WEBVTT - Day Three, Part One from the Milken Global Conference 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.040 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.920 --> 0:00:23.960 Yes, indeed, everybody, we are finishing up one more day 0:00:24.000 --> 0:00:27.000 and some more wonderful interviews Carol Masser here at the 0:00:27.040 --> 0:00:29.320 Milkin Institute Global Conference, and of course, as you know 0:00:29.480 --> 0:00:32.479 on YouTube and on our Bloomberg original streaming service. I 0:00:32.520 --> 0:00:34.720 have to say in a special edition of the BW Daily, 0:00:35.040 --> 0:00:38.159 some reporting by our team Cat Doherty and Alison McNeely, 0:00:38.240 --> 0:00:40.680 they noted the glum mood among the financial elite at 0:00:40.680 --> 0:00:44.240 the Milkin Institute conference here hasn't been limited to bankers. 0:00:44.280 --> 0:00:47.520 They talked about the lousy environment for private equity fundraising, 0:00:47.800 --> 0:00:50.000 but as our next guest will tell you, they were 0:00:50.000 --> 0:00:52.560 actually putting the finishing touches on a capital raise while 0:00:52.560 --> 0:00:54.320 at Milkin. So we're going to get into it with 0:00:54.400 --> 0:00:57.760 us on site here at Milkin is one of the 0:00:57.800 --> 0:01:01.400 co founders of the Private from Red Arts Capital, Nick 0:01:01.480 --> 0:01:04.200 and Twan, and he joins us. Welcome, Welcome, great to 0:01:04.240 --> 0:01:04.520 be here. 0:01:04.520 --> 0:01:05.160 Thanks for having me. 0:01:05.240 --> 0:01:06.759 It's great to have you here. I want to get 0:01:06.760 --> 0:01:09.800 to the capital raise in just a moment. But the 0:01:09.840 --> 0:01:13.160 stresses that we are seeing in the banking community, the 0:01:13.200 --> 0:01:15.960 regional banks, what impact are you feeling at all when 0:01:15.959 --> 0:01:18.000 it comes to I don't know your world in general, 0:01:18.080 --> 0:01:20.000 or people maybe coming to you where they can't get 0:01:20.040 --> 0:01:20.800 funding elsewhere. 0:01:21.120 --> 0:01:21.440 Sure. 0:01:21.520 --> 0:01:25.160 Well, I think it's stratified between size of business. So 0:01:25.760 --> 0:01:30.000 our firm focuses on middle market companies, so some of 0:01:30.000 --> 0:01:33.119 those businesses might be more impacted than others. Fortunately, our 0:01:33.160 --> 0:01:35.200 portfolio has not been impacted in today. 0:01:35.440 --> 0:01:37.240 You haven't seen any impact, Okay, So tell me about 0:01:37.240 --> 0:01:40.520 this fundraise. You guys just wrapped up what fundraising from 0:01:40.640 --> 0:01:43.240 about two hundred and seventy million for the debut of 0:01:43.240 --> 0:01:45.760 your private equity fund. Tell me about it. 0:01:45.840 --> 0:01:48.320 Yes, and it was oversubscribed right, Yes, our target was 0:01:48.360 --> 0:01:50.120 two twenty five So yeah. 0:01:50.200 --> 0:01:53.120 We're sector focused on investing in the supply chain and logistics, 0:01:53.560 --> 0:01:56.280 and we believe deeply in sector expertise. 0:01:56.640 --> 0:01:58.400 So I think that was part of. 0:01:59.800 --> 0:02:03.080 The hitch was this is the right time to be 0:02:03.120 --> 0:02:05.920 investing in supply chain given all the challenges we saw 0:02:06.120 --> 0:02:07.080 during COVID. 0:02:07.040 --> 0:02:09.240 Because of the unshoring that's going on somewhat of the 0:02:09.680 --> 0:02:11.640 as I have some of the conversations I've hit here 0:02:11.680 --> 0:02:14.520 at milk and it's not that globalization is it's just 0:02:14.600 --> 0:02:17.280 moving around. Maybe it's gonna be different markets, but there 0:02:17.360 --> 0:02:18.640 is more onshoing going on. 0:02:18.800 --> 0:02:19.919 This is absolutely true. 0:02:20.160 --> 0:02:22.280 I think you're seeing it across the board, big Fortune, 0:02:22.360 --> 0:02:25.400 five hundreds and smaller businesses. I think people have learned 0:02:25.400 --> 0:02:28.560 even though supply chain challenges have diminished somewhat here in 0:02:28.600 --> 0:02:32.040 this country, people have learned that there needs to be 0:02:32.840 --> 0:02:36.119 additions to the supply chain strategy so there isn't one 0:02:36.240 --> 0:02:37.320 point of failure. 