1 00:00:02,200 --> 00:00:06,800 Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio. 2 00:00:07,520 --> 00:00:10,319 Speaker 1: This week on the podcast, Yes, I have an extra 3 00:00:10,360 --> 00:00:13,720 Speaker 1: special guest. His name is Mario Giannini, and he is 4 00:00:13,800 --> 00:00:19,959 Speaker 1: the CEO of private equity giant Hamilton's Lane. They oversee 5 00:00:20,200 --> 00:00:24,640 Speaker 1: or manage over five hundred billion dollars in assets. I 6 00:00:24,760 --> 00:00:27,960 Speaker 1: kind of feel like this is one of those people 7 00:00:28,560 --> 00:00:32,080 Speaker 1: that the average person in the industry doesn't really know, 8 00:00:32,760 --> 00:00:37,400 Speaker 1: and yet they're quite important, quite influential, and move around 9 00:00:37,840 --> 00:00:42,680 Speaker 1: a whole lot of capital. His background is that of 10 00:00:42,720 --> 00:00:47,160 Speaker 1: a bankruptcy lawyer turned private equity investor, and he really 11 00:00:47,200 --> 00:00:53,400 Speaker 1: has just a fascinating um history. There aren't a whole 12 00:00:53,400 --> 00:00:57,000 Speaker 1: lot of people who are more knowledgeable about the ins 13 00:00:57,000 --> 00:01:02,960 Speaker 1: and outs of private equity, buyout for ms UM, distress debt, 14 00:01:03,040 --> 00:01:06,640 Speaker 1: a whole run of different h fixed income private on 15 00:01:06,680 --> 00:01:11,400 Speaker 1: the private side. Really just a really informative, really knowledgeable guy. 16 00:01:11,800 --> 00:01:15,400 Speaker 1: I found this to be an utterly fascinating conversation, and 17 00:01:15,440 --> 00:01:17,720 Speaker 1: I think you will also so, with no further ado, 18 00:01:18,240 --> 00:01:25,759 Speaker 1: My conversation with Hamilton's Lanes Mario Jannini Vias is Masters 19 00:01:25,800 --> 00:01:31,080 Speaker 1: in Business with Barry Ridholts on Bloomberg Radio My special 20 00:01:31,080 --> 00:01:34,480 Speaker 1: guest today is Mario Janey. He is the CEO of 21 00:01:34,520 --> 00:01:38,080 Speaker 1: Hamilton's Lane, one of the largest private equity firms in 22 00:01:38,120 --> 00:01:42,479 Speaker 1: the world. He joined the firm in two years after 23 00:01:42,480 --> 00:01:46,720 Speaker 1: it was founded in Philadelphia. The company is publicly traded 24 00:01:46,760 --> 00:01:49,760 Speaker 1: with a market cap of three point five billion dollars 25 00:01:50,360 --> 00:01:55,920 Speaker 1: and overseas over five hundred billion dollars in investments, including 26 00:01:56,200 --> 00:02:00,800 Speaker 1: sixty eight billion dollars in discretionary assets under management. Janini 27 00:02:00,920 --> 00:02:04,760 Speaker 1: was named as one of c i o's Knowledge Broker 28 00:02:04,800 --> 00:02:10,919 Speaker 1: All Stars. Mario Jannini, Welcome to Bloomberg. Thank you. So 29 00:02:11,240 --> 00:02:15,520 Speaker 1: before Hamilton's Lane was making private investments, you were advising 30 00:02:15,600 --> 00:02:18,680 Speaker 1: companies on them. Tell us a little bit about your 31 00:02:18,800 --> 00:02:22,440 Speaker 1: your work history. I started out as a lawyer UM 32 00:02:22,520 --> 00:02:27,600 Speaker 1: and was singularly unsuccessful at that and really branched off 33 00:02:27,639 --> 00:02:31,000 Speaker 1: into because I came out of the bankruptcy side of 34 00:02:31,040 --> 00:02:36,760 Speaker 1: the legal world and really went into basically turning companies 35 00:02:36,800 --> 00:02:40,760 Speaker 1: around UM And at one point had sold a company 36 00:02:41,080 --> 00:02:44,320 Speaker 1: and I knew someone that had invested in Hamilton Lane 37 00:02:44,480 --> 00:02:46,360 Speaker 1: and they said you ought to go over there and 38 00:02:46,400 --> 00:02:47,800 Speaker 1: take a look. And I really thought I was just 39 00:02:47,840 --> 00:02:51,040 Speaker 1: going to spend a few months and find another company 40 00:02:51,080 --> 00:02:53,399 Speaker 1: to buy and never left. I was like the bad 41 00:02:53,440 --> 00:02:56,160 Speaker 1: penny that that stays. I couldn't get rid of you. 42 00:02:56,280 --> 00:02:59,880 Speaker 1: So I have to imagine that having a bankruptcy back 43 00:03:00,080 --> 00:03:04,839 Speaker 1: round gives you very specific insight into what companies can 44 00:03:04,880 --> 00:03:08,959 Speaker 1: be turned around and what really just needs to be liquidated. Yeah, 45 00:03:09,000 --> 00:03:11,799 Speaker 1: I think the bankruptcy background helped in that You're You're 46 00:03:11,800 --> 00:03:13,920 Speaker 1: absolutely right. It gives you an idea of what can 47 00:03:13,960 --> 00:03:16,920 Speaker 1: go wrong. I think that's the part that that I 48 00:03:17,000 --> 00:03:20,560 Speaker 1: took away was what can happen at companies, whether it's 49 00:03:20,560 --> 00:03:23,400 Speaker 1: companies were investing in or at Hamilton Lane, What leads 50 00:03:23,440 --> 00:03:25,560 Speaker 1: companies to go into a bad place? And then what 51 00:03:25,600 --> 00:03:27,280 Speaker 1: do you do with them, like you said, when they're 52 00:03:27,280 --> 00:03:30,040 Speaker 1: in that place. So it was very helpful from that perspective. 53 00:03:30,400 --> 00:03:33,560 Speaker 1: So tell us a little bit about Hamilton's Lanes business lines. 54 00:03:34,120 --> 00:03:37,120 Speaker 1: Who are your clients and what sort of investments do 55 00:03:37,200 --> 00:03:40,800 Speaker 1: you tend to consider? Well, our business lines is basically 56 00:03:41,040 --> 00:03:44,480 Speaker 1: we invest in our clients or anyone that is looking 57 00:03:44,560 --> 00:03:47,320 Speaker 1: to be investing in the private markets, whether it's private equity, 58 00:03:48,040 --> 00:03:52,400 Speaker 1: private debt, real estate, real assets, any of the column liquids, 59 00:03:52,400 --> 00:03:56,520 Speaker 1: the alternative markets, and we look at investments in all 60 00:03:56,560 --> 00:03:59,920 Speaker 1: of those different parts, and we help clients develop portfull 61 00:04:00,080 --> 00:04:03,680 Speaker 1: as we help clients choose investments both on an advisory 62 00:04:03,680 --> 00:04:06,440 Speaker 1: basis and on a discretionary basis, depending on how they 63 00:04:06,440 --> 00:04:08,960 Speaker 1: want to work with us. And the clients are global, 64 00:04:09,080 --> 00:04:12,600 Speaker 1: you know, it's about the business about clients are US 65 00:04:12,680 --> 00:04:16,400 Speaker 1: and are non US, So it's a it's a diversified 66 00:04:16,400 --> 00:04:20,039 Speaker 1: client based different types of clients, pension funds, high net worths, 67 00:04:20,200 --> 00:04:24,159 Speaker 1: um everything in between. UH and it really, as I said, 68 00:04:24,279 --> 00:04:27,040 Speaker 1: covers the whole range of the of the private markets. 69 00:04:27,080 --> 00:04:29,719 Speaker 1: We look at that buyouts, we look at venture capital. 70 00:04:30,200 --> 00:04:33,039 Speaker 1: I would say the largest part of our business is 71 00:04:33,080 --> 00:04:36,400 Speaker 1: the private equity side UM as compared to credit or 72 00:04:36,520 --> 00:04:39,279 Speaker 1: real assets, but those are, as you know, in the 73 00:04:39,320 --> 00:04:42,719 Speaker 1: private world, increasingly larger parts of it. And in the 74 00:04:42,760 --> 00:04:47,520 Speaker 1: private equity part, I would say it is mostly buyout, 75 00:04:47,680 --> 00:04:50,840 Speaker 1: growth capital, a little bit of venture um. And in 76 00:04:50,920 --> 00:04:53,680 Speaker 1: terms of geography, in terms of where we invest, it's 77 00:04:53,720 --> 00:04:58,880 Speaker 1: probably six US, Europe and then the rest of the 78 00:04:58,880 --> 00:05:02,400 Speaker 1: world accounts for the rest. So I mentioned earlier, you 79 00:05:02,480 --> 00:05:05,719 Speaker 1: have sixty eight billion dollars in assets under management that 80 00:05:05,760 --> 00:05:10,560 Speaker 1: are discretionary and that you have either advisory or supervisory 81 00:05:10,640 --> 00:05:13,720 Speaker 1: management over the nets let's call it four hundred and 82 00:05:13,720 --> 00:05:17,080 Speaker 1: fifty billion dollars. I know I'm going to get questions 83 00:05:17,120 --> 00:05:19,640 Speaker 1: about that, so let me just pass them along to you. 84 00:05:20,320 --> 00:05:25,000 Speaker 1: What is the difference between discretionary assets under management and 85 00:05:25,400 --> 00:05:28,360 Speaker 1: the balance of the assets that you were either supervising 86 00:05:28,680 --> 00:05:32,520 Speaker 1: or advising on. Yeah, the difference is essentially who who 87 00:05:32,560 --> 00:05:37,120 Speaker 1: controls the final decision. So with the discretionary assets under management, 88 00:05:37,880 --> 00:05:41,120 Speaker 1: somebody gives Hamilton Lane a dollar a euro again and 89 00:05:41,200 --> 00:05:44,520 Speaker 1: says you invest that for us. You make all the choices, 90 00:05:44,760 --> 00:05:47,560 Speaker 1: you decide where you want to put it, which investments 91 00:05:47,560 --> 00:05:49,440 Speaker 1: you want to put it in, and it's it's completely 92 00:05:49,480 --> 00:05:54,120 Speaker 1: up to you. On the advisory or assets under advisement, 93 00:05:54,160 --> 00:05:57,640 Speaker 1: however they're they're phrased there, we're working with the clients. 94 00:05:57,640 --> 00:06:00,960 Speaker 1: So the client will say anything like go find the 95 00:06:00,960 --> 00:06:03,919 Speaker 1: best buy up fund, bring it back to us and 96 00:06:04,640 --> 00:06:07,560 Speaker 1: recommend it to us, and we will make the final decision, 97 00:06:08,080 --> 00:06:11,680 Speaker 1: or we work collaboratively. But in the advisement or advisory 98 00:06:11,680 --> 00:06:14,480 Speaker 1: part of the business, we don't have the final say. 99 00:06:14,839 --> 00:06:17,919 Speaker 1: Is it is really the client that makes that final determination, 100 00:06:17,960 --> 00:06:20,120 Speaker 1: and it maybe on our recommendation it maybe just on 101 00:06:20,160 --> 00:06:23,240 Speaker 1: our bringing five funds and they pick one of them. Um, 102 00:06:23,520 --> 00:06:25,680 Speaker 1: it depends on how we work with them. But that's 103 00:06:25,680 --> 00:06:29,480 Speaker 1: the essential differences. Who makes that final call. Is there 104 00:06:29,480 --> 00:06:34,800 Speaker 1: any real difference between assets under discretionary management or assets 105 00:06:34,920 --> 00:06:38,640 Speaker 1: under advisement. There's no specific difference. I mean, there may 106 00:06:38,640 --> 00:06:41,159 Speaker 1: be a difference in terms of what a specific client 107 00:06:41,279 --> 00:06:43,800 Speaker 1: is looking for. So if a client is asking us 108 00:06:43,839 --> 00:06:47,240 Speaker 1: to look at only large buyouts, um, then sure that's 109 00:06:47,240 --> 00:06:49,039 Speaker 1: all we're looking at for them. But in terms of 110 00:06:49,040 --> 00:06:52,440 Speaker 1: the analysis, in terms of looking at you know, which 111 00:06:52,480 --> 00:06:54,360 Speaker 1: are the best investments? Why are they the best? The 112 00:06:54,400 --> 00:06:57,320 Speaker 1: analysis is the same, and it really comes down to 113 00:06:57,920 --> 00:07:00,440 Speaker 1: then you know, how does it fit in the port folio. 114 00:07:00,920 --> 00:07:03,800 Speaker 1: And there again it's either our decision in terms of 115 00:07:03,839 --> 00:07:07,040 Speaker 1: our discretion, we make the decision, or it's the client's 116 00:07:07,040 --> 00:07:10,200 Speaker 1: decision in terms of saying, I know you love that fund, 117 00:07:10,640 --> 00:07:12,960 Speaker 1: but it doesn't fit for X, y Z reason that 118 00:07:13,000 --> 00:07:16,200 Speaker 1: we're determining. But the analysis is the same. There's been 119 00:07:16,240 --> 00:07:21,400 Speaker 1: some criticism about performance reporting in some private markets I 120 00:07:21,720 --> 00:07:26,400 Speaker 1: r R in particular, what's the best way for private 121 00:07:26,440 --> 00:07:31,320 Speaker 1: markets to report investment performance? Yeah, there really is a 122 00:07:31,320 --> 00:07:33,680 Speaker 1: lot of criticism about I r R, and I think 123 00:07:33,680 --> 00:07:36,640 Speaker 1: it's it's misplaced, honestly. I mean, obviously I'm in private equity, 124 00:07:36,680 --> 00:07:39,520 Speaker 1: so I'm going to say, well, it's misplaced. But it's 125 00:07:39,560 --> 00:07:42,040 Speaker 1: not that hard to do private equity on an I 126 00:07:42,200 --> 00:07:44,000 Speaker 1: r R or a t w R a time way 127 00:07:44,040 --> 00:07:47,280 Speaker 1: to return, which is how most asset classes are are judged. 