WEBVTT - Bloomberg Businessweek Weekend - June 3rd, 2022 0:00:01.040 --> 0:00:05.400 This is Bloomberg Business Week inside from the reporters and 0:00:05.559 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:12.600 global business, finance and tech news as it happened. S 0:00:12.600 --> 0:00:16.440 Bloomberg Business Week with Carol Messier and Bloomberg Quick Takes 0:00:16.520 --> 0:00:21.200 Tim Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the 0:00:21.239 --> 0:00:24.920 weekend edition of Bloomberg Business Week. Are double issue centers 0:00:24.960 --> 0:00:28.680 around big tech and no bigger story this week in 0:00:28.720 --> 0:00:31.480 the world of technology, really the global corporate world than 0:00:31.600 --> 0:00:34.479 Cheryl Sandberg announcing she will soon step down as the 0:00:34.560 --> 0:00:37.680 chief operating officer of Meta Platforms. We're gonna get to 0:00:37.720 --> 0:00:39.760 that in just a moment. We're also talking s g 0:00:39.920 --> 0:00:42.560 and combating climate change with the CEO of the industrial 0:00:42.600 --> 0:00:46.199 giant Johnson Controls on the push to decarbonized buildings. It's 0:00:46.240 --> 0:00:47.920 a green world or trying to be a green world. 0:00:47.960 --> 0:00:50.640 We're all just living in it, all right. Plus everything 0:00:50.760 --> 0:00:53.680 you need to know about what's sure to be a 0:00:53.760 --> 0:00:57.480 busy and costly summer travel season. All of that to come. 0:00:57.560 --> 0:00:59.680 We begin, though, with a story you saw and heard 0:00:59.680 --> 0:01:03.040 about first on Bloomberg. Cheryl Sandberg will leave her post 0:01:03.080 --> 0:01:06.320 as met as CEO in the full and few journalists 0:01:06.319 --> 0:01:09.440 know her better than Bloomberg Technology host Emily Chang. Emily 0:01:09.680 --> 0:01:13.679 joined us immediately with her reaction. I have been waiting 0:01:13.720 --> 0:01:16.640 for this moment for years. I mean I you just 0:01:16.680 --> 0:01:18.520 had to know that she has been at the company 0:01:18.560 --> 0:01:20.160 for a really long time. She has all of these 0:01:20.160 --> 0:01:23.720 other interests and ambitions, all of which we know about, right, 0:01:24.480 --> 0:01:29.199 and she's getting married, she's got five kids now. Um. 0:01:29.240 --> 0:01:31.240 I just had a sense that this moment was coming, 0:01:31.280 --> 0:01:33.640 even though I asked her many times and she always 0:01:33.640 --> 0:01:35.880 denied it. Um. And I was talking about this with 0:01:35.880 --> 0:01:39.000 with Kurt Wagner as well. Um, you know, this was 0:01:39.080 --> 0:01:41.880 kind of our first instinct, but we didn't know for sure, 0:01:41.959 --> 0:01:44.160 and it was you know, it's the end of a 0:01:44.200 --> 0:01:48.800 Silicon valierra. But why now, Well, of course we can speculate. 0:01:49.040 --> 0:01:51.200 I will tell you what she says about why now. 0:01:51.560 --> 0:01:53.760 She's been at this job for fourteen years. She thought 0:01:53.840 --> 0:01:56.240 this was going to be a five year job, and 0:01:56.600 --> 0:01:59.000 she wants to spend her time doing other things. She 0:01:59.120 --> 0:02:02.200 joked that was she has set it was the honor 0:02:02.200 --> 0:02:04.880 and privilege of a lifetime to do this job, but 0:02:04.960 --> 0:02:07.680 also joked that it was not the most manageable job 0:02:08.120 --> 0:02:11.639 that you could imagine. And I will add my own 0:02:11.680 --> 0:02:14.760 thoughts about why now you know, Facebook is in the 0:02:14.760 --> 0:02:17.840 middle of making this huge pivot to the metaverse, which 0:02:17.880 --> 0:02:22.280 means really significantly evolving their business model, and that's her job. 0:02:23.040 --> 0:02:25.200 But it says so much about like we're all trying 0:02:25.200 --> 0:02:26.720 to figure out what this. I mean, this is a 0:02:26.720 --> 0:02:29.800 big pivot, right, So not only did they change the 0:02:29.880 --> 0:02:33.200 name to meta, but they are evolving their products and 0:02:33.200 --> 0:02:35.359 they're going to have to evolve their business. What is 0:02:35.400 --> 0:02:37.799 