0:02:36.960 --> 0:02:37.400 In the future. 0:02:37.520 --> 0:02:40.400 What kind of companies in particular, I know trucking is 0:02:40.480 --> 0:02:42.320 among some of the companies that you guys have been 0:02:42.360 --> 0:02:44.400 involved in. What particularly is coming before you? 0:02:44.919 --> 0:02:47.559 Yeah, so we're spending a lot of time looking at warehousing. 0:02:48.240 --> 0:02:50.280 I think that's a trend regardless what's going on in 0:02:50.400 --> 0:02:53.040 terms of onshoing or near shoring. 0:02:53.639 --> 0:02:55.760 Is the actual actual buildings. 0:02:55.360 --> 0:02:56.560 Or that's correct. 0:02:56.639 --> 0:03:01.600 Yeah, the businesses that operate within warehousing facilit We are 0:03:01.600 --> 0:03:05.840 particularly focused on investing right now in transloading. 0:03:05.240 --> 0:03:07.920 Or rail related services around warehousing. 0:03:08.000 --> 0:03:12.320 So moving big heavy bulky loads, and we're also focused 0:03:12.320 --> 0:03:15.280 on contract packaging. We have a business called Courgistics that 0:03:15.400 --> 0:03:19.040 is invested in They're a large contract packager focused on 0:03:19.080 --> 0:03:21.840 consumer brands as well as industrial brands. 0:03:22.360 --> 0:03:24.639 When we're spending a lot of time in aerospace and defense. 0:03:24.360 --> 0:03:26.680 As well, what specifically there I was curious about that. 0:03:26.880 --> 0:03:30.520 Yeah, so we like manufacturers of parts and components that 0:03:30.600 --> 0:03:34.160 go into engines, maintenance repair of those engines. 0:03:34.480 --> 0:03:37.160 Obviously, commercial airlines were heavily. 0:03:36.840 --> 0:03:38.920 Impacted by COVID, but there's a major ramp up and 0:03:38.960 --> 0:03:41.880 an unfortunately because a lot of the uncertainty globally, there's 0:03:41.880 --> 0:03:45.080 also a high demand for defense related aerospace services. 0:03:45.120 --> 0:03:46.640 So it's actually the supply chains of the things that 0:03:46.680 --> 0:03:49.680 are moving things around, That's correct. Like you can break 0:03:49.720 --> 0:03:52.360 it down so many different ways. What are the valuations 0:03:52.360 --> 0:03:54.640 on things? I mean, have they come down a bit 0:03:54.680 --> 0:03:56.080 in terms of when you're you know. 0:03:56.320 --> 0:03:58.680 Well, I think that goes back to the size of 0:03:58.720 --> 0:04:01.280 businesses as we discussed before. Or I also think that 0:04:02.560 --> 0:04:05.360 there is a bit of a gap or a delta 0:04:05.400 --> 0:04:07.840 between what the sellers are expecting and what buyers are 0:04:07.840 --> 0:04:10.120 willing to pay for businesses, and some of that has 0:04:10.160 --> 0:04:12.720 to do with you know, leverage capacity and what lenders 0:04:12.760 --> 0:04:13.360 are willing. 0:04:13.160 --> 0:04:15.200 To do in favor of the buyers. Are the sellers. 0:04:15.760 --> 0:04:16.760 I think it's been well. 0:04:17.000 --> 0:04:19.840 I think it's sellers expectations might be a little bit 0:04:19.920 --> 0:04:22.919 higher than what what buyers are willing to pay, and 0:04:23.040 --> 0:04:24.440 you see that probably more likely. 0:04:24.279 --> 0:04:25.719 In the higher ends. 0:04:25.560 --> 0:04:27.960 Of the market than the lower ends of the market. Right, 0:04:28.760 --> 0:04:31.200 But in our space, I think there's plenty of opportunities still, 0:04:31.200 --> 0:04:32.720 particularly because we're so focused. 