128 00:07:47,920 --> 00:07:51,360 Speaker 1: And so this whole notion that I r R is misleading. 129 00:07:52,440 --> 00:07:55,560 Speaker 1: It is one measure. The problem with private equity, unlike 130 00:07:55,560 --> 00:07:58,040 Speaker 1: the public markets is in the public park is if 131 00:07:58,080 --> 00:08:00,680 Speaker 1: I give you a taller to invest, you go invested 132 00:08:00,720 --> 00:08:03,120 Speaker 1: in the In the public markets, you invested all at 133 00:08:03,160 --> 00:08:06,400 Speaker 1: once and it stays in there. In private equity, if 134 00:08:06,440 --> 00:08:08,480 Speaker 1: it's a dollar, you commit a dollar and then I 135 00:08:08,520 --> 00:08:12,280 Speaker 1: invests you know, periodically, it's it doesn't go in all 136 00:08:12,320 --> 00:08:13,960 Speaker 1: at the same time. And so all the I r 137 00:08:14,080 --> 00:08:17,360 Speaker 1: R is is a measure of trying to figure out 138 00:08:17,440 --> 00:08:20,800 Speaker 1: how to determine performance when you're not taking all the 139 00:08:20,840 --> 00:08:23,280 Speaker 1: money at once and investing it at once. And it's 140 00:08:23,320 --> 00:08:25,600 Speaker 1: just one measure. And we have a lot of clients 141 00:08:25,600 --> 00:08:27,640 Speaker 1: that use I r R and then use t w R. 142 00:08:27,840 --> 00:08:32,559 Speaker 1: They use different different ways of measuring performance. So yeah, 143 00:08:32,679 --> 00:08:34,840 Speaker 1: if you're using our our alone, it can be a 144 00:08:34,840 --> 00:08:39,120 Speaker 1: little hard to then compare it to your other asset classes. 145 00:08:39,600 --> 00:08:42,079 Speaker 1: But most people don't do that. They really compare it 146 00:08:42,120 --> 00:08:44,560 Speaker 1: in a number of different ways. So I wouldn't be 147 00:08:44,600 --> 00:08:48,319 Speaker 1: too exercised about this whole h R R debate. So 148 00:08:48,400 --> 00:08:51,000 Speaker 1: one of the things we've been hearing is that the 149 00:08:51,120 --> 00:08:57,400 Speaker 1: public markets have gotten price. Fixed income is yielding practically zero, 150 00:08:58,120 --> 00:09:03,040 Speaker 1: and that is creating a lot of opportunity and competition 151 00:09:03,080 --> 00:09:05,880 Speaker 1: in the private space. Tell us a little bit about 152 00:09:05,960 --> 00:09:09,680 Speaker 1: what you see in the private equity markets, and for 153 00:09:09,720 --> 00:09:12,880 Speaker 1: you that includes the debt markets as well. Yeah, I'll 154 00:09:12,880 --> 00:09:15,840 Speaker 1: look at it from two perspectives. One is from the 155 00:09:15,840 --> 00:09:19,240 Speaker 1: one you alluded to, which is, um, we're seeing a 156 00:09:19,280 --> 00:09:22,280 Speaker 1: whole lot of interest in the private markets, um, and 157 00:09:22,360 --> 00:09:25,839 Speaker 1: it's driven by the factors you cited. Let's talk about credit. 158 00:09:25,880 --> 00:09:28,959 Speaker 1: For example, in the credit markets, if you're a public 159 00:09:29,040 --> 00:09:33,720 Speaker 1: credit investor, you're getting lousy returns. I mean, they're just 160 00:09:33,840 --> 00:09:37,040 Speaker 1: historically they're very low, and so it drives you to 161 00:09:37,160 --> 00:09:39,440 Speaker 1: look at private credit because the returns are so much 162 00:09:39,520 --> 00:09:42,800 Speaker 1: higher than they are on the public side. And frankly, 163 00:09:42,840 --> 00:09:45,160 Speaker 1: there's on the private credit side, there's a huge amount 164 00:09:45,160 --> 00:09:48,440 Speaker 1: of opportunity because when you look at where the public 165 00:09:48,480 --> 00:09:51,600 Speaker 1: markets provide credit, it's too larger companies, and private credit 166 00:09:51,640 --> 00:09:55,320 Speaker 1: tends to provide two smaller companies. So there's a big 167 00:09:55,320 --> 00:09:59,520 Speaker 1: opportunity set there. And with banks having left that market 168 00:09:59,640 --> 00:10:02,480 Speaker 1: after the Great Financial Crisis, there's there's just a lot 169 00:10:02,520 --> 00:10:06,120 Speaker 1: of space for private credit to grow. On the equity side, 170 00:10:06,200 --> 00:10:09,240 Speaker 1: private equity, you have the same factors at work that 171 00:10:09,280 --> 00:10:11,520 Speaker 1: you have in the public markets. Evaluations are really high 172 00:10:12,040 --> 00:10:15,040 Speaker 1: um and there's a lot of competition for deals. With 173 00:10:15,240 --> 00:10:18,760 Speaker 1: that said, you look at the number of private companies 174 00:10:18,760 --> 00:10:21,040 Speaker 1: that there are compared to public companies. You look at 175 00:10:21,040 --> 00:10:23,080 Speaker 1: the number of public companies, I think, what is it 176 00:10:23,120 --> 00:10:26,240 Speaker 1: over the last ten years, they've they've gone down in 177 00:10:26,280 --> 00:10:29,800 Speaker 1: the US. There's just more places to invest in the 178 00:10:29,800 --> 00:10:32,280 Speaker 1: private side than there is in the public side, and 179 00:10:32,360 --> 00:10:35,480 Speaker 1: so there's opportunity out there. But I am the last 180 00:10:35,480 --> 00:10:37,840 Speaker 1: person to tell you that the world is a screaming 181 00:10:37,880 --> 00:10:40,480 Speaker 1: by because prices are cheap on the on the private side, 182 00:10:40,559 --> 00:10:43,600 Speaker 1: they're not. You really have to work to get returns. 183 00:10:44,000 --> 00:10:46,400 Speaker 1: There's a there's a lot of money floating around the world. 184 00:10:46,480 --> 00:10:50,080 Speaker 1: Right now. Let's talk a little bit about what's going 185 00:10:50,120 --> 00:10:54,280 Speaker 1: on with the public markets. You mentioned earlier that the 186 00:10:54,400 --> 00:10:58,439 Speaker 1: number of publicly traded companies in the US has dropped 187 00:10:58,440 --> 00:11:01,920 Speaker 1: practically in half. I think the will share five thousand 188 00:11:02,040 --> 00:11:06,439 Speaker 1: is now down to about Why do you think companies 189 00:11:06,440 --> 00:11:10,840 Speaker 1: are staying private longer over the past decade. What do 190 00:11:10,880 --> 00:11:14,079 Speaker 1: you think is driving that? I think it's a couple 191 00:11:14,080 --> 00:11:17,640 Speaker 1: of reasons. The first is, the most publicized reason, is 192 00:11:17,760 --> 00:11:20,920 Speaker 1: the hassle of being public. You read about the costs 193 00:11:20,920 --> 00:11:25,480 Speaker 1: associated with whether it's more more auditing people, more financial, 194 00:11:25,720 --> 00:11:29,200 Speaker 1: more compliance, whatever it is. I think being public is 195 00:11:29,280 --> 00:11:31,960 Speaker 1: just you know, it's a hardship for for many companies, 196 00:11:31,960 --> 00:11:35,320 Speaker 1: for many executives, and so people would prefer not doing 197 00:11:35,320 --> 00:11:37,640 Speaker 1: it if they didn't have to. And that really is 198 00:11:37,679 --> 00:11:41,120 Speaker 1: the second reason why you've seen a reduction I think 199 00:11:41,120 --> 00:11:44,880 Speaker 1: in public companies is is the rise of private equity. 200 00:11:44,880 --> 00:11:48,400 Speaker 1: In private markets, you now have a very very credible 201 00:11:48,440 --> 00:11:51,720 Speaker 1: alternative financing source for some of the things that you 202 00:11:51,720 --> 00:11:54,640 Speaker 1: would otherwise have to go public ten years ago. Um, 203 00:11:54,679 --> 00:11:57,439 Speaker 1: if you want to acquire a company, private equity is 204 00:11:57,440 --> 00:11:59,080 Speaker 1: there to provide the capital. You don't have to go 205 00:11:59,160 --> 00:12:02,120 Speaker 1: public to raise the capital. If if you want to 206 00:12:02,160 --> 00:12:04,000 Speaker 1: take out a founder. If you want to do, you know, 207 00:12:04,040 --> 00:12:06,280 Speaker 1: whatever you want to do with your shareholder base, you 208 00:12:06,320 --> 00:12:08,080 Speaker 1: can do it. On the private equity side, there's just 209 00:12:08,160 --> 00:12:11,040 Speaker 1: an enormous amount of capital. That is, they're ready to 210 00:12:11,160 --> 00:12:14,240 Speaker 1: provide corporate finance in a way that before it really 211 00:12:14,320 --> 00:12:17,360 Speaker 1: either was a bank or the public markets. So I 212 00:12:17,360 --> 00:12:19,800 Speaker 1: think it's the combination of those two things that has 213 00:12:19,880 --> 00:12:23,440 Speaker 1: led to a reduction in the number of public companies. 214 00:12:23,760 --> 00:12:27,640 Speaker 1: So how has all this capital that's been slashing around 215 00:12:28,440 --> 00:12:32,960 Speaker 1: changed the pe landscape? It's more than just quantity. How 216 00:12:33,080 --> 00:12:38,120 Speaker 1: is this qualitatively changing that market? It's changed how you 217 00:12:38,160 --> 00:12:41,199 Speaker 1: have to go about getting return. I think what has 218 00:12:41,240 --> 00:12:45,160 Speaker 1: happened is when when there wasn't as much capital, then 219 00:12:45,280 --> 00:12:48,240 Speaker 1: you really could use just financial engineering. I mean, it 220 00:12:48,280 --> 00:12:50,440 Speaker 1: was it was a much smaller game in the sense 221 00:12:50,480 --> 00:12:54,280 Speaker 1: of there there wasn't as much competition for deals. It 222 00:12:54,320 --> 00:12:56,240 Speaker 1: wasn't as well known on the private I mean you 223 00:12:56,240 --> 00:12:58,680 Speaker 1: look at twenty years ago, even coming out of the 224 00:12:58,720 --> 00:13:01,760 Speaker 1: O one two thousand a one downturn, it just was 225 00:13:01,800 --> 00:13:04,679 Speaker 1: not a normal way to to do financing, to use 226 00:13:04,679 --> 00:13:07,400 Speaker 1: private equity. That's just not the case anymore. So what 227 00:13:07,440 --> 00:13:12,280 Speaker 1: it means is from the qualitative perspective, you need to 228 00:13:12,400 --> 00:13:15,120 Speaker 1: do something more than just figure out how to lever 229 00:13:15,240 --> 00:13:18,160 Speaker 1: a company and reduce costs or you know, whatever you 230 00:13:18,200 --> 00:13:21,840 Speaker 1: did years ago. Um, you have to do something to 231 00:13:21,960 --> 00:13:25,240 Speaker 1: make that company better. Whether it's an acquisition strategy, whether 232 00:13:25,320 --> 00:13:29,000 Speaker 1: it's it's an operating strategy. You got to grow that company. 