1
00:00:02,720 --> 00:00:12,920
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

2
00:00:14,440 --> 00:00:15,800
Speaker 2: Welcome back to Bloomberg Markets.

3
00:00:15,800 --> 00:00:18,520
Speaker 3: I'm Shinali Basik here with Romaine Bostek live at the

4
00:00:18,520 --> 00:00:24,160
Speaker 3: Milkan Institute Global Conference. Now we're joined here by Mark

5
00:00:24,200 --> 00:00:26,639
Speaker 3: at Nacio. Of course you might know him as a brewers,

6
00:00:26,680 --> 00:00:29,720
Speaker 3: owner of the mill markety, but if you also know

7
00:00:29,880 --> 00:00:32,000
Speaker 3: him as the co founder of Press and Capital Group,

8
00:00:32,120 --> 00:00:34,320
Speaker 3: so steeped in credit markets.

9
00:00:34,640 --> 00:00:35,800
Speaker 2: First, let's take a big step back.

10
00:00:35,840 --> 00:00:37,600
Speaker 3: We're talking about how I think this might be the

11
00:00:37,600 --> 00:00:40,559
Speaker 3: busiest Milk and I have been in my career. It's

12
00:00:40,600 --> 00:00:43,000
Speaker 3: because you had the Treasury secretary year, you had Elon

13
00:00:43,080 --> 00:00:45,040
Speaker 3: Musk here overnight, and a lot of talks about a

14
00:00:45,080 --> 00:00:47,760
Speaker 3: valatle economic environment. How do you make sense of it

15
00:00:47,800 --> 00:00:51,519
Speaker 3: all to your investors and to your colleagues across the industry.

16
00:00:52,560 --> 00:00:56,360
Speaker 2: Well, volatility, and thanks again for having me on. It's

17
00:00:56,400 --> 00:00:59,880
Speaker 2: always interesting to mark year to year how things are going.

18
00:01:00,160 --> 00:01:02,480
Speaker 2: Last year, all the questions were about how do you

19
00:01:02,520 --> 00:01:06,120
Speaker 2: deal with stability and what about lower interest rates? So

20
00:01:06,160 --> 00:01:10,959
Speaker 2: we don't have the challenges of stability anymore, you know,

21
00:01:11,040 --> 00:01:12,760
Speaker 2: I think one of the things you do in certain

22
00:01:12,800 --> 00:01:16,560
Speaker 2: times like this is you step back and you kind

23
00:01:16,600 --> 00:01:19,560
Speaker 2: of assess things because while there's a lot of you know,

24
00:01:20,120 --> 00:01:23,480
Speaker 2: day to day volatility which affects you in the public

25
00:01:23,560 --> 00:01:28,040
Speaker 2: markets as private investors in Preston's eighty percent private capital

26
00:01:28,400 --> 00:01:32,399
Speaker 2: and as you know, more loans than equity adjacent, we

27
00:01:32,440 --> 00:01:34,760
Speaker 2: can just see how it all plays out. So the

28
00:01:34,800 --> 00:01:38,120
Speaker 2: Secretary of the Treasury today was talking about this three

29
00:01:38,160 --> 00:01:43,200
Speaker 2: part plan right for lower taxes, less regulation, and addressing

30
00:01:43,240 --> 00:01:46,800
Speaker 2: trade and balances. And I was at a reception that

31
00:01:46,880 --> 00:01:49,640
Speaker 2: he spoke at yesterday. He spoke a little more off

32
00:01:49,720 --> 00:01:51,720
Speaker 2: the record, but I'll put it on the record now

33
00:01:51,960 --> 00:01:54,320
Speaker 2: about how that you know, maybe you could even address

34
00:01:54,360 --> 00:01:57,840
Speaker 2: that holistically and that it should all come together and work,

35
00:01:58,320 --> 00:02:00,920
Speaker 2: and you know it might now it Donald Reagan, I believe,

36
00:02:00,960 --> 00:02:04,160
Speaker 2: tried the same thing, and it's not so easy, especially

37
00:02:04,160 --> 00:02:07,120
Speaker 2: now because the world really is truly global and we're

38
00:02:07,120 --> 00:02:10,640
Speaker 2: sort of you know, uncoupling that a little bit. But

39
00:02:11,120 --> 00:02:13,320
Speaker 2: you know, maybe maybe this will all come together and

40
00:02:13,600 --> 00:02:16,400
Speaker 2: work out well for the country. Clearly things that swung

41
00:02:16,480 --> 00:02:19,079
Speaker 2: too far in the other direction, you know, economically in

42
00:02:19,160 --> 00:02:21,360
Speaker 2: terms of trade and balances, and it's getting addressed.

