Speaker 1: Let's go to Welcome to the Bloomberg Markets podcast sweet
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Speaker 1: Bloomberg dot com Splash podcast. Very positive and very right
Speaker 1: on this story since day one. He's viewed it as
Speaker 1: a tech story, not a metal bending story per se,
Speaker 1: and he's been absolutely right. Dan, what was your takeaway
Speaker 1: from your time down in Austin. Look, I think Paul,
Speaker 1: with these as well as Apple events, I think investors
Speaker 1: always want more meat on the boat. You know, obviously
Speaker 1: they lead the groundwork for what I've used a flex
Speaker 1: to muscles type of event from a scale and scoope
Speaker 1: in terms of what they're doing on evs. But you
Speaker 1: didn't have a sub thirty k vehicle introduced. I think
Speaker 1: that's still to come, but I think they read the
Speaker 1: groundwork for it. Stock was so off knee jerk and
Speaker 1: now becomes a sort of what's the next step on
Speaker 1: this roadmap? I mean, Dan, you know that I feel
Speaker 1: like their design and vehicles are just too long in
Speaker 1: the tooth. I mean they Matt Winkler has had his
Speaker 1: models for more than a decade, wow, which says a
Speaker 1: lot about the quality of the vehicles, and I'm not
Speaker 1: debating that, but it's just tired and they all look
Speaker 1: alike except for the cyber truck, which is I guess what,
Speaker 1: three years late now. So at what point does Elon
Speaker 1: Musk stop fooling around with Twitter and start like working
Speaker 1: on progress at his car company. Look, I think you
Speaker 1: hit the nail on the head relative to competition increasing,
Speaker 1: and you won't how sort of come out with more models.
Speaker 1: I think they've the first time admitted they're going to
Speaker 1: need basically ten models for the long term, and now
Speaker 1: it's about when do they come out? What do they
Speaker 1: look like? Look, I personally believe, based on our work,
Speaker 1: sub thirty k is going to be the key from
Speaker 1: a cheaper vehicle as well as an suv like Tessler.
Speaker 1: I think that's really from a mass market, which streets
Speaker 1: open to focus on and clearly, look cybertruck. A year
Speaker 1: from now you'll see cybertrucks around and that I mean
Speaker 1: there was Deliveries should be by your early next year,
Speaker 1: but that's not going to move the needle from a
Speaker 1: mass perspective, and that's why this is so important. From
Speaker 1: sub thirty K, Well, they just need to look since
Speaker 1: the model S was introduced, the nine to eleven has
Speaker 1: had four model changes, okay, and today's models doesn't look
Speaker 1: any different than it did ten years ago. It still
Speaker 1: looks great. I think, if you I'm going to carve
Speaker 1: myself never that into it. But I just feel like
Speaker 1: they need to. You know, if Mercedes or if BMW
Speaker 1: hadn't changed their design language in over a decade, it
Speaker 1: would be a real problem. Why is it okay for
Speaker 1: this company? I think it's because when you think an
Speaker 1: electric vehicles right now, it's still Tesla's world. Everyone else
Speaker 1: paid in terms of the EV space. They know there's
Speaker 1: an opportunity let's call it three million vehicles in terms
Speaker 1: of how they get they just hit there four millions
Speaker 1: in terms of deliveries. So they've really obviously crushed in
Speaker 1: terms of this initial sort of you know, growth area.
Speaker 1: But now it's the next phase of the growth story,
Speaker 1: and I think it's all about costs. It's all about efficiencies.
Speaker 1: They can lower by forty fifty percent in terms of
Speaker 1: what they're talking about. Then all of a sudden, you
Speaker 1: start to have a twenty twenty eight k Tessla out there. Hey, Dan,
Speaker 1: you know, one of the most read stories on the
Speaker 1: terminal today is about Elon mush not surprisingly, but it's
Speaker 1: about his use of his private plane and he's flown
Speaker 1: the most among some of the richest billionaires AND's and
Speaker 1: it's really spiked up after he bought Twitter. But it
Speaker 1: just goes to the point he's got so many different
Speaker 1: companies in so many different businesses and I'm wondering in
Speaker 1: Austin at the investor date to what extent was that
Speaker 1: brought up or addressed by him or by investors that Hey, Elon,
Speaker 1: can you focus on where the real money is, which
Speaker 1: is Tesla. Look, I think there's definitely questions around that
Speaker 1: and nothing on Twitter. I think that's something that started
Speaker 1: to go more into the background. But you're starting to
Speaker 1: see more, you know what I'd say, Ben Strength, you know,
Speaker 1: Tom Zoo and two Mothers are starting to come up
Speaker 1: in terms of the TESTA organization. I believe he's been
Speaker 1: able to balance it well, but no doubt you're starting
Speaker 1: to see, you know, a must ask pay more and
Speaker 1: more attention to some of these next steps with Tessa
Speaker 1: with SpaceX, and I think that continues to be a
Speaker 1: source subject for investors for you know what I've used
Speaker 1: probably with the most fouled individual in the world. What
Speaker 1: do you think about I saw a Lucid on the
Speaker 1: road yesterday. Barely see any of those. I saw Rivian
Speaker 1: parked by the scars Dale train station. They look sweet,
Speaker 1: but they're really disappointing in terms of their ability to
Speaker 1: ramp up production. Faraday whatever it's called. I still have
Speaker 1: never seen one of those Pollstar, Yeah, Pollstar, but that's
Speaker 1: Volvo right, So okay, I mean, what do you think
Speaker 1: about these electric vehicle startups that we all had such
Speaker 1: high hopes for it and everybody bet up the stock
Speaker 1: initially and now have just been in disappointment after disappointment.
Speaker 1: Are they going to come back? Are they going to survive? Look?
Speaker 1: I think it's a great comparison what we saw yesterday.