233 00:13:29,200 --> 00:13:32,800 Speaker 1: And it has changed the nature of how private equity 234 00:13:32,960 --> 00:13:36,320 Speaker 1: generates in my view. I think if you look at 235 00:13:36,640 --> 00:13:39,640 Speaker 1: we run value creation models that say how to how 236 00:13:39,679 --> 00:13:43,320 Speaker 1: does how is returned generated from these deals? Um, And 237 00:13:43,360 --> 00:13:45,920 Speaker 1: you've seen a shift over the last ten, fifteen, twenty 238 00:13:46,000 --> 00:13:50,280 Speaker 1: years into much more emphasis on operating results, much more 239 00:13:50,320 --> 00:13:53,480 Speaker 1: emphasis on eva dog growth. Um. So that has really 240 00:13:53,559 --> 00:13:56,120 Speaker 1: changed what you're looking for in general partners, what you're 241 00:13:56,160 --> 00:14:00,120 Speaker 1: looking for to make money. Interesting. So, Hamilton Lane is 242 00:14:00,160 --> 00:14:03,719 Speaker 1: one of the few alternative asset managers that that's a 243 00:14:03,760 --> 00:14:09,600 Speaker 1: publicly traded company. What's the motivation for somebody that manages 244 00:14:09,800 --> 00:14:14,600 Speaker 1: private investments to themselves go public? Yeah? Interesting, isn't it. 245 00:14:14,600 --> 00:14:18,000 Speaker 1: It's the you know, we we we preached the virtues 246 00:14:18,040 --> 00:14:21,000 Speaker 1: of being private and we're public. Um. I think it's 247 00:14:21,040 --> 00:14:23,120 Speaker 1: part of the life cycle of many companies. I think 248 00:14:23,160 --> 00:14:25,440 Speaker 1: for us There were a couple of things that drove it. 249 00:14:25,600 --> 00:14:28,720 Speaker 1: One was we were always an equity culture, even when 250 00:14:28,760 --> 00:14:32,480 Speaker 1: we were when we were private, the mantra around the 251 00:14:32,520 --> 00:14:36,560 Speaker 1: firm was, you know you you create value, personal value 252 00:14:37,120 --> 00:14:40,560 Speaker 1: through equity ownership. And and we add well over a 253 00:14:40,640 --> 00:14:44,320 Speaker 1: hundred of the employees that had equity stake in the company, 254 00:14:44,440 --> 00:14:47,560 Speaker 1: and I think you reach a point where everyone has 255 00:14:47,560 --> 00:14:51,040 Speaker 1: equity and they go, what am I doing with this equity? 256 00:14:51,200 --> 00:14:53,840 Speaker 1: And it's it's amazing. It leads to the question of, oh, 257 00:14:53,880 --> 00:14:55,760 Speaker 1: I get what's gonna happen. We're gonna get sold to 258 00:14:55,800 --> 00:14:58,680 Speaker 1: someone and then everyone's going to realize their equity value. 259 00:14:59,160 --> 00:15:01,920 Speaker 1: And internally the be in questioning that, and externally people 260 00:15:01,960 --> 00:15:04,720 Speaker 1: begin asking you that. So when you look at how 261 00:15:04,760 --> 00:15:07,560 Speaker 1: do I, how do I give people a path over 262 00:15:07,640 --> 00:15:11,640 Speaker 1: ten years, over fifteen years to realize equity value in 263 00:15:11,680 --> 00:15:14,280 Speaker 1: their holdings, going public is one of the ways you 264 00:15:14,320 --> 00:15:16,880 Speaker 1: can do that, and so that was certainly probably the 265 00:15:17,920 --> 00:15:22,760 Speaker 1: most important factor. The other factor was was the branding um. 266 00:15:22,840 --> 00:15:25,360 Speaker 1: What we realized there was a group in Europe, Partners 267 00:15:25,360 --> 00:15:28,920 Speaker 1: Group that in public and the branding impact was huge. 268 00:15:29,040 --> 00:15:31,960 Speaker 1: I think in an industry that people viewed as small, 269 00:15:32,440 --> 00:15:36,480 Speaker 1: the ability to say, you know, we're we're institutional enough, 270 00:15:36,560 --> 00:15:40,760 Speaker 1: we've got quality controls, we've got sec controls were legit, 271 00:15:41,160 --> 00:15:44,800 Speaker 1: and and that really mattered, particularly outside the United States. UM. 272 00:15:44,920 --> 00:15:46,560 Speaker 1: And then the third factor was just the one I 273 00:15:46,560 --> 00:15:50,000 Speaker 1: talked about alluded to with the equity ownership, was it 274 00:15:50,080 --> 00:15:52,600 Speaker 1: tells people you're going to stay independent. I think all 275 00:15:52,600 --> 00:15:55,160 Speaker 1: the questions about who's going to own you in five years, 276 00:15:55,200 --> 00:15:57,880 Speaker 1: which is really important in the business we do. People 277 00:15:57,880 --> 00:16:00,160 Speaker 1: want to know that you're going to be around for 278 00:16:00,240 --> 00:16:02,280 Speaker 1: ten years. You know, they're signing up for quite some 279 00:16:02,360 --> 00:16:05,440 Speaker 1: time to be doing these investments. So those three factors 280 00:16:05,440 --> 00:16:08,480 Speaker 1: made it an interesting way to go, and the markets 281 00:16:08,480 --> 00:16:10,480 Speaker 1: were open to it where they weren't I don't know, 282 00:16:10,640 --> 00:16:13,120 Speaker 1: fifteen years ago, you couldn't really think about going public 283 00:16:13,400 --> 00:16:15,840 Speaker 1: in the business we're in. So you guys, I p O, 284 00:16:17,600 --> 00:16:22,760 Speaker 1: what was that experience. Well, it's funny because you're you're 285 00:16:22,800 --> 00:16:25,640 Speaker 1: all of a sudden talking to public equity people, and 286 00:16:25,680 --> 00:16:27,960 Speaker 1: you know, we're always used to talking to private equity people. 287 00:16:28,320 --> 00:16:30,800 Speaker 1: So the roads show all of those things that was 288 00:16:30,960 --> 00:16:33,440 Speaker 1: that was just a very very different sort of thing, 289 00:16:34,160 --> 00:16:37,520 Speaker 1: you know, publicly. I know this sounds stupid and probably 290 00:16:37,520 --> 00:16:40,560 Speaker 1: says something about how little I know. But in private equity, 291 00:16:40,640 --> 00:16:44,200 Speaker 1: you spend all this time analyzing companies because you're stuck 292 00:16:44,240 --> 00:16:46,680 Speaker 1: with them for some period of time. You can't just say, oh, 293 00:16:46,880 --> 00:16:49,720 Speaker 1: made a mistake. In the public world, it's just a 294 00:16:49,800 --> 00:16:53,200 Speaker 1: very different experience because they all have a mentality of 295 00:16:53,760 --> 00:16:55,840 Speaker 1: I'd like to pick the investment, but if it's a mistake, 296 00:16:56,120 --> 00:16:58,160 Speaker 1: I can always change my mind in a month of week, 297 00:16:58,200 --> 00:17:00,280 Speaker 1: you know, whatever it is. And so that just a 298 00:17:00,280 --> 00:17:03,360 Speaker 1: different mindset. So it was it was interesting. It was 299 00:17:03,560 --> 00:17:06,919 Speaker 1: kind of getting your your head framed around. They have 300 00:17:07,040 --> 00:17:11,280 Speaker 1: a different time frame, their perspective, their time horizon is 301 00:17:11,359 --> 00:17:14,320 Speaker 1: just different from what we're sort of used to as 302 00:17:14,359 --> 00:17:16,800 Speaker 1: what we do day to day in our business. So 303 00:17:16,920 --> 00:17:21,320 Speaker 1: does having to report to shareholders every ninety days? Does 304 00:17:21,359 --> 00:17:24,960 Speaker 1: that change your perspective on anything? How does that impact 305 00:17:25,440 --> 00:17:29,120 Speaker 1: how you think about managing a company with over four 306 00:17:29,520 --> 00:17:34,440 Speaker 1: employees and I know you're international, What do those quarterly 307 00:17:34,720 --> 00:17:38,680 Speaker 1: requirements due to how you see the world. Yeah, it 308 00:17:38,720 --> 00:17:41,720 Speaker 1: hasn't changed anything at this point for I think a 309 00:17:41,760 --> 00:17:43,840 Speaker 1: couple of reasons. One is we went out as a 310 00:17:43,880 --> 00:17:48,280 Speaker 1: controlled company um and, which which technically just means that 311 00:17:48,440 --> 00:17:53,080 Speaker 1: while I don't know if you think something like of 312 00:17:53,200 --> 00:17:57,359 Speaker 1: the of the equity is owned by management, voting control 313 00:17:57,480 --> 00:18:00,000 Speaker 1: is something like eighty something percent, we owned voting control. 314 00:18:00,280 --> 00:18:03,119 Speaker 1: So we don't have to worry about hedge funds buying 315 00:18:03,240 --> 00:18:06,919 Speaker 1: us or activists investors and demanding changes. So there's no 316 00:18:07,040 --> 00:18:09,960 Speaker 1: real pressure on oh my gosh, you know that the 317 00:18:10,000 --> 00:18:12,479 Speaker 1: shareholders going to demand we do this and vote us 318 00:18:12,480 --> 00:18:15,000 Speaker 1: out or whatever they do on the on the public side, 319 00:18:15,000 --> 00:18:18,760 Speaker 1: on those situations, that is a huge factor. It eases 320 00:18:18,800 --> 00:18:21,480 Speaker 1: all of that pressure. The other thing we are very 321 00:18:21,480 --> 00:18:25,000 Speaker 1: clear with people is don't judge us quarter a quarter. 322 00:18:25,520 --> 00:18:28,600 Speaker 1: This just isn't a quarterly judgment business. Uh, you know, 323 00:18:28,680 --> 00:18:31,040 Speaker 1: we look at it year to year and that's how 324 00:18:31,080 --> 00:18:33,520 Speaker 1: we're going to do things. And there's sort of, I believe, 325 00:18:33,560 --> 00:18:37,359 Speaker 1: a self selection process. Investors or shareholders that want that 326 00:18:37,440 --> 00:18:40,359 Speaker 1: perspective will buy your shares and others that don't won't. 327 00:18:41,040 --> 00:18:43,040 Speaker 1: And so we've not really felt a whole lot of 328 00:18:43,040 --> 00:18:46,560 Speaker 1: pressure in terms of quarterly earnings or meeting numbers. You 329 00:18:46,600 --> 00:18:50,160 Speaker 1: look at our quarterly numbers, we've we've hit consensus on some, 330 00:18:50,320 --> 00:18:55,040 Speaker 1: we've exceeded, we've we've we've not met consensus and other quarters, 331 00:18:55,040 --> 00:18:57,879 Speaker 1: and you know, it's just sort of that's kind of 332 00:18:57,920 --> 00:19:00,760 Speaker 1: what it is each quarter. You can't really help that. Huh. 333 00:19:00,880 --> 00:19:03,880 Speaker 1: Quite interesting. Let's let's talk a little bit about what's 334 00:19:03,920 --> 00:19:09,600 Speaker 1: been going on in with the pandemic and lockdown. You 335 00:19:09,640 --> 00:19:12,320 Speaker 1: guys are a global company. You have I think seventeen 336 00:19:12,359 --> 00:19:17,320 Speaker 1: offices around the world. How early on did you recognize 337 00:19:17,920 --> 00:19:22,080 Speaker 1: how severely the economy was going to be impacted by 338 00:19:22,119 --> 00:19:27,919 Speaker 1: the pandemic. I don't know that we recognized it a 339 00:19:28,000 --> 00:19:31,720 Speaker 1: lot earlier than most. I think we were so are 340 00:19:31,880 --> 00:19:36,239 Speaker 1: our offices in Asia closed very early, but even at 341 00:19:36,280 --> 00:19:40,040 Speaker 1: that point, so this is probably what December there there 342 00:19:40,119 --> 00:19:44,400 Speaker 1: closing early January. Even at that point, I think there 343 00:19:44,480 --> 00:19:47,919 Speaker 1: was a feeling that there wasn't a feeling that devirus 344 00:19:48,000 --> 00:19:51,080 Speaker 1: as contagious as we now know it is UM and 345 00:19:51,160 --> 00:19:53,960 Speaker 1: so I think we felt that it was probably going 346 00:19:54,000 --> 00:19:57,480 Speaker 1: to be contained Asia. UM when we really began to 347 00:19:57,480 --> 00:20:00,400 Speaker 1: realize when it when it spread to Europe, our European 348 00:20:00,560 --> 00:20:04,760 Speaker 1: offices at that point in our European clients were saying, uh, 349 00:20:05,000 --> 00:20:07,880 Speaker 1: this is not that, this is not your average flu. 350 00:20:08,000 --> 00:20:10,720 Speaker 1: I got news for you people, And so I would 351 00:20:10,800 --> 00:20:16,560 Speaker 1: say we went into pretty heavy duty beware mode, maybe 352 00:20:16,600 --> 00:20:20,600 Speaker 1: a few weeks earlier than than general. But as you know, 353 00:20:20,800 --> 00:20:25,040 Speaker 1: once it hit Europe, it really started to spread pretty quickly. UM. 354 00:20:25,080 --> 00:20:28,040 Speaker 1: But I think it's February, it was pretty clear that 355 00:20:28,160 --> 00:20:31,000 Speaker 1: this was going to be a pretty big impact, if 356 00:20:31,040 --> 00:20:34,320 Speaker 1: not globally, at least in some very major areas of 357 00:20:34,400 --> 00:20:39,359 Speaker 1: the world. M quite quite interesting. So are there any 358 00:20:39,400 --> 00:20:44,359 Speaker 1: advantages to private companies UH during a pandemic and lockdown 359 00:20:44,920 --> 00:20:50,200 Speaker 1: versus those that are public? How does that impact management 360 00:20:50,240 --> 00:20:56,760 Speaker 1: of those entities in very tumultuous, volatile times. The one 361 00:20:56,800 --> 00:20:59,320 Speaker 1: thing I will say, and not just because I'm in 362 00:20:59,320 --> 00:21:02,320 Speaker 1: private equity it, but paying some credit to the private 363 00:21:02,359 --> 00:21:06,120 Speaker 1: equity world, private credit world, the private world, Um, they 364 00:21:06,240 --> 00:21:09,200 Speaker 1: learned from the O eight o nine downturn, and what 365 00:21:09,240 --> 00:21:13,439 Speaker 1: we saw really beginning in February. UM. Certainly in the 366 00:21:13,520 --> 00:21:17,919 Speaker 1: in the Western world was immediate and I mean immediate 367 00:21:18,040 --> 00:21:22,159 Speaker 1: action saying this is really going to be bad. We 368 00:21:22,200 --> 00:21:24,920 Speaker 1: need to hunker down and prepare. And so I would 369 00:21:24,960 --> 00:21:28,160 Speaker 1: say that the private world reacted far faster, and maybe 370 00:21:28,240 --> 00:21:31,239 Speaker 1: because they could, because obviously if you're private, you can 371 00:21:31,280 --> 00:21:33,080 Speaker 1: do things instantly and you don't have to worry about, 372 00:21:33,240 --> 00:21:34,960 Speaker 1: you know, saying anything in the public or what the 373 00:21:34,960 --> 00:21:38,960 Speaker 1: public reaction is going to be. And we had we 374 00:21:39,040 --> 00:21:43,600 Speaker 1: had people talking about, you know, contingency planning in February 375 00:21:44,240 --> 00:21:47,280 Speaker 1: and putting those plans into into place. But I think 376 00:21:47,320 --> 00:21:49,359 Speaker 1: it was more driven. I think it was less driven 377 00:21:49,400 --> 00:21:52,439 Speaker 1: by the pandemic. Then it was driven by I know 378 00:21:52,520 --> 00:21:55,400 Speaker 1: what happened in O eight O nine, and it feels 379 00:21:55,480 --> 00:21:59,119 Speaker 1: like that kind of thing happening again, so let's prepare 380 00:21:59,160 --> 00:22:01,480 Speaker 1: for the worst, um And I would say that was 381 00:22:01,520 --> 00:22:04,320 Speaker 1: across the board. It was surprising how quickly it happened. 