0:04:32.880 --> 0:04:34.560 Nick, I'm wondering. I mean, I love that you play 0:04:34.600 --> 0:04:36.240 in the middle market space. I mean, I feel like 0:04:36.320 --> 0:04:39.200 we often talk about the big, you know, publicly traded companies, 0:04:39.200 --> 0:04:41.520 but there's so many companies in the middle market space, 0:04:41.560 --> 0:04:43.840 and it's one of the areas I think that we're 0:04:43.839 --> 0:04:46.200 concerned about not being able to get the financing they 0:04:46.279 --> 0:04:48.640 need or the funding that they need. Based on the 0:04:48.680 --> 0:04:50.960 activity that you're seeing in the companies that you're seeing, 0:04:50.960 --> 0:04:52.760 what does it tell you about the economic outlook? 0:04:53.040 --> 0:04:54.040 Yeah, I think it's mixed. 0:04:54.240 --> 0:04:54.440 Right. 0:04:55.360 --> 0:04:57.799 In some parts of the economy, things are very strong. 0:04:57.800 --> 0:05:00.560 If we touched on in aerospace and defense industries are 0:05:00.560 --> 0:05:04.279 booming and others for instance and trucking, where we do 0:05:04.360 --> 0:05:09.000 not have any investments currently. Freight rates have been significantly impacted, 0:05:09.000 --> 0:05:11.200 and now that's again off of a kind of an 0:05:11.240 --> 0:05:13.840 all time hide during COVID. But I think there are 0:05:13.880 --> 0:05:16.680 some woves and that does create opportunities for investment, particularly 0:05:16.680 --> 0:05:20.720 if companies or families are looking to exit or have 0:05:20.839 --> 0:05:22.400 liquidity challenges. 0:05:22.120 --> 0:05:24.000 Because a lot of times there are family owned businesses 0:05:24.040 --> 0:05:27.760 right in that space. Having said that, what are the 0:05:28.040 --> 0:05:30.480 exits for you guys? What's your time frame of holding? 0:05:30.520 --> 0:05:33.560 Is it typical private equity or is it maybe a 0:05:33.640 --> 0:05:35.760 sell to a company or something much more quickly. 0:05:36.080 --> 0:05:38.680 Yeah, so we are a typical private equity firm. I 0:05:38.760 --> 0:05:41.440 think what perhaps might be a little bit different. I 0:05:41.480 --> 0:05:43.120 think this is the trend that we're seeing in private 0:05:43.160 --> 0:05:45.880 dect BEE in general, is it's so hard to find the. 0:05:45.880 --> 0:05:47.880 Right business, the right culture, the right people. 0:05:48.560 --> 0:05:50.520 So when you find that the idea of having to 0:05:50.760 --> 0:05:53.320 flip things right away, it can be challenging. So I 0:05:53.320 --> 0:05:56.440 think what part of our thematic related investment work is 0:05:56.440 --> 0:05:59.240 to find businesses where we understand what the strategy is. 0:05:59.360 --> 0:06:01.520 To grow a bit business before we get involved. 0:06:02.080 --> 0:06:04.640 And so what we tell sellers and families is that 0:06:04.800 --> 0:06:07.000 if the strategy is to grow over a longer period 0:06:07.000 --> 0:06:07.320 of time. 0:06:07.480 --> 0:06:09.160 We can help provide the solutions to do that. 0:06:09.400 --> 0:06:11.760 If it's really just they're looking for the liquidity and 0:06:11.800 --> 0:06:14.200 they're looking for stewardship for the business for the future, 0:06:14.240 --> 0:06:15.520 that's a different strategy as well. 0:06:15.720 --> 0:06:18.080 Listen, we only have unfortunately thirty forty seconds you're black 0:06:18.120 --> 0:06:22.240 owned private equity firm. It's a rarity. Yes, I know, 0:06:22.400 --> 0:06:24.720 it is unfortunate, and these are some things I'm going 0:06:24.720 --> 0:06:26.560 to talk about with John O'Bryant in a little bit. 0:06:27.360 --> 0:06:29.760 But I am curious, does it also maybe help you 0:06:30.000 --> 0:06:31.800 in the middle market space to some extent are not 0:06:31.839 --> 0:06:34.479 necessarily is it? Does it help you or is it sometimes? 