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Speaker 1: Hello, and welcome to the Credit Edge Weekly Markets podcast.

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Speaker 1: My name is James Crombie. I'm a senior editor at Bloomberg.

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Speaker 2: And I'm Tolio Adam Muto, a senior analyst at Brimberg Intelligence.

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Speaker 2: This week, we are very pleased to welcome Ian Jackson,

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Speaker 2: head of Strategic Opportunities at Permira.

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Speaker 3: How are you, Ian, I'm very well, Thank you, Thank

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Speaker 3: you very much for having me today.

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Speaker 2: Great good to have you here. With committed capital of

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Speaker 2: more than eighty five billion euros, Permira is definitely one

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Speaker 2: of the behemoths in the private markets. It's global too,

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Speaker 2: with offices in around fifteen countries all around the world.

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Speaker 2: Ian is the head of Strategic Opportunity and join Permira

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Speaker 2: Credit in July twenty twenty two, which incidentally is also

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Speaker 2: when I started a blom Bag. Ian brings over a

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Speaker 2: quarter of a century of experience in private credit, so

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Speaker 2: he's definitely a great person to speak to about the

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Speaker 2: promise and the potential pitfalls of private markets.

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Speaker 3: That makes me sound very old.

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Speaker 1: Thank you, not at all, not at all, not as

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Speaker 1: old as me, but Dean, thank you for joining us. Volatility,

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Speaker 1: as we keep saying, is rising across markets. But credit

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Speaker 1: is actually holding up pretty well. Corporate bond spreads are

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Speaker 1: only a couple of basis points wider than they were

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Speaker 1: before the Iran War started. They have a lot further

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Speaker 1: to go, though, if the worst projections on inflation and

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Speaker 1: the economy actually play out. A lot depends on how

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Speaker 1: long this war actually goes on. So what do you

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Speaker 1: make of this in it's definitely getting more choppy, there's

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Speaker 1: more fear than greed at the moment. But do you

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Speaker 1: see much in the way of strategic opportunity?

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Speaker 3: All right, yeah, look, I think there is.

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Speaker 4: I think that you know, the car situations obviously series,

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Speaker 4: but I wouldn't say today it's a full blown crisis,

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Speaker 4: at least it's not at this stage. What makes it

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Speaker 4: important is not just the headline event, but the interaction

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Speaker 4: of the several forces that the matter enormously for credits,

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Speaker 4: so geopolitics, energy, inflation expectations, and the path of obviously

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Speaker 4: interest rates as you mentioned, but credit markets, as you suggested,

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Speaker 4: can often look calm right up to the point where

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Speaker 4: they're not so refinancing conditions, titans spreads start to differentiate

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Speaker 4: more aggressively, and we've seen a little bit of that

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Speaker 4: we haven't gone that far yet. So to me, the

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Speaker 4: question is not whether you know this is we're going

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Speaker 4: down that path, but when it becomes a credit story

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Speaker 4: and it transmits into the credit world through whether it's

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Speaker 4: higher energy prices, margins, lack of confidence, rates, outlook, et cetera,

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Speaker 4: that's when.

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Speaker 3: It becomes a bit more real for people like us.

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Speaker 2: You mentioned that there are still interesting opigytunities. I guess

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Speaker 2: despite the fact that we may not have seen for

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Speaker 2: adjustment yet and the fact that credit markets might take

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Speaker 2: some time to make those adjustments. Where would you say

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Speaker 2: you're seeing the most interesting opportunities now? Would you say

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Speaker 2: it's in the US or Europe or elsewhere?

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Speaker 3: Well, we're very much European focus.

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Speaker 4: We do invest outside Europe, but predominantly that AU and

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Speaker 4: you mentioned at least in credit.

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Speaker 3: Is very much focused in Europe.

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Speaker 4: Private credit is still very attractive in parts. It's a

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Speaker 4: little less forgiving today because the easy one of years

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Speaker 4: have gone. But you know, areas such as infrastructure, any

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Speaker 4: resil energy, resilience. I will also say selected credit opportunities

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Speaker 4: and some parts of digital buildout are where demand is

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Speaker 4: linked to genuine bottlenecks rather than just a fashion cycle.

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Speaker 4: There's definitely a scarcity of capital there. What I think

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Speaker 4: is less attractive, though, is the kind of environment where

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Speaker 4: assets have been bid up through just pure optimism. And

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Speaker 4: you know, we're trying to stay away from those things

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Speaker 4: where companies have to grow into their capital structure. We're

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Speaker 4: not not huge fans of that. So I think, you know,

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Speaker 4: if the thesis depends mainly on the abundant refinancing, cheap

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Speaker 4: capital and a benign macro environment, we're not. We're very

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Speaker 4: cautious on that. You know, the world today is all

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Speaker 4: about what the word today I think is all about resilience,

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Speaker 4: and that's where we're focused our time at the moment.

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Speaker 1: It sounds that you think that things will get worse,

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Speaker 1: but I'm wondering what the triggers might be and what

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Speaker 1: you're looking for in terms of, you know, signs that

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Speaker 1: we're actually going into more of a crisis mode in credit.

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Speaker 5: Yeah, I mean, there's been a lot of a lot

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Speaker 5: of noise and a lot of press around what we're

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Speaker 5: seeing at the moment with public credit funds. I think

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Speaker 5: the first thing to say about though, is that there

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Speaker 5: is a lot of pressure on retail orienty credit funds,

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Speaker 5: But I don't think it necessarily means that the underlying

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Speaker 5: asset classes is broken in any shape or form.

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Speaker 3: In many case is what we're seeing.

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Speaker 4: I think it's just a mismatch between what investors are wanting,

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Speaker 4: which is, you know, periodic liquidity and portfolios that invested

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Speaker 4: relatively illiquid private loans. And so we've seen that mismatch

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Speaker 4: in history a lot. I think we're just seeing it

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Speaker 4: again today. You know, these vehicles were designed with gates

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Speaker 4: and quartery repurchased limits for exactly this reason. So you know,

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Speaker 4: when we see, you know, with demptra requests exceed those limits,

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Speaker 4: it's not necessary a sign of failure or underlying issues

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Speaker 4: with credit. You could just argue that the structure is

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Speaker 4: just operating as it was, you know, it was intended

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Speaker 4: to do. I think them portant question today for people

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Speaker 4: like me is you know, what is the credit quality

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Speaker 4: of the underlying book of these of these of these funds,

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Speaker 4: How transparent is the manager being and investors properly matched

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Speaker 4: to their liquidity profile. I think just aside just this

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Speaker 4: whole wealth channel, I think strategically it's important it's not

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Speaker 4: going away, but it's like to remain as and we're like,

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Speaker 4: you remain a different source of capital the future, but

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Speaker 4: it's coming under snifferent pressure today. And then if you

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Speaker 4: look at.

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Speaker 3: Specific sectors, software obviously has been talked about a lot.

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Speaker 4: At the moment, I think in some areas it's overdone.

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Speaker 4: I think, you know, we've done a lot of work

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Speaker 4: on AI over the last several years. It's certainly not

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Speaker 4: new to us at Permira, and I think, you know,

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Speaker 4: depending on the type of company, we're actually quite comfortable

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Speaker 4: with that risk profile. But you have to do a

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Speaker 4: lot of work and understand the main drivers of that.

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Speaker 2: You mentioned something earlier about retail asking for their moneyback

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Speaker 2: basically in some of these funds and so on. Clearly

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Speaker 2: your focus at Premiere, I guess has been more on

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Speaker 2: institution and investors. But do you think that in the

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Speaker 2: future or maybe even now, retail might have a role

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Speaker 2: to play or a bigger role to play in private market.

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Speaker 4: I think they're already playing a very large role, and

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Speaker 4: I don't think that's going to diminish over time. I

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Speaker 4: think the channel is getting a lot of bad press

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Speaker 4: unfortunately today, But as I said before, that you know

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Speaker 4: the fact that you can actually take money out means

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Speaker 4: people in periods of volativity will want to take money out.

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Speaker 4: They've been designed that way. But you know, generally speaking,

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Speaker 4: I think you know, the asset classes is very strong.

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Speaker 4: You know, around the edges there will certainly be things

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Speaker 4: that maybe shouldn't have been done at the time. But

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Speaker 4: you I wouldn't point, I wouldn't say that's just a

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Speaker 4: credit phenomenon. I think that's just an investing phenomenon. And

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Speaker 4: so you ask your question, Yes, I think you know,

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Speaker 4: these wealth channels will be around for some time and

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Speaker 4: if if anything else, they probably will grow.

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Speaker 1: There is a lot of noises to say from the

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Speaker 1: BC's we are hearing it daily about these redemptions, and

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Speaker 1: you know, I do take your point that if investors'

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Speaker 1: retail investors had read page one of the prospectives, they

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Speaker 1: would have known that, you know, this is what the

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Speaker 1: situation that they face, and they might not even get

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Speaker 1: five percent. You know that was discretionary anyway. But there

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Speaker 1: is a lot of noise. There is a lot of

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Speaker 1: negativity at what point or how much of it is

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Speaker 1: bleed being through to everything you're doing.

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Speaker 4: So yes, around around the edges, certainly right, you know,

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Speaker 4: underwriting this hasn't stopped. People are still obviously very focused

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Speaker 4: on on on deploying capital, but it's it's hard to

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Speaker 4: ignore what's going on around the world today, right. So

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Speaker 4: I mean, coming into coming into this work, coming into

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Speaker 4: the year, generally thought it was going to be fairly benign.

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Speaker 4: But an M and A activity was picking up. And

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Speaker 4: you know, a couple of months in and Chat GBT

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Speaker 4: or Claude launch another version of their AI systems and

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Speaker 4: suddenly the software market completely falls over. And then obviously

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Speaker 4: be the conflict in the Middle East as adding another

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Speaker 4: another dimension, and so you know, at the moment, it's

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Speaker 4: it's it's cascading, but I think it's fairly controlled today.

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Speaker 4: I was listening to one of your your commentators recently

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Speaker 4: and they were talking about two very high profile.

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Speaker 3: Bankruptcies in the US.