Speaker 1: I mean, Tessa flexes the muscles has the scale. You're
Speaker 1: going to see GM doing the same thing coming at
Speaker 1: the three one through Ari quoter on what's forward. But
Speaker 1: these startups, it is so difficult to scale and so expensive,
Speaker 1: and in a risingry environment that's tougher and tougher, so
Speaker 1: we're going to survive. Some are not. And I think
Speaker 1: it also just shows the dog ain't the homework excuse
Speaker 1: like we've seen Rithian others. It just doesn't work in
Speaker 1: this market where the dream quoter unquotter story stocks are
Speaker 1: no longer. I thought r J. Scaringe was gonna kill it.
Speaker 1: He took like a decade to bring out the truck,
Speaker 1: and now, I mean, fifty thousand is all they're gonna
Speaker 1: make in twenty twenty three. If I ordered one of
Speaker 1: those and I'm on a two year waiting list that
Speaker 1: just went to three years, I'm gonna be super disappointed.
Speaker 1: I mean, it has been up there from a disappointment
Speaker 1: with riving and trooms out of gate given r J
Speaker 1: and you know everything we saw from him pre IPO
Speaker 1: up there with you know, maybe Zach Wilson and some
Speaker 1: other disappointments, it's been very, very frustrating for industris. Hey, Dan,
Speaker 1: just real quick, thirty seconds your time in Austin. What's
Speaker 1: the number one question you heard from institutional investors? Well,
Speaker 1: I think today the big focus is, Okay, what does
Speaker 1: ultimately the timeline look like to get efficiencies down? And
Speaker 1: is the China growth story, continuing to ram push price cuts.
Speaker 1: Everyone's focused on price cuts in China. What the demand
Speaker 1: story looks like. We continue believe that that's robust. But again,
Speaker 1: haters continue the heat on task with that good stuff.
Speaker 1: All right, Dan Ives, thanks so much for joining us.
Speaker 1: Appreciate getting your perspective as always on Tesla and on
Speaker 1: all things technology. Again, Tesla stock off about five percent
Speaker 1: here to a little bit disappointing as you read some
Speaker 1: of the research and some of the reporting, just that
Speaker 1: there wasn't more color as Dan was suggesting on some
Speaker 1: of the newer models that just kind of more to come.
Speaker 1: So you kind of have to just kind of believe
Speaker 1: in Elon and that's been the story for a long
Speaker 1: period of time. Dan I has from web Bush. Let's
Speaker 1: get to our c suite conversation. We're talking insurance, Juan Andre,
Speaker 1: is that that thing to do? That? Right? Thank you?
Speaker 1: We want to draw a CEO of Everest. There's an end.
Speaker 1: There's not on my list my sheet. It's just because
Speaker 1: thank you. Okay. The most important thing the names I
Speaker 1: care about the New York stock chame symbol stock symbol
Speaker 1: R E go. We'll get you there. And this is
Speaker 1: a stock that's done really well. So we want to
Speaker 1: talk to one on here. He's also what a name, Yeah,
Speaker 1: got out to you all right, So this is an
Speaker 1: insurance company. Tell us about Everst, tell us about what
Speaker 1: you do, and then we'll get into some of the
Speaker 1: you know, the growth drivers. The challenge is that type
Speaker 1: of thing. Yeah, No, absolutely, Paul, pleasure to be here. Look,
Speaker 1: Everest is what we call a hybrid company. We have
Speaker 1: both reinsurance business and an insurance business. You know, we
Speaker 1: trade in the New York Stock Exchange, part of the
Speaker 1: SMP five hundred, and we have done exceedingly well over
Speaker 1: the last few years. As a matter of fact, I've
Speaker 1: been the CEO since January first of twenty twenty, and
Speaker 1: we've grown the reinsurance business about fifty five percent in
Speaker 1: that period of time. January first, twenty twenty. Time to
Speaker 1: take over a Yeah, it's a wonderful time. You must
Speaker 1: have taken off your tie and marchin, unbutton your top
Speaker 1: like I need to breathe a little bit. Yeah, Well,
Speaker 1: realistically I was only out of the office for a
Speaker 1: couple of months and then I was back all in.
Speaker 1: But it goes back to the story, right, because I
Speaker 1: think we've done a very nice job managing the company
Speaker 1: through all of these challenges. And you know, to what
Speaker 1: I was saying, it's not only the growth of fifty
Speaker 1: six in our reinsurance business over that period of time
Speaker 1: over sixty in our primary business, but the stock price
Speaker 1: has gone up about forty percent since I started in
Speaker 1: twenty twenty, so the company has done well. So yeah,
Speaker 1: I mean I usually look at a comp screen, as
Speaker 1: our listeners know, to see how you've done over a
Speaker 1: five year period. You've outperformed over that period, but I'll
Speaker 1: put in you know, your starting date still massively outperformed
Speaker 1: not only the S and P five hundred, but also
Speaker 1: the financial sector. Why do you think it is that
Speaker 1: you're doing so much better than the benchmarks? Yeah, No, Look,
Speaker 1: I think it's a few things. Number One, I think
Speaker 1: we've got a world class team. We've put together a
Speaker 1: very clear strategy, and we have been relentless about executing
Speaker 1: against that strategy. So I think those are sort of
Speaker 1: the key elements that we have. In addition to that,
Speaker 1: we've also had a good market, you know, and that's
Speaker 1: one of the things that it's important to talk about today.
Speaker 1: It's the fact that in the reinsurance market particularly, we
Speaker 1: have a one in a generation type opportunity. There's a
Speaker 1: secular supply and demand to balance that's taking place right now,
Speaker 1: and we're uniquely positioned to take advantage of that. And
Speaker 1: so all of that together, I think, is what's led
Speaker 1: to that outperformance. We're making a big deal on Bloomberg
Speaker 1: Gradi on television today about the rise in interest rates,
Speaker 1: the ten year Treasury now above four percent. How does
Speaker 1: that impact your business a rising interest rate environment? Yeah,
Speaker 1: absolutely so. By definition, because we're a reinsurance insurance company,
Speaker 1: we tend to invest in very conservative investments, mostly fixed income,
Speaker 1: so that really does translate to our portfolio yield increasing.
