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Speaker 1: Hello, and welcome to the Credit Edge, a weekly markets podcast.

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Speaker 1: My name is James Crumby, I'm Missing It editor at Bloomberg.

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Speaker 2: And I'm Arnold Kakuta, a senior credit analyst covering US

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Speaker 2: banks at Bloomberg Intelligence. And this week we're very pleased

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Speaker 2: to welcome Ted Goldthorpe. He's the head of BC Partner's Credit.

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Speaker 2: Welcome Ted, how.

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Speaker 3: Are you doing? Thank you and thank you for having me. Well,

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Speaker 3: so a little bit on Ted.

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Speaker 2: Before launching PC Partner's Credit in twenty seventeen, he was

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Speaker 2: president at Apollam Investment Corps, and prior to that, he

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Speaker 2: held senior roles at Goldman Sachs Sachs's Distressed and Special

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Speaker 2: Situations Group. So seen a lot of things, done, a

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Speaker 2: lot of things, and without I'll hand it over to

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Speaker 2: James to start the grilling full week real.

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Speaker 1: I just wanted to set the scene a little bit here.

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Speaker 1: Global markets on getting whipswored by recession fears and alarming

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Speaker 1: developments on the geopolitical front. Investors are spooked by increasingly

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Speaker 1: haphazard and nuretic US policy making, particularly on trade. I

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Speaker 1: was just looking up how many times the word uncertainty

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Speaker 1: appears on the Bloomberg terminal more than six thousand times

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Speaker 1: a day now, which is the highest since the depths

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Speaker 1: of the COVID pandemic in twenty twenty. We're hearing that

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Speaker 1: word in surround sound. But despite that, credit spreads are

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Speaker 1: actually quite tight. There's a hope that the longer term

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Speaker 1: trajectory of the US economy remains up and that the

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Speaker 1: new administration will do its best to defend growth, and

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Speaker 1: high yields are still luring buyers on the credit side. Plus,

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Speaker 1: there's not enough supply of corporate debt to satisfy all

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Speaker 1: the demand corporate debt markets that meanwhile pricing in low

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Speaker 1: odds of a US recession, which is being talked about

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Speaker 1: a lot more as US consumers weaken and business leaders

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Speaker 1: are complaining that they can't take long term decisions in

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Speaker 1: this environment. Every dip in recent memory has been swiftly bought,

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Speaker 1: and you only have to look at last week's twenty

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Speaker 1: six billion dollar bond deal from Mars, which got one

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Speaker 1: hundred and fifteen billion in orders to see how how

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Speaker 1: strong the demand is for this stuff. But ted, what's

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Speaker 1: your take as an investor? Is this the time to

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Speaker 1: be loading up on credit or are we going to

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Speaker 1: see more fundamental damage from what's happening in Washington.

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Speaker 4: I'm probably in the latter camp, you know, spreads around

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Speaker 4: their ninety eighth percentile. And the comment you made is

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Speaker 4: very very spot on, which is what's happening in credit

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Speaker 4: markets today. There's no supply, so when we have uncertainty,

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Speaker 4: there's less transaction volume. So coming into this year, m

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Speaker 4: and A, pipelines, m A backlogs, you know, the mood

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Speaker 4: within boardrooms post Trump selection was up for it from

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Speaker 4: a business perspective, and today, you know, there's just not

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Speaker 4: a lot of deal activity. So when we see a

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Speaker 4: good deal, it's very very competitive, just because there's not

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Speaker 4: a lot of volume. So I think what you said,

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Speaker 4: I actually think you framed today's market perfectly.

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Speaker 2: So, but but the yield, right, like, there's yield to

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Speaker 2: be had. So is it just kind of you know,

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Speaker 2: given all the uncertainty, you think maybe there's there's kind

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Speaker 2: of a pause there, this this yield euphoria, everybody kind

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Speaker 2: of stepping in even though maybe let's say the stock

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Speaker 2: markets are kind of showing this this this weakness maybe

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Speaker 2: not so much in the credit So is it kind

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Speaker 2: of better to kind of wait it out right now

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Speaker 2: before we kind of start seeing you know, the flight

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Speaker 2: to safety aspector.

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Speaker 4: I mean, the thing that's been really helpful for us is,

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Speaker 4: you know, private credit is still very interesting because even

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Speaker 4: those spreads have come down in the last twelve months,

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Speaker 4: spreads are where they were two or three years ago,

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Speaker 4: and SOFA has gone from zero to four. So we're

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Speaker 4: basically getting double the return we got three years ago

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Speaker 4: to lend the same oftentimes less leverage because obviously people

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Speaker 4: are solving for a fixed charge coverage ratio. So we're

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Speaker 4: getting higher absolute returns just because rates are higher. And

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Speaker 4: if you think about what Trump's doing, a lot of

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Speaker 4: the policies that the administration's pursuing is higher for longer.

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Speaker 4: So you know, the curve for SOFA has obviously gone up,

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Speaker 4: and that's a big, big talent for our business.

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Speaker 1: But it's private credit not moving because people aren't marking it.

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Speaker 4: I mean, we have a very that's I think that's

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Speaker 4: a very big misconception out there. I mean, you know,

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Speaker 4: all of our assets, so first of all, we disclose

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Speaker 4: everything we do. It's all very public, and all of

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Speaker 4: our assets could mark by third parties, so we less

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Speaker 4: and less over time, we have control over our own

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Speaker 4: marketing process, almost all of it. Boards are insisted on

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Speaker 4: third party marks, and so I don't think that's an

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Speaker 4: accurate description. I know, we you know, I hear that,

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Speaker 4: I hear that feedback quite commonly, But I.

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Speaker 1: Don't agree with that big month.

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Speaker 3: I mean, we obviously mark on a quarterly basis, because

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Speaker 3: you know, if it's in a public vehicle, we report quarterly, right,

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Speaker 3: But you know, the valuation process is very robust, and

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Speaker 3: then actually we see that across there's not like a

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Speaker 3: big it's not like we're seeing abuse in other credit managers.

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Speaker 3: We feel generally speaking, people are relatively accurately marked, got it?

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Speaker 2: And then you know, in terms of the higher for

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Speaker 2: longer aspect, but what about what about like with the

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Speaker 2: all the unsernty right now, maybe prospects of a weaker economy,

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Speaker 2: like doesn't that hurt the underlying portfolio companies?

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Speaker 1: Right?

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Speaker 2: And then in a higher for longer scenario, I meant,

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Speaker 2: great for you know, the ones collecting the interest, right,

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Speaker 2: but then for the for the borrows themselves, isn't that

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Speaker 2: kind of adding stress? So what does your take on that?

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Speaker 4: Yeah, I would say, I mean listen. I mean, this

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Speaker 4: recent environment is only six weeks into it, right. If

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Speaker 4: this persists for a long period of time, it's going

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Speaker 4: to have impact on the credit worthiness of borders for sure.

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Speaker 4: But what I would say is the issues that we're

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Speaker 4: facing companies two or three years ago, a lot of

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Speaker 4: them have gone away. So labor inflation, labor shortages, supply

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Speaker 4: chain issues, a lot of those things have been kind

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Speaker 4: of like rectified over the last eighteen months. So we

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Speaker 4: actually really haven't had any real credit surprises in the

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Speaker 4: last twelve months. Now, again that's on a trailing basis,

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Speaker 4: and that's on a trailing metric. On a go forward basis,

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Speaker 4: I mean, it's inevitable that the economy is going to

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Speaker 4: slow down.

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Speaker 1: How does that affect your companies? As Enel says, you know,

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Speaker 1: it's putting stress on them, and there's a lot of

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Speaker 1: stuff coming down the pipe in terms of policies. We

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Speaker 1: can't even see the policies very far, but that's got

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Speaker 1: to hurt at some point. And you cover the middle market, right,

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Speaker 1: so you must be getting some really interesting signals right

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Speaker 1: now from that piece of the economy. What are they doing?

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Speaker 4: I mean, listen, if you're exposed to government spending the

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Speaker 4: high end consumer or infrastructure, you're actually doing pretty well.

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Speaker 4: If you're exposed to the low en consumer or you're

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Speaker 4: you know, small businesses, you're you're feeling more pressure. So

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Speaker 4: we actually really don't us as a us BC partners,

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Speaker 4: but I think it's pretty prevalent across private credit.

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Speaker 3: We don't have a lot of consumer exposure.

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Speaker 4: So when you hear consumer weakness, you know a lot

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Speaker 4: of the businesses are going to be impacted by tariffs,

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Speaker 4: a lot of them are exposed to consumer as well,

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Speaker 4: you know, important importing of toys and all that kind

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Speaker 4: of stuff, Like we really don't have that in our portfolio.

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Speaker 4: You know, most private credit managers like US are healthcare, software,

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Speaker 4: financial services, in our case, balance sheet light. So we're

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Speaker 4: not exposed to banks. We're exposed to you know, wealth management, insurance, brokeerds,

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Speaker 4: things like that.

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Speaker 3: So a lot of the sectors that we're exposed.

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Speaker 4: To aren't that correlated with what's aren't directly impacted by

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Speaker 4: what's happening. All that being said, they're indirectly impacted, and

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Speaker 4: there's you know, knock on effects that you know you

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Speaker 4: may see.

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Speaker 1: And for our listeners who don't really know what the

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Speaker 1: middle market is, and I I must say, I'm like,

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Speaker 1: I'm confused sometimes because we have guests recently who said

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Speaker 1: a billion dollar could be a middle market loan? What

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Speaker 1: does it mean in terms of size and scope?

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Speaker 3: Yeah, no, you're so, it's so funny you say that.

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Speaker 4: So you know, our business used to be called middle

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Speaker 4: market lending, and then it was called direct lending, and

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Speaker 4: now it's called private credit. So we've largely replaced the

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Speaker 4: banks for lending. So like banks, market share in our

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Speaker 4: world has gone from ninety four percent to four percent.