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Speaker 4: I think it was First Brands and a Tracola, you know,

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Speaker 4: I think it was The consensus was it was isolated.

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Speaker 3: That's probably right.

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Speaker 4: I think fraud was cited as the reason for the bankruptcy.

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Speaker 3: But in history, Ford typically.

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Speaker 4: Is the canary in the conway, right, So we've seen this,

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Speaker 4: We've seen this play out in the past a number

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Speaker 4: of times in the past. Now I'm not putting two

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Speaker 4: and two and coming up with five here, but you know,

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Speaker 4: I think, you know, a reasonable investor should step back

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Speaker 4: a bit and just reassess the changing environment today and

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Speaker 4: and incorporate what they're hearing and seeing into their underwriting. So,

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Speaker 4: you know, we during April of last year with the tariffs,

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Speaker 4: we you know, we stopped, we cleaned down our pipeline

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Speaker 4: and reset it and just added additional processes to our underwriting.

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Speaker 4: And I could argue again, we're now doing the same

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Speaker 4: thing again with with with AI. You know, what's the

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Speaker 4: haves and the have not what we're like, what we

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Speaker 4: don't like. And so in this ever changing world, you

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Speaker 4: just have to be aware that what may have.

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Speaker 3: Worked in a benign environment doesn't work today.

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Speaker 1: And the reason why the frauds become clear is that

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Speaker 1: just because all the liquidity, the easy money is just

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Speaker 1: flowing out and now these companies are kind of hitting

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Speaker 1: the wall in terms of having to refinance their debt

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Speaker 1: and and correct Yes, yeah, in terms of processes, though,

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Speaker 1: could you say anything more about that, like what what

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Speaker 1: new are you doing now that you know in response

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Speaker 1: to this.

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Speaker 4: Well, in response to those two particular issues, not not

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Speaker 4: not a lot more, but I think we've certainly incorporated

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Speaker 4: into our underwriting. Now if we're looking at a manufacturing business,

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Speaker 4: you know, where do they have their where do they

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Speaker 4: have manufacturing where they're in customers? If if they're manufacturing

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Speaker 4: in China and importing into the US, you know, you

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Speaker 4: question what could change over time with that specifically, But

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Speaker 4: with AI, you know, it's it's it's one of those

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Speaker 4: things today where generally I think the market has overreacted.

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Speaker 3: If I'm being honest, I.

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Speaker 4: Think we've seen opportunities where we think, you know, it's

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Speaker 4: it's that we think they're very interesting. I think for

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Speaker 4: credit investors we look at AI slightly differently to equity investors. Right,

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Speaker 4: We're we're not trying to find the next big winner, right,

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Speaker 4: We're just trying to avoid losers. So it's as much

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Speaker 4: about downside protection and upside capture relative to our private

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Speaker 4: equity college. So when I think about AI, the first

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Speaker 4: question I tend to ask is does this technology make

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Speaker 4: this business more resilient or does it make it obsolete?

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Speaker 4: That's the first and thing we think about. And the

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Speaker 4: second thing is really around is this a temporal thing

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Speaker 4: or a structural thing. So if there's a lot of

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Speaker 4: market volatility right now, spreads of whining software selling off,

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Speaker 4: but that doesn't always reflect real fundamental risk, right and

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Speaker 4: so that just presents opportunities. So some businesses aren't doubtedly

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Speaker 4: being caught in this noise, So that's great for us

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Speaker 4: if we can identify them. But others are genuinely business

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Speaker 4: models that will get disrupted. Now, they're unlikely to go

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Speaker 4: to zero this year, probably not even next year, but

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Speaker 4: over the next five years, will they present refinancing risks

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Speaker 4: at the time when they come up for maturity?

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Speaker 3: Absolutely? Yes.

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Speaker 4: I also think a lot of people talk about and

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Speaker 4: I'm not the expert on this. My private equity colleagues

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Speaker 4: will shoot me if I pretend to be an expert

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Speaker 4: in AI, because they certainly know a lot more than

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Speaker 4: I do. But you know, historically software businesses were valued

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Speaker 4: for things like recurring revenue and switching costs. But AI

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Speaker 4: is challenging that thesis, so you have to go a

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Speaker 4: lot deeper now, And so you know, what does the

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Speaker 4: company actually do?

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Speaker 3: Is it a source of critical data or is it

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Speaker 3: just a layer on top of another layer on top

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Speaker 3: of another layer.

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Speaker 4: And you know, can the product be replicated by AI,

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Speaker 4: or is it deeply embeddied in workflows things like this.

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Speaker 4: You're going to hear that a lot over them if

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Speaker 4: over the coming years, and people will start to well. Dispersion,

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Speaker 4: I think is what already begin to see with certain

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Speaker 4: AI names, and I think that will filter through to

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Speaker 4: other to other sectors as well.

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Speaker 2: We've talked a little bit about AI, but I want

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Speaker 2: to just follow up on that, if that's okay. So

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Speaker 2: some people would have us believe that AI will, for instance,

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Speaker 2: take all the credit analyst roles quite soon, and I

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Speaker 2: should probably consider retirement, but other people will probably think

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Speaker 2: that I should, you know, plow on and keep going.

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Speaker 2: But I mean that's just obviously on the personal level,

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Speaker 2: but just more broadly, like what your whereas Permira on

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Speaker 2: that scale that you know, AI will replace all our

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Speaker 2: jobs or it will be more complimentary. Where would you

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Speaker 2: say you sit on the scale of AI positive and

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Speaker 2: negative parties.

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Speaker 4: So one of the benefits of being part of Permira

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Speaker 4: and specifically Permira Private Equity, we've had a lot of

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Speaker 4: insight into the whole development of AI for number of years.

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Speaker 4: So I don't know whether you know, but Permira was

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Speaker 4: one of the first European private equifirms established a permanent

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Speaker 4: presence in Silica Valley about twenty years ago. So we

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Speaker 4: saw this coming and we've got very deep networks across

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Speaker 4: the West coast and we've actually got a GENAI team

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Speaker 4: and analytics value creation team as well. So it's been

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Speaker 4: hammered into us for at least two years now about

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Speaker 4: about AI and so we as an institution have been

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Speaker 4: using it the various tools, whether it's STRATEGBT or Claude

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Speaker 4: and others for about eighteen months two years now, and

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Speaker 4: so we're quite a fay as an organization. So I

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Speaker 4: think every day we're getting better and we're developing more

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Speaker 4: ways and to be more more productive ultimately over time.

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Speaker 4: And I can't give you that time frame. Do you

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Speaker 4: end up employing less people, probably or do you end

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Speaker 4: up managing more money and more of strategies and you

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Speaker 4: the same number of people. I don't know what that

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Speaker 4: long term that that long term you looks like. But

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Speaker 4: from a credit standpoint, can we do more with the

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Speaker 4: same number of people? Absolutely can, right, So we probably

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Speaker 4: see one hundred and fifty to two hundred opportunities a year.

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Speaker 4: We probably invest in less than five percent of them,

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Speaker 4: and we can do with that with a team of

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Speaker 4: less than eight people. So it gives you an idea

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Speaker 4: of how efficient that has been. And I would say

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Speaker 4: that's only increasing as we become more we become better

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Speaker 4: at utilizing some of these AI tools.

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Speaker 2: I mean, as you would, I guess appreciate. Even at Bloomberg,

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Speaker 2: we are sort of incorporating more and more and more

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Speaker 2: AI into our workflow, as you'd expect from a technology company.

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Speaker 2: But just to go back to one of the points

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Speaker 2: that you mentioned earlier about picking AI winners or avoiding

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Speaker 2: the losers, how straightforward or easy do you think it

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Speaker 2: is at this stage? Given that there are so many

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Speaker 2: I think unknown about how the entire thing will develop,

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Speaker 2: and also given that a lot of AI that is

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Speaker 2: in use at the moment isn't necessarily paid for, how

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Speaker 2: do you go about picking the winners or losers at

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Speaker 2: this stage?

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Speaker 4: That's a really good question. I would say, you know,

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Speaker 4: we've had an AI framework.

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Speaker 3: I you know, how we.

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Speaker 4: Look at companies through the through the lens of how

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Speaker 4: it might get disrupted by AI for some time. So

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Speaker 4: in my team, whenever we get a new opportunity, doesn't

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Speaker 4: have to be tech. You know, we always look through

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Speaker 4: it from that perspective, So no, I think we will

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Speaker 4: increasingly spend a lot of time understanding a company's mote,

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Speaker 4: right and as a term I'm sure you've heard a

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Speaker 4: number of times before, but from a credit perspective, it's

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Speaker 4: really around just making sure that we're stress testing the

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Speaker 4: company under different on AI scenarios. So going back to

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Speaker 4: basic credit calculations around cash flow, resist resilience, market positioning,

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Speaker 4: stickiness of customers, mission critical products, things like that, which

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Speaker 4: you know we are as a team in Permira Credits

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Speaker 4: certainly getting better at it. But I think we still

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Speaker 4: need that private equity overlay because these guys live and

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Speaker 4: breed on a on a on a daily basis and

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Speaker 4: have for some time now.

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Speaker 1: The BDCs that we talked about earlier, business development companies,

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Speaker 1: the pressure is on them because of their software exposure.

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Speaker 1: You know, they have twenty twenty five percent some of

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Speaker 1: them to those to the to the industry, those loans.

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Speaker 1: If you look at how they're trading, they're dropping pretty fast.

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Speaker 1: We're talking to distress buyers who are offering you know,

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Speaker 1: sixties and you know, before a couple of months ago,

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Speaker 1: they're offering eighty and you know, these things are dropping.

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Speaker 1: I'm wondering what kind of levels you're seeing in the market,

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Speaker 1: I mean, and what sort of default rates are expecting.

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Speaker 1: We've had fifteen percent from Marathon as a kind of

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Speaker 1: broad US software default rate.