382 00:22:05,320 --> 00:22:09,320 Speaker 1: Huh So, so that's a really interesting observation. How does 383 00:22:10,240 --> 00:22:13,320 Speaker 1: compare to an event like O eight oh nine, or 384 00:22:13,359 --> 00:22:15,920 Speaker 1: how does it compare to the you know, dot Com 385 00:22:15,960 --> 00:22:22,320 Speaker 1: implosion two thousand to two thousand and three. I think 386 00:22:22,359 --> 00:22:24,399 Speaker 1: we all thought in March that it was going to 387 00:22:24,480 --> 00:22:27,320 Speaker 1: be almost a replay of oh eight O nine. I 388 00:22:27,359 --> 00:22:31,720 Speaker 1: think everyone prepared for it um as if we're going 389 00:22:31,760 --> 00:22:35,760 Speaker 1: to have twelve to eighteen months of just all hell 390 00:22:35,800 --> 00:22:39,920 Speaker 1: breaking loose, and that's when it all changed, as you know. UM. 391 00:22:39,960 --> 00:22:44,040 Speaker 1: I think a couple of things were different. One, you 392 00:22:44,119 --> 00:22:47,679 Speaker 1: had a monetary and fiscal response, in literally the period 393 00:22:47,720 --> 00:22:50,359 Speaker 1: of a month or two. That did I don't know 394 00:22:50,520 --> 00:22:54,080 Speaker 1: ten times what it took the fiscal and monetary authorities 395 00:22:54,119 --> 00:22:57,520 Speaker 1: in OH nine to do over eighteen months twenty four months. 396 00:22:57,920 --> 00:23:03,720 Speaker 1: So the speed of the response was unbelievable and which 397 00:23:03,840 --> 00:23:06,760 Speaker 1: in my view really led to the stock markets certainly 398 00:23:06,800 --> 00:23:09,840 Speaker 1: doing better, all markets doing better um, and the economy 399 00:23:09,920 --> 00:23:14,040 Speaker 1: is sort of flatlining and not falling apart. That was 400 00:23:14,480 --> 00:23:17,800 Speaker 1: big difference, number one. But the other big difference that 401 00:23:18,080 --> 00:23:23,439 Speaker 1: only became apparent after a month m was in In 402 00:23:23,520 --> 00:23:26,520 Speaker 1: every other downturn I've ever been associated with, you could 403 00:23:26,600 --> 00:23:29,960 Speaker 1: look back and go, here's the companies that did well, 404 00:23:30,000 --> 00:23:32,080 Speaker 1: and here's the companies that didn't. You know, they had 405 00:23:32,080 --> 00:23:34,720 Speaker 1: too much leverage so they didn't do well. They had, 406 00:23:34,920 --> 00:23:37,159 Speaker 1: you know, lousy management, they didn't do well. Whatever you 407 00:23:37,200 --> 00:23:39,560 Speaker 1: could point to mistakes that were made or things that 408 00:23:39,600 --> 00:23:42,399 Speaker 1: were done wrong, that wasn't the case in this In 409 00:23:42,440 --> 00:23:46,600 Speaker 1: this pandemic, here it was random. If you were in 410 00:23:46,640 --> 00:23:49,200 Speaker 1: the right industry, you did well. If you were in 411 00:23:49,240 --> 00:23:52,560 Speaker 1: the wrong industry, you did poorly. And it didn't matter 412 00:23:52,640 --> 00:23:55,120 Speaker 1: what your balance sheet looked like, it didn't matter how 413 00:23:55,160 --> 00:23:58,800 Speaker 1: good or bad your management was. You it was kind 414 00:23:58,800 --> 00:24:01,640 Speaker 1: of the the luck of the draw or the bad 415 00:24:01,720 --> 00:24:04,600 Speaker 1: luck of the draw. If you're in a pandemic hit industry, 416 00:24:04,600 --> 00:24:06,560 Speaker 1: if you're in a hotel, if you're in a restaurant, 417 00:24:06,600 --> 00:24:11,000 Speaker 1: if you're in travel, you're in trouble, and no amount 418 00:24:11,040 --> 00:24:14,200 Speaker 1: of great foresight would have helped you. And and that 419 00:24:14,320 --> 00:24:17,480 Speaker 1: is we just haven't seen that before. It's it's a 420 00:24:17,680 --> 00:24:21,240 Speaker 1: very very unique situation that way. Sure, after a few 421 00:24:21,280 --> 00:24:24,400 Speaker 1: months then it became apparent who knows what they're doing, 422 00:24:24,640 --> 00:24:28,320 Speaker 1: who can adjust to it. But that initial shock to 423 00:24:28,440 --> 00:24:31,880 Speaker 1: the company, or that initial boost to the company had 424 00:24:32,119 --> 00:24:35,760 Speaker 1: very very little to do with the genius or the 425 00:24:35,840 --> 00:24:39,240 Speaker 1: lack of genius of anyone associated with that particular investment. 426 00:24:40,440 --> 00:24:44,760 Speaker 1: Are your investors aware of that or or understanding of that? 427 00:24:45,000 --> 00:24:50,920 Speaker 1: Because I can imagine certain people just demanding performance regardless 428 00:24:50,960 --> 00:24:56,280 Speaker 1: and markets don't work that way. How empathetic and understanding 429 00:24:56,480 --> 00:25:01,160 Speaker 1: has the private equity investor class b into what's clearly 430 00:25:01,320 --> 00:25:06,960 Speaker 1: an exogeneous shock UM? I would say pretty good. I 431 00:25:06,960 --> 00:25:09,240 Speaker 1: would say pretty good. I think there's still the demand 432 00:25:09,280 --> 00:25:13,120 Speaker 1: for performance, UM, and so that doesn't go away. I don't. 433 00:25:13,160 --> 00:25:14,880 Speaker 1: I don't think you get a I think you get 434 00:25:14,880 --> 00:25:17,040 Speaker 1: a free pass to say, well, I guess what, I 435 00:25:17,080 --> 00:25:20,560 Speaker 1: just invested in all restaurants. Um, so you don't get that, 436 00:25:21,280 --> 00:25:24,520 Speaker 1: but I do think again, conditioned by O eight O 437 00:25:24,680 --> 00:25:30,000 Speaker 1: nine investors, I was surprised that in March we weren't 438 00:25:30,000 --> 00:25:32,520 Speaker 1: getting a lot of calls the way we got an 439 00:25:32,520 --> 00:25:34,800 Speaker 1: O eight O nine of people really saying get me 440 00:25:34,840 --> 00:25:37,240 Speaker 1: out of my investments, or you've got to do something, 441 00:25:37,440 --> 00:25:39,560 Speaker 1: or oh my gosh, I don't want to be anywhere 442 00:25:39,560 --> 00:25:44,000 Speaker 1: near I liquid assets. Instead people said, I get the drill, 443 00:25:44,040 --> 00:25:47,920 Speaker 1: I understand what happens. Um. I actually would almost rather 444 00:25:47,960 --> 00:25:51,000 Speaker 1: be in liquids than in public right now. So I'm 445 00:25:51,000 --> 00:25:53,800 Speaker 1: not panicking. And I think that that again was more 446 00:25:53,920 --> 00:25:57,560 Speaker 1: conditioning from from the DO nine experience. Um, And that's 447 00:25:57,560 --> 00:26:01,360 Speaker 1: how people have reacted. They've they've taken it in stride 448 00:26:01,680 --> 00:26:04,840 Speaker 1: and again and not something that you would have expected 449 00:26:05,040 --> 00:26:06,560 Speaker 1: that if you had talked to me in April, I 450 00:26:06,600 --> 00:26:09,720 Speaker 1: would not have thought that that's how people would have 451 00:26:09,720 --> 00:26:13,160 Speaker 1: reacted on the investment side, on the private markets. But 452 00:26:13,400 --> 00:26:17,400 Speaker 1: that's been the experience really really interesting. Are there any 453 00:26:17,440 --> 00:26:21,639 Speaker 1: particular areas in the economy that, because of the pandemic, 454 00:26:21,720 --> 00:26:25,960 Speaker 1: because of the lockdown, have created some opportunities. I mean, 455 00:26:26,040 --> 00:26:29,080 Speaker 1: I understand no one wants to put money into restaurant 456 00:26:29,200 --> 00:26:35,000 Speaker 1: chains or or hotels or live entertainment venues, but anything 457 00:26:35,600 --> 00:26:39,200 Speaker 1: that has popped up because of this that suddenly has 458 00:26:39,240 --> 00:26:43,919 Speaker 1: become more interesting. Well, here here's the funny part. I 459 00:26:43,960 --> 00:26:46,840 Speaker 1: think you mentioned three industries where I think people are looking. 460 00:26:46,880 --> 00:26:48,480 Speaker 1: So I think one of the things people have to 461 00:26:48,520 --> 00:26:52,080 Speaker 1: make a decision about today is are they going to 462 00:26:52,119 --> 00:26:54,199 Speaker 1: be value or growth investors? And I know in the 463 00:26:54,200 --> 00:26:57,080 Speaker 1: public markets that's the sort of common refrain, but in 464 00:26:57,119 --> 00:27:00,480 Speaker 1: the private markets that has not been the normal refrain. 465 00:27:01,400 --> 00:27:05,920 Speaker 1: We really never thought of the world as growth versus value. 466 00:27:06,680 --> 00:27:09,720 Speaker 1: But as investors, I think we have two choices today, 467 00:27:09,840 --> 00:27:12,560 Speaker 1: and you can choose to be agnostic and just you know, 468 00:27:13,160 --> 00:27:15,480 Speaker 1: do a little bit of everything. But are you going 469 00:27:15,520 --> 00:27:18,640 Speaker 1: to invest in the growth areas the areas that right 470 00:27:18,680 --> 00:27:21,560 Speaker 1: now are selling multiples that they were pre pandemic because 471 00:27:21,560 --> 00:27:24,560 Speaker 1: these companies have done great, whether they're technology companies, whether 472 00:27:24,600 --> 00:27:28,400 Speaker 1: there's some there's some home improvement companies that have done 473 00:27:28,400 --> 00:27:33,080 Speaker 1: great during this pandemic. Their growth companies, they've grown and 474 00:27:33,200 --> 00:27:37,040 Speaker 1: you believe they'll continue to grow because people this pandemic 475 00:27:37,040 --> 00:27:40,160 Speaker 1: will go on some time longer and or people's behavior 476 00:27:40,359 --> 00:27:42,719 Speaker 1: will have changed and they'll be using these sorts of 477 00:27:42,760 --> 00:27:45,680 Speaker 1: services and companies longer. Or are you going to pay 478 00:27:45,760 --> 00:27:53,440 Speaker 1: cheaper prices for assets in those very industries you described restaurants, hotels, um, 479 00:27:53,520 --> 00:27:56,920 Speaker 1: And you're going to make a decision that those industries 480 00:27:56,960 --> 00:28:00,760 Speaker 1: are coming back in X time frame in X way 481 00:28:00,880 --> 00:28:03,359 Speaker 1: like they'll grow, you know, they'll be equal to what 482 00:28:03,400 --> 00:28:05,800 Speaker 1: they were before, they'll be where you pick your number. 