Speaker 1: So that's generally a good thing for us. Yeah. I
Speaker 1: mean last year the SMP was down twenty percent and change.
Speaker 1: You are up twenty percent and change. Is that Is
Speaker 1: that kind of outperformance going to stick if we have
Speaker 1: a recession? What happens to your business if we go
Speaker 1: into a serious recession? Yeah, Matt. Look, we tend to
Speaker 1: be essentially a safe port in a recession, and the
Speaker 1: reason for that is businesses can't do their job without
Speaker 1: our products, right, You can't run a company without general liability, insurance,
Speaker 1: property insurance, directors and officers liability, and particularly in the
Speaker 1: heightened risk environment that you have today, demand for our
Speaker 1: products is at an all time high. So for us,
Speaker 1: a recession is actually an opportunity for us to continue
Speaker 1: to grow. So are there sectors of the economy or
Speaker 1: let's put it this way, where do you guys focus
Speaker 1: What are some of the sectors that you guys have
Speaker 1: exposure to or want to have exposure to. Yeah, so
Speaker 1: we're very well diversified both in reinsurance and insurance, and
Speaker 1: that's really across industries, geography's product lines, et cetera. That
Speaker 1: gives us the ability to look at particular aspects of
Speaker 1: the economy and say, this is an area where we
Speaker 1: see a lot of opportunity and we want to play.
Speaker 1: For instance, property right now is a terrific area for
Speaker 1: us to play. Areas that we're watching more closely are
Speaker 1: credit credit related lines, things like mortgage surety, etcetera, etcetera.
Speaker 1: Because we don't know if there's going to be a
Speaker 1: credit cycle beyond some of this, how do you guys
Speaker 1: really compete against Again, we'd look about the stock Matt
Speaker 1: and now we always focus on stocks. If you get
Speaker 1: a snapshot of how companies are doing over a period
Speaker 1: of time, talk to us about your competition. Sure, it
Speaker 1: really does vary whether it's reinsurance or insurance. On the
Speaker 1: reinsurance side, we compete against Munich re, Swiss re hanover Re,
Speaker 1: and then some of the other Bermuda companies, some of
Speaker 1: the smaller ones. On the primary side, we're competing against
Speaker 1: chob aig Acca, Alliance, Zurich. Those are some of the competitors.
Speaker 1: How come those the res are all German speaking, Munich,
Speaker 1: re hanover Re, those are all a very small part
Speaker 1: of the middle of Europe. Why is reinsurance so concentrated there? Yeah,
Speaker 1: I think historically a lot of the large global reinsurers
Speaker 1: did come out of the continent of Europe, but their
Speaker 1: worldwide right. Their home offices may be in Munich or Zurich,
Speaker 1: but they're really worldwide players. But I think a lot
Speaker 1: of it was just their history and a lot of
Speaker 1: opportunity in the continent of Europe when they first started.
Speaker 1: So what do you do? Why are we not interviewing
Speaker 1: him in Bermuda? We should? That was are you actually headquarter?
Speaker 1: You literally live in Bermuda. Now I go back and
Speaker 1: forth to Bermuda. Our company is headquartered in Bermuda. Yes,
Speaker 1: we know a guy in Bermuda. There's and he went
Speaker 1: to Johns Hopkins as Yes, we've got your masters at
Speaker 1: Johns Hopkins right international, we could tie all in. So
Speaker 1: do you focus your business because you studied international studies.
Speaker 1: You've been recognized by Latino Leaders magazine for your contributions.
Speaker 1: You had Latin American studies also as part of your masters,
Speaker 1: do you focus on a global business or as your
Speaker 1: business really focused in the US Now? Our our business
Speaker 1: is totally global. So if I think about it from
Speaker 1: the reinsurance side, I have customers in a one hundred
Speaker 1: and fifteen countries around the world. That makes sense. We
Speaker 1: are the seventh largest reinsurer in the world, so we
Speaker 1: pray a significant role in all of that. On the
Speaker 1: primary side, we're in the middle of expanding our business
Speaker 1: from North America also into other countries. So matter of fact,
Speaker 1: we just opened up offices in Santiago, Dusseldorf, Paris, Madrid,
Speaker 1: Singapore and in this year we have additional expansion to
Speaker 1: go as well. So this leads to my question about growth.
Speaker 1: What's your plan and look like, say a five year
Speaker 1: plan for growth from here? Are you going to do
Speaker 1: it organically? Are you? We talked to pack Allaghory yesterday
Speaker 1: and he's done a lot of it by buying other companies.
Speaker 1: What does it look like Foreverest. Yeah, for us, it's
Speaker 1: really more of an organic build and we have been
Speaker 1: very successful. I mean the growth numbers that I quoted
Speaker 1: earlier in our discussion, we're all organic based. And I'll
Speaker 1: give you an example. So in the reinsurance business, January
Speaker 1: first is where the majority of your renewals take place.
Speaker 1: So we secured over fifty percent of our portfolio on
Speaker 1: January one in an environment good number. That's a very
Speaker 1: good nub because my analyst, Matthew Palazzola, that's his question,
Speaker 1: ask him how the January one renewals went. Yeah, No,
Speaker 1: it's it's it's a it's a very Over fifty percent
Speaker 1: of your portfolio being secured in this January one is
Speaker 1: a very good number because what we saw is that
Speaker 1: once in a generation opportunity that I was telling you about,
Speaker 1: pricing for property catastrophe went up fifty percent in January one.
Speaker 1: In the US, it went up forty percent internationally, so
Speaker 1: we were able to secure over fifty percent of our
Speaker 1: portfolio at much better pricing, much better terms. So that
Speaker 1: sets us up with a very good tailwind going into
Speaker 1: twenty twenty three. How much of a problem are you, know,
Speaker 1: these big superstorms and are we really seeing more and
Speaker 1: more of them or do we just talk about it
Speaker 1: a lot? I mean, since Katrina, we haven't seen that
Speaker 1: kind of devastation in the US, but we've had some
Speaker 1: big storms along Florida. We had Superstorm Sandy here that
Speaker 1: closed the New York Stock Exchange for four days. Is
Speaker 1: that a concern for you? It certainly is, and I
Speaker 1: think it ought to be a concern for everybody. I'll
Speaker 1: give you a couple of statistics. So last year in
Speaker 1: twenty twenty two, the insurance industry paid out over one
Speaker 1: hundred and forty billion in insured loss. In twenty one
Speaker 1: it was one hundred and thirty billion, and insure laws.