0:06:34.520 --> 0:06:36.400 Why I think diversity is good for business, not just 0:06:36.440 --> 0:06:38.120 the right thing to do, it's good for business. The 0:06:38.160 --> 0:06:42.200 diversity of thought is incredibly powerful competitive advantage. We don't 0:06:42.240 --> 0:06:45.200 market to our firms that we're black owned. We market 0:06:45.200 --> 0:06:47.560 that we're experts in our space. But it's something that 0:06:47.600 --> 0:06:50.320 we consider and then for instance, today our firm is 0:06:50.360 --> 0:06:51.480 about fifty percent women. 0:06:51.640 --> 0:06:52.599 I love that. I saw that. 0:06:52.680 --> 0:06:54.120 It is also a rarety improvidence. 0:06:54.200 --> 0:06:55.960 So diversity with internally as well. 0:06:56.000 --> 0:06:57.800 Yeah, you got to you got to walk the walk. 0:06:57.760 --> 0:07:00.480 Right, and it brings you also diverse thinking, diverse right 0:07:00.520 --> 0:07:01.440 in terms of investments. 0:07:01.440 --> 0:07:01.840 That's great. 0:07:02.520 --> 0:07:04.360 Thank you so much. I hope we can stay in touch, 0:07:04.680 --> 0:07:07.400 love to hear more as you guys are making investments 0:07:07.400 --> 0:07:09.440 and where you're going. Logistics is always a fun space 0:07:09.840 --> 0:07:11.840 in terms of what it tells us. Nick Antwine of 0:07:11.880 --> 0:07:14.000 Red Arts Capital. Right here at Milkin, Folks, you are 0:07:14.000 --> 0:07:16.480 listening and watching Bloomberg BusinessWeek. This is Bloomberg. 0:07:16.800 --> 0:07:20.360 You're listening to the Bloomberg Business Week podcast. Catch us 0:07:20.400 --> 0:07:23.760 live weekday afternoons from three to six Eastern Listen on 0:07:23.800 --> 0:07:27.840 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 0:07:28.120 --> 0:07:30.440 or watch us live on YouTube. 0:07:32.040 --> 0:07:35.000 Carol Master live at the Milken Institute Global Conference. And 0:07:35.040 --> 0:07:37.480 I want to get to our guests because every time 0:07:37.760 --> 0:07:39.680 I speak with him, spend some time with him, he 0:07:39.680 --> 0:07:42.160 always inspires. He reminds us that will take work and 0:07:42.240 --> 0:07:45.280 conscious decisions to bring about a more equality and equitable world. 0:07:45.560 --> 0:07:47.320 So with us as the chairman and CEO of the 0:07:47.360 --> 0:07:51.520 nonprofit in Financial Literacy and Economic Conclusion, Operation Hope, He's 0:07:51.600 --> 0:07:55.280 involved in so much to close the gap. He's also 0:07:55.600 --> 0:07:58.160 a vice chair of former President Bush's Council on Financial Literacy. 0:07:58.240 --> 0:08:02.080 I mean, you've worked with President Obama Council on financial capability. 0:08:02.320 --> 0:08:04.120 You've done so much of You're hands in so much 0:08:04.240 --> 0:08:10.360 financial literacy. You're thinking about, you know, housing access, what's 0:08:10.440 --> 0:08:12.239 top of mind as you had I'm sure a million 0:08:12.240 --> 0:08:16.920 conversations here at milkon and have we gotten better in 0:08:17.000 --> 0:08:17.760 terms of equity? 0:08:18.200 --> 0:08:20.360 We've gotten better. The world's gotten worse. 0:08:21.120 --> 0:08:22.080 Well that doesn't feel good. 0:08:22.400 --> 0:08:25.920 Yeah, Well, the world's in turmoil now, so it's hard 0:08:25.960 --> 0:08:28.480 to find stable ground to sit. Good ideas. We've got 0:08:28.480 --> 0:08:33.400 more good ideas, we've got more proven ideas. Me yesterday, 0:08:33.480 --> 0:08:36.960 Fast Company announced that we were the World Changing We 0:08:37.040 --> 0:08:40.680 won this World Changing Ideas Award. In a more stable time, 0:08:40.720 --> 0:08:43.080 that would have been the shot the news that sort 0:08:43.080 --> 0:08:45.600 of rang around the world and have been rallying around that. 0:08:46.200 --> 0:08:48.560 You know, in this environment, you're an active shooter in Atlanta. 