483 00:28:06,400 --> 00:28:09,480 Speaker 1: I think that's where investors right now, where we're all 484 00:28:09,560 --> 00:28:12,520 Speaker 1: sort of trying to figure out where are we going 485 00:28:12,560 --> 00:28:15,560 Speaker 1: to lean, how are we going to invest, and what 486 00:28:15,600 --> 00:28:18,960 Speaker 1: are we doing because the cheap prices are in those 487 00:28:19,000 --> 00:28:21,480 Speaker 1: assets you describe that are in industries that are hit. 488 00:28:21,720 --> 00:28:24,080 Speaker 1: But do you believe they'll ever come back? They will, 489 00:28:25,040 --> 00:28:28,560 Speaker 1: I'm sure they will, But when what's the right capital 490 00:28:28,600 --> 00:28:33,119 Speaker 1: structure for these companies? Um? And what's the right price today? 491 00:28:34,400 --> 00:28:38,400 Speaker 1: So so those value sectors you mentioned, the immediate question 492 00:28:38,480 --> 00:28:42,520 Speaker 1: that pops into mind for private equity investing is is 493 00:28:42,560 --> 00:28:47,920 Speaker 1: this an equity investment or is this on the credit side. Yep, 494 00:28:48,360 --> 00:28:51,080 Speaker 1: that's both people are looking at it. That's exactly right 495 00:28:51,080 --> 00:28:54,080 Speaker 1: there looking at it both ways. Where do I want 496 00:28:54,080 --> 00:28:58,120 Speaker 1: to put what's my risk return profile around this um 497 00:28:58,160 --> 00:29:00,720 Speaker 1: and you know what does the company want? Obviously I'm 498 00:29:00,720 --> 00:29:03,320 Speaker 1: gonna take a lower number if I'm a lower return 499 00:29:03,400 --> 00:29:05,200 Speaker 1: number if I'm doing credit, but I'm going to have 500 00:29:05,400 --> 00:29:09,600 Speaker 1: more security around it. So I think that's those are 501 00:29:09,640 --> 00:29:11,680 Speaker 1: the areas that people are really big. But even on 502 00:29:11,720 --> 00:29:15,040 Speaker 1: the credit side, So maybe I want to put my 503 00:29:15,120 --> 00:29:17,920 Speaker 1: money with a growth company because it's gonna be safer, 504 00:29:18,000 --> 00:29:19,960 Speaker 1: it's going to grow. I don't have to worry about 505 00:29:19,960 --> 00:29:22,000 Speaker 1: whether you know, this pandemic is going to go on 506 00:29:22,000 --> 00:29:24,680 Speaker 1: a year or more and my value company will be 507 00:29:24,760 --> 00:29:27,360 Speaker 1: hit longer than I thought. It's a it's a very 508 00:29:27,480 --> 00:29:29,800 Speaker 1: very interesting time to invest. People have to make some 509 00:29:29,960 --> 00:29:35,160 Speaker 1: real choices UM and I think unlike pre pandemic, where 510 00:29:35,800 --> 00:29:37,400 Speaker 1: you didn't have a choice, you either were in an 511 00:29:37,440 --> 00:29:40,400 Speaker 1: industry that was hit or you weren't. I think investment 512 00:29:40,400 --> 00:29:43,320 Speaker 1: return over the next two or three years will really 513 00:29:43,400 --> 00:29:47,600 Speaker 1: be determined by decisions you make today around whether you're 514 00:29:47,640 --> 00:29:50,320 Speaker 1: going to look for growth, whether you're gonna look for value, 515 00:29:50,600 --> 00:29:52,880 Speaker 1: whether you're going into credit, whether you're going into equity. 516 00:29:53,120 --> 00:29:56,880 Speaker 1: I think people will be making portfolio and investment decisions 517 00:29:56,920 --> 00:29:59,920 Speaker 1: that will really matter. UM when we look back, when 518 00:30:00,040 --> 00:30:02,520 Speaker 1: when I have this interview in a couple of years, 519 00:30:02,960 --> 00:30:05,680 Speaker 1: we will look back and go, oh, my gosh, what 520 00:30:05,720 --> 00:30:07,680 Speaker 1: was I thinking. I really thought growth was going to 521 00:30:07,720 --> 00:30:10,200 Speaker 1: continue like this. Let's talk a little bit about what 522 00:30:10,360 --> 00:30:14,600 Speaker 1: the future of private equity investments look like. But but 523 00:30:14,720 --> 00:30:16,960 Speaker 1: I have to start with the question of I p 524 00:30:17,080 --> 00:30:20,160 Speaker 1: O S. I p O markets have been on fire 525 00:30:20,320 --> 00:30:24,360 Speaker 1: this year. Does that create a tail wind for private equity? 526 00:30:25,200 --> 00:30:30,800 Speaker 1: Probably probably everything. Everything is uh, you know, sort of 527 00:30:30,800 --> 00:30:34,560 Speaker 1: the the good side and bad side. The good side 528 00:30:35,240 --> 00:30:37,400 Speaker 1: is it creates exits. And at the end of the day, 529 00:30:37,920 --> 00:30:42,000 Speaker 1: you know, investors want exits. They they want some monetization 530 00:30:42,160 --> 00:30:44,280 Speaker 1: of their investments, and so the I p O market 531 00:30:44,320 --> 00:30:48,640 Speaker 1: provides that. It also provides another path. It's not it's 532 00:30:48,640 --> 00:30:51,400 Speaker 1: not the only path it gives. It gives a company. 533 00:30:51,400 --> 00:30:52,760 Speaker 1: If I'm going to say I'm an I p O 534 00:30:52,920 --> 00:30:57,720 Speaker 1: that almost automatically attracts strategic investors UM, and so I'm 535 00:30:57,800 --> 00:31:01,920 Speaker 1: creating an environment where they investment will probably do petter 536 00:31:02,080 --> 00:31:05,680 Speaker 1: because there's there's more interesting ways to to exit, and 537 00:31:05,760 --> 00:31:09,160 Speaker 1: it creates a competitive environment around that exit price. UM. 538 00:31:09,920 --> 00:31:13,400 Speaker 1: The bad side of it is twofold. One is that 539 00:31:13,960 --> 00:31:17,560 Speaker 1: it creates on the buy side, it creates a competitive 540 00:31:17,560 --> 00:31:19,720 Speaker 1: market with a higher price generally I p O s 541 00:31:19,800 --> 00:31:22,400 Speaker 1: or higher priced And so if I want to buy 542 00:31:22,520 --> 00:31:25,440 Speaker 1: company X, they say, well, you can buy me, but 543 00:31:25,480 --> 00:31:27,040 Speaker 1: you're gonna have to pay twice as much as you 544 00:31:27,120 --> 00:31:29,160 Speaker 1: just said because I'm an I p O. So it 545 00:31:29,920 --> 00:31:34,479 Speaker 1: has that sort of effect on my ability to invest 546 00:31:34,960 --> 00:31:37,840 Speaker 1: in some companies. The other thing it does is it 547 00:31:37,920 --> 00:31:41,479 Speaker 1: creates some pressure, interestingly for private equity of keeping up 548 00:31:41,600 --> 00:31:45,960 Speaker 1: performance post IPO. You saw that part of the reason 549 00:31:46,200 --> 00:31:48,920 Speaker 1: some people were skeptical about private equity, and you know 550 00:31:49,160 --> 00:31:51,440 Speaker 1: eight was because the companies that they took public in 551 00:31:51,640 --> 00:31:54,560 Speaker 1: six oh seven didn't perform as well as people wanted, 552 00:31:54,600 --> 00:31:56,600 Speaker 1: and so it took a period of time for private 553 00:31:56,600 --> 00:31:59,840 Speaker 1: equity to regain its credibility in the public markets. Um. 554 00:32:00,080 --> 00:32:03,120 Speaker 1: And so that as just another layer of pressure, if 555 00:32:03,160 --> 00:32:06,240 Speaker 1: you will, in terms of private equity and the scrutiny 556 00:32:06,320 --> 00:32:08,920 Speaker 1: on its performance, because it's not just performance as a 557 00:32:08,960 --> 00:32:12,560 Speaker 1: private company now, it's performance at a public company. So 558 00:32:12,920 --> 00:32:15,440 Speaker 1: so let's delve into that a little bit. If you're 559 00:32:15,440 --> 00:32:18,720 Speaker 1: evaluating a private investment company to determine whether or not 560 00:32:18,840 --> 00:32:21,840 Speaker 1: you want to put your own personal money in there, 561 00:32:22,440 --> 00:32:24,400 Speaker 1: what would you be looking for? What, what sort of 562 00:32:24,560 --> 00:32:29,280 Speaker 1: questions would you ask management? I I always think that 563 00:32:29,840 --> 00:32:33,640 Speaker 1: one of the most underrated things in investing is the 564 00:32:33,800 --> 00:32:37,360 Speaker 1: quality of the management team. UM. I think that is 565 00:32:37,720 --> 00:32:41,760 Speaker 1: that is where, yes, the financials are important, and they 566 00:32:41,840 --> 00:32:46,400 Speaker 1: always are. But does it relatively straightforward to to analyze it. 567 00:32:46,560 --> 00:32:49,360 Speaker 1: It doesn't. It doesn't take a rocket scientist to figure out, 568 00:32:49,520 --> 00:32:52,880 Speaker 1: you know what, what kind of interested exposure, what kind 569 00:32:52,880 --> 00:32:55,360 Speaker 1: of interest cost a company compare. You've got to make 570 00:32:55,440 --> 00:32:59,280 Speaker 1: some judgment about whether that industry is right. But at 571 00:32:59,320 --> 00:33:00,880 Speaker 1: the end of the day, I mean we've always said 572 00:33:00,920 --> 00:33:03,880 Speaker 1: this that if if you've got the right management team, 573 00:33:03,920 --> 00:33:06,560 Speaker 1: the right culture around that management team, you can have 574 00:33:06,640 --> 00:33:09,840 Speaker 1: the wrong business strategy and you'll probably be okay. But 575 00:33:09,960 --> 00:33:12,200 Speaker 1: the opposite is not true. You can have a great 576 00:33:12,240 --> 00:33:14,800 Speaker 1: business strategy, but if you've got a lousy management team, 577 00:33:14,800 --> 00:33:17,600 Speaker 1: a lousy culture at that company, you're probably not going 578 00:33:17,640 --> 00:33:20,000 Speaker 1: to do well. And so I think the first question 579 00:33:20,160 --> 00:33:22,880 Speaker 1: is around, you know, how does this management team work, 580 00:33:23,000 --> 00:33:26,640 Speaker 1: what are their motivations, how do they think about the future, 581 00:33:26,800 --> 00:33:29,239 Speaker 1: what are they looking to achieve? I think those are 582 00:33:29,280 --> 00:33:31,760 Speaker 1: the things that that you end up spending a lot 583 00:33:31,840 --> 00:33:35,440 Speaker 1: of time around um and that are not really quantifiable. 584 00:33:35,600 --> 00:33:38,520 Speaker 1: There's a whole raft of quantifiable things you can look at, 585 00:33:39,000 --> 00:33:42,840 Speaker 1: but there's an enormous qualitative element um And I would 586 00:33:42,880 --> 00:33:44,600 Speaker 1: say if you look at some of the best investors, 587 00:33:45,760 --> 00:33:47,440 Speaker 1: one of the things that's always struck me is how 588 00:33:47,520 --> 00:33:50,680 Speaker 1: some people are just really good at judging human talent 589 00:33:51,160 --> 00:33:53,360 Speaker 1: um and they do a great job of picking the 590 00:33:53,480 --> 00:33:57,320 Speaker 1: right management teams and picking the right people to go 591 00:33:57,520 --> 00:34:01,800 Speaker 1: into management teams. So I think that's an under appreciated 592 00:34:02,400 --> 00:34:07,640 Speaker 1: art of investing. Quite quite interesting. So there has been 593 00:34:08,080 --> 00:34:14,960 Speaker 1: increasing chatter about private equity potentially finding its way into 594 00:34:15,920 --> 00:34:22,240 Speaker 1: uh smaller than accredited investor portfolios, including four O one case. 595 00:34:22,719 --> 00:34:27,920 Speaker 1: What are your thoughts of private equity becoming I don't 596 00:34:27,960 --> 00:34:30,239 Speaker 1: know even know if normalized is the right word, but 597 00:34:30,800 --> 00:34:37,920 Speaker 1: sort of becoming just another asset class option. Yeah, I'm 598 00:34:38,000 --> 00:34:42,480 Speaker 1: probably in the skeptical camp on that one. Um. I 599 00:34:42,560 --> 00:34:44,719 Speaker 1: think there are there are on a good side, I 600 00:34:44,800 --> 00:34:48,960 Speaker 1: think it is Look, it's a it's a it's a 601 00:34:49,040 --> 00:34:52,480 Speaker 1: good returning asset class um and so people should have 602 00:34:52,640 --> 00:34:57,040 Speaker 1: access to it. But it's also an asset class that 603 00:34:57,160 --> 00:35:00,560 Speaker 1: doesn't have the kind of transparency that the public UH 604 00:35:00,760 --> 00:35:03,279 Speaker 1: markets have. It's an ethnic classes, as you talked about. 