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Speaker 4: Now we're getting into the regional banks world subscription lines

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Speaker 4: Leonard Lennar Finance and again on vir off topics. So

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Speaker 4: we view the middle market as call it ten to

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Speaker 4: seventy five million of vibada. But if you ask ten managers,

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Speaker 4: you'll get a slightly different definition by each manager. So

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Speaker 4: there's no that it used to be middle market lending

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Speaker 4: used to be ten to fifty and it's been like

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Speaker 4: that for a long time. The definition of that is

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Speaker 4: now changing. I view it as like, you know, once

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Speaker 4: you move a little bit higher than that, now you're

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Speaker 4: competing with the banks, So like you're competing with the

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Speaker 4: JP Morgan or Golden Sachs syndicated loan. And that's where

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Speaker 4: I feel like you're moving outside of what is what

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Speaker 4: people refer to as the middle market.

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Speaker 1: So the average deal size as well, No, I mean.

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Speaker 4: Our deal size is typically are are somewhere between one

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Speaker 4: hundred and three hundred million dollars. Once we get above that,

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Speaker 4: we feel we don't get covenants, spreads become tighter. We

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Speaker 4: start having to face off against banks and all the

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Speaker 4: big alternate asset managers who have you know, really good,

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Speaker 4: really scale platforms, you know, Blackstone, Apollo, you know managers

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Speaker 4: like that.

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Speaker 2: Yeah, and then you know, two years ago we had

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Speaker 2: the regional bank stress and and you know set Will

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Speaker 2: have talked about kind of being able to step in

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Speaker 2: and kind of help you know, the balance sheet optimization

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Speaker 2: there does that you know, is that some space that

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Speaker 2: you played in and then is that opportunity kind of

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Speaker 2: still there right now?

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Speaker 4: Yeah, It's funny, like we're really plugged into that space.

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Speaker 4: So I have in a background in that, so like

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Speaker 4: we have a we're very very plugged in there, and

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Speaker 4: we're really not seeing opportunities in the last six months,

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Speaker 4: so we saw a lot of opportunities post Silicon Valley bank,

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Speaker 4: so either to buy assets from banks to kind of

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Speaker 4: prove their to your point, prove their marks. There's a

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Speaker 4: lot of you know, red cap trades, so you guys

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Speaker 4: would call them SRTs, and they always they go. They

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Speaker 4: have a different name every year, but it's the same thing, right,

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Speaker 4: it's buying a first lost piece on a portfolio.

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Speaker 3: We're really not seeing a lot of activity in that sector.

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Speaker 3: In the last six months.

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Speaker 4: Bank leaning in regional banks was averaging ten percent a

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Speaker 4: year and it's gone to zero. So that gap has

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Speaker 4: been made up by US. So we are now replacing

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Speaker 4: the regional banks because the regional banks are their funding

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Speaker 4: costs have gone up and a lot of them have

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Speaker 4: marked market holes due to securities they held, so it's

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Speaker 4: harder for them to be offensive at a market like this.

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Speaker 2: And then on the SRTs, I mean, I guess we

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Speaker 2: had this buzzline game new regulation in the US which

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Speaker 2: was going to be very onerous. It seems like it's

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Speaker 2: on pause. And then you know, maybe that kind of

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Speaker 2: put a damper on kind of the US usage of SRTs.

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Speaker 2: But do you think that's going to still be like

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Speaker 2: a big thing in Europe, maybe less so in the

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Speaker 2: US or what are your thoughts on that.

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Speaker 4: I mean, one of the issues we have just generally speaking,

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Speaker 4: and this goes to James's point right at the start

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Speaker 4: of the podcast, is there's no velocity of capital. So

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Speaker 4: there's all this venture that's just trapped in funds. Private

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Speaker 4: equity average hoole period's gone from three to eight years.

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Speaker 4: Real estate is just sitting there waiting for there's just

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Speaker 4: no activity. And the reason for it is, you know,

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Speaker 4: it's financing costs are high. So my point about banks,

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Speaker 4: to your point is there's no velocity of their balance sheet,

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Speaker 4: like it slowed down. So you know they do a

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Speaker 4: lot of construction lending and cire they get taken out

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Speaker 4: by the developer and you know there's this and that's

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Speaker 4: just not happening, and so the multiplier of money is

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Speaker 4: just slowed down. And so there's this wall of activity

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Speaker 4: that has to happen. And again post election, we all

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Speaker 4: thought that that was this is the year. Like if

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Speaker 4: you if we sat down two months ago, I would

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Speaker 4: have told you that we're gonna have a very robust

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Speaker 4: deal environment. You know, our pipeline is terrible, Like we

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Speaker 4: have a very very small pipeline right now. And I

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Speaker 4: think you could hear that, you know, if people are

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Speaker 4: telling you honestly, Like there's just not a lot of deal.

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Speaker 3: Flow right now.

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Speaker 1: When was it last this bad.

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Speaker 3: Deal flow wise?

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Speaker 1: Yeah?

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Speaker 3: I mean usually when.

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Speaker 4: The world is bad, we do really well. I hate

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Speaker 4: to say it, so like when people aren't lending, we lend.

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Speaker 4: So we were really really busy in twenty one twenty two,

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Speaker 4: there were great environments for us, So overall activities are

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Speaker 4: very low, but that was good for us. Today it's

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Speaker 4: not a robust deal environment for US nor everybody else.

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Speaker 4: So it's kind of a weird. It's pretty unique six

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Speaker 4: weeks or four weeks or I don't know how long

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Speaker 4: it's been going on for it, but it's pretty unique.

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Speaker 3: Like this is not typical at all.

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Speaker 1: For yeah, but you think it might come back. Is

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Speaker 1: there some reason to believe that we will get this

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Speaker 1: long awaited revival in M and A.

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Speaker 4: I mean, listen, if uncertainty fades, so even if they

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Speaker 4: implement tariffs, at least you have certainty. And if you

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Speaker 4: implement tariffs in certain ways or like you know they're

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Speaker 4: gonna do targeted tariffs, I'm not going to just do

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Speaker 4: broad tariffs on total countries. So if they do that,

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Speaker 4: then you at least have certainty and then you can

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Speaker 4: make an underwriting decision.

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Speaker 3: You know.

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Speaker 4: Today, you know, we have companies that import pieces from

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Speaker 4: China into Ohio, they assemble them, they send all the

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Speaker 4: pieces down to Tijuana, Mexico, and then re import them.

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Speaker 4: So now they're subject to two tariffs. So what do

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Speaker 4: they do? They Should they ship everything to Tijuana and

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Speaker 4: just you know, not make stuff in the United States.

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Speaker 4: Should they find a new supply for China. I mean,

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Speaker 4: what's going on in boardrooms right now is like war games.

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Speaker 4: Plan out if this if then you know, if this happens,

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Speaker 4: and do this, if that happens, to do that, and

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Speaker 4: that is taken up a lot of management bandwidth.

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Speaker 1: Right, But is the ultimate hope that the Trump the

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Speaker 1: administration sees sense and you know, wants to defend these

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Speaker 1: businesses because ultimately the goal is to bring back back

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Speaker 1: jobs to the US. Right, So it is a sense

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Speaker 1: that you know that sanity might prevail.

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Speaker 3: Sanity typically preparels.

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Speaker 4: You know, there's a big movement from you know, again

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Speaker 4: like from our perspective, there's gonna be a lot of

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Speaker 4: movement from public sector to private sector, so they're moving

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Speaker 4: jobs in the private sector, spendings moving to the private sector.

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Speaker 4: And so again it's just a macro theme that you

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Speaker 4: just when you're underwriting credits you have to be aware of, right.

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Speaker 2: And then you know, I think I when I checked LinkedIn,

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Speaker 2: I think that that Riddell investment that you guys did,

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Speaker 2: you know, prominently featured. So I think that's a very

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Speaker 2: good metaphor for kind of maybe what people are looking

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Speaker 2: for right now. Something defensive, right, Riddell helmet maker, right

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Speaker 2: protects football players heads.

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Speaker 1: And American football.

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Speaker 3: Real football.

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Speaker 2: Yeah, so but I think it's it's something you people

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Speaker 2: are looking for, something defensive perhaps, or you know, something

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Speaker 2: on the protection area. So is that something that you're

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Speaker 2: looking at, maybe like in Europe, right, I guess they're

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Speaker 2: talking about having to defend themselves, so so you know

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Speaker 2: the defense industry there, or is that sort of sort

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Speaker 2: of a theme that you guys are looking at.

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Speaker 4: Or I mean, listen, I mean a lot of companies

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Speaker 4: have greatly benefited from stimulus or spent government spending, and

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Speaker 4: you know, it'll be interesting to see how Europe reacts

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Speaker 4: to what's happening. So you know, Germany's announced a massive

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Speaker 4: increase in defense spending and they carved it out of

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Speaker 4: their budget, so they don't they don't have to do

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Speaker 4: that sealing issue. And so some governments are spending more

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Speaker 4: and our government is attempted to spend less. So I

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Speaker 4: don't think it's a broad based theme. But I mean, listen,

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Speaker 4: I mean we all I hate to say that geopolitical

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Speaker 4: conflict is probably here to stay and therefore it's probably

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Speaker 4: some tailwinds in the defense space. So you know, we

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Speaker 4: had a large loan to two defense companies that just

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Speaker 4: got refinanced last week, so we're pretty big in that

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Speaker 4: that space. And you know, I mean, unfortunately, there's a

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Speaker 4: lot of tailwinds in that space.

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Speaker 1: I just wanted to deep on sports because you did

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Speaker 1: identify that as something that you you know, you have

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Speaker 1: a focus on. Everyone loves sports. They do well in

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Speaker 1: you know, political good and bad times. So where's the

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Speaker 1: opportunity for an investor in sports? And you know, how

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Speaker 1: are you playing that?