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Speaker 4: Yeah, look, I I so we obviously don't have the

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Speaker 4: BDC phenomenon over here in Europe. So it's you know,

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Speaker 4: the equivalent really is is direct lending funds, and obviously

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Speaker 4: they're not public and so they're private, they're private capital,

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Speaker 4: so you're not really seeing that filter into the market

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Speaker 4: as the way you would in the US. But having

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Speaker 4: said that, we do have you know, we do see

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Speaker 4: it in the boarder syndic game or boardly syndicated low market.

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Speaker 4: I would say, you know several names over the last

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Speaker 4: five to six weeks. Certainly you know ones that were

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Speaker 4: you know, firstly seeing secure that were trading sub eight

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Speaker 4: nine percent blew out and were trading low teen so

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Speaker 4: maybe four or five one hundred basis points wider. So

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Speaker 4: the good ones people have identified are now trading a

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Speaker 4: bit tighter, and the ones that people slow of a

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Speaker 4: question mark about are.

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Speaker 3: Still drifting a little bit lower.

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Speaker 4: And I think that's really really how it's going to

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Speaker 4: play out, and I doubt you're going to see material

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Speaker 4: changes in revenue because of the impact of AI in

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Speaker 4: the short term. So I think it would be interesting

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Speaker 4: to see where some of those names trade at the

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Speaker 4: end of this year, because you know, companies will probably

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Speaker 4: still be performing relatively well beyond budget, et cetera. And

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Speaker 4: you may not see the impact today, but ultimately when

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Speaker 4: it comes to refinancing in two or three years time,

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Speaker 4: that's when the rubber hits the road, and people will

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Speaker 4: be questioning whether the next the next five years after that,

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Speaker 4: where the impact of AI will have on some of

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Speaker 4: these companies.

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Speaker 1: And after the default, the bigger concern is obviously the recovery,

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Speaker 1: which estimates are going down all the time in terms

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Speaker 1: of how much you might get back through structuring. So

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Speaker 1: that's concerning not just to BDC's built says clos who

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Speaker 1: are having to get out because these things are being dumped.

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Speaker 1: I'm just wondering whether you think that there is potential

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Speaker 1: for more of a domino effect from this sector. As

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Speaker 1: you know, we feed on fears of the unknown, and

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Speaker 1: you also have actual rat downs in the market.

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Speaker 4: Yeah, Look, I think there's there's always that possibility. But

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Speaker 4: I will say say, you know, AI is not just

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Speaker 4: I think there's also a misconception having said what I've

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Speaker 4: just said is around AI just being a you know,

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Speaker 4: a software issue, right, I mean, AI is going to

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Speaker 4: disrupt many, many different sectors, and so it will impact

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Speaker 4: and reshape services, healthcare, consumer and so forth.

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Speaker 3: So yes, look, we're not going.

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Speaker 4: To assisily it in twenty twenty six, but we will

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Speaker 4: certainly see it in the coming years where there will

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Speaker 4: certainly be an impact across.

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Speaker 3: Many, many, many sectors.

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Speaker 4: We're not seeing that today, and it's it's part of

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Speaker 4: the you know, the market is that it's just basically

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Speaker 4: saying anything software related we don't really like, we don't

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Speaker 4: re understand. We'll come back at you once we understand it.

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Speaker 4: But you could argue some healthcare and consumer name should

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Speaker 4: be under should be struggling today as well if you

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Speaker 4: looking through the same lens.

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Speaker 1: But in terms of sectors that you see opportunity, I'm wondering,

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Speaker 1: you know where they are, and you know how they're

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Speaker 1: shielded from this also, how they're shielded from the potential

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Speaker 1: impacts of what we're seeing in the Middle East in

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Speaker 1: a higher oil prices and potential supply chainer disruptions.

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Speaker 4: Yeah, so I think you know, the first thing to

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Speaker 4: talk about there is probably oil. I mean everyone always

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Speaker 4: looks at oil and things filling up my car, but

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Speaker 4: all matters not just as a commodity price, right, So

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Speaker 4: it's it's a transmission mechanism into.

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Speaker 3: The into the border, into the border economy.

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Speaker 4: So if any energy price is stay elevated, they it

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Speaker 4: shows up in things like transport, manufacturing, household budgets, corporate margins.

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Speaker 4: And once that happens, the effect is not just an

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Speaker 4: economic one, it's financial. So because you know, inflation expectations

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Speaker 4: become stickier, and central banks we've already seen put any

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Speaker 4: further cuts on the hold and maybe the next movement

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Speaker 4: is up. So for credit that obviously matters a great deal.

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Speaker 4: So I would say higher for longer rates are not

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Speaker 4: simple just evaluation issue. Today for some parts of the

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Speaker 4: market it might become a solvency issue as well. So

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Speaker 4: you know, a company might look fine when you know

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Speaker 4: we finance it was cheap and plentiful, but if you

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Speaker 4: look today in a more fragile world, you know, more

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Speaker 4: maybe restrictive financing, some margin pressures coming through that changes

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Speaker 4: the dynamic completely.

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Speaker 3: I would not automatateally.

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Speaker 4: Assume though we're heading into some sort of second inflation wave,

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Speaker 4: though I'm not sure that's that's really the base case.

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Speaker 4: I do think there is a risk of inflation going

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Speaker 4: up meaningfully if energy remains elevated, but I don't think

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Speaker 4: we're there yet. And from a credit perspective, even a

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Speaker 4: modest change and that sort of probability matters because it

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Speaker 4: affects you know, market access, risk, appetite, default expectations, et cetera.

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Speaker 3: Which we're already kind of experiencing a.

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Speaker 4: Little bit today with volatility coming out of the conflict

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Speaker 4: in the in.

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Speaker 3: The Middle East.

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Speaker 4: But in terms of you know, my day to day

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Speaker 4: what what what do I like? You know, in in

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Speaker 4: opportunistic credit, we're going through a little bit of a bifurcation,

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Speaker 4: I would say. I'd say, on the on the one side,

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Speaker 4: you've got what I would call flow opportunities. So those

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Speaker 4: are more standard, more intermediated situations where you know, lots

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Speaker 4: of lenders are effectively looking at the same deals, using

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Speaker 4: similar frameworks and coming to broadly the similar conclusions. And

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Speaker 4: it's really you know, it tends to get priced fairly tightly,

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Speaker 4: and success is really driven by speed and scour rather

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Speaker 4: than you know, any sort of specific knowledge. But then

436
00:23:37,440 --> 00:23:39,040
Speaker 4: on the other side, which is where we tend to

437
00:23:39,040 --> 00:23:43,919
Speaker 4: focus more of our time, is generally complex opportunities and

438
00:23:43,960 --> 00:23:47,200
Speaker 4: so that that's really gets it. That's really for me anyway,

439
00:23:47,200 --> 00:23:49,240
Speaker 4: where where I think it's a lot a lot more interesting.

440
00:23:49,600 --> 00:23:52,119
Speaker 4: And what I mean by complaxts these are situations where

441
00:23:52,400 --> 00:23:54,840
Speaker 4: you know, the outcome really depends on how well you

442
00:23:54,960 --> 00:23:58,240
Speaker 4: understand the business underneath. And that's where obviously having a

443
00:23:58,920 --> 00:24:03,280
Speaker 4: private equity overlays so important. So you're looking at things

444
00:24:03,320 --> 00:24:08,359
Speaker 4: like operational nuances, sector dynamics, how value accruise over time,

445
00:24:09,040 --> 00:24:12,000
Speaker 4: et cetera. And it is much less about just providing

446
00:24:12,480 --> 00:24:15,720
Speaker 4: a check and much more about how you interpret how

447
00:24:15,760 --> 00:24:18,560
Speaker 4: you interpret a business. So for me, and I'm also

448
00:24:18,640 --> 00:24:22,200
Speaker 4: I should point out more importantly actually, is that complexity

449
00:24:22,600 --> 00:24:26,959
Speaker 4: doesn't automatically mean higher risk, right, And so that's a

450
00:24:27,000 --> 00:24:29,280
Speaker 4: lot of people confuse that and I just I think

451
00:24:29,320 --> 00:24:32,800
Speaker 4: that's role. It just often means the situation takes more

452
00:24:32,840 --> 00:24:35,639
Speaker 4: work to really get comfortable with. If you can do

453
00:24:35,680 --> 00:24:39,199
Speaker 4: the work properly, really understand what's driving that risk, you

454
00:24:39,200 --> 00:24:42,199
Speaker 4: can often get paid much more than I think than

455
00:24:42,240 --> 00:24:44,680
Speaker 4: the underlying risk actually justifies.

456
00:24:45,280 --> 00:24:46,400
Speaker 3: How much more do you get paid?

457
00:24:46,520 --> 00:24:48,520
Speaker 1: And can you give us more of a tangible example

458
00:24:48,560 --> 00:24:48,760
Speaker 1: of that?

459
00:24:49,400 --> 00:24:51,480
Speaker 4: Yeah, of course, I mean, so you know, I if

460
00:24:51,520 --> 00:24:54,760
Speaker 4: I think about you know, most opportunistic credit funds look

461
00:24:54,840 --> 00:24:58,040
Speaker 4: for mid teens. Let's just say I would say flow

462
00:24:58,280 --> 00:25:01,800
Speaker 4: flow opportunity to credit. Your probably talking about to one

463
00:25:01,880 --> 00:25:04,480
Speaker 4: hundred three hundred basis points tighter than that, and I

464
00:25:04,480 --> 00:25:08,680
Speaker 4: would say complexity is two or three hundred.

465
00:25:08,359 --> 00:25:09,159
Speaker 3: Points wider than that.

466
00:25:09,280 --> 00:25:11,680
Speaker 4: So you can be talking about as much as six

467
00:25:11,720 --> 00:25:14,600
Speaker 4: to seven hundred basis points difference between what I would

468
00:25:14,640 --> 00:25:19,040
Speaker 4: say flow versus complex situations.

