Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Welcome back to Bloomberg Markets.
Speaker 3: I'm Shinali Basik here with Romaine Bostek live at the
Speaker 3: Milkan Institute Global Conference. Now we're joined here by Mark
Speaker 3: at Nacio. Of course you might know him as a brewers,
Speaker 3: owner of the mill markety, but if you also know
Speaker 3: him as the co founder of Press and Capital Group,
Speaker 3: so steeped in credit markets.
Speaker 2: First, let's take a big step back.
Speaker 3: We're talking about how I think this might be the
Speaker 3: busiest Milk and I have been in my career. It's
Speaker 3: because you had the Treasury secretary year, you had Elon
Speaker 3: Musk here overnight, and a lot of talks about a
Speaker 3: valatle economic environment. How do you make sense of it
Speaker 3: all to your investors and to your colleagues across the industry.
Speaker 2: Well, volatility, and thanks again for having me on. It's
Speaker 2: always interesting to mark year to year how things are going.
Speaker 2: Last year, all the questions were about how do you
Speaker 2: deal with stability and what about lower interest rates? So
Speaker 2: we don't have the challenges of stability anymore, you know,
Speaker 2: I think one of the things you do in certain
Speaker 2: times like this is you step back and you kind
Speaker 2: of assess things because while there's a lot of you know,
Speaker 2: day to day volatility which affects you in the public
Speaker 2: markets as private investors in Preston's eighty percent private capital
Speaker 2: and as you know, more loans than equity adjacent, we
Speaker 2: can just see how it all plays out. So the
Speaker 2: Secretary of the Treasury today was talking about this three
Speaker 2: part plan right for lower taxes, less regulation, and addressing
Speaker 2: trade and balances. And I was at a reception that
Speaker 2: he spoke at yesterday. He spoke a little more off
Speaker 2: the record, but I'll put it on the record now
Speaker 2: about how that you know, maybe you could even address
Speaker 2: that holistically and that it should all come together and work,
Speaker 2: and you know it might now it Donald Reagan, I believe,
Speaker 2: tried the same thing, and it's not so easy, especially
Speaker 2: now because the world really is truly global and we're
Speaker 2: sort of you know, uncoupling that a little bit. But
Speaker 2: you know, maybe maybe this will all come together and
Speaker 2: work out well for the country. Clearly things that swung
Speaker 2: too far in the other direction, you know, economically in
Speaker 2: terms of trade and balances, and it's getting addressed.
Speaker 4: Do you think that we're going to see a little
Speaker 4: bit more stability out of Washington as we get.
Speaker 2: Deeper into the year, well, I think you've already started
Speaker 2: to see that Washington pays attention to the markets, as
Speaker 2: you had sharp moves, especially in the bond market that
Speaker 2: raised some concerns. And you know, I think the Treasury
Speaker 2: Secretary is quite measured, and I think he does have
Speaker 2: the presidency here, which is which is a good thing.
Speaker 2: And of course most of Wall Street is a fan
Speaker 2: of Jerome Powell. So the fact that whether he's going
Speaker 2: to stay on as affecture or not now for at
Speaker 2: least for now is off the table. Is a constructive film.
Speaker 3: But one issue I'm saying Scott Bess intends to move
Speaker 3: the markets, particularly the bond market. But you're seeing a
Speaker 3: rise upward in the ten year, you know, over the
Speaker 3: last three days and back, as we said here today
Speaker 3: we're at four thirty five, so higher regardless of all
Speaker 3: the veteroric that has been passed around over the last
Speaker 3: couple of days. So what do you make of this
Speaker 3: higher for longer scenarios in the bond market? And are
Speaker 3: you worried that the bond market is starting to shake
Speaker 3: off any relief that taxes might bring to the broader
Speaker 3: physical story of the United States.
Speaker 2: Well Son all, a higher for longer has been somewhat
Speaker 2: the theme for a long time now, and again the
Speaker 2: bond market hyperventilates over twenty basis point moves. Wasn't that
Speaker 2: long ago that we were worried that higher for longer
Speaker 2: meant hundreds of basis point moves. I went to a
Speaker 2: private dinner Jamie Diamond had and that the concern was
Speaker 2: that a seven percent, you know, reference rate, that we
Speaker 2: have a lot of default. So we're nowhere near that.
Speaker 2: And all of this is very constructive for private lenders
Speaker 2: because it sets a high floor for us to earn
Speaker 2: a spread over. And I talked about this last year.
Speaker 2: So our investors enjoy having an embedded portfolio that continues
Speaker 2: to have high yeels since most of it is floating rate.
