 3: performing credit. I like to call it sponsorabule. In other words,

773
00:38:46,920 --> 00:38:49,319
Speaker 3: these are the types of businesses that happen to be

774
00:38:49,360 --> 00:38:53,360
Speaker 3: owned by founders, families, entrepreneurs, et cetera, that private equity

775
00:38:53,400 --> 00:38:55,360
Speaker 3: would love to own. And that's a nice kind of

776
00:38:55,360 --> 00:38:59,440
Speaker 3: downside protection for us. But doing both really gives us

777
00:38:59,480 --> 00:39:04,680
Speaker 3: the flexibility in managing our pipeline and managing our risk,

778
00:39:05,040 --> 00:39:08,439
Speaker 3: but also managing our return. Right, so if we see

779
00:39:08,480 --> 00:39:12,120
Speaker 3: sponsor spreads tightening, we have the ability to still do

780
00:39:12,200 --> 00:39:14,720
Speaker 3: those non sponsor deals that are priced well into the sixes.

781
00:39:14,760 --> 00:39:17,239
Speaker 3: And that's a really nice way to create a portfolio

782
00:39:17,280 --> 00:39:20,759
Speaker 3: level return that is differentiated. And then the next one,

783
00:39:20,840 --> 00:39:24,440
Speaker 3: or the last piece of differentiation to your point, is

784
00:39:24,480 --> 00:39:26,600
Speaker 3: really those end markets that we do focus on. So

785
00:39:26,680 --> 00:39:29,120
Speaker 3: everyone you know, sports and media entertainment, and they have

786
00:39:29,160 --> 00:39:32,719
Speaker 3: that vanity effect, but they're also a really popular topic. Right.

787
00:39:32,760 --> 00:39:36,200
Speaker 3: A lot of the largest sovereign wealth funds are interested

788
00:39:36,239 --> 00:39:40,840
Speaker 3: in getting deeper into sports investing. And following them have

789
00:39:40,960 --> 00:39:43,239
Speaker 3: been you know, some of the larger pension systems and

790
00:39:43,280 --> 00:39:46,680
Speaker 3: state level pension systems, So a lot of investor interest

791
00:39:46,760 --> 00:39:49,080
Speaker 3: in the asset class and the fact that, you know,

792
00:39:49,200 --> 00:39:51,520
Speaker 3: it's one thing to be a relatively small, relatively new

793
00:39:51,560 --> 00:39:54,480
Speaker 3: manager who says I'm going to do sports lending. Great,

794
00:39:54,920 --> 00:39:57,080
Speaker 3: but to be able to say no, we're actually more

795
00:39:57,200 --> 00:39:59,480
Speaker 3: than just a you know, sort of new sort of

796
00:39:59,480 --> 00:40:03,239
Speaker 3: small man. We have this affiliated business and sort of

797
00:40:03,239 --> 00:40:06,120
Speaker 3: what we call the halo of the Andalusian brand I

798
00:40:06,120 --> 00:40:08,640
Speaker 3: think has been really powerful. And it's the same thing

799
00:40:08,680 --> 00:40:11,840
Speaker 3: with having you know, Roger and Joseph on our investment

800
00:40:11,840 --> 00:40:15,239
Speaker 3: committee around financial services. It's more than just a halo.

801
00:40:15,360 --> 00:40:18,200
Speaker 3: It really gives us what we call access. Yes, it's

802
00:40:18,200 --> 00:40:21,360
Speaker 3: access to deals and sponsors, but most importantly it's access

803
00:40:21,400 --> 00:40:26,160
Speaker 3: to information. Ultimately, you know, these are illiquid loans. You know,

804
00:40:26,320 --> 00:40:28,000
Speaker 3: I once had a boss say to me, you know,

805
00:40:28,080 --> 00:40:31,120
Speaker 3: many years ago, you know, the most important investment decision

806
00:40:31,160 --> 00:40:33,440
Speaker 3: you make in private credit is the first investment decision

807
00:40:33,440 --> 00:40:35,280
Speaker 3: you make, should you make the loan or not, because

808
00:40:35,320 --> 00:40:37,279
Speaker 3: after that there isn't really that much you can do.

809
00:40:37,360 --> 00:40:40,280
Speaker 3: It's i liquid, So really that access gives us that

810
00:40:40,280 --> 00:40:42,400
Speaker 3: that edge when it comes to decision making.

811
00:40:42,600 --> 00:40:45,680
Speaker 1: And you think that solvering wealth investment interest in sports

812
00:40:45,760 --> 00:40:47,080
Speaker 1: will grow from him.