469
00:25:19,520 --> 00:25:21,840
Speaker 2: One of the issues I guess we faced even at

470
00:25:21,880 --> 00:25:24,639
Speaker 2: the start of the year before the GARF situation and

471
00:25:24,680 --> 00:25:29,520
Speaker 2: so on, was that spread wetight and people were worried

472
00:25:29,560 --> 00:25:32,679
Speaker 2: that we wouldn't be able to replicate the returns that

473
00:25:32,720 --> 00:25:35,000
Speaker 2: we saw in twenty three, twenty four to twenty five

474
00:25:35,680 --> 00:25:38,959
Speaker 2: to some extent in credit market. So how are you

475
00:25:40,119 --> 00:25:42,840
Speaker 2: thinking about returns this year? What sort of returns could

476
00:25:42,840 --> 00:25:47,760
Speaker 2: we see from Permira and how does that level compare

477
00:25:47,800 --> 00:25:51,240
Speaker 2: to what you've seen in the previous two or three years.

478
00:25:52,119 --> 00:25:54,840
Speaker 4: I think it depends on what strategis you're looking at.

479
00:25:54,960 --> 00:25:58,879
Speaker 4: So spreads today haven't a part. Obviously in some of

480
00:25:58,880 --> 00:26:01,439
Speaker 4: the secondary goannge spread have widened a little bit, but

481
00:26:01,640 --> 00:26:03,840
Speaker 4: there's not a lot of new activity, not a lot

482
00:26:03,840 --> 00:26:05,679
Speaker 4: of primary new issue going on at the moment. So

483
00:26:05,800 --> 00:26:09,520
Speaker 4: it's a tough question to answer whether you know underwriter

484
00:26:09,600 --> 00:26:13,520
Speaker 4: expectations have changed maturally today maybe they're fifty to seventy

485
00:26:13,520 --> 00:26:16,360
Speaker 4: five basis points wider than they were at the very

486
00:26:16,400 --> 00:26:18,720
Speaker 4: beginning of the year or the types of last year.

487
00:26:19,680 --> 00:26:22,199
Speaker 4: Until we see an M and a pipeline, I think

488
00:26:22,359 --> 00:26:24,960
Speaker 4: is a really tough tough one to answer today. But

489
00:26:25,000 --> 00:26:29,399
Speaker 4: I would say in places like opportunistic credit, it's really

490
00:26:29,440 --> 00:26:32,320
Speaker 4: down to a scarcity of capital, especially around the complex names.

491
00:26:32,320 --> 00:26:35,439
Speaker 4: And so even though there's a lot of volatility today,

492
00:26:35,480 --> 00:26:39,320
Speaker 4: whether it's software impacted by AI or Middle East conflict,

493
00:26:41,000 --> 00:26:46,159
Speaker 4: these are very new, odd situations and so although you

494
00:26:46,200 --> 00:26:49,920
Speaker 4: know a lot of that noise is out there, generally speaking,

495
00:26:50,359 --> 00:26:53,040
Speaker 4: it's really around the Pacific risk and how many people

496
00:26:53,119 --> 00:26:56,480
Speaker 4: show up to price it, and that's where you know

497
00:26:56,640 --> 00:26:58,639
Speaker 4: you can you can gain an extra five to six

498
00:26:58,720 --> 00:27:01,080
Speaker 4: hundred basis points.

499
00:27:00,960 --> 00:27:03,080
Speaker 1: Well as an average deal there for you in.

500
00:27:03,200 --> 00:27:07,000
Speaker 4: We stay pretty close to the four key verticals that

501
00:27:07,080 --> 00:27:10,040
Speaker 4: we have at Pamira because we've obviously got, you know,

502
00:27:10,520 --> 00:27:14,600
Speaker 4: these these very knowledgeable sector teams. So we focus on technology,

503
00:27:14,720 --> 00:27:19,040
Speaker 4: we focus on healthcare, we focus on consumer, and we

504
00:27:19,119 --> 00:27:22,360
Speaker 4: focus on business services. And that's really where I think

505
00:27:22,400 --> 00:27:26,480
Speaker 4: we have a significant edge generally across the credit platform

506
00:27:26,520 --> 00:27:29,560
Speaker 4: being how to rely on our on our private equity colleagues,

507
00:27:29,960 --> 00:27:33,560
Speaker 4: uh and that flow of information you know, obviously subject

508
00:27:33,600 --> 00:27:38,640
Speaker 4: to my legal compliance obviously flows incredibly incredibly well between

509
00:27:39,080 --> 00:27:42,359
Speaker 4: between the between the groups. I think in an ever

510
00:27:42,560 --> 00:27:47,440
Speaker 4: increasingly complex world that we find ourselves in, I think

511
00:27:47,440 --> 00:27:51,320
Speaker 4: it's very difficult to do it, to do credit without

512
00:27:51,359 --> 00:27:55,320
Speaker 4: having that sort of sector insight, to be honest, because

513
00:27:56,760 --> 00:28:00,919
Speaker 4: especially around technology, where you can look at something and

514
00:28:00,920 --> 00:28:04,280
Speaker 4: and can just disregard it because it's you know, it

515
00:28:04,320 --> 00:28:06,840
Speaker 4: may not be generating an EBITDA, But then if you

516
00:28:06,920 --> 00:28:10,080
Speaker 4: understand the fundamentals that's driving that and the fact that

517
00:28:10,920 --> 00:28:14,200
Speaker 4: they're reinvesting in technology and their customer base, et cetera,

518
00:28:14,359 --> 00:28:17,680
Speaker 4: and customer retention, you can have a very different view

519
00:28:17,680 --> 00:28:17,840
Speaker 4: in it.

520
00:28:17,880 --> 00:28:18,600
Speaker 3: If you know what you're.

521
00:28:18,480 --> 00:28:22,480
Speaker 4: Looking for and that's where having sector teams that day in,

522
00:28:22,600 --> 00:28:29,000
Speaker 4: day out, that's all they do. It's it's basically means

523
00:28:29,040 --> 00:28:32,200
Speaker 4: we have a much larger opportunity set in which we

524
00:28:32,320 --> 00:28:33,399
Speaker 4: can which we can play in.

525
00:28:35,280 --> 00:28:38,479
Speaker 2: But how's all of this uncertainty you think affecting one

526
00:28:38,520 --> 00:28:41,719
Speaker 2: of the key verticals that you mentioned the consumer sector?

527
00:28:43,240 --> 00:28:46,720
Speaker 2: On one hand, I would think, yes, people are paying

528
00:28:46,760 --> 00:28:50,800
Speaker 2: more for gas at the pump and so on. Not

529
00:28:50,880 --> 00:28:54,320
Speaker 2: the only thing, but inflation is potentially rising. But then

530
00:28:54,880 --> 00:28:57,880
Speaker 2: there's all the government intervention that is coming or has

531
00:28:57,880 --> 00:28:59,960
Speaker 2: already come to sort of offset that. Do you think

532
00:29:00,280 --> 00:29:02,480
Speaker 2: that government intervention is going to be enough to sort

533
00:29:02,480 --> 00:29:05,280
Speaker 2: of prop up the consumer sector and people will still

534
00:29:05,360 --> 00:29:08,080
Speaker 2: keep spending or do you see risks in some parts

535
00:29:08,080 --> 00:29:08,680
Speaker 2: of the sector.

536
00:29:09,920 --> 00:29:13,480
Speaker 4: I think it depends what they're propping up. I think,

537
00:29:13,560 --> 00:29:17,120
Speaker 4: you know, we obviously had the energy shocks, and you

538
00:29:17,200 --> 00:29:20,120
Speaker 4: know the government looking to cap energy prices and so forth,

539
00:29:20,280 --> 00:29:26,280
Speaker 4: and so that obviously keeps people obviously doesn't reduce people's

540
00:29:26,280 --> 00:29:29,200
Speaker 4: purse as a result of that. So that's obviously generally

541
00:29:29,200 --> 00:29:31,960
Speaker 4: a positive. But the consumer is definitely, you know, where

542
00:29:32,000 --> 00:29:34,400
Speaker 4: we sit in the cycle today is definitely a sector

543
00:29:34,440 --> 00:29:37,240
Speaker 4: which we're a lot more putious of than we probably.

544
00:29:36,880 --> 00:29:38,440
Speaker 3: Were just two years ago.

545
00:29:39,840 --> 00:29:42,200
Speaker 4: You know, we're not seeing it come through yet in

546
00:29:42,640 --> 00:29:46,640
Speaker 4: credit card defaults and so forth. But you don't need

547
00:29:46,680 --> 00:29:48,520
Speaker 4: a lot of noise like this for people to suddenly

548
00:29:48,800 --> 00:29:51,960
Speaker 4: tighten their belts not go out as much. You know,

549
00:29:52,080 --> 00:29:55,760
Speaker 4: the whole restaurant sector is struggling today. People just don't

550
00:29:55,760 --> 00:29:57,200
Speaker 4: go out as much as they used to, and so

551
00:29:58,360 --> 00:29:59,840
Speaker 4: you know that that's a space where you have to

552
00:29:59,840 --> 00:30:02,040
Speaker 4: be a lot more courseous of. So I think anything

553
00:30:02,080 --> 00:30:08,080
Speaker 4: that's direct to consumer changes very rapidly to the noise

554
00:30:08,120 --> 00:30:11,000
Speaker 4: that you hear that gets amplified by the media and

555
00:30:11,040 --> 00:30:13,280
Speaker 4: so forth, around the conflict and so forth.

556
00:30:13,360 --> 00:30:15,640
Speaker 3: So you just you have to be a lot more

557
00:30:15,640 --> 00:30:16,440
Speaker 3: conscious of that.

558
00:30:16,880 --> 00:30:19,600
Speaker 4: And you know that that comes through in a number

559
00:30:19,600 --> 00:30:22,480
Speaker 4: of ways, whether it's pricing or the amount of leverage

560
00:30:22,520 --> 00:30:25,960
Speaker 4: that you're you're you you permit.

561
00:30:25,720 --> 00:30:27,840
Speaker 3: On an opportunity.

562
00:30:27,720 --> 00:30:29,800
Speaker 4: And sometimes that just doesn't work for the owner of

563
00:30:29,840 --> 00:30:32,840
Speaker 4: the business, so you just don't have a meeting of binds.