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Speaker 4: Yeah, so we've avoided teams and we're much more involved

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Speaker 4: with like the ecosystem of sports. So you know, Radelle

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Speaker 4: is a good example of that. You know, we own

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Speaker 4: one of the largest. We're on the board of one

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Speaker 4: of the largest sports agencies' a GCS called GS so

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Speaker 4: you know we're the we're the largest agent and golf

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Speaker 4: tennis third in the NFL. We have an MBA practice.

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Speaker 4: We're getting involved with hospitality and everything else. And again

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Speaker 4: like that market, you know, live events, it's what's happened

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Speaker 4: in Music's have it everywhere like live events are greatly

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Speaker 4: benefiting the whole the whole ecosystem. So you don't have

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Speaker 4: to go buy a soccer team to benefit from the

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Speaker 4: rise of sports. And so we're playing it in those ways.

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Speaker 4: The second we're playing it is through media. So we

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Speaker 4: marry our media assets with our sports assets. So we

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Speaker 4: have this platform that we're involved with called Dude Perfect,

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Speaker 4: which you know you have a fifteen year old although

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Speaker 4: what it is, you know, if you watch Jude Perfect.

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Speaker 4: We can marry them with our athletes, we can marry

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Speaker 4: them with bridell, we can marry them with all kinds

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Speaker 4: of things and create synergies for portfolio companies.

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Speaker 1: And you can make money, not just have fun.

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Speaker 3: And you can make money. It's a good business, you know,

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Speaker 3: very very good business.

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Speaker 1: So that's for you. That business is directly lending to

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Speaker 1: the companies that do this.

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Speaker 4: We do a lot of structured lending, which means, you know,

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Speaker 4: we have some kind of upside, whether that's through a

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Speaker 4: convertible or warrants or a liquidation preference. And then a

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Speaker 4: lot of our companies we sit on the boards. So

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Speaker 4: our strategy is kind of a hybrid between private equity

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Speaker 4: and credit. So we're not like a pure ulplus five

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Speaker 4: hundred lender to do a great company. We do a

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Speaker 4: lot of stuff in between, and that's where we always

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Speaker 4: find value. So sponsor finance has become very competitive and

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Speaker 4: quite frankly, relatively commoditized. That kind of stuff is not right,

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Speaker 4: and the reason for that is just less competitive, harder

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Speaker 4: to source. The big guys, they can't scale it, so

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Speaker 4: it's not worth our time. So we've been very successful

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Speaker 4: with very very high turns partially because we don't compete

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Speaker 4: with the big guys. You know, their minimum check size

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Speaker 4: is larger than our largest deal.

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Speaker 1: What does very high returns mean?

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Speaker 3: Mid teens? Okay? In credit?

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Speaker 4: So that's the thing, Like you go back to this

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Speaker 4: uncertainty question, like we're lending money today still, Like despite

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Speaker 4: this collapse and spreads, you know, we're still lending money

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Speaker 4: at ten to eleven percent. Yeah, so we could get

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Speaker 4: in a big debate about where equity returns are going

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Speaker 4: to be, and we're like, we're liquid, equity should trade

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Speaker 4: or high yeld returns and the reality is boring is beautiful,

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Speaker 4: Like I'm lending three or four times EBITDA great business

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Speaker 4: business is worth like fifteen times, so I have a

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Speaker 4: big margin of safety and I'm getting eleven to twelve percent.

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Speaker 1: So you did mention the company that's getting burned on

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Speaker 1: the Canadian and the Mexican texts at the same time

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Speaker 1: that the tariffs, so there must be some risk in

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Speaker 1: that portfolio as well.

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Speaker 4: All right, So yeah, I mean I'm like to say,

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Speaker 4: we don't have any risk on our portfolio, but you know,

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Speaker 4: if you're if you're lending to good businesses at low

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Speaker 4: leverage points. And again, the thing that's interesting that's changed,

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Speaker 4: which I don't know if your other guests have talked

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Speaker 4: about this, but companies are taking on less leverage because

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Speaker 4: it's so expensive. You know, very few companies are generating

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Speaker 4: unleveraged free casual returns higher than the leverage. So the

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Speaker 4: leverage really isn't providing them any real accretion. So they

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Speaker 4: do it because they need the money, or because they

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Speaker 4: want to make acquisitions, or if they take money from us,

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Speaker 4: they sell something a year later for two times money.

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Speaker 4: So they're are being moycs. But generally speaking, like taking

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Speaker 4: on lots of debts not a creative anymore. And it

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Speaker 4: was when rates red zero. So our companies are asking

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Speaker 4: us for less leverage. So our average leverage point is

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Speaker 4: probably down one to two turns over the last you know,

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Speaker 4: eighteen months, and.

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Speaker 1: You'll secure it and you're getting some kind of upside.

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Speaker 1: You say, the means that sort of profit share or

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Speaker 1: something like that to benefit.

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Speaker 4: Yeah, it's product share, warrants, liquidation preference, if you guys

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Speaker 4: know what that is?

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Speaker 1: All the above, and how is it compared to what

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Speaker 1: we'd call broadly syndicated loans in terms of you know,

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Speaker 1: is there is a big spread difference now or is

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Speaker 1: it getting squeezed via all of the competition.

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Speaker 4: I mean, you know, all my peers will probably massively

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Speaker 4: disagree with me, but liquid credits super hard. You know,

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Speaker 4: there's this credit and credit of violence, like you know,

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Speaker 4: people joke about it and you guys write about it.

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Speaker 3: It's like getting really really bad, like really bad.

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Speaker 4: Like it used to be good for us, good for

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Speaker 4: the company, and there's greatest decrestion of win wins and

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Speaker 4: now it's a zero sum game and it's fully become

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Speaker 4: zero sum. So if you're not big and you're not

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Speaker 4: incredibly sophisticated, you should not buy anything in liquid credit

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Speaker 4: because you can get run over by the smart, big guys.

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Speaker 4: And we're we have you know, we're over ten billion dollars.

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Speaker 4: We're doing really really well, like we're not big enough.

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Speaker 4: So that's a that's become a really tough place to

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Speaker 4: to traffic.

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Speaker 3: And again, no covenants. You know, sponsors.

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Speaker 4: You know, if you're in a if you're in a

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Speaker 4: deal with an aggressive sponsor, you know you kind of

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Speaker 4: expected them to do what they needed to do to

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Speaker 4: make sure they protected their LPs. Now everyone's doing it.

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Speaker 4: You know, KKR did this deal called the Envision. You know,

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Speaker 4: KKR used to treat their lendards very well and they

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Speaker 4: you know, after that deal, like gloves are off, like

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Speaker 4: you know, like if they're doing bad things to creditors,

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Speaker 4: means everybody's going to do bad things to credits.

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Speaker 1: But what stops it moving down into the middle markets.

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Speaker 4: Hasn't come yet. I think a couple of things. Number

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Speaker 4: one is, if you think about large cap sponsors versus

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Speaker 4: bid cap sponsors, MidCap sports tend to have less companies

435
00:19:01,160 --> 00:19:03,840
Speaker 4: in our portfolio, so if something goes bad, it's much

436
00:19:03,880 --> 00:19:06,200
Speaker 4: worse for them. It's like it's harder for them to

437
00:19:06,280 --> 00:19:08,520
Speaker 4: raise their next fund. The big guys tend to be

438
00:19:08,560 --> 00:19:11,920
Speaker 4: a little bit more economically rational. A lot of times,

439
00:19:11,920 --> 00:19:14,080
Speaker 4: the middle market sponsors will do things to help their

440
00:19:14,119 --> 00:19:17,359
Speaker 4: companies because it means it's the difference between them raising

441
00:19:17,400 --> 00:19:18,720
Speaker 4: and not raising their next fund.

442
00:19:19,119 --> 00:19:21,040
Speaker 3: That's number one. And number two is, like, you know,

443
00:19:21,080 --> 00:19:23,680
Speaker 3: our deals have covenants. You know, generally speaking, we hold

444
00:19:23,680 --> 00:19:25,800
Speaker 3: it ourself or we're in a deal with like two

445
00:19:25,880 --> 00:19:28,240
Speaker 3: guys and we all know each other, and you know,

446
00:19:28,280 --> 00:19:30,639
Speaker 3: my peers are really smart. We all act very similarly,

447
00:19:31,040 --> 00:19:34,200
Speaker 3: and so generally speaking, we're relatively aligned and working with

448
00:19:34,240 --> 00:19:36,159
Speaker 3: a sponsor to get to the right place. We're not

449
00:19:36,240 --> 00:19:38,960
Speaker 3: like suing each other and like like stealing their ip

450
00:19:39,200 --> 00:19:41,320
Speaker 3: and like that. Just you can't do that with our documents,

451
00:19:41,359 --> 00:19:43,440
Speaker 3: first of all, and second of all, like the middle

452
00:19:43,440 --> 00:19:45,000
Speaker 3: market guys don't do that to each other.

453
00:19:45,119 --> 00:19:47,360
Speaker 1: Yeah, it just seems that then the Broady isy indicated market,

454
00:19:47,400 --> 00:19:49,200
Speaker 1: there is this kind of lack of products that people

455
00:19:49,200 --> 00:19:50,919
Speaker 1: are pushing down a bit in terms of you know,

456
00:19:50,920 --> 00:19:53,520
Speaker 1: trying to find opportunities in the you know, smaller deals

457
00:19:53,920 --> 00:19:55,800
Speaker 1: because they can't find product elsewhere.

458
00:19:56,160 --> 00:19:57,440
Speaker 3: Well, that's that's happening.