0:08:48.640 --> 0:08:51.320 You've got a bank going bus, you gotta you got 0:08:51.320 --> 0:08:53.880 a stalemate in Washington, d C. On the debt crisis. 0:08:53.880 --> 0:08:57.000 You've got so there's so many things distracting people. The 0:08:57.559 --> 0:08:59.840 urgent is crowding out the important. 0:09:00.480 --> 0:09:01.800 And yet you are getting stuff done. 0:09:01.880 --> 0:09:04.000 John, Yet we're still getting stuff done. I'll just punched 0:09:04.080 --> 0:09:05.600 right through it, you know, over and around it, through it. 0:09:05.640 --> 0:09:07.679 I go to it, and rainbow's only follows. 0:09:07.679 --> 0:09:08.079 Storms. 0:09:08.160 --> 0:09:10.440 Cannot have a rainbow without a storm first. I don't 0:09:10.440 --> 0:09:12.800 mind a good fight. I don't mind having to punch 0:09:12.840 --> 0:09:14.840 through the rhetoric with substance. I've been doing that my 0:09:14.920 --> 0:09:16.840 whole life, and we have a lot of substance now. 0:09:17.200 --> 0:09:20.840 And look we're here. I'm here talking to you. I'm 0:09:20.920 --> 0:09:22.800 not being pushed to the I'm not sorry. I'm not 0:09:22.880 --> 0:09:24.959 at the edges of the conversation. I'm often at the 0:09:25.000 --> 0:09:27.840 center of a conversation, right That's where I've wanted to be. 0:09:27.920 --> 0:09:30.160 That's where the issue needs to be. We're just there 0:09:30.160 --> 0:09:32.800 in a very chaotic, crazy times. I think that we're 0:09:32.800 --> 0:09:35.240 sitting in a moment in history right now, Carol. The 0:09:35.280 --> 0:09:37.520 history does not feel historic when you're sitting in it. 0:09:37.520 --> 0:09:39.680 It just feels like another day. But I think that 0:09:39.720 --> 0:09:42.920 what happens between now and twenty thirty, between the pandemic 0:09:42.920 --> 0:09:45.760 and George Floyd's murder and the attack on our capital 0:09:46.040 --> 0:09:49.120 which reset everything, and the end of twenty thirty, is 0:09:49.120 --> 0:09:51.520 what I call the third reconstruction and this next ten 0:09:51.840 --> 0:09:54.199 this ten year period will decide the quality of life 0:09:54.200 --> 0:09:56.560 for the next one hundred years. So I don't mind 0:09:56.559 --> 0:09:59.079 being exhausted, worn out from work from cancy in the 0:09:59.120 --> 0:10:00.960 morning and can't see at night. I think it's relevant. 0:10:01.000 --> 0:10:03.520 I think it matters what I'm saying, what you're doing matters. 0:10:03.559 --> 0:10:05.880 You cannot have a movement without the media. Doctor King 0:10:06.600 --> 0:10:08.640 never would have had a movement if it wasn't for 0:10:08.679 --> 0:10:14.160 the media being amplifying his good message. So I think 0:10:14.200 --> 0:10:14.960 that all this. 0:10:14.920 --> 0:10:17.160 Is Oh, I appreciate that. I mean, it's not perfect. 0:10:17.240 --> 0:10:17.960 If we know that. 0:10:18.800 --> 0:10:21.640 I want to ask about your partnership that you've had 0:10:21.640 --> 0:10:23.200 with Fulton Bank. Talk to me a little bit about 0:10:23.520 --> 0:10:25.640 I feel like you know you and I've talked about 0:10:25.640 --> 0:10:29.080 this a lot of folks. There's lots of conversations. You 0:10:29.120 --> 0:10:31.240 actually take those conversations and put it into action. So 0:10:31.280 --> 0:10:32.000 tell us about this. 0:10:32.080 --> 0:10:37.680 Yeah, PhDs are good, pH d's are better. So the 0:10:37.800 --> 0:10:40.880 one thing I love about this, And Fulton won't appreciate 0:10:40.920 --> 0:10:42.800 the way I'm going to characterize this, but I think 0:10:42.840 --> 0:10:48.680 it's an important characterization. A relatively small sized bank in 0:10:49.000 --> 0:10:54.400 Pennsylvania small by banking standards, not small by bank their standards. 