43
00:02:21,440 --> 00:02:22,839
Speaker 4: Do you think that we're going to see a little

44
00:02:22,880 --> 00:02:25,480
Speaker 4: bit more stability out of Washington as we get.

45
00:02:25,360 --> 00:02:29,160
Speaker 2: Deeper into the year, well, I think you've already started

46
00:02:29,160 --> 00:02:32,440
Speaker 2: to see that Washington pays attention to the markets, as

47
00:02:32,440 --> 00:02:35,280
Speaker 2: you had sharp moves, especially in the bond market that

48
00:02:35,720 --> 00:02:38,600
Speaker 2: raised some concerns. And you know, I think the Treasury

49
00:02:38,680 --> 00:02:42,080
Speaker 2: Secretary is quite measured, and I think he does have

50
00:02:42,160 --> 00:02:44,799
Speaker 2: the presidency here, which is which is a good thing.

51
00:02:44,800 --> 00:02:47,240
Speaker 2: And of course most of Wall Street is a fan

52
00:02:47,280 --> 00:02:50,240
Speaker 2: of Jerome Powell. So the fact that whether he's going

53
00:02:50,280 --> 00:02:52,840
Speaker 2: to stay on as affecture or not now for at

54
00:02:52,919 --> 00:02:55,600
Speaker 2: least for now is off the table. Is a constructive film.

55
00:02:55,880 --> 00:02:59,040
Speaker 3: But one issue I'm saying Scott Bess intends to move

56
00:02:59,080 --> 00:03:03,480
Speaker 3: the markets, particularly the bond market. But you're seeing a

57
00:03:03,600 --> 00:03:05,960
Speaker 3: rise upward in the ten year, you know, over the

58
00:03:06,040 --> 00:03:08,320
Speaker 3: last three days and back, as we said here today

59
00:03:08,360 --> 00:03:12,960
Speaker 3: we're at four thirty five, so higher regardless of all

60
00:03:13,080 --> 00:03:15,000
Speaker 3: the veteroric that has been passed around over the last

61
00:03:15,040 --> 00:03:17,600
Speaker 3: couple of days. So what do you make of this

62
00:03:17,720 --> 00:03:20,840
Speaker 3: higher for longer scenarios in the bond market? And are

63
00:03:20,840 --> 00:03:23,400
Speaker 3: you worried that the bond market is starting to shake

64
00:03:23,480 --> 00:03:28,120
Speaker 3: off any relief that taxes might bring to the broader

65
00:03:28,120 --> 00:03:29,840
Speaker 3: physical story of the United States.

66
00:03:30,639 --> 00:03:32,920
Speaker 2: Well Son all, a higher for longer has been somewhat

67
00:03:32,919 --> 00:03:36,920
Speaker 2: the theme for a long time now, and again the

68
00:03:36,960 --> 00:03:40,800
Speaker 2: bond market hyperventilates over twenty basis point moves. Wasn't that

69
00:03:40,920 --> 00:03:43,760
Speaker 2: long ago that we were worried that higher for longer

70
00:03:43,880 --> 00:03:46,960
Speaker 2: meant hundreds of basis point moves. I went to a

71
00:03:47,240 --> 00:03:50,560
Speaker 2: private dinner Jamie Diamond had and that the concern was

72
00:03:50,600 --> 00:03:54,720
Speaker 2: that a seven percent, you know, reference rate, that we

73
00:03:54,880 --> 00:03:56,800
Speaker 2: have a lot of default. So we're nowhere near that.

74
00:03:57,920 --> 00:04:00,360
Speaker 2: And all of this is very constructive for private lenders

75
00:04:00,400 --> 00:04:03,280
Speaker 2: because it sets a high floor for us to earn

76
00:04:03,280 --> 00:04:05,480
Speaker 2: a spread over. And I talked about this last year.

77
00:04:05,800 --> 00:04:09,720
Speaker 2: So our investors enjoy having an embedded portfolio that continues

78
00:04:09,760 --> 00:04:12,800
Speaker 2: to have high yeels since most of it is floating rate.