the business model in the metaverse? And and they don't 0:02:37.840 --> 0:02:39.799 know the answer to that question yet. Cheryl s Hamberg 0:02:39.840 --> 0:02:42.000 doesn't know the answer to that question yet. She said 0:02:42.040 --> 0:02:45.000 she sees the long term opportunity and that she believes 0:02:45.000 --> 0:02:47.440 in the company as much as she ever did, but 0:02:47.639 --> 0:02:51.880 that they don't. Essentially, in so many words, they don't 0:02:51.919 --> 0:02:54.120 know yet. Okay, So what does it mean for Meta 0:02:54.160 --> 0:02:56.600 Platforms with Javier or Levan coming in, who was the 0:02:56.639 --> 0:02:59.440 chief growth officer Meta Platforms. First of all, it means 0:02:59.480 --> 0:03:01.720 Cheryl's not going to be there, and she will be 0:03:01.760 --> 0:03:04.600 on the board and I think her you know, impact 0:03:04.639 --> 0:03:07.560 on the company will certainly loom large. But I'm sure 0:03:07.560 --> 0:03:10.320 there'll be some type of leadership vacuum given that she 0:03:10.520 --> 0:03:13.800 is leaving, But it seems like Facebook has over the 0:03:13.880 --> 0:03:18.960 years been very focused on building out a team, building 0:03:18.960 --> 0:03:23.160 a succession plan, and they're kind of reorganizing the roles 0:03:23.200 --> 0:03:26.560 of it. So even though um Hobby will become the CEO, 0:03:26.880 --> 0:03:28.639 he's not going to have oversight over all of the 0:03:28.760 --> 0:03:31.480 very same things she had oversight of. Nick Clegg had 0:03:31.480 --> 0:03:35.400 already taken on policy and comms, which had lived under 0:03:35.480 --> 0:03:39.160 Cheryl for years. Then you've got Andrew Bosworth the CTO, 0:03:39.680 --> 0:03:43.320 Chris Cox, the Chief Product officer, and of course Mark Zuckerberg. 0:03:43.480 --> 0:03:47.160 And out of all of those people, only Nick Clegg 0:03:47.480 --> 0:03:50.000 is kind of a recent joiner. These are all long 0:03:50.040 --> 0:03:54.040 time Facebook executives that know the history, you know, know 0:03:54.200 --> 0:03:56.360 what Mark Zuckerberg wants, know how to work with him, 0:03:57.000 --> 0:03:59.880 and they're now in charge of figuring out where this 0:04:00.000 --> 0:04:02.400 company is going. You know, people talk about her as 0:04:02.440 --> 0:04:04.920 one of the most influential women in the world. She's 0:04:04.960 --> 0:04:07.840 one of the most influential people. She has become one 0:04:07.880 --> 0:04:11.680 of the influential people in the world, and definitely in 0:04:11.760 --> 0:04:16.680 business and obviously Silicon Valley she built and scaled the 0:04:16.720 --> 0:04:21.560 business models of Google and Facebook, two of the biggest 0:04:21.640 --> 0:04:25.280 companies in the world today. That is huge and not 0:04:25.360 --> 0:04:28.919 everyone agrees with how they did it, but you know, 0:04:28.960 --> 0:04:31.200 these are companies ranking in billions and billions of dollars 0:04:31.240 --> 0:04:33.799 and that is in large part because of Cheryl Samberg, 0:04:33.839 --> 0:04:37.000 which makes me wonder. She's young. Yeah, she could do. 0:04:37.400 --> 0:04:40.320 She's getting married, she's got it a chapter to write. 0:04:40.480 --> 0:04:42.320 When I heard that there was going to be possibly 0:04:42.320 --> 0:04:43.960 some news, I thought the same thing. Okay, she's done, 0:04:43.960 --> 0:04:45.800 but I'm like, is she gonna go into politics? Like 0:04:45.960 --> 0:04:48.839 is like, so, how do you think about it? Someone 0:04:48.880 --> 0:04:52.279 who has followed her trajectory, has had numerous conversations and 0:04:52.360 --> 0:04:55.039 has you know, incredible insight into her, Like, how do 0:04:55.080 --> 0:04:57.760 you think about what she might and again it speculation. Yes, 0:04:57.839 --> 0:05:00.040 so well, she just told me that's very unlike a 0:05:00.240 --> 0:05:02.320 politics or another role in business, that she wants to 0:05:02.320 --> 0:05:06.479 spend time on philanthropy, her foundation, women's issues, time with 0:05:06.520 --> 0:05:10.080 her family. You know. She also said never say never, 0:05:10.760 --> 0:05:12.520 and I guess I would say never say never. I 0:05:12.880 --> 0:05:15.800 do think that a role in politics, at least an 0:05:15.800 --> 0:05:18.080 elected role, is going to be is going to be 0:05:18.160 --> 0:05:20.800 very difficult for her given all of the controversies that 0:05:20.800 --> 0:05:23.440 that Facebook has weathered, could we see her in an 0:05:23.440 --> 0:05:29.719 appointed role in a democratic administration potentially? Um, But my 0:05:29.800 --> 0:05:33.280 guess is she she wants to have a more manageable 0:05:33.320 --> 0:05:37.159 lifestyle and for for for fourteen years and then out 0:05:37.200 --> 0:05:41.240 on Google before at she's been sprinting. I do wonder though, 0:05:41.279 --> 0:05:43.200 if I mean, given all of her interests that she 0:05:43.240 --> 0:05:47.000 has outside of Facebook and within meta platforms, being on 0:05:47.040 --> 0:05:49.880 the company's board, if she is going to have a 0:05:49.880 --> 0:05:55.000 more manageable life, because she's everywhere she is, she is ambitious. 0:05:55.480 --> 0:05:58.080 This is not retirement for Sheryl Sandberg. She wrote not one, 0:05:58.120 --> 0:06:01.480 but two books while she was CEO of Facebook. So 0:06:01.600 --> 0:06:05.120 and her own challenges while she was at Facebook two right, 0:06:05.279 --> 0:06:09.880 she that that people other people in that situation would 0:06:09.920 --> 0:06:11.560 have said, now is not the time for me to 0:06:11.600 --> 0:06:16.400 be working. I I can't imagine what she went through 0:06:16.440 --> 0:06:18.640 when when Dave died, And you know, I know that 0:06:18.680 --> 0:06:20.560 going back to work was part of what kind of 0:06:20.600 --> 0:06:24.320 helped her get past it and helped her keep keep going. 0:06:24.440 --> 0:06:26.120 Was was doing that job every day. But I mean, 0:06:26.160 --> 0:06:28.279 let's be honest, she had a pretty important job. You 0:06:28.320 --> 0:06:31.520 can't just check out of being the CEO of Facebook 0:06:31.839 --> 0:06:34.479 UM for an extended period of time. UM, and so 0:06:34.600 --> 0:06:36.280 you know, maybe maybe she you know, she never got 0:06:36.320 --> 0:06:39.720 a break. That was Bloomberg Technology host Emily Chang. Coming 0:06:39.760 --> 0:06:42.679 up more on Cheryl Sandberg and the corporate space, losing 0:06:42.720 --> 0:06:45.359 a prominent leader, one of the few women in the 0:06:45.400 --> 0:06:48.479 c suite. We're speaking with the Milk And Institute executive 0:06:48.520 --> 0:06:51.880 and former Massachusetts Lieutenant Governor Carrie Healy. You're listening to 0:06:51.920 --> 0:07:01.680 Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business 0:07:01.800 --> 0:07:05.520 Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovik 0:07:05.760 --> 0:07:09.720 from Bloomberg Radio. Tim and I were at the Milken 0:07:09.760 --> 0:07:12.400 Institute Global Conference in Beverly Hills back in May. They 0:07:12.400 --> 0:07:15.920 were celebrating twenty five years of the conference. Now the gathering, 0:07:16.000 --> 0:07:19.080 the annual gathering always a mixture of top financial names 0:07:19.360 --> 0:07:21.880 along with those that are tackling the big macro, social 0:07:21.920 --> 0:07:24.520 and political issues of the day. This past week, we 0:07:24.600 --> 0:07:27.160 spoke with Carrie Healy, president of the Milk And Center 0:07:27.200 --> 0:07:30.120 for Advancing the American Dream, also the former president of 0:07:30.120 --> 0:07:34.040 Babson College, former Massachusetts Lieutenant governor and a member of 0:07:34.040 --> 0:07:37.120 the Council on Foreign Relations, Carol. Remember we began by 0:07:37.160 --> 0:07:39.960 asking her all about another prominent female leader that's soon 0:07:40.000 --> 0:07:43.840 to be former Chief Operating Officer of Meta Platforms, Cheryl Sandberg. 