605 00:35:03,320 --> 00:35:05,640 Speaker 1: The r R has a different way of reporting, a 606 00:35:05,719 --> 00:35:08,440 Speaker 1: different way of money flows coming in and out compared 607 00:35:08,520 --> 00:35:11,840 Speaker 1: to public equity, and so I think we all have 608 00:35:12,040 --> 00:35:16,080 Speaker 1: to be really careful about assuming that this should be 609 00:35:16,200 --> 00:35:20,279 Speaker 1: a great four oh one K or retail investment option. UM. 610 00:35:20,400 --> 00:35:22,880 Speaker 1: To me, it's a little bit like what happened with 611 00:35:23,080 --> 00:35:26,160 Speaker 1: real estate when they created reads. I think that I 612 00:35:26,239 --> 00:35:30,880 Speaker 1: think that it will take some some legals, changes in 613 00:35:31,320 --> 00:35:35,600 Speaker 1: regulatory structure and law in order to create structures that 614 00:35:35,840 --> 00:35:40,840 Speaker 1: make private equity UM a good investment choice for the 615 00:35:40,960 --> 00:35:44,320 Speaker 1: retail investor. And I'm not sure that having the retail 616 00:35:44,360 --> 00:35:47,440 Speaker 1: investor go into some of these structures is really the 617 00:35:47,600 --> 00:35:49,360 Speaker 1: right way to go back. I worry about it. I 618 00:35:49,400 --> 00:35:53,640 Speaker 1: worry about what happens in a downturn when investors go, wait, 619 00:35:53,960 --> 00:35:56,640 Speaker 1: I didn't you didn't tell me that this was going 620 00:35:56,719 --> 00:36:01,200 Speaker 1: to happen UM. So I would say that, yes, it 621 00:36:01,400 --> 00:36:03,919 Speaker 1: is an asset class that will be an increasing part 622 00:36:03,960 --> 00:36:08,200 Speaker 1: of high net worth channels um UM. But I am 623 00:36:08,280 --> 00:36:12,480 Speaker 1: skeptical that existing structures are really going to be a 624 00:36:12,640 --> 00:36:15,920 Speaker 1: way that retail investors will be happy with their experience 625 00:36:16,080 --> 00:36:20,439 Speaker 1: with private equity. So you mentioned one of the obstacles 626 00:36:20,800 --> 00:36:24,719 Speaker 1: is the lack of transparency. What could the industry do 627 00:36:25,480 --> 00:36:31,799 Speaker 1: if it wanted to become more transparent, Well, I mean, 628 00:36:31,840 --> 00:36:34,240 Speaker 1: the thing it would have to do is provide essentially 629 00:36:34,320 --> 00:36:36,840 Speaker 1: daily pricing. The thing would have to do is provide 630 00:36:37,280 --> 00:36:42,520 Speaker 1: much more transparency around um operating performance at companies. And 631 00:36:42,880 --> 00:36:45,160 Speaker 1: and you know, there, there, you're in that struggle with 632 00:36:45,920 --> 00:36:48,680 Speaker 1: the whole purpose of private equity. Is that is that 633 00:36:48,880 --> 00:36:51,960 Speaker 1: you're not doing that? And so you know, are you 634 00:36:52,280 --> 00:36:55,640 Speaker 1: twisting the very one of the very things that makes 635 00:36:55,719 --> 00:37:01,080 Speaker 1: private equity interesting in order to to allow other investors 636 00:37:01,239 --> 00:37:03,680 Speaker 1: or to give access to other investors to come in. 637 00:37:04,600 --> 00:37:06,680 Speaker 1: That's that's a tough one. I think it is. It 638 00:37:06,880 --> 00:37:12,240 Speaker 1: is the fundamental daily pricing that is just a completely 639 00:37:12,280 --> 00:37:15,200 Speaker 1: different thing from what how private equity operates. That makes 640 00:37:15,239 --> 00:37:17,600 Speaker 1: it tough to say, Okay, we're going to be exactly 641 00:37:17,680 --> 00:37:21,359 Speaker 1: like our public equity brethren and do it this way. 642 00:37:22,200 --> 00:37:24,160 Speaker 1: I don't I don't have a great answer other than 643 00:37:24,200 --> 00:37:26,640 Speaker 1: to say the reachs did it, but they did it 644 00:37:26,680 --> 00:37:30,200 Speaker 1: in a in a completely different structure. And had tax 645 00:37:30,320 --> 00:37:34,160 Speaker 1: changes that allowed them essentially to create a basket of 646 00:37:34,320 --> 00:37:38,840 Speaker 1: companies UM and that worked, and I think if you 647 00:37:38,920 --> 00:37:41,200 Speaker 1: do it that way for private equity, I think that 648 00:37:41,280 --> 00:37:44,320 Speaker 1: would be an interesting way to go. Yeah. The the 649 00:37:44,520 --> 00:37:46,840 Speaker 1: nice thing about reets is is it sort of solves 650 00:37:46,920 --> 00:37:50,120 Speaker 1: the K one tax issues. If you're going to have 651 00:37:50,200 --> 00:37:54,960 Speaker 1: a hundred separate private holdings, UM, so somewhere between an 652 00:37:55,000 --> 00:37:58,239 Speaker 1: E t F and a RED might be one situation. 653 00:37:59,160 --> 00:38:02,520 Speaker 1: I know there's a lot of reporting and custodial issues, 654 00:38:03,080 --> 00:38:05,880 Speaker 1: but how on earth could you possibly get a daily 655 00:38:06,000 --> 00:38:11,680 Speaker 1: price from a relatively small private company that that becomes 656 00:38:11,760 --> 00:38:16,520 Speaker 1: all but impossible. I you could barely get annual prices. 657 00:38:16,600 --> 00:38:19,160 Speaker 1: Really quarterly prices, what are they? How much does a 658 00:38:19,239 --> 00:38:23,120 Speaker 1: private business really change month to month, quarter to quarter? 659 00:38:25,080 --> 00:38:27,799 Speaker 1: It doesn't. I mean, I think some of the things 660 00:38:27,840 --> 00:38:30,359 Speaker 1: that you've seen it people talk about is essentially an 661 00:38:30,400 --> 00:38:38,280 Speaker 1: algorithm that mimics. So private company is in it makes drywall, 662 00:38:38,600 --> 00:38:41,080 Speaker 1: and so you get a basket of public companies that 663 00:38:41,160 --> 00:38:44,040 Speaker 1: are in that industry, and then you apply it's daily 664 00:38:44,160 --> 00:38:47,000 Speaker 1: changes to that private companies changes. I mean, it's a synthetic. 665 00:38:47,560 --> 00:38:50,600 Speaker 1: You're not really pricing because at the end pricing is 666 00:38:51,120 --> 00:38:54,320 Speaker 1: a matter of of a buyer and a seller, and 667 00:38:54,480 --> 00:38:56,800 Speaker 1: you don't have that in the in the private context, 668 00:38:57,040 --> 00:39:01,120 Speaker 1: so anything you do will be synthetic. Quite quite interesting. 669 00:39:01,560 --> 00:39:03,399 Speaker 1: Let me switch gears on you and talk a little 670 00:39:03,400 --> 00:39:07,680 Speaker 1: bit about E s G environmental, social and governance issues. 671 00:39:08,360 --> 00:39:12,560 Speaker 1: Last month Hamilton Lane created a position to formally lead 672 00:39:12,640 --> 00:39:16,200 Speaker 1: your efforts in that space. How is E s G 673 00:39:16,640 --> 00:39:20,640 Speaker 1: and impact investing playing out in the private markets and 674 00:39:20,920 --> 00:39:25,440 Speaker 1: are you seeing any sort of demand for institutional investors 675 00:39:25,520 --> 00:39:31,520 Speaker 1: for this? I would say, if you, if you project 676 00:39:31,640 --> 00:39:35,240 Speaker 1: out a few years, what will be the biggest changes 677 00:39:35,400 --> 00:39:37,960 Speaker 1: in the private markets. I think E s G will 678 00:39:38,000 --> 00:39:40,839 Speaker 1: be up there. I don't know it's number one, number three, 679 00:39:40,920 --> 00:39:44,879 Speaker 1: but it'll be up there. Um. And it's been an 680 00:39:44,920 --> 00:39:47,960 Speaker 1: important factor for some time, but I think interestingly the 681 00:39:48,360 --> 00:39:52,080 Speaker 1: pandemic will make that even more of a focus. Whether 682 00:39:52,160 --> 00:39:54,920 Speaker 1: it's because people go, the reason the pandemic happened is 683 00:39:54,960 --> 00:39:58,799 Speaker 1: because of human encroachment on nature. Whether it's because people 684 00:39:58,840 --> 00:40:01,719 Speaker 1: go during the pandemic, we've seen that, you know, we 685 00:40:01,960 --> 00:40:06,360 Speaker 1: we can reduce our reliance on certain things. There's just 686 00:40:06,840 --> 00:40:08,840 Speaker 1: it is. It is going to be a part of 687 00:40:09,040 --> 00:40:12,840 Speaker 1: everyday conversation, and I'll divide it into two parts. The 688 00:40:13,000 --> 00:40:16,720 Speaker 1: one part is have we seen more interest in impact 689 00:40:16,800 --> 00:40:19,839 Speaker 1: investing or E s G focus investing. I would say 690 00:40:19,920 --> 00:40:25,520 Speaker 1: there's a little more interest in specific investments targeted in 691 00:40:25,600 --> 00:40:29,239 Speaker 1: those areas, but that's sort of been a generally increasing part. 692 00:40:29,960 --> 00:40:35,200 Speaker 1: Where there is a really increasing focus is on E 693 00:40:35,480 --> 00:40:38,759 Speaker 1: s G as a criteria on every investment you make. 694 00:40:38,880 --> 00:40:41,319 Speaker 1: So it's not to say I am going to make 695 00:40:41,640 --> 00:40:44,840 Speaker 1: an impact investment because it will have X, y z 696 00:40:44,960 --> 00:40:48,840 Speaker 1: impact on the environment. Every investment will be analyzed. And 697 00:40:48,960 --> 00:40:53,279 Speaker 1: we're getting more inquiries around this than than we've ever had. 698 00:40:54,120 --> 00:40:57,880 Speaker 1: What is what is that investments impact on the environment, 699 00:40:58,200 --> 00:41:01,480 Speaker 1: How is that impact, how that investment um what is 700 00:41:01,520 --> 00:41:04,399 Speaker 1: the governance around it? So I believe that just as 701 00:41:04,560 --> 00:41:07,920 Speaker 1: we all have become accustomed to looking at an investment 702 00:41:07,960 --> 00:41:11,279 Speaker 1: and saying, what is the projected EBA DAT in year three, 703 00:41:11,400 --> 00:41:13,759 Speaker 1: you know, whatever it is, I think we will have 704 00:41:14,320 --> 00:41:17,959 Speaker 1: every investment report, every investment analysis look at a deal 705 00:41:18,520 --> 00:41:22,440 Speaker 1: under a set of E s T criteria and and 706 00:41:22,600 --> 00:41:24,759 Speaker 1: we will be we will be judged by that as 707 00:41:24,840 --> 00:41:29,680 Speaker 1: part of our investment performance. I've heard from a number 708 00:41:29,840 --> 00:41:33,320 Speaker 1: of different analysts who look at the s G not 709 00:41:33,600 --> 00:41:38,160 Speaker 1: as a sort of progressive versus conservative political battle, but 710 00:41:38,400 --> 00:41:41,600 Speaker 1: rather in context of, hey, this is a methodology of 711 00:41:41,680 --> 00:41:45,520 Speaker 1: doing certain types of risk screening. UM. You don't end 712 00:41:45,640 --> 00:41:49,840 Speaker 1: up with the sort of me too movement that in 713 00:41:50,000 --> 00:41:54,960 Speaker 1: companies where there's diverse boards and promotion for women and 714 00:41:55,040 --> 00:41:57,400 Speaker 1: people of color, and you don't end up with the 715 00:41:57,480 --> 00:42:00,800 Speaker 1: sort of UM disaster we saw in Gulf of Mexico 716 00:42:00,840 --> 00:42:04,879 Speaker 1: a few years ago, UM with with a giant oil 717 00:42:04,960 --> 00:42:08,360 Speaker 1: spill when you're screening for e s G. So the 718 00:42:08,400 --> 00:42:13,520 Speaker 1: bigger question is is this merely a risk screening tool? 719 00:42:13,640 --> 00:42:15,719 Speaker 1: What what is the impact of this when you're looking 720 00:42:15,760 --> 00:42:20,560 Speaker 1: at private companies. Well, it's certainly a risk screening tool, 721 00:42:20,680 --> 00:42:24,360 Speaker 1: but it's also a return enhancing tools. So, for example, 722 00:42:25,080 --> 00:42:30,680 Speaker 1: UM will take a consumer oriented company. Will consumers respond 723 00:42:30,920 --> 00:42:34,400 Speaker 1: to a company that has a more diverse board, a 724 00:42:34,480 --> 00:42:38,480 Speaker 1: more diverse management team? Will consumers respond better to a 725 00:42:38,600 --> 00:42:43,680 Speaker 1: company that is making efforts to promote UM UH to 726 00:42:44,560 --> 00:42:48,400 Speaker 1: retard climate change. I think it is becoming, yes, certainly 727 00:42:48,440 --> 00:42:51,880 Speaker 1: a risk factor, but it is becoming a factor of 728 00:42:52,440 --> 00:42:56,080 Speaker 1: my business will do better or it won't get hurt 729 00:42:56,640 --> 00:42:59,279 Speaker 1: because I'm perceived as a company that is indifferent to 730 00:42:59,360 --> 00:43:04,360 Speaker 1: the environment or indifferent to social factors, or isn't governed properly. Um. So, 731 00:43:04,560 --> 00:43:06,480 Speaker 1: I think as we look at it, it is it 732 00:43:06,640 --> 00:43:09,960 Speaker 1: is both. It is both a defensive and offensive part 733 00:43:10,160 --> 00:43:16,879 Speaker 1: of generating return and and reducing risk and to stay, 734 00:43:17,040 --> 00:43:21,080 Speaker 1: I don't think this is a sad we've crossed whatever 735 00:43:21,200 --> 00:43:23,520 Speaker 1: line you crossed when you say, now this is part 736 00:43:23,560 --> 00:43:29,400 Speaker 1: of mainstream investment analysis. Huh that that's quite quite interesting. 