459
00:19:57,600 --> 00:20:01,159
Speaker 1: Yeah, So it does not just bring the same stuff

460
00:20:01,160 --> 00:20:02,760
Speaker 1: from the other market, and you know, you lose the

461
00:20:02,760 --> 00:20:05,359
Speaker 1: covenants because everyone's competing more, and then you get into

462
00:20:05,400 --> 00:20:08,800
Speaker 1: these these violent credits to situations. I mean, does does

463
00:20:08,800 --> 00:20:12,600
Speaker 1: it Does it naturally follow that Broady syndicated practices go

464
00:20:12,680 --> 00:20:15,000
Speaker 1: into the middle markets.

465
00:20:14,080 --> 00:20:16,679
Speaker 4: Because remember, like our stuff's ill liquid, So like in

466
00:20:16,760 --> 00:20:17,960
Speaker 4: liquid markets, I can buy up.

467
00:20:17,920 --> 00:20:20,560
Speaker 3: Some debt and go after you. You can't buy into

468
00:20:20,560 --> 00:20:20,960
Speaker 3: our debt.

469
00:20:21,280 --> 00:20:23,399
Speaker 4: And if a middle market guy's sold debt A, the

470
00:20:23,440 --> 00:20:27,399
Speaker 4: sponsor can block it and be oftentimes yea and B.

471
00:20:27,520 --> 00:20:29,639
Speaker 4: If you did that, like you know what sponsor's going

472
00:20:29,680 --> 00:20:31,840
Speaker 4: to do business with you if when times get tough,

473
00:20:31,920 --> 00:20:33,840
Speaker 4: you sell your debt to some person who comes and

474
00:20:33,880 --> 00:20:34,480
Speaker 4: like takes.

475
00:20:34,240 --> 00:20:36,520
Speaker 3: Your keys and yeah, you know, threatens you.

476
00:20:36,560 --> 00:20:38,639
Speaker 4: I mean, it's just not that's just not we'd be

477
00:20:38,680 --> 00:20:40,160
Speaker 4: out of business, like we'd lose our franchise.

478
00:20:40,240 --> 00:20:42,560
Speaker 2: Yeah, how do you you know, you talked about the

479
00:20:42,560 --> 00:20:45,119
Speaker 2: the middle market space really moving from the banks, you know,

480
00:20:45,160 --> 00:20:47,720
Speaker 2: to the private credits side. But but that's that's I

481
00:20:47,720 --> 00:20:50,240
Speaker 2: guess on the back of all the regulation put in

482
00:20:50,240 --> 00:20:53,240
Speaker 2: place right post financial crisis. So do you feel like

483
00:20:53,320 --> 00:20:55,280
Speaker 2: that's kind of shifting now that we're in like a

484
00:20:55,359 --> 00:20:58,800
Speaker 2: Trump you know, deregulation world, or are certain a sense

485
00:20:58,880 --> 00:21:01,320
Speaker 2: kind of some of these regional banks or even I

486
00:21:01,320 --> 00:21:03,720
Speaker 2: think JP Morgan right, they're setting a credit funding, a

487
00:21:03,720 --> 00:21:06,600
Speaker 2: private credit fund I think is ten to fifty billion

488
00:21:06,680 --> 00:21:07,159
Speaker 2: or something like that.

489
00:21:07,240 --> 00:21:08,640
Speaker 3: So what are your thoughts on that?

490
00:21:08,840 --> 00:21:11,120
Speaker 4: Yeah, I mean, listen, I mean the again, we don't

491
00:21:11,160 --> 00:21:13,720
Speaker 4: compete with JP Morgan, but you know, JP Morgan is

492
00:21:13,720 --> 00:21:16,680
Speaker 4: getting you know, I remember the first billion dollar unit

493
00:21:16,680 --> 00:21:19,560
Speaker 4: Tronch was done by Blackstone and that was probably like

494
00:21:19,640 --> 00:21:22,200
Speaker 4: twelve years ago, and now they're happening every day, and

495
00:21:22,240 --> 00:21:24,120
Speaker 4: it was a big deal when it had happened, And

496
00:21:24,160 --> 00:21:26,600
Speaker 4: that's like, you know, so that like the blue Owls

497
00:21:26,640 --> 00:21:28,720
Speaker 4: of the world and the Blackstones of the world are

498
00:21:28,880 --> 00:21:31,240
Speaker 4: taking a lot of market share from the traditional banks.

499
00:21:31,280 --> 00:21:33,600
Speaker 3: So those guys, the investment banks have to do something.

500
00:21:34,040 --> 00:21:37,840
Speaker 4: And so obviously JP Morgan is very sophisticated with an

501
00:21:37,760 --> 00:21:41,680
Speaker 4: amazing franchise. All these banks have great front ends. I mean,

502
00:21:41,800 --> 00:21:44,040
Speaker 4: they source lots of deals. So the reason you're seeing

503
00:21:44,040 --> 00:21:46,120
Speaker 4: all these joint ventures, like we've announced three of them,

504
00:21:46,320 --> 00:21:49,639
Speaker 4: these joint ventures are basically matching our capital, which has

505
00:21:49,720 --> 00:21:52,600
Speaker 4: less constraints on it, with a big sourcing engine, and

506
00:21:52,640 --> 00:21:54,320
Speaker 4: so it's a really good These joint ventures are very

507
00:21:54,320 --> 00:21:57,680
Speaker 4: good marriage. JP Morgan's doing themselves because JP Morgan again

508
00:21:57,720 --> 00:21:59,920
Speaker 4: has a big, big leverage finance franchise, and they're also,

509
00:22:00,400 --> 00:22:01,399
Speaker 4: you know, very sophisticated.

510
00:22:01,400 --> 00:22:04,600
Speaker 1: Obviously you said it's kind of a pretty basic business lending,

511
00:22:04,680 --> 00:22:07,200
Speaker 1: middle market lending. It's you know, fairly, you know, it

512
00:22:07,280 --> 00:22:08,520
Speaker 1: used to be the most boring part of the bank.

513
00:22:08,520 --> 00:22:10,399
Speaker 1: Now it's the most exciting because everyone loves private credit.

514
00:22:10,680 --> 00:22:12,399
Speaker 1: To what extent is it being swept up in this

515
00:22:12,520 --> 00:22:15,240
Speaker 1: kind of euphoria, you know, all this of tourist money

516
00:22:15,240 --> 00:22:18,080
Speaker 1: coming in, that bad deals getting done again.

517
00:22:18,200 --> 00:22:21,800
Speaker 4: Like when I started BDC's, which are business development companies

518
00:22:21,840 --> 00:22:24,359
Speaker 4: that effectively make middle market loans, a lot of them

519
00:22:24,400 --> 00:22:27,320
Speaker 4: were run by entrepreneurs. Today you think, like, you know,

520
00:22:27,400 --> 00:22:29,000
Speaker 4: you roll for it all these years. It's you know

521
00:22:29,119 --> 00:22:31,920
Speaker 4: KKR has won, oak Tree has won, Carlisle has won.

522
00:22:31,960 --> 00:22:34,520
Speaker 4: I mean those are very sophisticated areas. These are very

523
00:22:34,600 --> 00:22:38,159
Speaker 4: very sophisticated institutional managers. So we talked earlier about like

524
00:22:38,160 --> 00:22:40,240
Speaker 4: mismarking the book and all that stuff. I mean, KKR

525
00:22:40,280 --> 00:22:41,840
Speaker 4: is not going to mismark their book, you know, like

526
00:22:41,880 --> 00:22:44,520
Speaker 4: it's a blue chip institution. And so I think the

527
00:22:44,880 --> 00:22:45,879
Speaker 4: industry's just matured.

528
00:22:46,119 --> 00:22:46,320
Speaker 3: Right.

529
00:22:46,400 --> 00:22:49,040
Speaker 4: So people always talk about this bubble in private credit.

530
00:22:49,280 --> 00:22:51,679
Speaker 4: I've heard that for twenty five years, Like there's been

531
00:22:51,720 --> 00:22:53,080
Speaker 4: a bubble for twenty five years in a row that

532
00:22:53,119 --> 00:22:56,200
Speaker 4: hasn't popped, right, And what people they don't compare apples

533
00:22:56,240 --> 00:22:58,639
Speaker 4: to apples, right, So what we talked about earlier, we

534
00:22:58,720 --> 00:23:01,400
Speaker 4: used to do ten to fifty vibit dah, like most

535
00:23:01,400 --> 00:23:03,360
Speaker 4: of these big guys they're average, but it does way

536
00:23:03,359 --> 00:23:06,360
Speaker 4: over one hundred million dollars now. So they're doing things

537
00:23:06,400 --> 00:23:08,679
Speaker 4: today that they weren't doing ten years ago. So now

538
00:23:08,800 --> 00:23:11,399
Speaker 4: we just compete against each other. Now they're competing against

539
00:23:11,400 --> 00:23:14,080
Speaker 4: the banks, right, or use another example, like we're all

540
00:23:14,080 --> 00:23:17,119
Speaker 4: getting very big and especially finance, you know, lending to

541
00:23:17,160 --> 00:23:19,480
Speaker 4: other lenders, lending into people's BDCs. I mean, that's like

542
00:23:19,520 --> 00:23:21,680
Speaker 4: a new area that no one was in ten years ago.

543
00:23:22,200 --> 00:23:25,239
Speaker 4: So we see the dollars raised. Those raised dollars are

544
00:23:25,280 --> 00:23:27,320
Speaker 4: doing different things and we did ten years ago. So

545
00:23:28,040 --> 00:23:30,119
Speaker 4: it's just not people talk about how crowd it is.

546
00:23:30,160 --> 00:23:33,159
Speaker 4: It's like not that crowded. I mean, like private credit

547
00:23:33,200 --> 00:23:35,800
Speaker 4: returns are higher than private equity over a one, two

548
00:23:35,880 --> 00:23:37,840
Speaker 4: and three year basis, and I'll bet you a lot

549
00:23:37,880 --> 00:23:39,640
Speaker 4: of money that will be higher than private equity over

550
00:23:39,760 --> 00:23:41,000
Speaker 4: a five year period pretty soon.