564
00:30:34,040 --> 00:30:36,920
Speaker 4: We have one consumer deal in our inn type portfolio today,

565
00:30:36,960 --> 00:30:39,120
Speaker 4: so it gives you an idea of how how little

566
00:30:39,160 --> 00:30:40,400
Speaker 4: we are focused on that today.

567
00:30:40,600 --> 00:30:42,479
Speaker 1: Where do you focus by country in Europe?

568
00:30:42,720 --> 00:30:45,160
Speaker 4: So we're you know, we're probably over indexed in the

569
00:30:45,240 --> 00:30:48,360
Speaker 4: UK generally, But to be honest, some of the businesses

570
00:30:48,440 --> 00:30:51,560
Speaker 4: that we've invested in have global revenues, uh and so

571
00:30:51,880 --> 00:30:53,880
Speaker 4: you know, i'd say they're based in the UK, but

572
00:30:54,240 --> 00:30:58,360
Speaker 4: you know, it's hard to say that they're a UK business.

573
00:30:58,640 --> 00:31:03,240
Speaker 4: We've got all opportunities that we've we've transacted in in

574
00:31:03,640 --> 00:31:08,880
Speaker 4: southern Spain and then just broadly across across across Europe.

575
00:31:09,040 --> 00:31:12,640
Speaker 4: We generally speaking, we haven't done a lot in France today.

576
00:31:13,440 --> 00:31:18,360
Speaker 4: We're looking recently at Germany, Northern Italy and Spain. But

577
00:31:18,600 --> 00:31:20,680
Speaker 4: you know, a lot of the opportunities we see today

578
00:31:20,760 --> 00:31:22,000
Speaker 4: come through come through with the UK.

579
00:31:22,760 --> 00:31:24,960
Speaker 1: In terms of complexity that you mentioned earlier, I mean,

580
00:31:25,080 --> 00:31:27,960
Speaker 1: that's a word that's used here a lot to apply

581
00:31:28,040 --> 00:31:30,360
Speaker 1: to even clos and I know you're you know you

582
00:31:30,480 --> 00:31:34,520
Speaker 1: mentioned clos earlier. It's a big focus collateralized loan obligations.

583
00:31:34,560 --> 00:31:37,120
Speaker 1: Just those three words disturbs a lot of people and

584
00:31:37,200 --> 00:31:39,680
Speaker 1: makes them think of CDOs. Obviously they're not. How does

585
00:31:39,800 --> 00:31:41,920
Speaker 1: how is that business going at a time when when

586
00:31:41,960 --> 00:31:45,520
Speaker 1: loans are under a lot of pressure? How is the arbitrage.

587
00:31:45,560 --> 00:31:46,960
Speaker 1: I mean, we know a lot of people actually like

588
00:31:47,320 --> 00:31:50,520
Speaker 1: the products, particularly the higher quality tiers of it, but

589
00:31:50,840 --> 00:31:52,760
Speaker 1: they're a bit more skeedulal of the equity. I'm wondering

590
00:31:52,760 --> 00:31:54,280
Speaker 1: what your view of the business is right now and

591
00:31:54,280 --> 00:31:55,520
Speaker 1: where do we go for the rest of the year.

592
00:31:56,360 --> 00:31:59,040
Speaker 4: Look, I mean, it's been a phenomenally performing asset class

593
00:31:59,080 --> 00:32:01,480
Speaker 4: over the last few years, you know, post GFC. Any

594
00:32:01,760 --> 00:32:04,040
Speaker 4: to answer during the GFC, A lot of good managers

595
00:32:04,280 --> 00:32:07,360
Speaker 4: continue to pay distributions on the equity, so you know,

596
00:32:07,640 --> 00:32:11,600
Speaker 4: it's actually proven to be a very resilient, resilient structure.

597
00:32:11,840 --> 00:32:14,280
Speaker 4: You know, there's been some technical reasons why some of

598
00:32:14,320 --> 00:32:18,360
Speaker 4: the trances are traded out recently. We're keeping an eye

599
00:32:18,400 --> 00:32:21,000
Speaker 4: on some of those. We think they might become more interesting.

600
00:32:21,560 --> 00:32:25,480
Speaker 4: But generally speaking that the CLO space and the equity

601
00:32:25,520 --> 00:32:29,000
Speaker 4: as well has performed exceptionally well, I don't I don't

602
00:32:29,000 --> 00:32:31,600
Speaker 4: necessarily see that change. Look, there are periods certainly where

603
00:32:31,640 --> 00:32:33,320
Speaker 4: as you as you're right you said James d Art

604
00:32:33,440 --> 00:32:37,160
Speaker 4: doesn't work, And I don't think we're I don't think

605
00:32:37,160 --> 00:32:37,840
Speaker 4: we're there today.

606
00:32:38,400 --> 00:32:40,600
Speaker 3: We may have been there, you know a few weeks back.

607
00:32:40,920 --> 00:32:43,760
Speaker 4: Today it's probably a bit better, but it's a changing

608
00:32:43,800 --> 00:32:46,360
Speaker 4: feast and I think a lot of these CLO managers

609
00:32:46,800 --> 00:32:49,280
Speaker 4: come to market just the right time, get things done,

610
00:32:49,320 --> 00:32:52,120
Speaker 4: and then you know, they have a period of time

611
00:32:52,120 --> 00:32:55,480
Speaker 4: where they reassess, maybe add a little bit to existing clos.

612
00:32:56,120 --> 00:32:59,240
Speaker 4: But the structures themselves have held up well, and I

613
00:32:59,280 --> 00:33:02,960
Speaker 4: would say a lot more resilient post the GFC with

614
00:33:03,080 --> 00:33:07,000
Speaker 4: the equity alignment to the regulatory equity alignment that was required.

615
00:33:07,040 --> 00:33:08,840
Speaker 4: So jenery speaking, I think it's a it's just a

616
00:33:08,840 --> 00:33:09,680
Speaker 4: decent asset class.

617
00:33:10,560 --> 00:33:14,520
Speaker 1: Just to throw another three letter acronym L liability management

618
00:33:16,240 --> 00:33:18,920
Speaker 1: that's been big in the US. We have taught to

619
00:33:18,960 --> 00:33:21,480
Speaker 1: lawyers who are keen to make it much bigger in Europe.

620
00:33:21,600 --> 00:33:25,720
Speaker 1: But I'm looking at the CLO impact. You know, we

621
00:33:25,720 --> 00:33:29,240
Speaker 1: we we talked to investors and clos and various other

622
00:33:29,360 --> 00:33:32,160
Speaker 1: parts of the market. They you know, if they're not

623
00:33:32,200 --> 00:33:35,800
Speaker 1: big enough and they get with an LME, even if

624
00:33:35,800 --> 00:33:38,040
Speaker 1: the loan is at ninety, they might want to just

625
00:33:38,080 --> 00:33:41,520
Speaker 1: get out a much bigger discount because they just don't

626
00:33:41,560 --> 00:33:44,120
Speaker 1: have the firepower to go through such a thing. How's

627
00:33:44,120 --> 00:33:45,240
Speaker 1: it affecting your business?

628
00:33:46,160 --> 00:33:48,560
Speaker 4: That's to be honest, that's a spot on I think,

629
00:33:48,640 --> 00:33:52,960
Speaker 4: you know, although LEM really hasn't made its way materially

630
00:33:53,000 --> 00:33:56,840
Speaker 4: to Europe, it is definitely something that is in the

631
00:33:56,840 --> 00:34:00,120
Speaker 4: back of people's mind, both as you know CLO manager

632
00:34:00,360 --> 00:34:03,800
Speaker 4: and you know opportunistic credit special sits or even distress guys.

633
00:34:04,360 --> 00:34:06,920
Speaker 4: You know, twenty odd years ago, if you were an

634
00:34:06,920 --> 00:34:10,239
Speaker 4: investor buying a twenty million piece in a seat, a

635
00:34:10,239 --> 00:34:14,040
Speaker 4: super senior cap structure and a boordly syndicated loan and

636
00:34:14,080 --> 00:34:17,640
Speaker 4: a restructuring occurred, you would get your pro or to

637
00:34:17,680 --> 00:34:21,000
Speaker 4: share of whatever was offer and that's how it worked.

638
00:34:22,160 --> 00:34:24,560
Speaker 4: That is not the case anymore. You can be top

639
00:34:24,600 --> 00:34:27,719
Speaker 4: of the cap structure. If the company that goes through

640
00:34:27,719 --> 00:34:32,480
Speaker 4: a restructuring needs the liquidity, the big guy who can

641
00:34:32,520 --> 00:34:36,960
Speaker 4: write the bigger check can typically dictate how that restructuring

642
00:34:37,000 --> 00:34:40,759
Speaker 4: will go. So I think, you know, one of the

643
00:34:40,760 --> 00:34:43,160
Speaker 4: things that we permit a credit are very conscious of

644
00:34:43,600 --> 00:34:47,359
Speaker 4: across the platform is, you know, if we're never going

645
00:34:47,360 --> 00:34:49,960
Speaker 4: to be a massive player in any one particular cap structure,

646
00:34:50,040 --> 00:34:52,440
Speaker 4: so we look at the secondary market to a slightly

647
00:34:52,440 --> 00:34:55,200
Speaker 4: different lens to now, and that's why the software the

648
00:34:55,239 --> 00:34:58,160
Speaker 4: broad sell off in software names, there's been such an

649
00:34:58,160 --> 00:35:01,560
Speaker 4: interesting place for us because a lot of these names

650
00:35:01,560 --> 00:35:03,680
Speaker 4: we just don't believe we'll go through a restructuring, so

651
00:35:03,719 --> 00:35:05,960
Speaker 4: it's more of a porter pa trade. And so if

652
00:35:06,040 --> 00:35:08,080
Speaker 4: you don't believe it's going through restructuring and you don't

653
00:35:08,480 --> 00:35:11,600
Speaker 4: believe there will be a liquidity event, then you're buying

654
00:35:11,640 --> 00:35:13,440
Speaker 4: something at eighty five that in the next six or

655
00:35:13,480 --> 00:35:16,160
Speaker 4: twelve months probably trads at ninety five, and then you

656
00:35:16,239 --> 00:35:19,160
Speaker 4: sell into that market and that's fine. You know, no

657
00:35:19,320 --> 00:35:22,640
Speaker 4: lem's triggered, nothing good. But if you're looking at things

658
00:35:22,680 --> 00:35:25,239
Speaker 4: on the basis that you know, I'm buying something at

659
00:35:25,239 --> 00:35:27,719
Speaker 4: five times that traders at ten times. If it goes

660
00:35:27,719 --> 00:35:29,680
Speaker 4: through a bankruptcy process, I'll come out the other end

661
00:35:29,719 --> 00:35:32,399
Speaker 4: and known the equity and you're a small guy, that's

662
00:35:32,440 --> 00:35:33,960
Speaker 4: probably not how it plays out anymore.