0:07:44.000 --> 0:07:47.400 My my guess is that she'll have another reincarnation and 0:07:47.400 --> 0:07:50.560 and come come forward and do something very interesting in 0:07:50.600 --> 0:07:53.960 the future. One of the things that I've noticed about 0:07:54.240 --> 0:07:57.840 women now is that they have longer workspans, and so 0:07:57.920 --> 0:08:00.960 you can really afford to have many different types of 0:08:01.040 --> 0:08:03.520 career over the course of time. And I'll just be 0:08:03.600 --> 0:08:06.200 looking forward to seeing what she does next. And forgive 0:08:06.240 --> 0:08:08.040 me because I want to go more into terms of 0:08:08.080 --> 0:08:09.560 the straight line of what you guys are doing at 0:08:09.560 --> 0:08:11.040 the center. But I gotta tell you, when I think 0:08:11.080 --> 0:08:13.360 about the American dream, and this is hard for me 0:08:13.880 --> 0:08:16.040 and I think many Americans to get away from. It 0:08:16.080 --> 0:08:18.600 doesn't conjure up a picture of young innocent children being 0:08:18.680 --> 0:08:22.080 killed by guns. I ask you, as a former lieutenant 0:08:22.080 --> 0:08:25.280 governor of a well known state and who worked on 0:08:25.360 --> 0:08:29.080 some really tough issues, whether it was sexual abuse, children abuse, 0:08:29.480 --> 0:08:32.520 you know how, and you did this in a bipartisan way. 0:08:32.520 --> 0:08:36.079 Why is it that we cannot get something more constructively 0:08:36.160 --> 0:08:40.280 done in a bipartisan way. When it comes to gun legislation, well, well, 0:08:40.320 --> 0:08:44.880 first and foremost, it is absolutely heartbreaking I think for 0:08:44.920 --> 0:08:48.200 anyone you know, to to witness this and to imagine 0:08:48.400 --> 0:08:51.680 this happening uh here in our country again and again. 0:08:52.120 --> 0:08:56.199 So it is a horrifying spectacle for us to deal with. 0:08:56.360 --> 0:08:59.680 And when I was Lieutenant governor and I served with 0:08:59.679 --> 0:09:03.680 mintra Omnie, we were able to actually bring both um 0:09:04.200 --> 0:09:08.640 the gun advocates and also the gun control advocates together 0:09:09.200 --> 0:09:14.000 on some gun control legislation. And it was not easy, 0:09:15.000 --> 0:09:18.040 but I think that it was extremely important that some 0:09:18.200 --> 0:09:22.480 common sense regulations were put into place at the same time, 0:09:23.000 --> 0:09:26.839 some some fairness was you know, also put into place 0:09:27.160 --> 0:09:31.840 around how applications are handled. Massachusetts is very unique in 0:09:31.920 --> 0:09:36.040 how they deal with gun licensing in that it's actually local. 0:09:36.120 --> 0:09:40.320 The local police chiefs get to decide who gets a gun, 0:09:40.400 --> 0:09:42.640 and I think that actually makes a lot of sense 0:09:42.760 --> 0:09:46.280 because that's where people are best known in their own communities, 0:09:46.520 --> 0:09:48.280 and so we had a little bit of a leg 0:09:48.360 --> 0:09:51.680 up there. We could show respect to local officials, but 0:09:51.760 --> 0:09:54.560 we also needed to control some of the guns that 0:09:54.600 --> 0:09:58.080 we see involved in in some of the worst crimes now. 0:09:58.160 --> 0:09:59.640 But do we have to get to a point? And 0:09:59.679 --> 0:10:02.400 you know, certainly our allies are saying, this is a 0:10:02.679 --> 0:10:05.840 this is a US problem. It's not a developed world problem. 0:10:05.880 --> 0:10:09.800 It's a United States of America problem. I mean, most 0:10:09.840 --> 0:10:12.360 people on a logical level would say, why do we 0:10:12.400 --> 0:10:17.440 need automatic firearms out there? Um, why can't we just 0:10:17.800 --> 0:10:20.800 take them away like we do in other countries. Do 0:10:20.880 --> 0:10:23.040 you see that as a as a you know, violation 0:10:23.080 --> 0:10:25.160 of rights? And forgive me for going there, But I 0:10:25.240 --> 0:10:28.440 just because you fine, I mean, it's it's an incredibly 0:10:28.480 --> 0:10:31.600 important issue, and that was the decision that that we 0:10:31.720 --> 0:10:36.760 made in Massachusetts to limit those those high capacity UH 0:10:37.640 --> 0:10:41.200 munitions and guns. But but I think that what I'd 0:10:41.200 --> 0:10:44.040 really like to see is an honest debate about this, 0:10:44.160 --> 0:10:46.800 an honest one UH that that doesn't have to do 0:10:46.880 --> 0:10:50.400 with politics. And it upsets me terribly to imagine that 0:10:50.520 --> 0:10:54.640 this could be politicized in the upcoming UH cycle of elections. 