0:10:54.559 --> 0:10:56.520 It's actually a big bank by their standars. Fulton Bank 0:10:56.559 --> 0:10:59.640 is this great institution in Pennsylvania doing great work, but 0:10:59.640 --> 0:11:03.720 they're not household name. This relatively small market cap bank 0:11:03.800 --> 0:11:06.880 based on the banks we hear on TV or in 0:11:07.040 --> 0:11:11.920 Bloomberg all the time. Did a billion dollars in mortgage 0:11:11.920 --> 0:11:16.680 creation for African American not just minority, not women, not 0:11:16.840 --> 0:11:22.200 some super group of underserved, just African Americans. A billion 0:11:22.280 --> 0:11:25.800 dollars through Operation Hope in our Hope and sides, proving 0:11:25.840 --> 0:11:27.560 that you can do well and do good, proving that 0:11:27.600 --> 0:11:29.920 you can move the needle on forty one percent of 0:11:29.960 --> 0:11:32.760 af Americans who own a home, and when seventy five 0:11:32.760 --> 0:11:34.920 percent of Whites own a home, that delta thirty percent 0:11:35.040 --> 0:11:38.160 is the loss of wealth creation, the loss of tax base, 0:11:38.240 --> 0:11:41.520 the loss of our opportunity lasts. So the fact that one 0:11:41.559 --> 0:11:44.840 bank that is not yet a household name, they mean 0:11:44.840 --> 0:11:47.040 they will be after this interview, right, did a billion 0:11:47.120 --> 0:11:51.720 dollars of credible, well underwritten structured home ownership. Tying it 0:11:51.760 --> 0:11:54.160 to our coaching work at Hope Inside, where we got 0:11:54.160 --> 0:11:58.199 credit scores up, debt down, savings up. Some people could qualify. 0:11:58.280 --> 0:12:00.560 So did it in a safest down basis. We just 0:12:00.600 --> 0:12:03.680 did the hard work together. A billion dollars. That's a 0:12:03.720 --> 0:12:04.240 real number. 0:12:04.400 --> 0:12:06.840 What's interesting is right, it was for people who qualified, 0:12:06.840 --> 0:12:08.920 and you talked about getting the credit scores up. I 0:12:08.960 --> 0:12:12.319 mean these are people that you guys have worked with, right, 0:12:12.800 --> 0:12:13.960 who wanted to be homeowners? 0:12:14.000 --> 0:12:14.120 Yes? 0:12:14.320 --> 0:12:15.400 And what did they have to do? 0:12:15.559 --> 0:12:15.800 Yes? 0:12:15.800 --> 0:12:18.120 And you educated them yes, and then they did the work. 0:12:18.240 --> 0:12:21.760 So we're getting the bank out of the no business 0:12:22.559 --> 0:12:25.880 and back into the yes business by working with and 0:12:25.960 --> 0:12:28.760 I want to again a command Fulton Bank in their leadership, 0:12:28.800 --> 0:12:32.080 their chairman, see, I command wells Fargo, I command well 0:12:32.080 --> 0:12:33.800 as far as ordered a hundred of our hope in 0:12:33.840 --> 0:12:36.960 side locations plus. That's not charity, that's business. Bank of 0:12:36.960 --> 0:12:38.640 America's ordered one hundred plus. 0:12:38.400 --> 0:12:40.680 Locations true outside the bank. 0:12:40.559 --> 0:12:43.720 Inside the bank. We're the only nonprofit in US history 0:12:43.720 --> 0:12:46.480 allowed to operate inside of a bank branch. Truist once 0:12:46.559 --> 0:12:48.400 has been half of their bank branches. They have two 0:12:48.400 --> 0:12:52.040 thousand branches. You're talking about changing banking itself. But back 0:12:52.040 --> 0:12:54.839 to this example of Fulton. So we go into the 0:12:54.880 --> 0:12:57.480 bank branch and we can do what the banker can't 0:12:57.480 --> 0:13:01.319 do we can actually ask the personal direct question, missus Jones. Yes, 0:13:02.360 --> 0:13:04.840 let's look at your credit report. This is like a 0:13:04.840 --> 0:13:07.800 bus accident. And we both have a nice laugh because 0:13:07.800 --> 0:13:11.360 miss Jones knows that she knows her history. Yeah, I 0:13:11.400 --> 0:13:13.319 haven't looked at my credit at score in a while. Okay, 0:13:13.320 --> 0:13:16.160 what's that? I don't know, John, what that's called an error? Okay? 0:13:16.360 --> 0:13:19.840 The law states that if the credit bureaus, three of 0:13:19.840 --> 0:13:22.800 them can't confirm that that's yours, they must remove it. 0:13:23.120 --> 0:13:24.760 How about we write a letter to the credit bureaus 0:13:24.800 --> 0:13:27.600 together and challenge them. Yes, we write that letter together. 