663
00:35:36,160 --> 00:35:39,000
Speaker 2: I guess one risk of this current uncertainty and what

664
00:35:39,040 --> 00:35:41,960
Speaker 2: you mentioned about for being the Canarian coal mine and

665
00:35:42,000 --> 00:35:46,280
Speaker 2: so on, is that we could see more enemy exercises

666
00:35:46,360 --> 00:35:48,839
Speaker 2: come through in Europe. Do you think that to risk

667
00:35:48,920 --> 00:35:51,600
Speaker 2: or do you think that they're just singular opportunities that

668
00:35:52,719 --> 00:35:54,960
Speaker 2: could come up like the one that you just should

669
00:35:54,960 --> 00:35:55,799
Speaker 2: have walked us through.

670
00:35:56,680 --> 00:35:59,720
Speaker 4: No, well, I think it's Everyone always talks about Europe

671
00:35:59,719 --> 00:36:02,040
Speaker 4: being singularity, and I always think that's a little bit

672
00:36:02,040 --> 00:36:07,320
Speaker 4: of a misnomer because Europe has a myriad of bankruptcy regimes,

673
00:36:07,320 --> 00:36:12,239
Speaker 4: and so although Leene absolutely is something that potentially could

674
00:36:12,239 --> 00:36:15,279
Speaker 4: happen increasingly across Europe, I think you also have to

675
00:36:15,360 --> 00:36:18,279
Speaker 4: counter the fact that the equity in certain jurisdictions is

676
00:36:18,320 --> 00:36:20,040
Speaker 4: a lot stronger than it is in a Chapter eleven

677
00:36:20,080 --> 00:36:22,360
Speaker 4: process in the US, and so I think that's a

678
00:36:22,400 --> 00:36:25,080
Speaker 4: counterweight to someone just coming in and muscling their way in.

679
00:36:25,280 --> 00:36:27,920
Speaker 4: The large guy that comes in and Froesy's weight around

680
00:36:28,000 --> 00:36:31,760
Speaker 4: still has to contend with the fact that local laws

681
00:36:31,920 --> 00:36:34,120
Speaker 4: may mean that they don't get as much as the equity,

682
00:36:34,239 --> 00:36:35,560
Speaker 4: or they have to give a bigger tip to the

683
00:36:35,600 --> 00:36:41,719
Speaker 4: existing holders. They still may cramm down existing senior holders,

684
00:36:41,760 --> 00:36:44,640
Speaker 4: but they may not get the best deal that they

685
00:36:44,640 --> 00:36:46,600
Speaker 4: were hoping for that they potentially would get in a

686
00:36:46,640 --> 00:36:48,120
Speaker 4: Chapter eleven process in the US.

687
00:36:49,440 --> 00:36:53,759
Speaker 1: After the Liberation Day so called one year ago, there

688
00:36:53,840 --> 00:36:57,120
Speaker 1: was this kind of knee jerk push from global funds

689
00:36:57,120 --> 00:36:59,480
Speaker 1: into other parts of the world, and the most immediate

690
00:37:00,040 --> 00:37:03,759
Speaker 1: active opportunity was Europe. Obviously, that's a big thing that

691
00:37:04,200 --> 00:37:07,359
Speaker 1: it included, and everyone realized that they needed to be

692
00:37:07,400 --> 00:37:11,040
Speaker 1: more geographically diversified. But now we've got the war impact

693
00:37:11,120 --> 00:37:15,040
Speaker 1: and the much potentially much stronger negatives in terms of

694
00:37:15,200 --> 00:37:18,680
Speaker 1: European economies that flows, things have been reversed a bit.

695
00:37:18,719 --> 00:37:20,480
Speaker 1: I'm wondering where you see that now in terms of,

696
00:37:20,520 --> 00:37:22,120
Speaker 1: you know, when you go out and talk to people

697
00:37:22,200 --> 00:37:25,160
Speaker 1: that aren't European or aren't based there, or aren't even

698
00:37:25,239 --> 00:37:28,440
Speaker 1: exposed to the continent, how they see it right now

699
00:37:28,560 --> 00:37:31,319
Speaker 1: and against the US. Yeah.

700
00:37:31,320 --> 00:37:33,839
Speaker 4: Look, so I think you know, if coming into this year,

701
00:37:33,840 --> 00:37:37,759
Speaker 4: I would have said that Europe was looking probably the

702
00:37:37,800 --> 00:37:41,920
Speaker 4: best it's looked in several years, primarily because you always

703
00:37:41,920 --> 00:37:44,879
Speaker 4: looked at Europe at generating one one and a half

704
00:37:44,880 --> 00:37:47,719
Speaker 4: percent of GDP, the US was two and a half three,

705
00:37:47,920 --> 00:37:51,279
Speaker 4: and so the difference was of a size which basically meant, well,

706
00:37:52,040 --> 00:37:55,680
Speaker 4: you overweight US versus Europe. I think coming into this year,

707
00:37:55,760 --> 00:37:58,600
Speaker 4: I think there was a general consensus that US probably

708
00:37:58,680 --> 00:38:00,879
Speaker 4: wasn't going to grow as much and Europe is probably

709
00:38:01,040 --> 00:38:07,000
Speaker 4: grow a little better. Don't underestimate Germany's ability to, you know,

710
00:38:07,080 --> 00:38:11,319
Speaker 4: to relinquish its fiscal responsibilities and start to spend a

711
00:38:11,320 --> 00:38:13,919
Speaker 4: lot more money now and as a result, that could

712
00:38:14,000 --> 00:38:17,000
Speaker 4: drive a lot of positivity across Europe. Look, I think

713
00:38:17,120 --> 00:38:19,600
Speaker 4: I think depending on what happens in the Middle East

714
00:38:19,640 --> 00:38:23,680
Speaker 4: over the next three to six weeks, that that that

715
00:38:23,680 --> 00:38:26,640
Speaker 4: that backdrop still may be still may be intact, and

716
00:38:26,680 --> 00:38:28,919
Speaker 4: so we would still we have to wait and see.

717
00:38:28,960 --> 00:38:30,960
Speaker 4: I think I think today there's still a lot of

718
00:38:31,040 --> 00:38:36,080
Speaker 4: uncertainty and until until the conflict dies down or some

719
00:38:36,120 --> 00:38:39,440
Speaker 4: sort of agreement is reached, I think it's very difficult

720
00:38:39,440 --> 00:38:42,839
Speaker 4: to make take a long term view over Europe versus

721
00:38:42,920 --> 00:38:43,920
Speaker 4: the US today.

722
00:38:43,640 --> 00:38:45,840
Speaker 3: Because I think there are there's.

723
00:38:45,440 --> 00:38:48,480
Speaker 4: Competing reasons why one looks better than the other, and

724
00:38:48,520 --> 00:38:50,560
Speaker 4: I think investors are taking a bit of a pause

725
00:38:50,680 --> 00:38:53,759
Speaker 4: just to see how things work out. But generally, having

726
00:38:53,760 --> 00:38:55,480
Speaker 4: done this for thirty odd years now, I do I

727
00:38:55,480 --> 00:38:58,000
Speaker 4: do think Europe is fairly attractive place today.

728
00:38:58,719 --> 00:39:00,640
Speaker 1: Yeah, I think that the people have seen the value

729
00:39:00,800 --> 00:39:02,960
Speaker 1: relative relative value, but I think they're a bit more

730
00:39:02,960 --> 00:39:05,360
Speaker 1: concerned than that. Crazy to say, but the one big

731
00:39:05,400 --> 00:39:07,879
Speaker 1: theme that a lot of investors are looking at much

732
00:39:07,920 --> 00:39:11,239
Speaker 1: more closely is defense. Across the board, big up tick

733
00:39:11,239 --> 00:39:12,719
Speaker 1: and spend, And I was wondering, you know, how you

734
00:39:12,840 --> 00:39:14,759
Speaker 1: view that as permira. Is there an opportunity for you

735
00:39:14,880 --> 00:39:16,440
Speaker 1: that Are there any particular parts of defense that you

736
00:39:16,520 --> 00:39:17,279
Speaker 1: might get involved with.

737
00:39:18,440 --> 00:39:22,319
Speaker 4: Yes, we have a very strong ESG overlay with a

738
00:39:22,320 --> 00:39:24,360
Speaker 4: lot of stuff that we do, so I guess the

739
00:39:24,400 --> 00:39:27,560
Speaker 4: point end we probably stay away from, but the maintenance.

740
00:39:27,040 --> 00:39:29,439
Speaker 3: Thereof we probably would look at.

741
00:39:29,760 --> 00:39:33,120
Speaker 4: We were actually looking at a port business just recently

742
00:39:33,160 --> 00:39:37,600
Speaker 4: actually across across Europe that would service not just I

743
00:39:37,600 --> 00:39:40,440
Speaker 4: think they called them great ships, but you know, military,

744
00:39:40,520 --> 00:39:44,239
Speaker 4: military hardware and so forth. Look, I think that's that's

745
00:39:44,280 --> 00:39:46,560
Speaker 4: still to play out. There's definitely a lot of money

746
00:39:46,560 --> 00:39:48,759
Speaker 4: being raised in that space. I think we're going to

747
00:39:48,840 --> 00:39:54,040
Speaker 4: choose choose our situations very carefully. But you know, although

748
00:39:54,160 --> 00:39:56,120
Speaker 4: potentially a growth there, I think there's just a lot

749
00:39:56,160 --> 00:39:58,840
Speaker 4: of capital s A lot of capital will chase that

750
00:39:58,920 --> 00:40:01,640
Speaker 4: down and so I don't think maybe the opportunity in

751
00:40:01,719 --> 00:40:03,520
Speaker 4: terms of pricing will be as good as people think

752
00:40:03,560 --> 00:40:05,839
Speaker 4: it ultimately will be. But I do think there will

753
00:40:05,880 --> 00:40:09,680
Speaker 4: be equally good opportunities in other sectors which we will

754
00:40:09,680 --> 00:40:13,080
Speaker 4: probably focus full time on.