79
00:04:14,080 --> 00:04:17,600
Speaker 3: So you mind, let's switch gears for a second here,

80
00:04:17,720 --> 00:04:19,800
Speaker 3: because in addition to your world as an investor in

81
00:04:19,839 --> 00:04:22,560
Speaker 3: thread of markets, you are bury from it. A sports investor,

82
00:04:22,640 --> 00:04:24,400
Speaker 3: you got in a lot earlier than a lot of

83
00:04:24,400 --> 00:04:27,960
Speaker 3: you're a private investment bibles have gotten in. We were

84
00:04:27,960 --> 00:04:31,240
Speaker 3: talking about the Brewers. I'm actually curious now that we're

85
00:04:31,240 --> 00:04:34,000
Speaker 3: talking about some of the off the record conversations about

86
00:04:34,040 --> 00:04:37,600
Speaker 3: how you think that the live golf situation is going.

87
00:04:37,520 --> 00:04:42,440
Speaker 2: To play out, so that that would count as a

88
00:04:42,520 --> 00:04:48,560
Speaker 2: high inside fast fold with me trying to hit. Look,

89
00:04:48,560 --> 00:04:51,719
Speaker 2: I've been constructive in this for a while, going back

90
00:04:51,720 --> 00:04:54,200
Speaker 2: to when you know John Henry. First of all, I

91
00:04:54,200 --> 00:04:58,200
Speaker 2: should say, who runs you know, the CEO of Famway

92
00:04:58,760 --> 00:05:01,760
Speaker 2: and they owned Liverpool and the Red Sox and the Penguins.

93
00:05:02,240 --> 00:05:04,919
Speaker 2: He did a brilliant job in structuring this and he

94
00:05:05,240 --> 00:05:09,200
Speaker 2: really focused on it. And so from my standpoint, which

95
00:05:09,240 --> 00:05:12,120
Speaker 2: was now a couple of years ago, I felt like

96
00:05:12,160 --> 00:05:15,200
Speaker 2: the best athletes want to compete against the best. They

97
00:05:15,240 --> 00:05:18,960
Speaker 2: always do. It's the reason Shoeyo Tani a number of

98
00:05:18,960 --> 00:05:21,320
Speaker 2: the Japanese players are coming to playing the major leagues

99
00:05:21,360 --> 00:05:24,719
Speaker 2: now because you know, you want to test yourself. And

100
00:05:24,800 --> 00:05:27,200
Speaker 2: so I always felt there was a reason for the

101
00:05:28,279 --> 00:05:32,520
Speaker 2: two sides to come together. I think that you know,

102
00:05:32,560 --> 00:05:37,880
Speaker 2: the prince in Saudi would like to see something work out,

103
00:05:37,880 --> 00:05:42,080
Speaker 2: although what they've done is quite impressive. And you know,

104
00:05:42,279 --> 00:05:45,320
Speaker 2: we now have a president who is an avid golfer

105
00:05:45,880 --> 00:05:50,120
Speaker 2: and absolutely wants to see this work. So you know,

106
00:05:50,160 --> 00:05:52,000
Speaker 2: you have a lot of folks who want to see

107
00:05:52,000 --> 00:05:55,200
Speaker 2: it work, but it's still complex to put it, to

108
00:05:55,240 --> 00:05:58,520
Speaker 2: put Humpty Dumpty back together a little bit, and that's complicated.

109
00:05:58,839 --> 00:06:02,360
Speaker 2: As an investor, I like complicated situations because you know,

110
00:06:02,680 --> 00:06:04,600
Speaker 2: most people shy away from them, and that's where you

111
00:06:04,640 --> 00:06:05,760
Speaker 2: can create value.

112
00:06:05,560 --> 00:06:08,000
Speaker 4: Well as an investor, particularly in sports. I mean, you

113
00:06:08,040 --> 00:06:11,600
Speaker 4: have a lot of portfolio investors now looking for an

114
00:06:11,720 --> 00:06:14,240
Speaker 4: entry point into the world of sports, sports as an

115
00:06:14,279 --> 00:06:18,000
Speaker 4: asset class, if you will. What happens for those folks,

116
00:06:18,000 --> 00:06:20,359
Speaker 4: those folks that aren't the mark out in ostios that

117
00:06:20,360 --> 00:06:23,600
Speaker 4: can sort of buy the actual entire team. Are they

118
00:06:23,600 --> 00:06:25,719
Speaker 4: going to have an opportunity to buy a slice of

119
00:06:25,800 --> 00:06:27,080
Speaker 4: some of these teams or these leagues.