737 00:43:30,120 --> 00:43:34,200 Speaker 1: I wanted to address, um, one of the issues you 738 00:43:34,320 --> 00:43:37,920 Speaker 1: raised in terms of government, in terms of governance and 739 00:43:38,120 --> 00:43:43,239 Speaker 1: diversity on boards. Hamilton Lane was recently named International LP 740 00:43:43,400 --> 00:43:47,520 Speaker 1: of the Year by the Private Equity Women's Investor Network. 741 00:43:48,480 --> 00:43:53,040 Speaker 1: Our industry is very underrepresented with women, with people of color. 742 00:43:53,719 --> 00:44:02,279 Speaker 1: What does that honorific mean about your approach to diversity. Well, 743 00:44:02,360 --> 00:44:05,239 Speaker 1: I feel like, you know, pat ourselves on the back. 744 00:44:05,400 --> 00:44:08,280 Speaker 1: I feel like we have always been very, very conscious 745 00:44:08,560 --> 00:44:11,880 Speaker 1: of the importance of diversity for for us as a 746 00:44:12,000 --> 00:44:14,960 Speaker 1: firm in terms of being a better firm. It did 747 00:44:15,080 --> 00:44:17,920 Speaker 1: it just it just matters to us, and so I 748 00:44:18,040 --> 00:44:20,560 Speaker 1: feel like we've always been at the forefront of that 749 00:44:20,920 --> 00:44:23,400 Speaker 1: in terms of our industry. But you're right, our industry 750 00:44:23,600 --> 00:44:28,400 Speaker 1: is not great, both financial industry in general and private 751 00:44:28,440 --> 00:44:33,680 Speaker 1: equity specifically UM and so I'm I'm very proud of 752 00:44:33,800 --> 00:44:36,680 Speaker 1: that honor. I think it it says that people recognize 753 00:44:36,800 --> 00:44:40,000 Speaker 1: that we are we have done a lot in terms 754 00:44:40,040 --> 00:44:43,920 Speaker 1: of diversity, but we need to do more. I mean, 755 00:44:43,960 --> 00:44:46,839 Speaker 1: it's as simple as that. It is still we need 756 00:44:46,920 --> 00:44:49,359 Speaker 1: to do more both for Hamilton Wayne and we need 757 00:44:49,400 --> 00:44:52,040 Speaker 1: to do more in terms of making the industry more diverse. 758 00:44:52,120 --> 00:44:56,200 Speaker 1: I mean, I think the good news about being our 759 00:44:56,320 --> 00:44:59,080 Speaker 1: size and having our place in the industry is that 760 00:45:00,080 --> 00:45:03,800 Speaker 1: we we have an ability um to to frame the 761 00:45:03,920 --> 00:45:09,200 Speaker 1: conversation and make sure that where we're investing, diversity is 762 00:45:09,280 --> 00:45:12,000 Speaker 1: one of the goals that are investee companies, that our 763 00:45:12,080 --> 00:45:16,040 Speaker 1: general partners understand is important to us and to our clients. So, 764 00:45:16,880 --> 00:45:19,880 Speaker 1: you know, it's it's a process. We're very happy with 765 00:45:19,960 --> 00:45:23,120 Speaker 1: where we are, and you just gotta keep you gotta 766 00:45:23,200 --> 00:45:26,960 Speaker 1: keep moving. So I know you represent Hamilton Lane on 767 00:45:27,000 --> 00:45:30,160 Speaker 1: a couple of boards, both boards of advisors and boards 768 00:45:30,200 --> 00:45:34,000 Speaker 1: of directors. What sort of h what does that work like? 769 00:45:34,200 --> 00:45:37,120 Speaker 1: Do you enjoy it or do you feel like you 770 00:45:37,280 --> 00:45:40,680 Speaker 1: really have input into some of the companies you invest in? 771 00:45:41,280 --> 00:45:46,839 Speaker 1: Or are these really more just advisory positions. Yeah, I'm 772 00:45:46,880 --> 00:45:51,279 Speaker 1: more on on the advisory side, so I'm not I'm 773 00:45:51,320 --> 00:45:53,480 Speaker 1: not a huge fan of advisory boards, to tell you 774 00:45:53,560 --> 00:45:56,920 Speaker 1: the truth. People always laugh at me about about that. Um, 775 00:45:57,520 --> 00:46:01,200 Speaker 1: they're fine and they're good in terms of particularly when 776 00:46:01,239 --> 00:46:03,719 Speaker 1: it gets to talking about conflict of interest issues. I 777 00:46:03,800 --> 00:46:06,200 Speaker 1: think they're important that you have a board to do that. 778 00:46:06,640 --> 00:46:10,080 Speaker 1: But in terms of getting information, in terms of providing feedback, 779 00:46:10,239 --> 00:46:13,040 Speaker 1: in terms of the kinds of things that really matter 780 00:46:13,840 --> 00:46:19,400 Speaker 1: in shape how how groups invest, I think the smaller 781 00:46:19,480 --> 00:46:22,040 Speaker 1: meetings are still more important. I don't know that that 782 00:46:22,520 --> 00:46:25,840 Speaker 1: advisory boards really accomplished as much as you want them to. 783 00:46:26,480 --> 00:46:29,080 Speaker 1: As I said, I think that their ability to appine 784 00:46:29,120 --> 00:46:32,120 Speaker 1: on conflicts is important, and the fact that they're there 785 00:46:32,440 --> 00:46:35,640 Speaker 1: and provide a way for the general partners to be 786 00:46:35,760 --> 00:46:39,279 Speaker 1: more transparent is important. But as a decision making body, 787 00:46:40,120 --> 00:46:43,759 Speaker 1: I'm not a huge huge believer in that. Alright, let 788 00:46:43,840 --> 00:46:47,560 Speaker 1: me throw a curveball at you. Tell us about the Hambletons. 789 00:46:52,280 --> 00:46:56,560 Speaker 1: So that is a curveball. Um, we have a house 790 00:46:56,640 --> 00:46:59,479 Speaker 1: band essentially, it's uh, I don't know. There are twelve 791 00:46:59,560 --> 00:47:04,440 Speaker 1: or thirteen of us, and we do well in the pandemic. 792 00:47:04,520 --> 00:47:07,719 Speaker 1: But we do a charity concert every year. Uh, and 793 00:47:08,400 --> 00:47:10,359 Speaker 1: it's fun. You know. We get six or seven hundred people, 794 00:47:10,400 --> 00:47:12,520 Speaker 1: We pick a charity that we want to give to 795 00:47:12,640 --> 00:47:15,480 Speaker 1: whom we give the proceeds. Uh, and it's it's a 796 00:47:15,520 --> 00:47:17,719 Speaker 1: good outlet. We have I don't know, four or five 797 00:47:17,760 --> 00:47:19,880 Speaker 1: singers and like every other band, they're the DeVos and 798 00:47:20,040 --> 00:47:22,480 Speaker 1: we do whatever they want us to do. I play 799 00:47:22,520 --> 00:47:25,719 Speaker 1: guitar poorly, but I play and it's it's fun. I 800 00:47:25,760 --> 00:47:28,479 Speaker 1: think people enjoy it during the pandemic. What we've done 801 00:47:28,640 --> 00:47:32,520 Speaker 1: is we've probably every month we do a song. You know, 802 00:47:32,680 --> 00:47:35,359 Speaker 1: we'll do it virtually and then someone puts it together 803 00:47:35,440 --> 00:47:37,240 Speaker 1: and then we send it out over a Slack channel. 804 00:47:37,680 --> 00:47:40,760 Speaker 1: And it's it's fun. People enjoy all different genres of music. 805 00:47:42,200 --> 00:47:44,360 Speaker 1: I can imagine that being fun when I when I 806 00:47:44,440 --> 00:47:46,719 Speaker 1: sort of happened across that in our research, I said, 807 00:47:47,400 --> 00:47:50,000 Speaker 1: I have to save that question because it does look 808 00:47:50,080 --> 00:47:53,640 Speaker 1: like fun. So music the big deal for us, you know. 809 00:47:53,719 --> 00:47:55,759 Speaker 1: So our conference rooms I don't know if you know this, 810 00:47:55,880 --> 00:47:58,840 Speaker 1: but our conference rooms are we don't have like the 811 00:47:58,920 --> 00:48:00,959 Speaker 1: Lincoln Room or the room or whatever, you know, whatever 812 00:48:01,000 --> 00:48:03,440 Speaker 1: people name things. We have on one floor we have 813 00:48:03,520 --> 00:48:06,759 Speaker 1: guitar makers Gibson, Sender, Martin, and on the other floor 814 00:48:06,880 --> 00:48:09,400 Speaker 1: we have guitar players. So we have the event haling Room, 815 00:48:09,520 --> 00:48:12,800 Speaker 1: Jimmy Page Room, Jimmy Hendricks Room. Just the music is 816 00:48:12,800 --> 00:48:14,680 Speaker 1: a big deal for the firm, and so it's always 817 00:48:14,719 --> 00:48:18,440 Speaker 1: been that way. That's quite interesting. UM So let me 818 00:48:18,560 --> 00:48:21,719 Speaker 1: jump to my favorite questions that we ask all our 819 00:48:21,800 --> 00:48:25,480 Speaker 1: guests and and let's see how you how you manage these. 820 00:48:25,719 --> 00:48:30,040 Speaker 1: UM tell us what you've been streaming under lockdown? What 821 00:48:30,160 --> 00:48:34,239 Speaker 1: are your favorite Netflix or or Amazon Prime shows? What 822 00:48:34,360 --> 00:48:37,920 Speaker 1: are you listening to? What are you keeping yourself entertained with? 823 00:48:40,320 --> 00:48:42,399 Speaker 1: So that I hate to say this, but I don't. 824 00:48:42,440 --> 00:48:45,960 Speaker 1: I don't listen to podcast. I hate I shouldn't say that, right, 825 00:48:46,560 --> 00:48:49,600 Speaker 1: I don't think anybody. Yeah, well, why don you get 826 00:48:49,640 --> 00:48:52,880 Speaker 1: to your favorite books? I'm gonna that's that's my third question. 827 00:48:53,000 --> 00:48:55,840 Speaker 1: But this question I am. I am a big stand 828 00:48:56,200 --> 00:49:00,360 Speaker 1: I'm a big fan of um of of ms streets 829 00:49:00,520 --> 00:49:05,520 Speaker 1: on on Amazon. I watched things like Shetland, Borderland River. 830 00:49:06,239 --> 00:49:12,360 Speaker 1: I love those kind of Scandinavian noir h mysteries. I 831 00:49:12,480 --> 00:49:15,279 Speaker 1: love them. I just watched these things Look at Night, 832 00:49:16,920 --> 00:49:20,520 Speaker 1: my My wife is similar, and I remember her watching 833 00:49:21,400 --> 00:49:25,200 Speaker 1: UM the Original Woman with a dragon tattoo in I 834 00:49:25,280 --> 00:49:28,680 Speaker 1: think it was Danish or or she the not the 835 00:49:28,880 --> 00:49:33,000 Speaker 1: Swedish person. The Swedish version, yeah right, and when when 836 00:49:33,200 --> 00:49:36,160 Speaker 1: the US version came out, she's like, Nope, no interests. 837 00:49:36,760 --> 00:49:40,160 Speaker 1: So those terrible. It was terrible. The Swedish version was compelling. 838 00:49:40,600 --> 00:49:42,279 Speaker 1: Tell her to watch River. I don't know if she's 839 00:49:42,280 --> 00:49:45,759 Speaker 1: seen it, but Rivers it's a one season show on 840 00:49:46,000 --> 00:49:48,600 Speaker 1: I think it was Amazon. I camera his Amazon Netflix. 