755
00:40:13,080 --> 00:40:14,880
Speaker 2: One of the issues that's come up in some of

756
00:40:14,880 --> 00:40:19,520
Speaker 2: our conversations has been how this elevated uncertainty across the

757
00:40:19,560 --> 00:40:25,239
Speaker 2: golf might affect fundraising broadly, Like, we know that there's

758
00:40:25,320 --> 00:40:28,240
Speaker 2: been quite a bit of issuance activity from this sovereign

759
00:40:28,280 --> 00:40:31,640
Speaker 2: related entities in the region, but it's really still seen

760
00:40:31,640 --> 00:40:34,480
Speaker 2: as a source of capital, I think, and I'm not

761
00:40:34,520 --> 00:40:36,920
Speaker 2: just talking about them buying Harrods and so on. Like,

762
00:40:37,200 --> 00:40:40,960
Speaker 2: how would you say that the situation in the golf

763
00:40:41,360 --> 00:40:43,680
Speaker 2: is affecting fundraising if at all?

764
00:40:45,560 --> 00:40:48,680
Speaker 3: Look, it's I think in this short term.

765
00:40:48,880 --> 00:40:51,080
Speaker 4: I mean, you've obviously got to be very sensitive to

766
00:40:51,120 --> 00:40:55,640
Speaker 4: the situation, so you know, it's it's it's it's obviously

767
00:40:56,200 --> 00:40:58,279
Speaker 4: a human a human cost to this as well. So

768
00:40:59,000 --> 00:41:01,359
Speaker 4: I would say we haven't necessarily seen a slow down.

769
00:41:01,760 --> 00:41:03,680
Speaker 4: But to be honest, it's only been two or three weeks.

770
00:41:03,680 --> 00:41:05,920
Speaker 4: So if you ask me that question six weeks from now,

771
00:41:05,920 --> 00:41:08,880
Speaker 4: maybe it's a very different answer. But technology allows people

772
00:41:08,880 --> 00:41:13,799
Speaker 4: to still communicate very easily. And so you know, we're

773
00:41:13,800 --> 00:41:16,480
Speaker 4: in contact with a lot of our largest investors in

774
00:41:16,480 --> 00:41:18,879
Speaker 4: the region. We have got very deep relationship with them.

775
00:41:19,480 --> 00:41:23,160
Speaker 4: We haven't seen anything significantly change there. But as I said,

776
00:41:23,200 --> 00:41:25,879
Speaker 4: the longer this goes on, maybe that changes. But they

777
00:41:25,880 --> 00:41:28,719
Speaker 4: still have capital deploy they want to give it to

778
00:41:28,960 --> 00:41:30,359
Speaker 4: managers that they trust.

779
00:41:30,360 --> 00:41:31,560
Speaker 3: Both in equity and credit.

780
00:41:33,280 --> 00:41:36,040
Speaker 1: Private acty generally is you know, always getting a bit

781
00:41:36,040 --> 00:41:39,000
Speaker 1: of a tough press in certain places, and there is

782
00:41:39,800 --> 00:41:42,320
Speaker 1: you know, you've mentioned ESG that there are social impacts,

783
00:41:42,920 --> 00:41:45,720
Speaker 1: but I'm wondering in terms of the industry more broadly,

784
00:41:45,760 --> 00:41:48,040
Speaker 1: is it going through a bit of a test phase

785
00:41:48,080 --> 00:41:50,200
Speaker 1: at this point? Is they're going to be consolidation. Are

786
00:41:50,239 --> 00:41:52,960
Speaker 1: their firms sitting on mountains of dry powder that could

787
00:41:53,000 --> 00:41:55,880
Speaker 1: convince you know, LPs to back takeovers of smaller firms,

788
00:41:57,080 --> 00:41:58,520
Speaker 1: you know, so they don't have to go through another

789
00:41:58,520 --> 00:41:59,360
Speaker 1: fundraising cycle.

790
00:42:00,160 --> 00:42:03,040
Speaker 3: Yeah. Look, I think not just equity, I think credits

791
00:42:03,080 --> 00:42:04,839
Speaker 3: as well. I think there's a.

792
00:42:04,800 --> 00:42:09,840
Speaker 4: Lot of smaller funds out there who are maybe sitting

793
00:42:09,880 --> 00:42:12,800
Speaker 4: on one or two assets, and once they sold those assets,

794
00:42:12,840 --> 00:42:17,120
Speaker 4: I think it may be tough to raise to raise

795
00:42:17,160 --> 00:42:22,400
Speaker 4: another vintage, whether it's either equity or or credit. I

796
00:42:22,440 --> 00:42:24,520
Speaker 4: think one of the funnels we're seeing a little bit

797
00:42:24,520 --> 00:42:28,160
Speaker 4: more of credit is when we're lending to business lends.

798
00:42:28,200 --> 00:42:32,480
Speaker 4: The businesses that are owned by private equity sponsors that

799
00:42:32,640 --> 00:42:35,839
Speaker 4: are raising money on a deal by deal basis, so

800
00:42:36,520 --> 00:42:39,879
Speaker 4: they've you know, for whatever reason decideress either spin out

801
00:42:40,280 --> 00:42:42,480
Speaker 4: haven't been able to raise the capital, or they need

802
00:42:42,480 --> 00:42:43,960
Speaker 4: to build their track record and so.

803
00:42:43,840 --> 00:42:44,359
Speaker 3: They're going out.

804
00:42:44,400 --> 00:42:46,120
Speaker 4: And so we've seen that a couple of times. I'm

805
00:42:46,160 --> 00:42:49,360
Speaker 4: very happy to look at those businesses. It really depends

806
00:42:49,360 --> 00:42:51,680
Speaker 4: on the on the managers and if we know them.

807
00:42:52,320 --> 00:42:55,080
Speaker 4: But look, I think there's going to be consolidation, at

808
00:42:55,120 --> 00:42:59,120
Speaker 4: least at the smaller end in both equity and credit

809
00:42:59,160 --> 00:43:01,800
Speaker 4: funds in the in the coming years.

810
00:43:02,320 --> 00:43:03,960
Speaker 1: If you have to pick one thing though, in terms

811
00:43:03,960 --> 00:43:06,880
Speaker 1: of like where you're really excited for the next twelve months,

812
00:43:07,000 --> 00:43:09,120
Speaker 1: is there one thing that we're you know, we're always

813
00:43:09,160 --> 00:43:11,600
Speaker 1: asking about relative value. Is there one thing you think

814
00:43:11,719 --> 00:43:13,000
Speaker 1: is particularly attractive right now?

815
00:43:14,280 --> 00:43:17,920
Speaker 4: Well, I think with the increased volatility that we're starting

816
00:43:17,920 --> 00:43:20,640
Speaker 4: to see now, the secondary market is certainly going to

817
00:43:20,680 --> 00:43:22,360
Speaker 4: be a lot more interesting this year than it was

818
00:43:22,440 --> 00:43:24,360
Speaker 4: last year, and it has been for some time. So

819
00:43:25,040 --> 00:43:28,560
Speaker 4: if you think about periods of volatility, whether it's the GFC,

820
00:43:28,920 --> 00:43:35,560
Speaker 4: European Sovereign crisis, the commodities crisis in fifteen sixteen, COVID,

821
00:43:36,080 --> 00:43:39,880
Speaker 4: a couple of days during uh, you know, a liberation week.

822
00:43:40,760 --> 00:43:41,360
Speaker 3: And now.

823
00:43:43,200 --> 00:43:45,600
Speaker 4: You can really count on one hand the number of

824
00:43:45,640 --> 00:43:49,160
Speaker 4: piers of volatility, right and so and and they were

825
00:43:49,200 --> 00:43:52,040
Speaker 4: all very all very different, and those those windows of

826
00:43:52,040 --> 00:43:57,160
Speaker 4: opportunities got smaller and smaller. The fact that the opportunity

827
00:43:57,160 --> 00:44:00,839
Speaker 4: in software is still present six weeks later probably tells

828
00:44:00,880 --> 00:44:03,600
Speaker 4: you something that there is a bit more volatility and

829
00:44:03,680 --> 00:44:05,959
Speaker 4: noise out there today than there has been for some time.

830
00:44:06,040 --> 00:44:08,520
Speaker 4: And so if I had to put my finger on

831
00:44:08,640 --> 00:44:10,720
Speaker 4: one thing, I think some of the risk adjustine returns

832
00:44:10,760 --> 00:44:13,960
Speaker 4: being able to buy firstly secured in some of these

833
00:44:14,080 --> 00:44:16,640
Speaker 4: very large cap structors, it's probably a good place to

834
00:44:16,640 --> 00:44:18,279
Speaker 4: put some money today.

835
00:44:18,440 --> 00:44:20,799
Speaker 1: You're talking about software specifically.

836
00:44:20,840 --> 00:44:25,919
Speaker 4: Software, but also you know, it really really depends over

837
00:44:25,920 --> 00:44:28,920
Speaker 4: the next six weeks whether you know, if the conflict

838
00:44:29,080 --> 00:44:32,560
Speaker 4: in the Middle East doesn't slow down, are we going

839
00:44:32,600 --> 00:44:38,640
Speaker 4: to see that impact other businesses potentially? And I think

840
00:44:38,640 --> 00:44:40,839
Speaker 4: there will be un knock on effect, and so there'll

841
00:44:40,880 --> 00:44:43,799
Speaker 4: be second third order events, which basically mean sectors that

842
00:44:43,840 --> 00:44:45,800
Speaker 4: you thought were probably more resilient.