120
00:06:27,240 --> 00:06:30,880
Speaker 2: Yeah, they will remain and in a couple of ways. Actually,

121
00:06:30,960 --> 00:06:33,560
Speaker 2: now there's a lot more liquidity in the secondary market,

122
00:06:34,160 --> 00:06:36,880
Speaker 2: and at these valuations, very few people can you know,

123
00:06:37,120 --> 00:06:40,480
Speaker 2: Josh Hiris can figure out how to buy the Washington Commanders,

124
00:06:40,960 --> 00:06:43,640
Speaker 2: but you know, at six point six billion dollars, kind

125
00:06:43,640 --> 00:06:46,359
Speaker 2: of a big ticket for most folks. And so, but

126
00:06:46,520 --> 00:06:49,240
Speaker 2: you can now buy pieces of teams. So both I

127
00:06:49,279 --> 00:06:52,920
Speaker 2: believe the Dolphins and the Eagles put evaluation at eight

128
00:06:52,960 --> 00:06:57,560
Speaker 2: billion dollars, and so pieces of it off. In those cases,

129
00:06:57,560 --> 00:07:00,880
Speaker 2: the NFL has approved funds to do that, so high

130
00:07:00,920 --> 00:07:03,920
Speaker 2: net worth individuals can get involved in funds. But there's

131
00:07:03,960 --> 00:07:08,280
Speaker 2: also secondary opportunities. And now I believe, like Morgan Stanley

132
00:07:08,279 --> 00:07:11,080
Speaker 2: for example, is coming up with an ETF for sports

133
00:07:11,080 --> 00:07:13,680
Speaker 2: broad You know, if you look at the sports ecosystem broadly,

134
00:07:13,880 --> 00:07:17,720
Speaker 2: and it's three trillion dollars, it's not just teams and leagues,

135
00:07:17,800 --> 00:07:23,640
Speaker 2: it's media, it's you know, betting, it's infrastructure, and and

136
00:07:23,680 --> 00:07:26,200
Speaker 2: then it's you know, it's even companies that provide equipment

137
00:07:26,800 --> 00:07:31,239
Speaker 2: those industries. So there's now how they're going to create

138
00:07:31,280 --> 00:07:33,160
Speaker 2: an index I'll be curious to.

139
00:07:33,200 --> 00:07:35,120
Speaker 4: That's what I'm curious about too. And then you got

140
00:07:35,120 --> 00:07:36,960
Speaker 4: the whole fan issues, right if you have a bad

141
00:07:37,080 --> 00:07:40,640
Speaker 4: game or bad uh season, does everyone just sell everything?

142
00:07:41,880 --> 00:07:44,040
Speaker 2: You know, you see at least in collectibles and we

143
00:07:44,240 --> 00:07:46,640
Speaker 2: you know, I just this is just hitting me. You

144
00:07:46,760 --> 00:07:50,400
Speaker 2: actually have the prices of collectible cards trade based on

145
00:07:50,480 --> 00:07:54,120
Speaker 2: how the player does that year. That's not really the

146
00:07:54,160 --> 00:07:55,240
Speaker 2: long term value.

147
00:07:54,960 --> 00:07:55,440
Speaker 4: Of the card.

148
00:07:56,040 --> 00:07:58,000
Speaker 2: So obviously vintage cards you have to worry about that

149
00:07:58,040 --> 00:08:00,880
Speaker 2: with Babe Ruth, but you know, Mike Traps cards trade

150
00:08:00,920 --> 00:08:04,000
Speaker 2: up and down depending on whether he's injury. That's but

151
00:08:04,080 --> 00:08:06,320
Speaker 2: it'll be easting to see if that happens with sports investment.

152
00:08:06,600 --> 00:08:07,960
Speaker 2: All right, Mark really appreciate it.

153
00:08:07,960 --> 00:08:10,000
Speaker 4: We'll let you get back to it. Mark on a nasal,

154
00:08:10,120 --> 00:08:12,200
Speaker 4: the co founder of Crescent Capital,