551
00:23:41,440 --> 00:23:43,359
Speaker 1: But when we talk to your competitors and we you know,

552
00:23:43,359 --> 00:23:46,840
Speaker 1: had this conversation last year with another big firm, you know,

553
00:23:46,960 --> 00:23:49,360
Speaker 1: we were pushing them on the idea that maybe there's

554
00:23:49,400 --> 00:23:51,880
Speaker 1: too much money and not enough deals, and they accepted

555
00:23:51,920 --> 00:23:53,760
Speaker 1: that fat on the on the large of deals in

556
00:23:53,760 --> 00:23:57,680
Speaker 1: the US, and that possibly, you know, mistakes get made

557
00:23:57,720 --> 00:24:01,879
Speaker 1: at that point with taking new entrants. And then you know,

558
00:24:01,880 --> 00:24:03,560
Speaker 1: you push them a bit more when they say, well,

559
00:24:04,440 --> 00:24:07,359
Speaker 1: we succeed by not doing the bad deals. Then you

560
00:24:07,400 --> 00:24:09,879
Speaker 1: say who's doing the bad deals? And they say the

561
00:24:09,960 --> 00:24:12,239
Speaker 1: terrorists are doing the bad deal. So you know, at

562
00:24:12,280 --> 00:24:15,520
Speaker 1: some point there must be some risk involved in what

563
00:24:15,640 --> 00:24:18,000
Speaker 1: has been a very very fast growing market.

564
00:24:18,160 --> 00:24:20,719
Speaker 4: I think the bigger issue is that our LPs are

565
00:24:20,760 --> 00:24:23,840
Speaker 4: getting very focused on is you know, we're sole lead

566
00:24:23,920 --> 00:24:26,440
Speaker 4: and own a lot of our own deals. Those really

567
00:24:26,480 --> 00:24:29,199
Speaker 4: big deals are mostly clubbed up, and so a lot

568
00:24:29,240 --> 00:24:31,800
Speaker 4: of people have an allocation to a number of different

569
00:24:32,000 --> 00:24:35,439
Speaker 4: best in class managers, and when there's a default, like

570
00:24:35,480 --> 00:24:38,600
Speaker 4: a company called plural Sites, they see a number of

571
00:24:38,640 --> 00:24:41,119
Speaker 4: the guys they've allocated to in the same loan. And

572
00:24:41,160 --> 00:24:44,359
Speaker 4: so urlps are now saying to us, so, wait a second,

573
00:24:44,359 --> 00:24:46,560
Speaker 4: am I Long just one big? Because am I just long?

574
00:24:46,600 --> 00:24:49,280
Speaker 4: Like an index fund of direct lending? And now they're

575
00:24:49,280 --> 00:24:52,000
Speaker 4: asking for people who fish in a different pond, right,

576
00:24:52,040 --> 00:24:54,080
Speaker 4: So like we don't we don't go head to head

577
00:24:54,080 --> 00:24:56,000
Speaker 4: with those guys, like we just if you ask any

578
00:24:56,040 --> 00:24:57,959
Speaker 4: of those guys, they would not used as competitor. They

579
00:24:57,960 --> 00:24:59,720
Speaker 4: wuldn't even know who we are, right, So what that

580
00:24:59,800 --> 00:25:01,920
Speaker 4: means is like there's a lot of the reason we're

581
00:25:01,960 --> 00:25:04,440
Speaker 4: growing so quickly is we don't compete with those guys.

582
00:25:04,480 --> 00:25:06,639
Speaker 4: So we're not seeing bad ones getting done. Like in

583
00:25:06,640 --> 00:25:08,439
Speaker 4: my career, I've seen people do a lot of stupid stuff.

584
00:25:08,480 --> 00:25:11,560
Speaker 4: I have seen some new entrants do dumb things. But

585
00:25:11,640 --> 00:25:14,199
Speaker 4: remember these new entrants are tiny, tiny, tiny, Like if

586
00:25:14,200 --> 00:25:16,480
Speaker 4: you think about our you know, eighty five percent of them

587
00:25:16,440 --> 00:25:18,520
Speaker 4: on our in our space goes to like eight guys,

588
00:25:19,080 --> 00:25:21,119
Speaker 4: and so yes, are the tourists doing bad deals?

589
00:25:21,240 --> 00:25:23,280
Speaker 3: They are, But I mean this is like a rounding

590
00:25:23,400 --> 00:25:24,840
Speaker 3: error in our industry.

591
00:25:24,520 --> 00:25:27,080
Speaker 1: And so any default on those would not riffle across

592
00:25:27,160 --> 00:25:30,280
Speaker 1: and cause a panic and a you know, that's what

593
00:25:30,280 --> 00:25:31,080
Speaker 1: people are worried about.

594
00:25:31,200 --> 00:25:34,040
Speaker 4: But yeah, yeah, that's totally misguided. This whole like systemic

595
00:25:34,080 --> 00:25:36,359
Speaker 4: risk around product credit. I mean, very smart people are

596
00:25:36,400 --> 00:25:39,320
Speaker 4: saying that, Yeah, I really, yeah, am at a loss

597
00:25:39,359 --> 00:25:41,119
Speaker 4: to know where they I'd love to hear them explain

598
00:25:41,160 --> 00:25:42,080
Speaker 4: to be a boy.

599
00:25:42,320 --> 00:25:44,679
Speaker 1: The other thing that the smart people are saying, you know,

600
00:25:44,760 --> 00:25:46,600
Speaker 1: in particular Goldman, is that they're only going to be

601
00:25:47,200 --> 00:25:50,720
Speaker 1: maybe eight players left once this whole thing shakes out,

602
00:25:51,040 --> 00:25:54,280
Speaker 1: and implying that you need to be massive to survive

603
00:25:54,320 --> 00:25:57,439
Speaker 1: in private credit. Do you need to grow, do you

604
00:25:57,440 --> 00:26:00,080
Speaker 1: need to expand you need to acquire, you know, to

605
00:26:00,080 --> 00:26:01,679
Speaker 1: to make your platform successful.

606
00:26:01,920 --> 00:26:02,720
Speaker 3: Well that's a good question.

607
00:26:03,280 --> 00:26:05,280
Speaker 4: So I don't agree with the first premise because remember

608
00:26:05,320 --> 00:26:07,640
Speaker 4: the world is big, right, Like, private credit's only five

609
00:26:07,640 --> 00:26:09,680
Speaker 4: percent of global credit, So we have a lot of

610
00:26:09,720 --> 00:26:12,400
Speaker 4: room to grow, right, So I don't agree that that

611
00:26:12,920 --> 00:26:14,480
Speaker 4: there's gonna be like five guys left at the end.

612
00:26:14,480 --> 00:26:16,560
Speaker 4: I don't think it's gonna be like AI or something else,

613
00:26:16,800 --> 00:26:19,320
Speaker 4: because again, there's different parts of the market. There's specialty finance,

614
00:26:19,440 --> 00:26:21,640
Speaker 4: like we're in insurance, Like the world is a big

615
00:26:21,680 --> 00:26:23,520
Speaker 4: place and there's a lot of different teams you can play.

616
00:26:23,840 --> 00:26:25,240
Speaker 4: So I don't agree with the first premise.

617
00:26:25,359 --> 00:26:26,800
Speaker 3: And what was the second? Sorry, what was there second?

618
00:26:26,880 --> 00:26:30,800
Speaker 1: For you your firm, do you need to acquire to get

619
00:26:30,880 --> 00:26:32,360
Speaker 1: scale to survive in this.

620
00:26:32,560 --> 00:26:34,160
Speaker 3: Yeah, that's that's a good question.

621
00:26:34,240 --> 00:26:37,200
Speaker 4: So it's not so much about scale, it's about think

622
00:26:37,240 --> 00:26:40,400
Speaker 4: about the worst business to be in from an inflation perspective, us,

623
00:26:40,440 --> 00:26:42,840
Speaker 4: you know, pressure on fees, we're pay our employees way

624
00:26:42,880 --> 00:26:46,040
Speaker 4: more money, we're giving them remote work, so our productivity.

625
00:26:46,080 --> 00:26:48,080
Speaker 4: I mean, we can debate remote work, but there's no

626
00:26:48,080 --> 00:26:50,239
Speaker 4: doubt that productivity has gone down. And then like if

627
00:26:50,280 --> 00:26:52,840
Speaker 4: you think about under the previous administration, and again you

628
00:26:52,840 --> 00:26:54,919
Speaker 4: mentioned DoD Frank and all this stuff, like we're like

629
00:26:55,000 --> 00:26:57,679
Speaker 4: despite what people say, like they call it the shadow

630
00:26:57,720 --> 00:27:00,960
Speaker 4: banking system, which is so offensive, Like we're heavily, heavily regulated,

631
00:27:01,000 --> 00:27:03,399
Speaker 4: you know, like we've complained, like we have you know,

632
00:27:03,440 --> 00:27:06,760
Speaker 4: insurance regulations, we have public we're monitored by the SEC

633
00:27:06,800 --> 00:27:09,000
Speaker 4: who's super smart. So the cost to run a business

634
00:27:09,000 --> 00:27:10,640
Speaker 4: like ours has gone through the roof, and our fees

635
00:27:10,680 --> 00:27:13,480
Speaker 4: are down. So like you know, think about like businesses

636
00:27:13,480 --> 00:27:15,359
Speaker 4: you don't want to be in unless you have scale. Right,

637
00:27:15,680 --> 00:27:17,479
Speaker 4: So you've seen a lot of my peers sell themselves

638
00:27:17,480 --> 00:27:19,320
Speaker 4: over the last twelve to eighteen months. And these are

639
00:27:19,359 --> 00:27:22,080
Speaker 4: really really smart, really best in class managers. Now, first

640
00:27:22,080 --> 00:27:24,639
Speaker 4: of all, the purchase prices are massive, so like you know,

641
00:27:24,720 --> 00:27:27,199
Speaker 4: eight times ebit does become thirty five times ebitdah. So

642
00:27:27,640 --> 00:27:29,600
Speaker 4: you know, these people are obviously not stupid, but scale

643
00:27:29,640 --> 00:27:32,800
Speaker 4: is important. So we've done thirty two acquisitions. Most of

644
00:27:32,800 --> 00:27:35,840
Speaker 4: our acquisitions have been on the smaller side. But that

645
00:27:35,920 --> 00:27:37,920
Speaker 4: being said, you know we can roll them on our platform.