0:10:54.720 --> 0:10:57.880 So I think now is one of those moments where 0:10:57.960 --> 0:11:02.079 people have really gotten complete leave, fed up with the 0:11:02.400 --> 0:11:06.880 with the repetitive nature of this horror, and and hopefully 0:11:07.720 --> 0:11:10.200 good people on both sides will come together. I know 0:11:10.240 --> 0:11:13.440 that there is a growing number of people in the 0:11:13.440 --> 0:11:16.679 middle right now in the Senate and in the House UM, 0:11:16.800 --> 0:11:20.600 whether it's the problem Solvers Caucus or or the loose 0:11:20.640 --> 0:11:24.600 association of of people who have more moderate and collaborative 0:11:24.640 --> 0:11:28.800 values in the Senate, and hopefully, uh, they will come 0:11:28.800 --> 0:11:33.640 together and and promote a reasonable compromise. Well, given your 0:11:33.679 --> 0:11:37.079 experience and what you were able to accomplish as lieutenant 0:11:37.080 --> 0:11:41.800 governor of Massachusetts, how would you advise Democrats and Republicans 0:11:42.040 --> 0:11:45.880 to actually come to some sort of meaningful conclusion here? 0:11:47.160 --> 0:11:49.800 In politics in general, I think right now is a 0:11:49.840 --> 0:11:54.800 moment where people need to put their own re election aside. Uh. 0:11:54.840 --> 0:11:58.600 There is too much focus on each person's personal career 0:11:59.040 --> 0:12:02.200 and not enough on the good of the country and 0:12:02.240 --> 0:12:04.960 the good of the people. And so we need more 0:12:05.000 --> 0:12:08.280 people to have genuine courage and step up and be 0:12:08.400 --> 0:12:10.800 leaders in the true sense of the word and not 0:12:10.920 --> 0:12:13.760 be looking to that next election cycle, and to be 0:12:13.840 --> 0:12:16.679 able to go back to their constituents and say I 0:12:16.720 --> 0:12:19.600 did what was right. I did what was right for 0:12:19.640 --> 0:12:22.320 you and your children, and if you would like to 0:12:22.360 --> 0:12:24.679 not re eleuct me, there will be others to serve. 0:12:25.040 --> 0:12:27.439 Carrie Healy, she's president of the Milk and Center for 0:12:27.440 --> 0:12:30.800 Advancing the American Dream. She was former president at Babson College, 0:12:30.840 --> 0:12:34.400 former Massachusetts Lieutenant Governor, member of the Council on Foreign Relations. 0:12:34.440 --> 0:12:36.960 She really has seen the world from so many different angles. 0:12:37.160 --> 0:12:39.120 Talked to us a bit more about the Milk and Center. 0:12:39.640 --> 0:12:42.000 You know, how do we need to think about getting 0:12:42.000 --> 0:12:45.719 to the American dream going forward for more now? One 0:12:45.760 --> 0:12:47.520 of the ways that I think we should be thinking 0:12:47.559 --> 0:12:50.120 about it is how do we help people reach their 0:12:50.160 --> 0:12:53.079 full potential? How do we remove the obstacles that are 0:12:53.080 --> 0:12:56.160 in the way. What's fascinating is there was a Mackenzie 0:12:56.200 --> 0:12:59.880 study recently um that said there are thirty million America 0:13:00.240 --> 0:13:03.880 out there who have the skills to be making seventy 0:13:04.520 --> 0:13:09.079 more income. No imagine that se more income, but they 0:13:09.200 --> 0:13:14.000 can't because they don't have the degree necessary to get 0:13:14.040 --> 0:13:18.280 that job. And a lot of employers have simply said, 0:13:18.320 --> 0:13:21.320 it's going to be easier for me to find well 0:13:21.400 --> 0:13:25.520 qualified people for my job if I make a bachelor's 0:13:25.559 --> 0:13:28.640 degree necessary, if I just make it a qualification, right 0:13:28.920 --> 0:13:30.840 carry Tim and I are saying in the background, were like, 0:13:31.280 --> 0:13:33.640 college is telling you, Jerry, and you were the former 0:13:33.679 --> 0:13:35.840 president of Babson College, would you did you come to 0:13:35.880 --> 0:13:38.319 this conclusion recently did you come to this Would you 0:13:38.320 --> 0:13:39.840 have said the same thing will you were the president 0:13:39.840 --> 0:13:42.040 of Babson Was there something that that changed your opinion 0:13:42.080 --> 0:13:45.000 about this. I think I'm just starting to see in 0:13:45.040 --> 0:13:47.840 the last year, so the statistics, you know, I've started 0:13:47.880 --> 0:13:50.400 to dig into what are the what are the obstacles 0:13:50.520 --> 0:13:52.800 for people achieving the American dream? And I was really 0:13:52.880 --> 0:13:56.480 lucky at Babson College because it was a business school. 