Speaker 1: So what we're clearly seeing is more severe storms. This
Speaker 1: is all driven by climate change, right Caesar warming up,
Speaker 1: Warmer seas lead to more severity, higher category four, category
Speaker 1: five type storms. So that creates for our industry essentially
Speaker 1: an impetus to get much better at risk selection and modeling,
Speaker 1: and frankly, that's one of the things that we've done
Speaker 1: at Everest in this period of time is reduce our
Speaker 1: exposure to natural catastrophe, which then reduces our volatility to earnings.
Speaker 1: And it goes back to the diversification point that I
Speaker 1: was making earlier. We're a well balanced company, so we
Speaker 1: don't have to rely only on property. Natural catastrophe exposures.
Speaker 1: What happens to our good friends down in Florida, can
Speaker 1: they even get insurances? And that's where you're from, right,
Speaker 1: you grew up in Miami. I am I'm a Florida boy.
Speaker 1: It happens well. Listen, if Florida has gone through a
Speaker 1: very difficult period of time, particularly over the last couple
Speaker 1: of years, but the governor in the special legislative session
Speaker 1: that they just had at the end of last year,
Speaker 1: have put in place some very good reforms that will
Speaker 1: curve some of the fraud, some of the litigation that
Speaker 1: basically was creating a capacity crunch, if you will, in
Speaker 1: the state. Now, those reforms will take some time to
Speaker 1: play out, but ultimately that votes very well for Florida
Speaker 1: for their consumers. And for the insurance and reinsurance market.
Speaker 1: I mean that's so as a state kind of for
Speaker 1: the last backstop in Florida. Look, I think in Florida
Speaker 1: have a few wasues. One, you're exposed to hurricanes because
Speaker 1: the word is, you have a lot of people moving
Speaker 1: down there, people like to live on the coast. And
Speaker 1: in addition to that, you have some of the environmental
Speaker 1: factors I just described. There's a lot of fraud and
Speaker 1: there's a lot of litigation, and that's really what the
Speaker 1: governor and the legislature have really just addressed. But again
Speaker 1: that'll take a little bit of time to show up.
Speaker 1: All right, fascinating stuff. Want Andrade CEO of Everest. It's
Speaker 1: in New York Stock Exchange traded company r E is
Speaker 1: a symbol like reinsurance based in Bermuda, Bermuda. And again,
Speaker 1: why are we here not in Bermuda? We could have
Speaker 1: done this. Why isn't there everyone based in Bermuda? Exactly?
Speaker 1: I want to talk energy. We'll do that with Greg Ebel.
Speaker 1: He's the CEO of n Bridge Energy that trades on
Speaker 1: the New York Stock is changed as symbol as e
Speaker 1: N as a Nancy Bison boy it's got a seventy
Speaker 1: eight billion dollar market. Captus stocks up about one point
Speaker 1: two percent today, kind of unchanged on the year. And
Speaker 1: this isn't a company that also had an investor day yesterday.
Speaker 1: It's not just Tesla, but a lot of hope are
Speaker 1: trying to get out in front of their shareholders. Greg,
Speaker 1: thanks so much for joining us here. I'd love to
Speaker 1: first of all, just tell us what end Bridge Energy does,
Speaker 1: how does it fit into the energy stream, and then
Speaker 1: tell us kind of what were your big big points
Speaker 1: you tried to make yesterday your investor day. Sure, I appreciate,
Speaker 1: appreciate being with your Polman. Thanks very much. Yeah. So
Speaker 1: the best way for your listeners probably to think through
Speaker 1: this and Bloomberg Radio think through this is, you know,
Speaker 1: end Bridge is really like the FedEx, if you will,
Speaker 1: from an energy infrastructure perspective, and we're really trying to
Speaker 1: be that first choice for our customers for energy delivery.
Speaker 1: So we pick up whether it's oil or it's gas,
Speaker 1: or we're on the renewable side as well, we'll store
Speaker 1: it and ultimately we deliver it to those users. So
Speaker 1: yesterday it was about going out to the our investors
Speaker 1: and telling them how we you know, we see four
Speaker 1: to six percent growth here over the medium term, continued
Speaker 1: growth in our dividend, which by the way, we've increased
Speaker 1: every year for twenty eight years. So that makes us
Speaker 1: one of those, uh, you know, dividend ristocrats out there.
Speaker 1: And that's a key component in this type of environment.
Speaker 1: And it's all backed up by about seventeen and a
Speaker 1: half billion dollars of pipeline projects that can go throughout
Speaker 1: of North America and wind projects and renewable projects in
Speaker 1: five to seven countries. You know, we move twenty five
Speaker 1: to thirty percent of all the oil and all the
Speaker 1: gas that moves to North America to day every day
Speaker 1: safely reliably. So are there places I just recall seeing
Speaker 1: a story last month where gas bills just soared in California,
Speaker 1: whereas everywhere else around the world, around the country, I
Speaker 1: should say, they were stable or even down. Are there
Speaker 1: places that it's harder to get gas and oil? Two? Yeah, absolutely,
Speaker 1: so California is a good example, you know. But we
Speaker 1: have pipelines where the mainline pipe, the main pipeline provider
Speaker 1: for gas into New England. So New England actually pays
Speaker 1: some of the highest prices for natural gas in the world,
Speaker 1: if you can believe put that in the context of
Speaker 1: what everything that's going on in Europe and stuff. And
Speaker 1: that's not because there's no supply, right the supply. I
Speaker 1: think about the Marsalage shale, they'll think Pennsylvania, Ohio. It's
Speaker 1: about infrastructure. So if you're relying on infrastructure and you
Speaker 1: can't get the supply to where the demand is, good,
Speaker 1: old economics push that. And so you've got a lot
Speaker 1: of people in New England who, through no fault of
Speaker 1: their own, are extremely disadvantaged in terms of what they've
Speaker 1: got to pay for what they've got to pay for
Speaker 1: natural guys. You know, for many years we've been able
Speaker 1: to change that. We'd like to kind of get back
Speaker 1: at doing that. It's a challenging environment as you know, pipelines.