813
00:40:47,320 --> 00:40:49,520
Speaker 3: I think it will. I do. I think, you know,

814
00:40:50,400 --> 00:40:53,280
Speaker 3: both a push and a pull. You know. The pull,

815
00:40:53,320 --> 00:40:56,080
Speaker 3: I guess is there aren't that many other people who

816
00:40:56,120 --> 00:40:59,040
Speaker 3: can afford to buy, you know, an eight billion dollar team.

817
00:40:59,320 --> 00:41:01,759
Speaker 3: So I think that there's a there's they're going to

818
00:41:01,840 --> 00:41:04,719
Speaker 3: become some of the you know, last buyer standing, if

819
00:41:04,719 --> 00:41:05,839
Speaker 3: you will. I don't know if that's a good thing

820
00:41:05,880 --> 00:41:09,279
Speaker 3: or a bad thing. I guess that's the pull, you know.

821
00:41:09,320 --> 00:41:12,680
Speaker 3: And and the push is that internationalization of the brands

822
00:41:12,680 --> 00:41:16,960
Speaker 3: and the internationalization of the of the activities, you know,

823
00:41:17,200 --> 00:41:20,280
Speaker 3: bringing the NBA to China, bringing the NBA to Europe,

824
00:41:20,680 --> 00:41:25,719
Speaker 3: bringing you know, a higher level of soccer or football

825
00:41:25,880 --> 00:41:30,840
Speaker 3: to the Middle East. Right, huge underserved markets, underserved populations

826
00:41:30,840 --> 00:41:34,040
Speaker 3: that are are really clamoring for access to the product.

827
00:41:34,560 --> 00:41:37,040
Speaker 3: And then again look at I p L in the

828
00:41:37,200 --> 00:41:40,400
Speaker 3: India Premier League cricket. You know, you can really create

829
00:41:40,520 --> 00:41:45,160
Speaker 3: some very significant media contracts where maybe they didn't wasn't

830
00:41:45,160 --> 00:41:47,640
Speaker 3: obvious that they they would have existed previously. So I

831
00:41:47,680 --> 00:41:50,000
Speaker 3: think that they're gonna. They're here to stay. The somomnwall

832
00:41:50,040 --> 00:41:51,160
Speaker 3: funds are here to stay.

833
00:41:51,160 --> 00:41:53,719
Speaker 1: In sports, does your platform need to grow to accommodate

834
00:41:53,719 --> 00:41:54,160
Speaker 1: the demand?

835
00:41:54,640 --> 00:41:56,000
Speaker 3: The answer is yes for sure.

836
00:41:56,760 --> 00:42:00,319
Speaker 1: Consolidation Is it organic? How do How do I think.

837
00:42:00,239 --> 00:42:02,680
Speaker 3: On the sports side, I think it's a lot a

838
00:42:02,719 --> 00:42:06,600
Speaker 3: lot of organic. And the reason I'm sort of thinking

839
00:42:06,640 --> 00:42:08,600
Speaker 3: as I say it, you know, we see a lot

840
00:42:08,600 --> 00:42:12,560
Speaker 3: of opportunities around things like stadium financing and adjacent real

841
00:42:12,680 --> 00:42:16,200
Speaker 3: estate financing. Again that's not what we do. We're not

842
00:42:16,280 --> 00:42:18,840
Speaker 3: real estate investors, but it could make a lot of

843
00:42:18,880 --> 00:42:21,719
Speaker 3: sense at some point when we're ready for it to

844
00:42:22,160 --> 00:42:24,719
Speaker 3: bring on a you know, not just a team and

845
00:42:24,840 --> 00:42:26,640
Speaker 3: capital that knows how to do that because the deal

846
00:42:26,680 --> 00:42:30,760
Speaker 3: flow is there. Similarly, just while we're on the sports

847
00:42:30,800 --> 00:42:33,320
Speaker 3: theme of you know, what I would call solution capital,

848
00:42:33,360 --> 00:42:36,479
Speaker 3: I mentioned we're senior lenders, but we see a huge

849
00:42:36,480 --> 00:42:39,080
Speaker 3: amount of opportunities in sports and what I would call

850
00:42:39,120 --> 00:42:43,120
Speaker 3: solution capital, so lower in the capital structure, more junior

851
00:42:43,160 --> 00:42:50,520
Speaker 3: opportunities across again adjacent businesses, emerging leagues, and international as well.

852
00:42:50,880 --> 00:42:52,759
Speaker 3: So I think that there's a huge amount of room

853
00:42:52,800 --> 00:42:55,920
Speaker 3: for growth. And I think on the more traditional part

854
00:42:55,960 --> 00:42:58,360
Speaker 3: of what we do. Again, that's senior lending side of things.