646
00:27:38,359 --> 00:27:39,760
Speaker 4: And then now you have like you know, instead of

647
00:27:39,760 --> 00:27:42,240
Speaker 4: two audits, you have one audit. You know, you're instead

648
00:27:42,240 --> 00:27:45,399
Speaker 4: of two CFOs, you have one CFO. And that's the

649
00:27:45,440 --> 00:27:48,560
Speaker 4: way to combat lower fees and higher costs.

650
00:27:49,040 --> 00:27:50,240
Speaker 1: Are you on the lookout for more?

651
00:27:51,600 --> 00:27:53,800
Speaker 4: We are very inquisitive, you know, like we've announced six

652
00:27:53,880 --> 00:27:57,439
Speaker 4: or seven public announcements this year around permanent capital. So

653
00:27:57,480 --> 00:27:59,640
Speaker 4: you know, we're merging our Canadian permanent capital vehicle into

654
00:27:59,640 --> 00:28:02,679
Speaker 4: the US. We're merging our two BDCs together. Is all

655
00:28:02,680 --> 00:28:05,920
Speaker 4: public by way, We're merging our We just announced we

656
00:28:05,960 --> 00:28:07,840
Speaker 4: took over an NL vehicle that we're going to.

657
00:28:07,920 --> 00:28:12,360
Speaker 3: Use to acquire something very large. So we've been very

658
00:28:12,440 --> 00:28:13,800
Speaker 3: very publicly acquiring lots.

659
00:28:13,600 --> 00:28:16,080
Speaker 1: Of things just in the US or overseas as well.

660
00:28:17,040 --> 00:28:17,800
Speaker 3: Mostly US.

661
00:28:18,640 --> 00:28:20,600
Speaker 4: I will say that that is an interesting theme because

662
00:28:20,600 --> 00:28:22,360
Speaker 4: I know you cover global credit. We can tack back

663
00:28:22,359 --> 00:28:24,160
Speaker 4: if you want, but I'm interested in this is probably

664
00:28:24,200 --> 00:28:27,000
Speaker 4: the first time in my whole career, like in twenty

665
00:28:27,000 --> 00:28:28,640
Speaker 4: five years of doing this, this is probably the first

666
00:28:28,640 --> 00:28:31,720
Speaker 4: time we're seeing actually decent relative value.

667
00:28:31,480 --> 00:28:32,800
Speaker 3: In Europe versus the US.

668
00:28:33,400 --> 00:28:37,040
Speaker 4: So Europe typically is worst companies, worse laws, more pick

669
00:28:37,600 --> 00:28:40,440
Speaker 4: you know, good deal like, less deals and more more competitive,

670
00:28:41,080 --> 00:28:43,480
Speaker 4: and so the US has always provided a better rout

671
00:28:43,560 --> 00:28:46,520
Speaker 4: of value in every environment that's kind of changed. Like

672
00:28:46,560 --> 00:28:48,400
Speaker 4: there's some really interesting I'm not saying this because of you,

673
00:28:48,440 --> 00:28:50,920
Speaker 4: but there's some interesting opportunities in the UK. You know,

674
00:28:50,960 --> 00:28:53,240
Speaker 4: in Europe we're back in a lot of family businesses,

675
00:28:53,320 --> 00:28:56,200
Speaker 4: and so like our average fund has had four percent,

676
00:28:56,560 --> 00:28:58,720
Speaker 4: our first funds four percent Europe. Now our second funds

677
00:28:58,760 --> 00:29:02,120
Speaker 4: twelve recent upon is thirty five percent Europe. Like, that's

678
00:29:02,160 --> 00:29:04,040
Speaker 4: the first time that's happened in my own career. So

679
00:29:04,080 --> 00:29:07,480
Speaker 4: we are we are seeing every so bearish on Europe.

680
00:29:07,960 --> 00:29:09,400
Speaker 4: But that doesn't mean there's not opportunity.

681
00:29:09,440 --> 00:29:11,240
Speaker 1: What kind of businesses are you looking at in the UK?

682
00:29:11,720 --> 00:29:15,280
Speaker 4: Mostly family owned businesses, you know, there's not there's not

683
00:29:15,320 --> 00:29:17,160
Speaker 4: the same level of access to capital.

684
00:29:16,880 --> 00:29:18,640
Speaker 1: In Europe, but any you like.

685
00:29:18,760 --> 00:29:20,520
Speaker 4: I mean, we did a really interesting deal in Denmark.

686
00:29:21,360 --> 00:29:24,080
Speaker 4: We did another interesting deal in Scandinavia as well, where

687
00:29:24,240 --> 00:29:26,840
Speaker 4: just the access to capitals not what companies have here.

688
00:29:27,120 --> 00:29:28,840
Speaker 4: The family owned business who want to buye oys brother

689
00:29:29,240 --> 00:29:32,920
Speaker 4: the company does online. It's basically an online auto platform.

690
00:29:33,400 --> 00:29:36,400
Speaker 4: So when Mercedes and BMW and others get their cars back,

691
00:29:36,680 --> 00:29:40,240
Speaker 4: you know, they distribute them to dealers and these guys

692
00:29:40,240 --> 00:29:42,200
Speaker 4: are kind of the technology company in the middle of that,

693
00:29:42,320 --> 00:29:43,600
Speaker 4: and they get a fixed feedb er car.

694
00:29:44,160 --> 00:29:46,680
Speaker 3: So that's just a kandom example.

695
00:29:46,720 --> 00:29:48,680
Speaker 1: Are you finding them cheaper in the US because of

696
00:29:48,680 --> 00:29:50,840
Speaker 1: the lack of competition, relativity.

697
00:29:50,520 --> 00:29:53,479
Speaker 4: Just less less like less people who do what we do,

698
00:29:54,040 --> 00:29:57,440
Speaker 4: which is like fill that gap between bank lending and

699
00:29:57,480 --> 00:29:58,120
Speaker 4: private equity.

700
00:30:00,000 --> 00:30:03,600
Speaker 1: And the scenes were as seeing more payment in kind, amendments, extensions,

701
00:30:03,640 --> 00:30:06,800
Speaker 1: all that stuff, you know, which is pointing to stress

702
00:30:06,800 --> 00:30:09,600
Speaker 1: in private credit. Right, do you expect more of that?

703
00:30:09,640 --> 00:30:13,800
Speaker 1: I mean if we get this whole volatility extends. You know,

704
00:30:13,880 --> 00:30:18,040
Speaker 1: people worried about recession now stackflation, you know, a scary

705
00:30:18,040 --> 00:30:19,560
Speaker 1: words being batted around.

706
00:30:19,680 --> 00:30:21,920
Speaker 4: Yeah, I mean the challenge with our investors is a

707
00:30:21,960 --> 00:30:24,680
Speaker 4: lot of folks on pick income. Now, remember not all

708
00:30:24,680 --> 00:30:27,280
Speaker 4: pick income is created equal. So like to your point,

709
00:30:27,320 --> 00:30:29,480
Speaker 4: if there's a restructuring and you start picking some interests,

710
00:30:29,560 --> 00:30:32,240
Speaker 4: the company can kind of get through whatever is impacting

711
00:30:32,280 --> 00:30:32,760
Speaker 4: their business.

712
00:30:32,760 --> 00:30:34,200
Speaker 3: That's one thing. It's another thing, like.

713
00:30:34,160 --> 00:30:36,240
Speaker 4: You know, there's a pretty common feature now in most

714
00:30:36,520 --> 00:30:38,520
Speaker 4: private credit and this is brand new by the way,

715
00:30:38,560 --> 00:30:40,880
Speaker 4: in the first two years they have the option to

716
00:30:41,000 --> 00:30:43,920
Speaker 4: pick half the spread. So even though the company's doing fine,

717
00:30:44,280 --> 00:30:47,360
Speaker 4: that shows up as potentially pick income and that's not bad.

718
00:30:48,040 --> 00:30:50,280
Speaker 4: Or when we do nav lending, you know, when we

719
00:30:50,360 --> 00:30:52,280
Speaker 4: lend against a private equity fund, there's no cash flow

720
00:30:52,280 --> 00:30:54,040
Speaker 4: in that fund, so that shows up as a picklan.

721
00:30:54,240 --> 00:30:57,400
Speaker 4: So the problem with our investors is they can't tell

722
00:30:57,600 --> 00:30:58,960
Speaker 4: when they go through all the LANs, they can't tell

723
00:30:59,000 --> 00:31:02,600
Speaker 4: what's what. So just assume pick income bed and not

724
00:31:02,680 --> 00:31:04,360
Speaker 4: all pin cup and good is bad. Like it's to

725
00:31:04,400 --> 00:31:06,960
Speaker 4: your point. If there's a restructuring, sometimes we you know,

726
00:31:07,320 --> 00:31:09,520
Speaker 4: change cash to pick. But I remember we do a

727
00:31:09,560 --> 00:31:11,880
Speaker 4: lot of nave lending and it's all that's pick. So

728
00:31:12,240 --> 00:31:16,080
Speaker 4: I have to be very transparent and communicate with my investors.