0:13:56.480 --> 0:13:59.720 It was an undergraduate, undergraduate business school. So the kids 0:13:59.760 --> 0:14:03.080 come in there, the young people coming there, um were 0:14:03.600 --> 0:14:06.800 they wanted to go into business, They wanted to be entrepreneurs, 0:14:06.840 --> 0:14:09.000 and they got to start their first company in the 0:14:09.080 --> 0:14:12.800 first year and and have that experience. And so they 0:14:13.000 --> 0:14:17.280 went just charging out into the workforce and either started 0:14:17.320 --> 0:14:21.840 their own companies or got jobs immediately of them get jobs, 0:14:21.960 --> 0:14:24.280 you know, in the first six months after graduation. So 0:14:24.360 --> 0:14:26.800 I didn't have to worry about them. I actually didn't 0:14:26.800 --> 0:14:29.720 even have to worry about looking their parents in the 0:14:29.840 --> 0:14:33.320 eye and saying, you know what, this is a good investment. 0:14:33.400 --> 0:14:35.800 You should go ahead and pay this tuition. Because I 0:14:35.880 --> 0:14:38.440 knew for a fact that it was going to pay off. 0:14:38.600 --> 0:14:40.720 That was Carrie Healey, President of the Milk and Center 0:14:40.720 --> 0:14:43.960 for Advancing the American Dream. Still ahead on Bloomberg Business Week, 0:14:44.280 --> 0:14:46.720 markets are going through what maybe the biggest mood shift 0:14:46.800 --> 0:14:49.360 we've seen since the financial crisis. Some may even call 0:14:49.440 --> 0:14:52.560 it a vibe ship. It's happening, and some of Wall 0:14:52.560 --> 0:14:55.640 Street's most high profile hedge fund managers are among the victims. 0:14:55.760 --> 0:15:02.200 Will explain next. This is Bloomberg Broadcasting from the financial 0:15:02.240 --> 0:15:05.720 capital of the World Bloomberg eleven Frio in New York 0:15:05.840 --> 0:15:10.120 to Washington, d C. Bloomberg to Boston, Bloomberg one oh 0:15:10.200 --> 0:15:13.280 six one does San Francisco, Bloomberg nine sixty to the 0:15:13.280 --> 0:15:16.400 country Sirius XM Chado one nine team, and around the 0:15:16.440 --> 0:15:20.440 globe the Bloomberg Business app and Bloomberg Radio dot Com. 0:15:20.480 --> 0:15:24.840 This is Bloomberg Business Week. Great story in the Finance 0:15:24.920 --> 0:15:27.480 section of the current double issue of Bloomberg Business Week. 0:15:27.520 --> 0:15:30.400 It's all about the so called Tiger Cubs and other 0:15:30.480 --> 0:15:33.080 hot hedge fund managers that have been slammed in this 0:15:33.160 --> 0:15:36.520 year's financial market mood swing. Hamma Parmer wrote the piece. 0:15:36.560 --> 0:15:39.360 She's a hedge fund reporter at Bloomberg News, and she's 0:15:39.400 --> 0:15:41.760 been really busy this year, covering an array of high 0:15:41.840 --> 0:15:45.960 profile firms that had been flourishing until our concentrated bets 0:15:45.960 --> 0:15:48.880 on tech Darlink's started to go bad. We've been seeing 0:15:48.880 --> 0:15:50.800 a bit of alatility for a little while, but it's 0:15:50.800 --> 0:15:53.680 been short spurts of alatility last year, and what we're 0:15:53.680 --> 0:15:57.680 seeing right now is sort of a prolonged period of 0:15:57.680 --> 0:16:01.080 of market draw downs and it seems to be consistent, 0:16:01.400 --> 0:16:03.840 and buying the dip really isn't working anymore. And so 0:16:04.000 --> 0:16:05.640 I thought, these guys are supposed to be smart and 0:16:05.680 --> 0:16:08.960 how to manage this fatile Yeah, And unfortunately, like the 0:16:09.040 --> 0:16:11.280 