855
00:42:59,360 --> 00:43:01,239
Speaker 3: You know, I mentioned two hundred and fifty thousand middle

856
00:43:01,280 --> 00:43:05,399
Speaker 3: market companies, you know, the middle market or the core

857
00:43:05,480 --> 00:43:08,000
Speaker 3: middle market where we focus. There's really just you know,

858
00:43:08,040 --> 00:43:10,279
Speaker 3: a couple of handful of lenders who focus on this

859
00:43:10,320 --> 00:43:13,160
Speaker 3: part of the market. I don't think at this point

860
00:43:13,200 --> 00:43:16,399
Speaker 3: any of them have kind of growth aspirations to get

861
00:43:16,640 --> 00:43:19,319
Speaker 3: huge and leave the market, but a few of them

862
00:43:19,640 --> 00:43:23,160
Speaker 3: are probably looking at some point to sell themselves, right,

863
00:43:23,200 --> 00:43:26,759
Speaker 3: I mean, you can't deny, you know, if you're if

864
00:43:26,760 --> 00:43:29,279
Speaker 3: you're a fund owner and you look at what black

865
00:43:29,360 --> 00:43:31,800
Speaker 3: Rock paid for HPS or some of these other transactions,

866
00:43:31,840 --> 00:43:36,120
Speaker 3: it's a pretty attractive opportunity to scale and get really

867
00:43:36,160 --> 00:43:38,520
Speaker 3: really big. So I think there's a couple of other

868
00:43:38,520 --> 00:43:41,000
Speaker 3: middle market players that are much further along in their

869
00:43:41,040 --> 00:43:43,239
Speaker 3: development than we are who might go that route. And

870
00:43:43,320 --> 00:43:45,359
Speaker 3: you know, some of the founders are a little bit

871
00:43:45,360 --> 00:43:48,200
Speaker 3: older than than perhaps we are, so they're thinking about

872
00:43:48,239 --> 00:43:50,080
Speaker 3: things that way. So I think there's a lot of

873
00:43:50,120 --> 00:43:53,759
Speaker 3: growth opportunity for us, both organ organically and potentially inorganically.

874
00:43:53,800 --> 00:43:56,239
Speaker 1: You know, not looking to sell, not no, not not.

875
00:43:56,520 --> 00:43:58,040
Speaker 3: It's going to be a while before look at.

876
00:43:57,960 --> 00:44:00,399
Speaker 1: All to become a school much bank.

877
00:44:02,200 --> 00:44:05,560
Speaker 3: I'll leave that to uh people who have more authority

878
00:44:05,600 --> 00:44:09,520
Speaker 3: than I do within and illusion. But you know, I

879
00:44:09,520 --> 00:44:11,759
Speaker 3: think there are that the sports advisory busins. They're really

880
00:44:11,760 --> 00:44:14,040
Speaker 3: happy with that business, the success that that business has

881
00:44:14,080 --> 00:44:17,040
Speaker 3: had in a relatively short amount of time. I mean

882
00:44:17,239 --> 00:44:20,960
Speaker 3: business I think is four years old or so. And

883
00:44:21,040 --> 00:44:23,759
Speaker 3: I think, you know, moving into merchant banking is a

884
00:44:23,760 --> 00:44:26,319
Speaker 3: real opportunity, but it comes with risks, right, and you're

885
00:44:26,360 --> 00:44:29,319
Speaker 3: a if you're just a pure advisor, you're objective. You

886
00:44:29,400 --> 00:44:31,400
Speaker 3: have you know, one horse in the race, and that's it.

887
00:44:31,640 --> 00:44:34,040
Speaker 3: When you start investing your own capital, your client's capital,

888
00:44:34,080 --> 00:44:35,400
Speaker 3: it gets a little bit more complicated.

889
00:44:35,960 --> 00:44:39,760
Speaker 1: Great stuff. Aaron Kless, CEO and CIO of Andalusian Credit Partners,

890
00:44:39,760 --> 00:44:41,240
Speaker 1: Many thanks for coming on the credit edge.

891
00:44:41,320 --> 00:44:43,040
Speaker 3: Thank you so much, had fun, and.

892
00:44:43,040 --> 00:44:46,440
Speaker 1: Of course we're very grateful to Ernold Kakuda with Bloomberg Intelligence. Cheers.

893
00:44:46,960 --> 00:44:49,840
Speaker 1: Thanks for having me for more credit market analysis and insight.

894
00:44:49,880 --> 00:44:51,920
Speaker 1: Read all of Ernold's great work on the Bloomberg terminal.

895
00:44:51,920 --> 00:44:54,399
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896
00:44:54,480 --> 00:44:58,400
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897
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898
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899
00:45:05,680 --> 00:45:07,879
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900
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903
00:45:17,880 --> 00:45:22,040
Speaker 1: at jcrombieight at Bloomberg dot net. I'm James Crombie. It's

904
00:45:22,040 --> 00:45:24,439
Speaker 1: been a pleasure having you join us again next week

905
00:45:24,480 --> 00:45:38,520
Speaker 1: on the Credit Edge