Speaker 1: What are the biggest headwinds Because you say a lot
Speaker 1: of people through no faults of their own, but of
Speaker 1: course we can all vote, and if the big headwind
Speaker 1: is say a governor or a state legislature, it is
Speaker 1: kind of our own fault. Well you hit it right on.
Speaker 1: That is it is when I say no fault of
Speaker 1: their own right, Obviously they're not approving pipelines are doing
Speaker 1: the regulatory side of things, and they're obviously not producing
Speaker 1: the product, so they're they're takers of the product. Most
Speaker 1: of our customers are utilities. So what we really need
Speaker 1: to do is to figure out some way and this
Speaker 1: is true for renewables as as well as pipelines. We've
Speaker 1: got to figure out a way how do we get
Speaker 1: permitting change so that people can get the energy that
Speaker 1: they need. You know, something in the last twelve months
Speaker 1: we've probably all realized, and maybe we were just getting
Speaker 1: too happy about this and complacent, that there is a
Speaker 1: real energy trilemma there of energy security, affordability, and obviously sustainability.
Speaker 1: So you know, I think we've really got to think
Speaker 1: that through. I know here in the United States, Congress
Speaker 1: has looked, as you probably recall, at various permitting reforms
Speaker 1: that was supposed to be part of some elements that
Speaker 1: happened last year. It didn't. Maybe this Congress will be
Speaker 1: able to make some of those changes. And then you
Speaker 1: pointed out at the state level, if you don't get
Speaker 1: support at the state level and makes it very difficult.
Speaker 1: So great, let's just go to that point here. Um,
Speaker 1: My energy analysts kind of said, Hey, ask Greg about
Speaker 1: Michigan and line five. And you know, Governor Whitmer of
Speaker 1: Michigan actually campaign against that pipeline project when you ran
Speaker 1: for office. So just give our listeners a sense of
Speaker 1: maybe the puts and takes when when you sit down
Speaker 1: with regulators, whether it's the state level or the federal level,
Speaker 1: about getting new project approved. Yeah, and you know, often
Speaker 1: it's a it's the situation of you know, people's varying
Speaker 1: views on the pace of energy transition. And again, we're
Speaker 1: involved in all aspects of this, right from the upstream
Speaker 1: to the downstream, from liquids the gas to renewables, and
Speaker 1: I think we've got a pretty good view on what
Speaker 1: that pays. So you know that situation line five, as
Speaker 1: you mentioned it, which is really about a very small
Speaker 1: piece of pipeline or distance wise, Uh, that's uh, that'sh
Speaker 1: goes across the straits there, and frankly, uh, you know,
Speaker 1: it's desperately needed that that energy in places like Detroit
Speaker 1: and refineries in Ohio, and it's also tied up, if
Speaker 1: to make it even more complicated, even in international treaties.
Speaker 1: So you know, despite the commentary out of the governor
Speaker 1: and the Attorney General. I think this is a federal issue.
Speaker 1: It's being dealt with right at the highest levels both
Speaker 1: of the Canadian government with the Prime Minister and obviously
Speaker 1: the Biden administration. So you know, I think this is
Speaker 1: about there's there's a way to do this, and there's
Speaker 1: a way to do this in a in a very
Speaker 1: transitional manner that does not but under fair burdens on consumers.
Speaker 1: And that's what we're trying to do. And in the meantime,
Speaker 1: you know that pipeline continues to run very safely and
Speaker 1: deliver the fuel that's needed to fuel the quality of
Speaker 1: life throughout the Michigan and obviously over in Ohio, any
Speaker 1: of the Canada as well. We always say on this show,
Speaker 1: just so you know, we always call it the Great
Speaker 1: State of Ohio, Greg, that Great State of Ohio or
Speaker 1: the Ohio State, one of the two, right the Ohio
Speaker 1: State University. Pretty good season, a little disappointing against Michigan, obviously,
Speaker 1: but that at all. So, Greg, what's that? What was
Speaker 1: a big message that you wanted to really get across
Speaker 1: at your investor day yesterday in conversially, what maybe is
Speaker 1: the is the number one issue for investors in your company. Well,
Speaker 1: I'd say the number one issue for investors in our company,
Speaker 1: and I think we're addressing it, is how do you
Speaker 1: get this seventeen and a half billion dollar backlog of
Speaker 1: projects into service on time and on budget. And fortunately
Speaker 1: that's spread out over ten or twelve projects, So we
Speaker 1: feel very good about that. Hence our view with investors
Speaker 1: that look, we want to be that first choice energy
Speaker 1: investment for you, and the way for us to do
Speaker 1: that is be that first choice energy delivery. And that's
Speaker 1: what we're really talking about. And you can do that
Speaker 1: in all aspects of the business at Enverridge. Right. Do
Speaker 1: you like utilities, We have the largest gas utility by
Speaker 1: volume in North America if you like the pipeline inside
Speaker 1: of things, and on the old side, we've got those
Speaker 1: pipelines if you like gas pipelines and LG and as
Speaker 1: you know, the United States is now the largest exporter
Speaker 1: of energy. We have that in our portfolio. And we
Speaker 1: also have renewables. We've been in the renewable business for
Speaker 1: twenty five years, so we know how to do that,
Speaker 1: whether it's solar or it's win And that was the
Speaker 1: message and all that what it's going to get you
Speaker 1: is a further extension of the twenty eight years in
Speaker 1: a row of increase in the dividends. So that's the
Speaker 1: message we were actually putting out there. All right, Greg,
Speaker 1: thanks so much for taking the time to join us.