843
00:44:45,600 --> 00:44:46,480
Speaker 3: Start to trade down.

844
00:44:47,480 --> 00:44:49,480
Speaker 1: And in terms of how you would get an edge

845
00:44:49,520 --> 00:44:52,160
Speaker 1: on that, that's your depth of team, your history in

846
00:44:52,160 --> 00:44:54,840
Speaker 1: the sector. You're able to see these see the value

847
00:44:54,840 --> 00:44:56,920
Speaker 1: and actually, you know, get a better read on it

848
00:44:57,120 --> 00:44:57,480
Speaker 1: than others.

849
00:44:57,560 --> 00:45:01,279
Speaker 4: You think, yeah, yeah, absolutely, I mean being able to

850
00:45:01,560 --> 00:45:04,279
Speaker 4: We use a term, you know, information velocity, right, the

851
00:45:04,320 --> 00:45:06,799
Speaker 4: speed of which you can get to the crutch of

852
00:45:06,840 --> 00:45:10,960
Speaker 4: an issue. And I'm still even surprised today, how how

853
00:45:11,160 --> 00:45:14,680
Speaker 4: how how quick when we when we look at a company,

854
00:45:14,800 --> 00:45:18,000
Speaker 4: one of our private equity colleagues in UH, you know,

855
00:45:18,040 --> 00:45:21,440
Speaker 4: in healthcare, may know the company, may know a customer,

856
00:45:21,480 --> 00:45:22,239
Speaker 4: they may know.

857
00:45:22,239 --> 00:45:24,560
Speaker 3: A supplier, may know a management team.

858
00:45:24,600 --> 00:45:27,200
Speaker 4: Just having that, you know, just being able to pick

859
00:45:27,280 --> 00:45:30,040
Speaker 4: up the phone speak to a senior advisor. I always say,

860
00:45:30,440 --> 00:45:33,240
Speaker 4: we're always two phone calls away from someone that knows

861
00:45:33,680 --> 00:45:36,520
Speaker 4: a lot more about a situation than we do, and

862
00:45:36,600 --> 00:45:39,839
Speaker 4: so we always, as part of our underwriting process, will

863
00:45:39,880 --> 00:45:43,240
Speaker 4: pick up the phone, and in Mosses, we will bring

864
00:45:43,280 --> 00:45:45,560
Speaker 4: one of our private equity colleagues onto the deal team

865
00:45:45,600 --> 00:45:49,000
Speaker 4: and help us get through our own investment committee. Because

866
00:45:49,360 --> 00:45:56,840
Speaker 4: having that ability to synthesize or demystify the equity story

867
00:45:56,880 --> 00:46:00,359
Speaker 4: for someone UH is invaluable. And so if you can

868
00:46:00,400 --> 00:46:02,200
Speaker 4: do that under one roof, I think that's a pretty

869
00:46:02,200 --> 00:46:03,040
Speaker 4: powerful proposition.

870
00:46:03,120 --> 00:46:06,000
Speaker 1: Today is now the time though to buy the software

871
00:46:06,520 --> 00:46:08,759
Speaker 1: as it's dropping or do you wait for it to

872
00:46:08,800 --> 00:46:09,560
Speaker 1: drop even more.

873
00:46:10,040 --> 00:46:11,960
Speaker 4: Well, I'm not going to sit here and say I

874
00:46:11,960 --> 00:46:13,719
Speaker 4: can always buy the low because I can't.

875
00:46:13,800 --> 00:46:14,960
Speaker 3: I don't think anyone else can.

876
00:46:15,040 --> 00:46:18,600
Speaker 4: But you know you're you're averaging overtime, right, And so

877
00:46:18,880 --> 00:46:21,680
Speaker 4: I think we've we think it's interesting today.

878
00:46:22,120 --> 00:46:24,239
Speaker 3: Could it be more interesting tomorrow? Absolutely?

879
00:46:24,760 --> 00:46:26,319
Speaker 4: I think the fund that we've gone a long term

880
00:46:26,400 --> 00:46:29,880
Speaker 4: view on listening on this stuff. So fundamentally we like

881
00:46:29,960 --> 00:46:31,360
Speaker 4: some of these names, and we think they're going to

882
00:46:31,360 --> 00:46:34,080
Speaker 4: be around for some time, so we will buy as

883
00:46:34,080 --> 00:46:36,600
Speaker 4: and when the opportunity presents itself.

884
00:46:39,080 --> 00:46:42,040
Speaker 2: We talked a lot about the golf and obviously also

885
00:46:42,120 --> 00:46:47,759
Speaker 2: about the software potential opportunity. What would you say is

886
00:46:48,400 --> 00:46:52,440
Speaker 2: the one key worry from your and investor? What question

887
00:46:52,560 --> 00:46:55,520
Speaker 2: are they asking you most frequently?

888
00:46:56,840 --> 00:46:58,800
Speaker 4: Well, I think you kind of touched that, or James

889
00:46:58,800 --> 00:47:01,120
Speaker 4: touched on it, but just a few minutes ago around

890
00:47:01,239 --> 00:47:05,239
Speaker 4: around Europe. And you know, if you think someone if

891
00:47:05,239 --> 00:47:09,319
Speaker 4: you've got an an end liberty partner or investor, if

892
00:47:09,320 --> 00:47:12,279
Speaker 4: they've got a global portfolio, typically sixty seventy percent of

893
00:47:12,280 --> 00:47:14,680
Speaker 4: that will be North America and then the rest will

894
00:47:14,719 --> 00:47:15,719
Speaker 4: be a mixture of Europe and.

895
00:47:17,520 --> 00:47:18,120
Speaker 3: In Asia.

896
00:47:18,520 --> 00:47:21,399
Speaker 4: Maybe the ways is slightly different, but broadly speaking, they'll

897
00:47:21,440 --> 00:47:25,440
Speaker 4: poor be overweight the US because Europe has underperform relative

898
00:47:25,480 --> 00:47:28,799
Speaker 4: to the US for several years. I think, as I said,

899
00:47:28,800 --> 00:47:31,120
Speaker 4: coming into this year, I think you know, that was

900
00:47:31,200 --> 00:47:32,399
Speaker 4: being dispelled a little bit.

901
00:47:32,480 --> 00:47:34,480
Speaker 3: But now with everything that's going on the.

902
00:47:34,520 --> 00:47:38,000
Speaker 4: Energy, the energy issue that we're presenting ourselves today, I

903
00:47:38,000 --> 00:47:40,399
Speaker 4: think people will start to question again. But I think

904
00:47:40,400 --> 00:47:43,840
Speaker 4: it's too early to have a really firm view on that.

905
00:47:43,880 --> 00:47:46,959
Speaker 4: I think we could quite quickly go back to where

906
00:47:47,000 --> 00:47:50,360
Speaker 4: we were at the beginning of this year, with Europe

907
00:47:50,400 --> 00:47:54,160
Speaker 4: positioning itself for much more higher sustained growth than we

908
00:47:54,239 --> 00:47:57,960
Speaker 4: had in the subsequent years. And so I think just

909
00:47:58,000 --> 00:47:59,920
Speaker 4: be patient and just to see how this how they

910
00:48:00,160 --> 00:48:03,160
Speaker 4: plays out. But I would say that's the biggest issue

911
00:48:03,200 --> 00:48:06,160
Speaker 4: because people have still got the mindset that Europe is,

912
00:48:06,280 --> 00:48:08,800
Speaker 4: you know, it's a collection of countries that don't necessarily

913
00:48:08,880 --> 00:48:12,320
Speaker 4: always working coordination relative to the US, and I think.

914
00:48:13,800 --> 00:48:15,880
Speaker 3: I think I think that's always always the case, to be.

915
00:48:15,880 --> 00:48:20,040
Speaker 1: Honest, And when you flag software in is a potential

916
00:48:20,080 --> 00:48:23,760
Speaker 1: opportunity in terms of software debt. Are you talking about

917
00:48:23,760 --> 00:48:27,080
Speaker 1: private loans, direct loans or are you talking about broadly syndicated

918
00:48:27,080 --> 00:48:29,520
Speaker 1: loans and is it mostly Europe that you're looking at

919
00:48:29,560 --> 00:48:30,280
Speaker 1: in that context?

920
00:48:31,400 --> 00:48:35,200
Speaker 4: Broadly syndicated loans predominantly Europe, but we are looking at

921
00:48:35,280 --> 00:48:35,879
Speaker 4: us as well.

922
00:48:36,120 --> 00:48:38,960
Speaker 1: Great stuff. Ian Jackson had a strategic opportunities at Permira.

923
00:48:39,040 --> 00:48:41,200
Speaker 1: Many thanks for joining us on the Credit Edge. Thank

924
00:48:41,239 --> 00:48:44,640
Speaker 1: you Jones, of course, very grateful to Tolu Alimutu from

925
00:48:44,640 --> 00:48:46,600
Speaker 1: Bloomberg Intelligence. Thank you for joining us today.

926
00:48:47,160 --> 00:48:49,600
Speaker 2: Thank you James, and thanks Ian for.

927
00:48:49,560 --> 00:48:52,680
Speaker 1: More credit market analysis and insight. Read all of Tolu's

928
00:48:52,680 --> 00:48:55,759
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929
00:48:55,760 --> 00:48:58,320
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930
00:48:58,400 --> 00:49:02,000
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931
00:49:02,120 --> 00:49:04,880
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933
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Speaker 1: Credit Edge.

934
00:49:09,080 --> 00:49:10,440
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935
00:49:10,560 --> 00:49:13,759
Speaker 1: We're on Apple, Spotify and all other good podcast providers,

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Speaker 1: tell your friends, or email me directly at Jcromby eight

938
00:49:21,120 --> 00:49:24,520
Speaker 1: at Bloomberg dot net. I'm James Cromby, it's been a

939
00:49:24,560 --> 00:49:26,840
Speaker 1: pleasure having you join us again next week on the

940
00:49:26,920 --> 00:49:41,640
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