volatility has been hitting the tech sox a great deal, 0:16:11.360 --> 0:16:14.080 and a lot of these tiger cubs are overweight and 0:16:14.120 --> 0:16:16.640 have been overweight in tech um so work for them 0:16:16.680 --> 0:16:19.440 for years and then obviously it's not working for them now. 0:16:19.600 --> 0:16:22.640 Is it normal that, like when the overall broader market 0:16:22.720 --> 0:16:25.160 is so heavily in tech, like kind of the mass 0:16:25.440 --> 0:16:27.960 investor that that it's it's the same thing that the 0:16:28.000 --> 0:16:30.720 hedge funds, and I always think that they're in something else. 0:16:30.760 --> 0:16:32.320 I don't know why I think that. Yes, No, I 0:16:32.360 --> 0:16:34.960 mean they're supposed to be more sophisticated. Um some of 0:16:34.960 --> 0:16:38.840 the funds have been trading different things more recently, and 0:16:38.880 --> 0:16:40.800 we are seeing that in some of the performance. Some 0:16:40.960 --> 0:16:43.640 Tiger Cubs are doing worse, some are doing a bit better. 0:16:43.680 --> 0:16:45.360 It's just a matter how much they've lost. They've all 0:16:45.400 --> 0:16:47.960 generally lost money, some have lost less, and I think 0:16:47.960 --> 0:16:51.480 that's because they have been trading a little bit differently. 0:16:51.760 --> 0:16:55.200 But still there is a general focus on these companies 0:16:55.240 --> 0:16:57.440 that have really struggled. I want to talk quit risk 0:16:57.520 --> 0:17:00.680 here because you've written about gape Plotkin. He's not a 0:17:00.720 --> 0:17:03.480 Tiger Cub, but you broke the story a couple of 0:17:03.480 --> 0:17:06.719 weeks ago of his hedge fund shuttering. Are we going 0:17:06.760 --> 0:17:09.240 to start seeing seeing more of that as these hedge 0:17:09.280 --> 0:17:12.280 funds have a hard time clawing back those losses. It's 0:17:12.280 --> 0:17:13.920 a really good question, and I feel like a lot 0:17:13.920 --> 0:17:16.199 of people in the industry are asking this. UM. The 0:17:16.200 --> 0:17:18.919 thing with Melvin is that they had a very difficult 0:17:19.000 --> 0:17:22.160 last year, prompted by this very strange Reddit phenomena, and 0:17:22.200 --> 0:17:24.639 then on top of that, they've been dealing with the 0:17:24.720 --> 0:17:26.720 volatility this year, so it's kind of been a double 0:17:26.720 --> 0:17:30.560 wemmy UM. Other funds have been down a lot this year, 0:17:30.560 --> 0:17:32.560 and maybe not as badly last year. So it really 0:17:32.600 --> 0:17:35.880 comes down to a fund, how much money it has 0:17:35.960 --> 0:17:39.160 on hand, how big it is, whether it's investors stick 0:17:39.200 --> 0:17:43.240 with them, and that may dictate the degree to which 0:17:43.320 --> 0:17:45.479 that they can consistently keep going or that they can 0:17:45.480 --> 0:17:48.160 bounce back. I love a quote your story. I think 0:17:48.160 --> 0:17:50.920 it's a deputy chief investment officer of Evanston Capital, which 0:17:50.960 --> 0:17:53.760 invests in hedge funds, and she says, you know, in 0:17:53.800 --> 0:17:56.240 terms of the quit risk, that's where a manager decides 0:17:56.240 --> 0:17:57.960 at the size of their losses are too large to 0:17:57.960 --> 0:17:59.600 climb out of. I mean there is a tipping point 0:17:59.880 --> 0:18:01.119 right at some point where a manager has to look 0:18:01.160 --> 0:18:03.639 at their fund and be like, I just can't I 0:18:03.640 --> 0:18:05.600 can't do it anymore. Yes, yes, And you could argue 0:18:05.600 --> 0:18:07.440 that was the tipping point from Melvin It was just 0:18:07.640 --> 0:18:10.320 a very very steep hole to dig you all out of. Well, 0:18:10.359 --> 0:18:12.800 it hasn't all been bad news. Ken Griffin at Citadel 0:18:13.880 --> 0:18:18.200 has returned almost in the first four months of the year. 0:18:18.400 --> 0:18:20.320 What do we know about what's been working for Citadel? 