Speaker 1: And you're busy there with your investor investor days, Greg Eble,
Speaker 1: he's the CEO of n y N Bridge Energy Basing, Calgary, Alberta.
Speaker 1: So away out there, one of those seas I really
Speaker 1: want to get to at some point. It stuck a
Speaker 1: little investment banking, little Wall Street stuff. We had some
Speaker 1: investor days. We're done with earnings. We can kind of
Speaker 1: look back. We can also talk a coin base with
Speaker 1: Shinale because yesterday she talked to Brian Armstrong. Yeah, and
Speaker 1: Brian Armstrong was not on Bloomberg, which I think you
Speaker 1: know what it was? Simulcast, dude, was it? Yes? I
Speaker 1: wanted a separate Okay, I was like, why isn't he
Speaker 1: in our Rain Radio studio. Sinali bask Alison Williams, Bloomberg Intelligence.
Speaker 1: Shinnali Bloomberg News joins us here. So Snai, real quick,
Speaker 1: what's the feedback you got on your discussion with our
Speaker 1: friends from coin Bass yesterday. Two things here. One is
Speaker 1: that he talked about how a lot of the assets
Speaker 1: on coin base were associated with the CFTC. They were commodities.
Speaker 1: And of course we know that the SEC is very
Speaker 1: concerned about certain assets being defined as securities. So that
Speaker 1: is going to be very telling about how this fight
Speaker 1: really continues to play out. But Gary Genzel and the
Speaker 1: SEC have said that their staking of ethereum is a
Speaker 1: security not coin basis. They've said, krack in staking service, okay, right,
Speaker 1: and they find cracking like thirty million bucks. Yeah, and
Speaker 1: they didn't admit or deny any wrongdoing, but that was
Speaker 1: the size of the total payment here, so yeah, I mean,
Speaker 1: if you pay somebody thirty million dollars, you don't have
Speaker 1: to admit or deny any wrongdoing. Clearly something happened there.
Speaker 1: So really, Brindan Armstrong is, you know, trying to exode
Speaker 1: a lot of confidence here, trying to work with the regulators.
Speaker 1: You know, he wore a suit. So I think this
Speaker 1: kind of shows you a lot about the place coin
Speaker 1: base is trying to take in the crypto world and
Speaker 1: try to bridge traditional finance with crypto. Hey, Alison Alson
Speaker 1: Williams Bloomberg intelligence. Also on our Bloomberg Interactor Broker Studio here,
Speaker 1: you were at Goldman Sachs yesterday. What's kind of your
Speaker 1: takeaway from Goldman from the investment banks, what's kind of
Speaker 1: the narrative you're on the big investment banks. So I
Speaker 1: think it's still all about the economy. Right, So we
Speaker 1: wrapped up the fourth quarter. We've had Goldman Investor Day.
Speaker 1: I was disappointing. Goldman, I think was disappointing on sort
Speaker 1: of both fronts, you know. And I think we talked
Speaker 1: about the fact that, like to me, they're killing it
Speaker 1: in their core business, right, so trading, gaining significant share,
Speaker 1: M and A, which is a lucrative business. You have
Speaker 1: all these boutiques that you know, have popped up going
Speaker 1: after that business. There's still number one for a long time.
Speaker 1: So I think that the quarters started out pretty strong
Speaker 1: in terms of trading. Question for you, Allison, because if
Speaker 1: some people are so upset about the consumer, but the
Speaker 1: reality is with rates up, do you think that what
Speaker 1: Goldman is trying to do, David Salomon is trying to
Speaker 1: do is just say hold on, like we can finally
Speaker 1: make money and consumer, let us try to do that.
Speaker 1: Is that kind of what he's trying. Can he say
Speaker 1: one thing or the other? Well, I think you know,
Speaker 1: it's funny because I think where they what they're doing
Speaker 1: is we're going to focus on the consumer in the
Speaker 1: in the areas that makes sense, right, So the Apple
Speaker 1: card and the GM business, we're going to focus on
Speaker 1: those areas. The balance transfer business, which you know, to
Speaker 1: me never made sense for them. It's I don't know
Speaker 1: what the competitive advantages of doing a strategy that came
Speaker 1: out in the nineties. It's never really been a winner, um,
Speaker 1: and does not work well in a higher rate environment. Um.
Speaker 1: So moving away from that and keeping the more profitable
Speaker 1: businesses um. But you should have just said it like that.
Speaker 1: He should have said, you know what, this was a
Speaker 1: bad idea. We made the wrong decision. We're going to
Speaker 1: move on from that. Well, we keep a couple of
Speaker 1: pieces of this business. Yes, but we're done. The consumer
Speaker 1: business is dead. Put it it's what do you put
Speaker 1: a fork in it? Right? It's over, and that's I
Speaker 1: think people would have been happy with it. They didn't
Speaker 1: come out and say, well, I think I think what
Speaker 1: they did say is that they are looking at strategic options, right,
Speaker 1: So I think people got excited like, oh, they might
Speaker 1: sell it, and then you know, analysts are like, oh,
Speaker 1: you gonna sell this quarter, You're gonna sell this and that.
Speaker 1: That's when he was kind of like, Okay, look like
Speaker 1: we've told you what we're going to tell you. We
Speaker 1: can't say anymore. All right, Alison Williams, Shinelli Bassek, give
Speaker 1: us a little bit of a round table here on
Speaker 1: all things Wall Street. Let's talk eighteen ft. Is that
Speaker 1: okay with you? Absolutely? I love ETS. I have a
Speaker 1: whole show dedicated to ETFs on Tuesdays no on Mondays
Speaker 1: at one pm Wall Street Time. Yasmin daya builder joints
Speaker 1: us here in our Bloomberg Interactor Broker studio. She's head
Speaker 1: of ETFs and managing director at Engine Number one. Yasmin,
Speaker 1: thanks much for joining us here in our Bloomberg Interactor
Speaker 1: Broker studio. We appreciate you coming in. Just give me
Speaker 1: the thirty second call on what is it? What do
Speaker 1: you guys do at Engine number one? Yeah? Sure, thanks
Speaker 1: for having me. And to Number One's an investment firm
Speaker 1: and we're focused on identifying and investing in large scale
Speaker 1: transformational themes. We're best known by many investors for our
Speaker 1: activist campaign where we got three people on the board
Speaker 1: of directors at x on Mobile, and I think that
Speaker 1: campaign sort of shows two things of how we focus.