729
00:31:16,120 --> 00:31:18,440
Speaker 4: But like, what what's like good pick and bad pick?

730
00:31:18,480 --> 00:31:20,479
Speaker 4: If that makes sense to you, and our investors are

731
00:31:20,480 --> 00:31:22,479
Speaker 4: super smart, Like it's not. What I'm saying is that

732
00:31:22,520 --> 00:31:24,880
Speaker 4: the investors just don't have all the like when you

733
00:31:24,920 --> 00:31:26,240
Speaker 4: look at our public company, they don't have all the

734
00:31:26,240 --> 00:31:29,240
Speaker 4: information on ibit dad and what's going on behind the scenes,

735
00:31:29,280 --> 00:31:31,680
Speaker 4: so that like they just have to default to two

736
00:31:31,720 --> 00:31:35,240
Speaker 4: things pick bed and subordinated bed. So like, you know,

737
00:31:35,240 --> 00:31:37,560
Speaker 4: we're in positions where we have one turn of bank

738
00:31:37,600 --> 00:31:40,720
Speaker 4: dead and we're like three times through a second lane.

739
00:31:41,560 --> 00:31:43,960
Speaker 4: But because the second lane people viewed as bad, there's

740
00:31:44,000 --> 00:31:46,680
Speaker 4: other situations where you know, we're now levered like nine

741
00:31:46,720 --> 00:31:49,120
Speaker 4: times in the first lane, and people view that first

742
00:31:49,200 --> 00:31:50,040
Speaker 4: lean safe is good.

743
00:31:50,240 --> 00:31:51,680
Speaker 3: So like you know, you know what I mean, Like,

744
00:31:51,800 --> 00:31:53,440
Speaker 3: so like there's a there's a knee.

745
00:31:53,240 --> 00:31:57,920
Speaker 4: Jerk reaction always that pick bad junior bed and generally

746
00:31:57,920 --> 00:32:01,440
Speaker 4: speaking it is or more risky, I would say, But again,

747
00:32:01,520 --> 00:32:03,240
Speaker 4: like the example, I use a real example, like you

748
00:32:03,280 --> 00:32:04,920
Speaker 4: know a lot of a lot of entrepreneurs don't want

749
00:32:04,920 --> 00:32:06,800
Speaker 4: to take on debt, so they take on a piece

750
00:32:06,800 --> 00:32:09,360
Speaker 4: of preferred or something. Yeah, that's pick and it's like

751
00:32:09,440 --> 00:32:12,440
Speaker 4: two times levered. And you know, from our perspective, very safe, right,

752
00:32:12,560 --> 00:32:14,120
Speaker 4: doesn't mean it's like a NPL.

753
00:32:14,320 --> 00:32:15,600
Speaker 3: Yeah, yeah, sorry, lot.

754
00:32:15,720 --> 00:32:18,280
Speaker 2: So how are those trends trending right now? I guess

755
00:32:18,520 --> 00:32:21,680
Speaker 2: you know, we when my colleagues covers Prospect Capital and

756
00:32:21,920 --> 00:32:23,720
Speaker 2: I guess they got kind of you know a lot

757
00:32:23,720 --> 00:32:26,120
Speaker 2: of pick income rising over there. So how how is

758
00:32:26,160 --> 00:32:30,040
Speaker 2: the pick trend going on at the BC Partner's credit portfolio?

759
00:32:30,320 --> 00:32:31,400
Speaker 2: Good pick and bag pick?

760
00:32:32,040 --> 00:32:35,440
Speaker 4: Yeah, es, so our you know, generally speaking, we average

761
00:32:35,440 --> 00:32:37,680
Speaker 4: about eight percent pick income. There's some of our peers

762
00:32:37,680 --> 00:32:39,920
Speaker 4: at our highest thirty five percent, so we if you

763
00:32:39,960 --> 00:32:42,040
Speaker 4: if you look at us, we're at the very low end.

764
00:32:41,880 --> 00:32:43,320
Speaker 3: Of the range.

765
00:32:43,680 --> 00:32:46,600
Speaker 4: So, but that being said, a lot of these pick

766
00:32:46,640 --> 00:32:49,200
Speaker 4: features I talked about earlier, they haven't really come into

767
00:32:49,240 --> 00:32:51,800
Speaker 4: our market, so it's not again, it's not apples to Apple.

768
00:32:51,880 --> 00:32:54,920
Speaker 4: So we look really good on that metric. So there

769
00:32:54,960 --> 00:32:56,760
Speaker 4: was a one of your peers put out an article

770
00:32:56,800 --> 00:32:58,680
Speaker 4: that listed all the companies and how much pick income

771
00:32:58,720 --> 00:33:01,120
Speaker 4: they have, and we look phenomenal on that metric. It's

772
00:33:01,120 --> 00:33:02,760
Speaker 4: not fair though, because a lot of the ones who

773
00:33:02,760 --> 00:33:05,440
Speaker 4: are higher on the pick scale are doing things like

774
00:33:05,760 --> 00:33:08,040
Speaker 4: arr loans and other things that tend to lend themselves

775
00:33:08,040 --> 00:33:10,400
Speaker 4: to pick. So it doesn't mean their portfolios on fire.

776
00:33:10,760 --> 00:33:12,680
Speaker 4: You know, you have to kind of like dig into

777
00:33:12,680 --> 00:33:14,200
Speaker 4: it a little bit more. But anyways, we look really

778
00:33:14,240 --> 00:33:14,840
Speaker 4: good in that metric.

779
00:33:15,480 --> 00:33:20,520
Speaker 1: The administration this could easily change, but they're signaling pain,

780
00:33:21,080 --> 00:33:24,320
Speaker 1: you know, in the economy for potential long term gain.

781
00:33:24,840 --> 00:33:27,320
Speaker 1: How does private credit do in that scenario. Let's say

782
00:33:27,320 --> 00:33:30,520
Speaker 1: this this situation goes on for months and the tariff

783
00:33:30,560 --> 00:33:33,000
Speaker 1: war escalates and all sorts of the other bad things

784
00:33:33,040 --> 00:33:35,760
Speaker 1: that you know, we fear happen. How does private credit

785
00:33:36,040 --> 00:33:37,120
Speaker 1: perform in that environment?

786
00:33:37,600 --> 00:33:39,480
Speaker 4: I mean you have to look at like the new

787
00:33:39,480 --> 00:33:42,000
Speaker 4: stuff we're doing versus what's in our portfolios. I mean,

788
00:33:42,320 --> 00:33:46,200
Speaker 4: we're credit sensitive, so what you just described is probably

789
00:33:46,400 --> 00:33:49,200
Speaker 4: I mean inevitably bad for our portfolios. Now again some

790
00:33:49,240 --> 00:33:52,040
Speaker 4: people have less consumer exposure and less retail exposure, whatever,

791
00:33:52,080 --> 00:33:54,880
Speaker 4: but you know, it's definitely not good for our portfolios.

792
00:33:55,000 --> 00:33:57,920
Speaker 4: And you know, generally speaking, our investors are credit sensitive,

793
00:33:58,280 --> 00:34:02,240
Speaker 4: not very sensitive. So that being said, you know, again,

794
00:34:02,280 --> 00:34:06,000
Speaker 4: if banks begin to pull back on lending, that's typically

795
00:34:06,080 --> 00:34:09,160
Speaker 4: very good for us because we get wider spreads, better terms,

796
00:34:09,440 --> 00:34:12,719
Speaker 4: and that more than offsets any risk of loss. So, like,

797
00:34:12,760 --> 00:34:14,640
Speaker 4: you know, the average loss in our space is about

798
00:34:14,640 --> 00:34:17,960
Speaker 4: forty BIPs over time, and so you know, spreads go

799
00:34:18,040 --> 00:34:19,640
Speaker 4: back up one hundred and forty basis points.

800
00:34:19,719 --> 00:34:21,799
Speaker 3: You know, a lot of losses before. That doesn't make

801
00:34:21,840 --> 00:34:22,399
Speaker 3: sense for us.

802
00:34:22,480 --> 00:34:24,800
Speaker 1: I want to ask you also about the biggest opportunity.

803
00:34:24,840 --> 00:34:27,080
Speaker 1: I always ask this question. You've heard it before. Where

804
00:34:27,120 --> 00:34:28,520
Speaker 1: is the best relative value right now?

805
00:34:28,719 --> 00:34:32,239
Speaker 4: Oh, generally speaking, I think the best I mean we

806
00:34:32,360 --> 00:34:35,040
Speaker 4: what I think the best opportunities right now is a

807
00:34:35,040 --> 00:34:38,480
Speaker 4: couple areas one especialty finance bause. Again, it's such a

808
00:34:38,480 --> 00:34:41,400
Speaker 4: big space, and that space was dominated by like ge

809
00:34:41,440 --> 00:34:44,319
Speaker 4: capital and you know who obviously you know, is not

810
00:34:44,360 --> 00:34:47,239
Speaker 4: what they used to be, and the regional banks, and

811
00:34:47,840 --> 00:34:50,640
Speaker 4: you know, so we're getting like really high returns on

812
00:34:50,719 --> 00:34:53,040
Speaker 4: things that are very low risk, like when you lend

813
00:34:53,040 --> 00:34:55,480
Speaker 4: to another lender who's then lending, and we're getting ten

814
00:34:55,480 --> 00:34:58,000
Speaker 4: to eleven percent the probability of loss. You know, we're

815
00:34:58,040 --> 00:35:01,440
Speaker 4: backing platforms that haven't lost money ever, and we're getting

816
00:35:01,480 --> 00:35:02,400
Speaker 4: twelve thirteen percent.

817
00:35:02,440 --> 00:35:04,080
Speaker 3: It's really interesting. So when you.