Speaker 3: So you mind, let's switch gears for a second here,
Speaker 3: because in addition to your world as an investor in
Speaker 3: thread of markets, you are bury from it. A sports investor,
Speaker 3: you got in a lot earlier than a lot of
Speaker 3: you're a private investment bibles have gotten in. We were
Speaker 3: talking about the Brewers. I'm actually curious now that we're
Speaker 3: talking about some of the off the record conversations about
Speaker 3: how you think that the live golf situation is going.
Speaker 2: To play out, so that that would count as a
Speaker 2: high inside fast fold with me trying to hit. Look,
Speaker 2: I've been constructive in this for a while, going back
Speaker 2: to when you know John Henry. First of all, I
Speaker 2: should say, who runs you know, the CEO of Famway
Speaker 2: and they owned Liverpool and the Red Sox and the Penguins.
Speaker 2: He did a brilliant job in structuring this and he
Speaker 2: really focused on it. And so from my standpoint, which
Speaker 2: was now a couple of years ago, I felt like
Speaker 2: the best athletes want to compete against the best. They
Speaker 2: always do. It's the reason Shoeyo Tani a number of
Speaker 2: the Japanese players are coming to playing the major leagues
Speaker 2: now because you know, you want to test yourself. And
Speaker 2: so I always felt there was a reason for the
Speaker 2: two sides to come together. I think that you know,
Speaker 2: the prince in Saudi would like to see something work out,
Speaker 2: although what they've done is quite impressive. And you know,
Speaker 2: we now have a president who is an avid golfer
Speaker 2: and absolutely wants to see this work. So you know,
Speaker 2: you have a lot of folks who want to see
Speaker 2: it work, but it's still complex to put it, to
Speaker 2: put Humpty Dumpty back together a little bit, and that's complicated.
Speaker 2: As an investor, I like complicated situations because you know,
Speaker 2: most people shy away from them, and that's where you
Speaker 2: can create value.
Speaker 4: Well as an investor, particularly in sports. I mean, you
Speaker 4: have a lot of portfolio investors now looking for an
Speaker 4: entry point into the world of sports, sports as an
Speaker 4: asset class, if you will. What happens for those folks,
Speaker 4: those folks that aren't the mark out in ostios that
Speaker 4: can sort of buy the actual entire team. Are they
Speaker 4: going to have an opportunity to buy a slice of
Speaker 4: some of these teams or these leagues.
Speaker 2: Yeah, they will remain and in a couple of ways. Actually,
Speaker 2: now there's a lot more liquidity in the secondary market,
Speaker 2: and at these valuations, very few people can you know,
Speaker 2: Josh Hiris can figure out how to buy the Washington Commanders,
Speaker 2: but you know, at six point six billion dollars, kind
Speaker 2: of a big ticket for most folks. And so, but
Speaker 2: you can now buy pieces of teams. So both I
Speaker 2: believe the Dolphins and the Eagles put evaluation at eight
Speaker 2: billion dollars, and so pieces of it off. In those cases,
Speaker 2: the NFL has approved funds to do that, so high
Speaker 2: net worth individuals can get involved in funds. But there's
Speaker 2: also secondary opportunities. And now I believe, like Morgan Stanley
Speaker 2: for example, is coming up with an ETF for sports
Speaker 2: broad You know, if you look at the sports ecosystem broadly,
Speaker 2: and it's three trillion dollars, it's not just teams and leagues,
Speaker 2: it's media, it's you know, betting, it's infrastructure, and and
Speaker 2: then it's you know, it's even companies that provide equipment
Speaker 2: those industries. So there's now how they're going to create
Speaker 2: an index I'll be curious to.
Speaker 4: That's what I'm curious about too. And then you got
Speaker 4: the whole fan issues, right if you have a bad
Speaker 4: game or bad uh season, does everyone just sell everything?
Speaker 2: You know, you see at least in collectibles and we
Speaker 2: you know, I just this is just hitting me. You
Speaker 2: actually have the prices of collectible cards trade based on
Speaker 2: how the player does that year. That's not really the
Speaker 2: long term value.
Speaker 4: Of the card.
Speaker 2: So obviously vintage cards you have to worry about that
Speaker 2: with Babe Ruth, but you know, Mike Traps cards trade
Speaker 2: up and down depending on whether he's injury. That's but
Speaker 2: it'll be easting to see if that happens with sports investment.
Speaker 2: All right, Mark really appreciate it.
Speaker 4: We'll let you get back to it. Mark on a nasal,
Speaker 4: the co founder of Crescent Capital,