Speaker 1: Number One, we come at some of these questions around,
Speaker 1: for example, climate change environmental issues from the lens of
Speaker 1: an investor. What is additive to shareholder value for a
Speaker 1: company over time, not ideology or morality of climate change
Speaker 1: for example. And secondly, we're active owners. We work closely
Speaker 1: with the companies in our portfolio to think about where
Speaker 1: are the things that they can do to be more
Speaker 1: accountable to their plans or accelerate their plans. Have you
Speaker 1: ever met Vek Ramaswami. I have not personally. Now, okay,
Speaker 1: so he's this drive guy. Yeah, I think he's running
Speaker 1: a real president. But he will tell you, or he
Speaker 1: tells us, that he's not anti ESG. He just wants
Speaker 1: to maximize profits. And I had thought of engine number
Speaker 1: one as being an ESG play. But you're saying that's
Speaker 1: not the case. Absolutely not. In fact, I think this
Speaker 1: is actually one of the hard parts of the market,
Speaker 1: is this terminology around ESG. So maybe I can spend
Speaker 1: a second on that and they'll talk about us ESG
Speaker 1: investing predominantly is about trying to rate companies and rank
Speaker 1: companies and so rating them by environmental criteria or social
Speaker 1: criteria and really ultimately saying what's the best company in
Speaker 1: the portfolio based on that criteria and what's the worst.
Speaker 1: The problem with that is, number one, all of that
Speaker 1: is very subjective. What's good to me may not be
Speaker 1: good to you. And secondly, that whole process is completely
Speaker 1: delinked from performance. None of that involves how does this
Speaker 1: actually relate to a company's long term prospects and value creation.
Speaker 1: We're really looking for where there is an intersection between
Speaker 1: criteria in these spaces and shareholder value. So we're absolutely
Speaker 1: looking at this in the investment from the investment lens,
Speaker 1: and our goal is ultimately long term investment performance for investors.
Speaker 1: All Right, So, I know, Yasman, you guys focus on
Speaker 1: a lot of thematic work in your ETFs, and we
Speaker 1: were just talking about supply chain talked to us about
Speaker 1: how what are some of the themes you guys are
Speaker 1: working on with your ETF business. Yeah, I think theme
Speaker 1: based investing is very interesting and from our perspective, one
Speaker 1: of the most interesting themes right now is the relocalization
Speaker 1: of supply chains to North America. Now, to talk about
Speaker 1: where is this investment going, you actually kind of have
Speaker 1: to spend a little time on where it's been, which
Speaker 1: is that for the past forty years, companies have really
Speaker 1: been focused primarily and almost exclusively in their supply chains
Speaker 1: around financial efficiencies, so moving huge parts of their supply
Speaker 1: chains to lower cost regions, eliminating redundant season supply chains.
Speaker 1: Which the best way to see this is just look
Speaker 1: at US manufacturing over that forty year period of time.
Speaker 1: I was just talking about US lost. The US lost
Speaker 1: seven million manufacturing jobs, so enormous and magnitude, but it
Speaker 1: actually left companies very exposed to a lot of i'd
Speaker 1: say unintended consequences. Ultimately, supply chains were proven to be
Speaker 1: very fragile. So the big trend right now is bringing
Speaker 1: back parts of supply chains to help create more resilience
Speaker 1: supply chains. And we think there's a lot of investment
Speaker 1: opportunity out But does it make sense, I mean, reassoring
Speaker 1: is the you know, popular term. Does it make sense
Speaker 1: to bring them back to the US because we still
Speaker 1: have high labor costs, right, or does it make sense
Speaker 1: to move away from countries with whom we may have,
Speaker 1: you know, our differences, but bring them to places like
Speaker 1: Mexico where they have much lower I mean, this is
Speaker 1: the old story. When I was a kid college, we
Speaker 1: studied machiadoras in Mexico and that was a bad thing
Speaker 1: back then. But now bringing a company back and putting
Speaker 1: it it's production in Mexico is a good thing. Yeah,
Speaker 1: it's a really good question. So first of all, the
Speaker 1: cost differentials and labor advantages between the US and China,
Speaker 1: for example, have narrowed, and in fact it's lower costs
Speaker 1: to produce certain goods in Mexico now, So your point,
Speaker 1: So the opportunity is really broadly North America, I would say,
Speaker 1: in a big way. So that's point one. Point two.
Speaker 1: Automation and innovation is going to be an important part
Speaker 1: of this, because you're absolutely right. There was a reason
Speaker 1: why many parts, in all parts, frankly of supply chains
Speaker 1: were put abroad. It was cost. So when bringing certain
Speaker 1: parts back, you have to think about, is there a
Speaker 1: way to actually make your manufacturing processes, your manufacturing factories
Speaker 1: more efficient in the way they operate to help combat
Speaker 1: that cost differential. And that's one of the big areas
Speaker 1: we're actually investing around, are there also positive? I mean,
Speaker 1: you don't care about climate change on an a moral ground,
Speaker 1: but if what you're doing happens to be better for
Speaker 1: the climate, doesn't that please your investors? I mean, we
Speaker 1: spend our time understanding how these issue areas impact broader
Speaker 1: stakeholders because it's an important part of understanding risk for companies.