818
00:35:03,960 --> 00:35:07,560
Speaker 4: Hear the rise of ABF and there's different terms for it, Yeah,

819
00:35:07,600 --> 00:35:10,319
Speaker 4: reason that's very topical right now is we're getting really

820
00:35:10,320 --> 00:35:15,120
Speaker 4: good returns because post Silicon Valley bank bank's funding costs

821
00:35:15,120 --> 00:35:17,440
Speaker 4: have gone up and so therefore and then a lot

822
00:35:17,440 --> 00:35:19,440
Speaker 4: of finance companies are a under a lot of stress.

823
00:35:19,840 --> 00:35:21,879
Speaker 4: So it's allowed us to kind of step in there

824
00:35:21,920 --> 00:35:22,960
Speaker 4: and kind of do what they.

825
00:35:22,960 --> 00:35:23,359
Speaker 3: Used to do.

826
00:35:23,600 --> 00:35:25,919
Speaker 1: So it's consumer lending, well.

827
00:35:25,800 --> 00:35:28,120
Speaker 4: It's lending to people who then lend, so like sometimes

828
00:35:28,120 --> 00:35:31,839
Speaker 4: that's commercial so and sometimes it's consumer. But you're kind

829
00:35:31,840 --> 00:35:33,319
Speaker 4: of like a couple of steps removed from the end

830
00:35:33,320 --> 00:35:35,879
Speaker 4: borrower and that's a lot lower risk.

831
00:35:36,280 --> 00:35:37,360
Speaker 3: And we're getting very good.

832
00:35:37,200 --> 00:35:40,240
Speaker 1: Returns, which means what mid teens again, yeah, load teens,

833
00:35:40,960 --> 00:35:43,320
Speaker 1: and that you think is the best opportunity for this yeah,

834
00:35:43,480 --> 00:35:44,319
Speaker 1: long longer time.

835
00:35:44,360 --> 00:35:46,759
Speaker 4: I think that's interesting you know again, like you know,

836
00:35:47,040 --> 00:35:49,319
Speaker 4: one of the big themes for US is and this

837
00:35:49,360 --> 00:35:51,320
Speaker 4: is obviously like you guys hear about this a lot

838
00:35:51,640 --> 00:35:55,120
Speaker 4: is private equity companies have private equity funds have had

839
00:35:55,160 --> 00:35:58,719
Speaker 4: a very hard time monetizing assets. So the average whole

840
00:35:58,719 --> 00:36:01,040
Speaker 4: period's gone from three to eight years. So what's the

841
00:36:01,080 --> 00:36:03,640
Speaker 4: solution for that? GP and AVE lending, you know, so

842
00:36:03,719 --> 00:36:06,960
Speaker 4: we are helping them create liquidity for their investors without

843
00:36:07,000 --> 00:36:09,439
Speaker 4: necessarily them having to sell assets at what they don't

844
00:36:09,440 --> 00:36:11,640
Speaker 4: think is fair market value. Number two is you know

845
00:36:11,760 --> 00:36:14,160
Speaker 4: you mentioned the Ridell deal, right, companies are having a

846
00:36:14,200 --> 00:36:16,560
Speaker 4: hard time selling themselves for what they think is fair value.

847
00:36:17,000 --> 00:36:19,200
Speaker 4: So we're going in and providing, you know, a debt

848
00:36:19,239 --> 00:36:21,480
Speaker 4: and a piece of preferred they can take a big

849
00:36:21,480 --> 00:36:24,560
Speaker 4: dividend out, get money to their investors, but maintain control.

850
00:36:24,840 --> 00:36:28,040
Speaker 4: And that theme has been probably fifty percent of our

851
00:36:28,080 --> 00:36:31,040
Speaker 4: marquee franchise deals have been that theme. So, you know,

852
00:36:31,080 --> 00:36:33,279
Speaker 4: we'll do we'll do a deal private equyfirm is able

853
00:36:33,280 --> 00:36:35,880
Speaker 4: to take out money, they maintain control and hope that

854
00:36:35,920 --> 00:36:37,560
Speaker 4: they can sell it at a higher price later. And

855
00:36:37,600 --> 00:36:40,280
Speaker 4: the reason people are so jacked up about this environment

856
00:36:40,600 --> 00:36:44,240
Speaker 4: six weeks ago is because spreads have come down, sofas

857
00:36:44,280 --> 00:36:46,800
Speaker 4: come down one hundred basis points, like a lot of

858
00:36:46,840 --> 00:36:48,799
Speaker 4: these things I talked about earlier. Our challenging companies are

859
00:36:48,880 --> 00:36:51,520
Speaker 4: kind of gone, and so it is the perfect time

860
00:36:51,560 --> 00:36:52,960
Speaker 4: for M and A. And you have a wall of

861
00:36:53,000 --> 00:36:55,680
Speaker 4: activity that has to happen. And so that's why it's

862
00:36:55,680 --> 00:36:57,320
Speaker 4: a little bit of a curve ball we've gotten in

863
00:36:57,360 --> 00:36:58,400
Speaker 4: the last six weeks.

864
00:36:58,880 --> 00:37:01,040
Speaker 1: We were recording this in the eye of a big

865
00:37:01,320 --> 00:37:04,880
Speaker 1: storm March eleventh. But you sound very calm, You've been

866
00:37:04,920 --> 00:37:07,600
Speaker 1: doing this a long time. What gives you conviction that

867
00:37:07,680 --> 00:37:10,600
Speaker 1: you know this market is not all about to fall apart,

868
00:37:10,680 --> 00:37:13,120
Speaker 1: because a lot of the sort of newcomers, as soon

869
00:37:13,120 --> 00:37:14,480
Speaker 1: as they see a bit of voluntils, as soon as

870
00:37:14,480 --> 00:37:16,440
Speaker 1: they see a bit of screaded widening, they panic.

871
00:37:16,840 --> 00:37:20,319
Speaker 4: What gives you confidence, I would say Number one is,

872
00:37:20,360 --> 00:37:22,600
Speaker 4: I mean, we backgrade companies. I'm sure every manager tells

873
00:37:22,600 --> 00:37:24,360
Speaker 4: you that, but I really feel good about our management teams.

874
00:37:24,920 --> 00:37:26,480
Speaker 4: Number two is the US economy still, I mean, this

875
00:37:26,520 --> 00:37:28,000
Speaker 4: is the place to be. To your point, like you

876
00:37:28,040 --> 00:37:31,200
Speaker 4: want to be in a storm like this, you kind

877
00:37:31,200 --> 00:37:32,680
Speaker 4: of want to be in the United States. And then

878
00:37:32,760 --> 00:37:35,040
Speaker 4: number three is like rates are high. So again to

879
00:37:35,040 --> 00:37:36,960
Speaker 4: my point earlier, our portfolios were thrown off a ton

880
00:37:37,000 --> 00:37:41,440
Speaker 4: of cash. So my funds typically return about fifty percent

881
00:37:41,440 --> 00:37:44,640
Speaker 4: of my opportunistic funds, but half our return comes from coupon.

882
00:37:44,800 --> 00:37:47,680
Speaker 4: Half of it comes from other stuff like fees and

883
00:37:47,760 --> 00:37:50,200
Speaker 4: equity and lick prefs and all this stuff. You know,

884
00:37:50,280 --> 00:37:53,120
Speaker 4: now like eighty to ninety percent of our returns are

885
00:37:53,160 --> 00:37:55,760
Speaker 4: coming from coupon. So I called the power of the coupon.

886
00:37:55,840 --> 00:37:57,879
Speaker 4: And actually my old boss used to use that term,

887
00:37:57,880 --> 00:38:00,399
Speaker 4: so I'm stealing from him. But you know, every day

888
00:38:00,400 --> 00:38:02,600
Speaker 4: I wake up, I'm making twelve or two percent, And

889
00:38:02,760 --> 00:38:04,759
Speaker 4: whether the market goes up or down or all that

890
00:38:04,800 --> 00:38:05,879
Speaker 4: matters to me is to pay me off.

891
00:38:06,160 --> 00:38:09,040
Speaker 1: Great stuff. Ted Goldthorpe, head of Credit at PC Partners,

892
00:38:09,040 --> 00:38:10,319
Speaker 1: has been a pleasure having you on the credit edge.

893
00:38:10,360 --> 00:38:13,000
Speaker 1: Many thanks, and of course we're very grateful to Arnold

894
00:38:13,040 --> 00:38:15,839
Speaker 1: Kakuda from Bloomberg Intelligence. Thanks for joining us today. Roolds.

895
00:38:16,440 --> 00:38:18,759
Speaker 1: For more credit analysis, read all of Arnold's great work

896
00:38:18,760 --> 00:38:21,319
Speaker 1: on the Bloomberg terminal. Bloomberg Intelligence is part of our

897
00:38:21,400 --> 00:38:24,440
Speaker 1: research department, with five hundred analyst and strategists working across

898
00:38:24,480 --> 00:38:27,520
Speaker 1: all markets. Coverage includes over two thousand equities and credits

899
00:38:27,560 --> 00:38:30,040
Speaker 1: and outlooks on more than ninety industries and one hundred

900
00:38:30,280 --> 00:38:34,200
Speaker 1: market indices, currencies and commodities. Please do subscribe to The

901
00:38:34,200 --> 00:38:36,920
Speaker 1: Credit Edge wherever you get your podcast. We're on Apple, Spotify,

902
00:38:37,000 --> 00:38:40,080
Speaker 1: and all other good podcast providers, including the Bloomberg Terminal

903
00:38:40,080 --> 00:38:42,960
Speaker 1: at bpod Go. Give us a review, tell your friends,

904
00:38:43,040 --> 00:38:46,279
Speaker 1: or email me directly at Jcromby eight at Bloomberg dot net.

905
00:38:46,760 --> 00:38:49,120
Speaker 1: I'm James Cromby. It's been a pleasure having you join

906
00:38:49,200 --> 00:39:08,919
Speaker 1: us again next week on the Credit Edge.