0:18:20.680 --> 0:18:23.639 So Citadel is a multi shot, multimanager fund. Them and 0:18:23.680 --> 0:18:26.360 their peers. What they do is they take little pods 0:18:26.440 --> 0:18:28.919 of traders who trade different things sort of kind of 0:18:28.920 --> 0:18:31.720 in silos, and they trade to cross asset classes. So 0:18:31.760 --> 0:18:34.560 they're a great deal more diversified. Though what's called market neutral, 0:18:34.840 --> 0:18:37.520 which means that they are supposed to trade um, not 0:18:37.840 --> 0:18:40.359 consistently with the market, like a typical of how what 0:18:40.359 --> 0:18:43.640 the SMP is doing, UM, that's supposed to provide steady 0:18:43.840 --> 0:18:47.080 results monthly. That add up. Macro funds have also been 0:18:47.119 --> 0:18:50.040 doing really well, and these are again funds that are 0:18:50.440 --> 0:18:53.520 trading in more things than just traditional stocks and so 0:18:53.760 --> 0:18:56.719 would have exposure to bonds. It's it's just a reminder 0:18:56.760 --> 0:18:59.120 of how much has been thrown into the equity market, right, 0:18:59.280 --> 0:19:00.639 Like if you think of at it, like all the 0:19:00.640 --> 0:19:03.600 liquidity that's been out there, and how much maybe you know, 0:19:03.760 --> 0:19:06.760 has been overexposed to equities versus when you hear about 0:19:06.760 --> 0:19:09.000 what Ken Griffin is doing over at Citadel, right, and 0:19:09.040 --> 0:19:11.800 which is kind of what you normally would tell an 0:19:11.800 --> 0:19:14.440 investor to be a lot more diversified. And this is 0:19:14.480 --> 0:19:17.600 why allocators to hedge funds try to create a portfolio 0:19:17.600 --> 0:19:19.840 of hedge funds that have that do different things and 0:19:19.880 --> 0:19:23.440 to diversify that exposure. So I mean, look, we can't 0:19:23.440 --> 0:19:25.159 look into the crystal Ball. But I'm wondering, based on 0:19:25.200 --> 0:19:28.320 your reporting and what you've been hearing from experts, if 0:19:28.359 --> 0:19:31.000 this is going to be a year of reckoning. It 0:19:31.080 --> 0:19:35.040 definitely seems like it's going to be a difficult year, absolutely, UM, 0:19:35.119 --> 0:19:38.399 because equity markets don't seem to be changing, you know, 0:19:38.640 --> 0:19:41.280 greatly in the near future. A lot of these funds 0:19:41.280 --> 0:19:44.320 have invested in private companies, and there's an expectation that 0:19:44.359 --> 0:19:47.040 the valuations of these private assets are going to be 0:19:47.119 --> 0:19:49.640 drawn down. So there does seem to be a great 0:19:49.680 --> 0:19:53.480 deal of pain ahead. How funds navigate it, UM well 0:19:53.560 --> 0:19:55.359 yet to be seen, and if there's creative ways to 0:19:55.359 --> 0:19:58.040 avoid it. How about overall assets, are we down a lot? 0:19:58.359 --> 0:20:00.119 I don't believe we are. I think as ad have 0:20:00.200 --> 0:20:02.640 still been growing into hedge fund because how many times 0:20:02.640 --> 0:20:05.320 have you and I talked about in moments of uncertainty 0:20:05.359 --> 0:20:08.040 or volatility and yet assets grow. And you know what 0:20:08.200 --> 0:20:12.119 last year when we saw that really terrible UM march, 0:20:12.560 --> 0:20:17.120 it was UM. That was when allocators, investors and hedge 0:20:17.160 --> 0:20:19.160 funds were saying, yeah, let's be up on the guys 0:20:19.200 --> 0:20:21.160 that we like, and they had a very good year 0:20:21.200 --> 0:20:24.359 in UM and so it's hard you have to gauge 0:20:24.440 --> 0:20:25.960 is this the time to get into them or is 0:20:26.000 --> 0:20:27.760 it time to be pulling out? And I think allocate 0:20:27.840 --> 0:20:30.359 is a thinking. Well, we keep hearing from our draft 0:20:30.359 --> 0:20:32.159 for the close guest Carol, that the FED is not 0:20:32.200 --> 0:20:34.399 going to come to the rescue like they did, you know, 0:20:34.520 --> 0:20:37.520 in the spring of But you do wonder at some 0:20:37.560 --> 0:20:39.359 point when something is so beaten down at some point, 0:20:39.480 --> 0:20:42.359 is that just an opportunity like it's so it just manages, 0:20:42.560 --> 0:20:44.560 you know, just determine. You have to think about what's 0:20:44.560 --> 0:20:46.119 your time frame right and how patient you can be. 0:20:46.280 --> 0:20:49.080