841 00:49:49,520 --> 00:49:54,280 Speaker 1: Just phenomenal if you like those sort of odd mystery 842 00:49:54,680 --> 00:49:58,040 Speaker 1: short seasons. Have you ever seen The Room? I believe 843 00:49:58,120 --> 00:50:01,640 Speaker 1: that's on Amazon Prime. Also I have not. I have 844 00:50:01,760 --> 00:50:04,760 Speaker 1: to watch that one. The Room very interesting cast, really 845 00:50:04,960 --> 00:50:10,000 Speaker 1: sort of borderline sci fi supernatural, but intriguing and definitely 846 00:50:10,040 --> 00:50:14,400 Speaker 1: worth worth playing with. UM. So let me ask you 847 00:50:14,520 --> 00:50:18,760 Speaker 1: this question. Tell us about your mentors who helped shape 848 00:50:19,120 --> 00:50:25,560 Speaker 1: your career. UM. I would say, certainly, in the private 849 00:50:25,600 --> 00:50:27,720 Speaker 1: equity world, there have been a couple of general partners 850 00:50:27,800 --> 00:50:30,160 Speaker 1: who I have viewed as mentors, who I've turned to 851 00:50:30,440 --> 00:50:35,520 Speaker 1: for advice, who I've turned to for for um for help. 852 00:50:36,080 --> 00:50:39,680 Speaker 1: But I would say my main mentors, interestingly were teachers 853 00:50:39,760 --> 00:50:44,360 Speaker 1: I had um in college who I remained close to 854 00:50:44,600 --> 00:50:48,360 Speaker 1: over the years. Um. They they were an enormous influence 855 00:50:48,960 --> 00:50:51,480 Speaker 1: on my life. So I would say I've always said 856 00:50:51,520 --> 00:50:54,879 Speaker 1: this to people, just the teachers you meet in your 857 00:50:55,000 --> 00:50:58,920 Speaker 1: life have an incredible can have an incredible influence on 858 00:50:59,600 --> 00:51:01,200 Speaker 1: what you do in life and how you do it. 859 00:51:01,400 --> 00:51:03,839 Speaker 1: It's a it's a surprising thing as I look back 860 00:51:03,880 --> 00:51:08,080 Speaker 1: and think about that you mentioned reading. Tell us about 861 00:51:08,239 --> 00:51:10,480 Speaker 1: some of your favorite books. What are you reading now 862 00:51:10,600 --> 00:51:14,879 Speaker 1: and what do you like to recommend to people. I'm 863 00:51:14,920 --> 00:51:18,160 Speaker 1: a I'm a fiction fan. I don't I don't read 864 00:51:18,200 --> 00:51:20,880 Speaker 1: a ton of nonfiction. I don't read business books or 865 00:51:21,480 --> 00:51:24,120 Speaker 1: how to or you know, the good the great kind 866 00:51:24,120 --> 00:51:27,640 Speaker 1: of stuff. Um, and I just I like all sorts 867 00:51:27,719 --> 00:51:36,000 Speaker 1: of fiction. What did I just at eleanor get the 868 00:51:36,080 --> 00:51:41,319 Speaker 1: exact title eleanor font is okay? Um? What have I read? 869 00:51:41,920 --> 00:51:46,200 Speaker 1: I read recently Americana? Um books like that. I just 870 00:51:46,640 --> 00:51:51,120 Speaker 1: all all sorts of different kinds of books. And uh, 871 00:51:51,239 --> 00:51:53,560 Speaker 1: what sort of advice would you give to a recent 872 00:51:53,719 --> 00:51:57,560 Speaker 1: college grad who was thinking about a career in the 873 00:51:57,719 --> 00:52:05,560 Speaker 1: private market space? Um, what I would tell them is 874 00:52:05,960 --> 00:52:10,760 Speaker 1: to be a little more flexible and open to changes 875 00:52:10,840 --> 00:52:12,920 Speaker 1: around what you're doing and how you're doing it. What 876 00:52:13,040 --> 00:52:16,480 Speaker 1: I find is a lot of people coming into the 877 00:52:16,600 --> 00:52:20,279 Speaker 1: private markets have a very very fixed view of what 878 00:52:20,440 --> 00:52:23,040 Speaker 1: they want in life and how they want it, and 879 00:52:23,200 --> 00:52:25,839 Speaker 1: it just doesn't happen that way. The markets. The world 880 00:52:25,960 --> 00:52:28,080 Speaker 1: is going to change over the next five or ten years. 881 00:52:28,160 --> 00:52:31,480 Speaker 1: It always does, and and people just need to be 882 00:52:31,880 --> 00:52:35,839 Speaker 1: way more open to trying different things, doing different things, 883 00:52:35,920 --> 00:52:39,880 Speaker 1: experiencing different things. I worry a little bit about, Okay, 884 00:52:39,960 --> 00:52:44,080 Speaker 1: here's how the private equity career span works, and that's 885 00:52:44,120 --> 00:52:46,080 Speaker 1: what I'm gonna do, come hell or high water, and 886 00:52:46,239 --> 00:52:49,440 Speaker 1: people just need to and coming from me and kind 887 00:52:49,440 --> 00:52:51,359 Speaker 1: of rich, but go with the flow a little more. 888 00:52:52,680 --> 00:52:56,400 Speaker 1: H good answer. And our final question, what do you 889 00:52:56,560 --> 00:53:00,120 Speaker 1: know about the world of private equity investing today that 890 00:53:00,320 --> 00:53:08,200 Speaker 1: you wish you knew thirty or so years ago? What 891 00:53:08,320 --> 00:53:10,080 Speaker 1: do I know today that I wish I knew thirty 892 00:53:10,160 --> 00:53:12,560 Speaker 1: years ago? I think it's the advice I would give 893 00:53:12,800 --> 00:53:17,320 Speaker 1: who have given myself the same advice that um, it 894 00:53:17,520 --> 00:53:19,680 Speaker 1: is not going to look the way it does, and 895 00:53:20,440 --> 00:53:23,880 Speaker 1: you can't you cannot. I wish I had known that 896 00:53:24,120 --> 00:53:26,560 Speaker 1: you can't assume that things are going to move in 897 00:53:26,800 --> 00:53:30,400 Speaker 1: any sort of linear direction. UM. Had I known that, 898 00:53:30,600 --> 00:53:33,920 Speaker 1: I think I would have been more aggressive about pursuing 899 00:53:34,080 --> 00:53:37,960 Speaker 1: certain changes. I would have been just more open to 900 00:53:38,080 --> 00:53:42,200 Speaker 1: certain changes. I guess I just thought things were going 901 00:53:42,280 --> 00:53:44,600 Speaker 1: to since it had happened that way before, it was 902 00:53:44,680 --> 00:53:47,800 Speaker 1: going to continue largely to happen that way going forward. 903 00:53:48,320 --> 00:53:53,239 Speaker 1: And that's not how it happened. Uh. Quite quite fascinating, Mario. 904 00:53:53,360 --> 00:53:56,080 Speaker 1: Thank you for being so generous with your time. The 905 00:53:56,560 --> 00:54:00,640 Speaker 1: when when this nonsense is all over, UM, we'd love 906 00:54:00,719 --> 00:54:04,200 Speaker 1: to have you actually in the Bloomberg building to do 907 00:54:04,320 --> 00:54:08,359 Speaker 1: this live and in person. It's it's a different experience. UM. 908 00:54:08,560 --> 00:54:11,319 Speaker 1: We're all trying our best under lockdown, but I'd love 909 00:54:11,400 --> 00:54:15,640 Speaker 1: to have you back to to continue this conversation. I'd 910 00:54:15,680 --> 00:54:17,480 Speaker 1: love to do that. I mean, it's interesting. I've said 911 00:54:17,520 --> 00:54:19,400 Speaker 1: to people, I'm I'm an introvert and I thought this 912 00:54:19,520 --> 00:54:22,040 Speaker 1: would be right up my alley, like I would thrive. 913 00:54:22,120 --> 00:54:24,799 Speaker 1: And what I've realized is the ability to see people 914 00:54:24,840 --> 00:54:28,920 Speaker 1: in person, the ability to exchange five minutes in the hallway, UM, 915 00:54:29,239 --> 00:54:33,000 Speaker 1: is a vital vital to how we operate, how we live, 916 00:54:33,080 --> 00:54:35,880 Speaker 1: how we learn. UM. And it's just it's amazing to 917 00:54:35,960 --> 00:54:38,320 Speaker 1: me how much how much I miss it, and I 918 00:54:38,360 --> 00:54:41,080 Speaker 1: suspect how much we all miss it. So so let 919 00:54:41,120 --> 00:54:44,920 Speaker 1: me slip in one final question. All this talk about 920 00:54:45,640 --> 00:54:48,640 Speaker 1: the end of cities, the death of the office, the 921 00:54:48,719 --> 00:54:52,600 Speaker 1: ability for everybody to work work remotely, how much of 922 00:54:52,680 --> 00:54:56,120 Speaker 1: that is just hype from within the lockdown. And as 923 00:54:56,200 --> 00:54:58,680 Speaker 1: soon as we get the opportunity to kind of return 924 00:54:58,760 --> 00:55:02,200 Speaker 1: to normal, a lot of things might end up going 925 00:55:02,280 --> 00:55:05,719 Speaker 1: back to the way they were. I think I think 926 00:55:05,760 --> 00:55:08,440 Speaker 1: we will return much more quickly to the way we 927 00:55:08,560 --> 00:55:12,120 Speaker 1: were than anyone anticipates. And I offered two anecdotal things. 928 00:55:12,200 --> 00:55:14,480 Speaker 1: One is looked at China where they basically gotten rid 929 00:55:14,520 --> 00:55:18,000 Speaker 1: of the virus um it is and and people I 930 00:55:18,040 --> 00:55:20,120 Speaker 1: know in China tell me it is largely the way 931 00:55:20,160 --> 00:55:23,480 Speaker 1: it was before. Other than international travel. People are going 932 00:55:23,560 --> 00:55:26,120 Speaker 1: to movies, people are going to restaurants, people are going 933 00:55:26,200 --> 00:55:29,399 Speaker 1: to parties, and I think we will be the same way. Um. 934 00:55:29,800 --> 00:55:31,759 Speaker 1: The other thing that's interesting is just at Hamilton Lane 935 00:55:31,800 --> 00:55:34,160 Speaker 1: before the pandemic, we were moving our offices in March. 936 00:55:34,239 --> 00:55:37,719 Speaker 1: Before the pandemic, we asked our employees whether they wanted 937 00:55:37,760 --> 00:55:39,520 Speaker 1: to work remotely, meaning did they want to be in 938 00:55:39,560 --> 00:55:43,800 Speaker 1: the office less than outside the office three days a 939 00:55:43,880 --> 00:55:47,240 Speaker 1: week or more, and it was something wanted to work remotely, 940 00:55:47,440 --> 00:55:49,920 Speaker 1: that this was really good. We asked the same thing 941 00:55:49,960 --> 00:55:52,800 Speaker 1: a couple of weeks ago, because we're going back to 942 00:55:52,880 --> 00:55:55,000 Speaker 1: the office on a voluntary basis, like one day a 943 00:55:55,040 --> 00:55:56,840 Speaker 1: week if people want to go back. In certain groups 944 00:55:57,520 --> 00:56:00,640 Speaker 1: out of the client and investment teams, one percent of 945 00:56:00,719 --> 00:56:02,720 Speaker 1: the people said they did not want to work remotely, 946 00:56:03,160 --> 00:56:06,160 Speaker 1: did not um And I think that's it's telling. I 947 00:56:06,200 --> 00:56:10,560 Speaker 1: think people before this pandemic and during the pandemic, there's 948 00:56:10,600 --> 00:56:14,080 Speaker 1: both the feeling of uh, you know, changing the way 949 00:56:14,120 --> 00:56:16,640 Speaker 1: we live as good and during the pandemic. Nothing will 950 00:56:16,680 --> 00:56:21,200 Speaker 1: be back the same. No, it will come back much faster. Sure, 951 00:56:21,320 --> 00:56:23,600 Speaker 1: business travel might be a little bit less because we've 952 00:56:23,600 --> 00:56:25,680 Speaker 1: all realized we don't need to go all over the 953 00:56:25,719 --> 00:56:28,960 Speaker 1: place ten times a year, but leisure travel, all of 954 00:56:29,000 --> 00:56:31,000 Speaker 1: the stuff we want to do together. It will come 955 00:56:31,040 --> 00:56:34,080 Speaker 1: back very very quickly once once we're certain we're not 956 00:56:34,120 --> 00:56:37,000 Speaker 1: going to get the the virus. Thanks Mario for being 957 00:56:37,440 --> 00:56:39,560 Speaker 1: so generous with your time. We have been speaking with 958 00:56:39,680 --> 00:56:44,560 Speaker 1: Mario Gianninni. He is the CEO of Hamilton's Lane. If 959 00:56:44,640 --> 00:56:47,359 Speaker 1: you enjoy this conversation, well, be sure and check out 960 00:56:47,480 --> 00:56:50,920 Speaker 1: any of the other fifty or so we've done over 961 00:56:50,960 --> 00:56:53,480 Speaker 1: the past six and a half years. You can find 962 00:56:53,560 --> 00:57:00,040 Speaker 1: those at iTunes, Spotify, Overcast, Stitcher, a cast, wherever you're in. 963 00:57:00,120 --> 00:57:04,400 Speaker 1: Your podcasts are sold. We love your comments, feedback and suggestions. 964 00:57:04,800 --> 00:57:07,680 Speaker 1: Give us a review on Apple iTunes. Write to us 965 00:57:07,840 --> 00:57:12,000 Speaker 1: at m IB podcast at Bloomberg dot net. You can 966 00:57:12,160 --> 00:57:14,879 Speaker 1: check out my daily reads at rit Halts dot com. 967 00:57:15,400 --> 00:57:18,640 Speaker 1: You can read my weekly column at Bloomberg dot com 968 00:57:18,760 --> 00:57:23,120 Speaker 1: slash Opinion. Follow me on Twitter at rit Halts. I 969 00:57:23,200 --> 00:57:25,320 Speaker 1: would be remiss if I did not thank the crack 970 00:57:25,400 --> 00:57:29,520 Speaker 1: staff that helps put together these conversations each week. Tim 971 00:57:29,600 --> 00:57:33,680 Speaker 1: Harrow is my audio engineer. Michael Boyle is my producer. 972 00:57:34,160 --> 00:57:37,760 Speaker 1: Michael Batnick is my head of research. Atika val Brund 973 00:57:38,000 --> 00:57:41,520 Speaker 1: is our project director. I'm Barry Rit Halts. You've been 974 00:57:41,600 --> 00:57:44,760 Speaker 1: listening to Masters in Business on Bloomberg Radio.