Speaker 1: And certainly the relocalization of supply chains to North America
Speaker 1: should actually lower emissions over time, just given the regulatory
Speaker 1: standards we have around environmental standards in the US. I'd
Speaker 1: also say it's going to be hugely impactful for job
Speaker 1: creation in the US, particularly in the manufacturing sector, and
Speaker 1: we spent a lot of time looking at when their
Speaker 1: local plant is built, what does that actually do in
Speaker 1: terms of, you know, the types of jobs that are
Speaker 1: brought back, the wages of those jobs, and I think
Speaker 1: importantly the multiplier effect of that, you know, the extra
Speaker 1: jobs that are created indirectly around that, And so I
Speaker 1: think that will actually be a huge, hugely important. By
Speaker 1: the way, I'm not sure how much you're focused on this,
Speaker 1: because that's I guess a longer term right, bringing these
Speaker 1: production facilities back and those jobs will be created over
Speaker 1: the next years, not months. But is it inflationary It
Speaker 1: certainly can be. Yeah, that's one of the big thesis
Speaker 1: across our whole broader. I mean, we're focused on the
Speaker 1: reindustrialization I would say about North America and implicit and
Speaker 1: that is an inflationary pressure. Yes. Another big theme I
Speaker 1: know you guys spend a lot of time on at
Speaker 1: engine Number one is energy. What are some of the
Speaker 1: plays and where you're seeing some of the flows go. Yeah. Absolutely, So,
Speaker 1: just to say up front, the energy transformation, as we
Speaker 1: call it, is one of the biggest investment opportunities that
Speaker 1: sits in front of us. By some estimates, it's going
Speaker 1: to take three to five trillion dollars of investment per
Speaker 1: year to decarbonize our economy. So we're talking about massive
Speaker 1: investment dollars flowing into the space. We have a very
Speaker 1: different point of view than most classic climate strategies. A
Speaker 1: classic climate strategy would be built in a way where
Speaker 1: it's if you don't like it, you don't own in,
Speaker 1: so you avoid the largest emitters, the largest companies and sectors.
Speaker 1: From our perspective, some of the biggest investment opportunities are
Speaker 1: places like agriculture, transportation, energy. Basically, seventy five percent of
Speaker 1: global greenhouse gas emissions come from those three segments. That's
Speaker 1: the heart of the energy transition. So where we spend
Speaker 1: our times across those value chains and just looking for
Speaker 1: opportunity in those spaces, which you know most most places
Speaker 1: would be just trying to minimize your emissions in your
Speaker 1: portfolio today by investing in sort of younger green technology solutions.
Speaker 1: What do you think about those younger green technology Are
Speaker 1: they just not ready to generate profit or oh it's
Speaker 1: an and not nor I mean, but that's that's I
Speaker 1: think the bigger thing here is just widening the aperture
Speaker 1: of where you see the opportunity. A good example of
Speaker 1: this would be transportation, just to talk about the whole
Speaker 1: system altogether. When most people think about what's the opportunity
Speaker 1: in the energy transition for transportation, those electric vehicles, and
Speaker 1: they'll own the companies that are the leaders leading automakers
Speaker 1: and electric vehicles. But there's so much more to the
Speaker 1: investment approach that you have to think about. For example,
Speaker 1: metals are an important component of batteries, which are obviously
Speaker 1: going to be a important part of being all electric.
Speaker 1: Mining equipment is needed to get those metals out of
Speaker 1: the ground. Another type of company you can invest around,
Speaker 1: and then transportation, how are you going to move all
Speaker 1: those inputs around. So we just define the opportunity a
Speaker 1: lot broadened, and I would say most investors do, who
Speaker 1: I think see it more from one sort of sector
Speaker 1: level lens. I'm learning a lot here. So where are
Speaker 1: the where do you see the flows in that? In
Speaker 1: the energy space, where do you see the flows going
Speaker 1: the most? Are people just looking to get the latest
Speaker 1: technology or can you get them to think bigger pictures
Speaker 1: and the and the metals. By the way, we just
Speaker 1: have a big BusinessWeek piece that forward, among others, is
Speaker 1: sourcing aluminum from minds that are allegedly polluting you know,
Speaker 1: whole communities in the Amazon. Oh. These are complex, complex topics,
Speaker 1: which is why I think this is one hundred percent
Speaker 1: the space for active management. It is very difficult to
Speaker 1: just kind of set it and forget it through an
Speaker 1: index based approach. I think theme based investing broadly is
Speaker 1: actually going to have a real kind of tailwind to
Speaker 1: it because if you think about right now, investors have
Speaker 1: to be hunting for differentiated sources of growth in their
Speaker 1: portfolio beyond what worked for them for the last ten
Speaker 1: fifteen years, which is just let me go to the
Speaker 1: lowest cost market cap portfolio i can. And so I
Speaker 1: think some of these themes, but particularly active managers who
Speaker 1: can play it in a really dynamic way, it's going
Speaker 1: to be very interesting for investors as they build portfolio.
Speaker 1: I think you've got one of the best seats on
Speaker 1: Wall Street, which is having a title head of ETFs anywhere.
Speaker 1: The growth in ETFs is pretty amazing believable. I mean
Speaker 1: it's just you know, so we can do a whole
Speaker 1: nother discussion and just on the ETF space and the funds. Well,
Speaker 1: what you guys are doing is unique inside that. Yeah,
Speaker 1: I mean my favorite thing about ETFs is it's both
Speaker 1: growing and evolving. I mean, it is a huge source
Speaker 1: of growth, but also if you look under the hood,
Speaker 1: the number of strategies that are coming out on the
Speaker 1: types of dynamic investments you can now access is so
Speaker 1: much wider than it was just five ten years. It's
Speaker 1: amazing good stuff and I learned a lot today. Yasmin,
Speaker 1: thank you so much for coming in. Yasmin DAYA build
Speaker 1: your head of ETF, managing director at Engine Number one.
Speaker 1: A very smart discussion ever. Thanks for listening to the
Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews
Speaker 1: with Apple Podcasts or whatever podcast platform you prefer. I'm
Speaker 1: Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three,
Speaker 1: and I'm Fall Sweeney. I'm on Twitter at pt Sweeney.
Speaker 1: Before the podcast, you can always catch us worldwide at
Speaker 1: Bloomberg Radio