0:13:27.720 --> 0:13:31.040 What's banking a trust business? It's about belief, It's about confidence. 0:13:31.200 --> 0:13:33.120 Credit comes to the work the Latin word credit od 0:13:33.120 --> 0:13:36.720 which is credibility capital from the Latin word capitas knowledge 0:13:36.720 --> 0:13:38.080 in the head. Now that this is about money, it's 0:13:38.080 --> 0:13:40.920 about how you feel. So we get the letter to 0:13:40.960 --> 0:13:43.400 the credit bureaus. They can't confirm that it's hers. They 0:13:43.440 --> 0:13:45.960 are removing it. In thirty days, her credit score pops 0:13:46.000 --> 0:13:48.920 thirty points. So now you go, yes, so now you 0:13:48.960 --> 0:13:52.840 go from five ninety to six twenty. Well, what happens 0:13:52.840 --> 0:13:55.680 to listen to her? To missus Jones self, esteem. It 0:13:55.760 --> 0:13:58.880 goes up her belief in the financial system, her trust, 0:13:59.160 --> 0:14:02.000 her confidence, her sense of independence. So she now she's 0:14:02.000 --> 0:14:05.480 sitting going okay, what else can we do? So then 0:14:05.520 --> 0:14:08.880 we tackle the charge off on her credit bureau. Well, 0:14:09.000 --> 0:14:11.840 that is hers. She was divorced ten years ago. It 0:14:11.880 --> 0:14:14.840 was a thousand dollars phone bill or balloons, one thousand dollars. 0:14:15.000 --> 0:14:17.680 They chased her, couldn't find her. That was sold to 0:14:17.760 --> 0:14:22.040 a credit repair agency, a debt collection agency for five 0:14:22.080 --> 0:14:24.640 cents on the dollar. We know that it's fifty bucks. 0:14:24.680 --> 0:14:26.560 What do they want? They want one hundred percent profit. 0:14:26.680 --> 0:14:30.160 They want one hundred bucks, Miss Jones. Let's call them together. 0:14:30.720 --> 0:14:33.000 We have missus Jones here. We're looking for her. She's 0:14:33.040 --> 0:14:35.520 looking for you. We want to pay our debt. We 0:14:35.560 --> 0:14:37.520 want a hundred bucks. No, we're gonna pay you two 0:14:37.600 --> 0:14:41.480 hundred bucks. Why because we want your absolute attention to 0:14:41.520 --> 0:14:43.880 take this off her credit report after she's satisized to 0:14:43.880 --> 0:14:45.320 fix it. And then when it shows back up on 0:14:45.400 --> 0:14:47.560 her credit report because it's been there ten years, we're 0:14:47.560 --> 0:14:49.160 got to write another letter to the credit burias and 0:14:49.200 --> 0:14:50.720 get it off again. They get it, They get a 0:14:50.720 --> 0:14:53.800 two hundred percent profit. She got an eighty percent discount. 0:14:53.880 --> 0:14:56.160 Fair exchange is no robbery. Her credit score goes up 0:14:56.200 --> 0:14:59.160 another twenty thirty forty points. So now she's an example. 0:14:59.240 --> 0:15:01.240 And she said, let's just say six fifty six sixty, 0:15:01.560 --> 0:15:03.840 she's now in striking distance of a six to eighty 0:15:03.920 --> 0:15:06.720 prime rate mortgage. We work on our budget, we work 0:15:06.720 --> 0:15:08.720 on a few other things, and all of a sudden, 0:15:08.840 --> 0:15:10.359 she's a shiny pinny. 0:15:10.280 --> 0:15:12.480 John, I am like, it is amazing what you do. 0:15:12.520 --> 0:15:14.760 And the thing is, you are all about financial literacy. 0:15:14.800 --> 0:15:15.880 And I think you and I've talked about it. I 0:15:15.920 --> 0:15:18.880 wish kids were starting from kindergarten that they learned about it. 0:15:18.920 --> 0:15:21.080 You work on it from middle school through college. 0:15:21.160 --> 0:15:23.720 Right now, now kindergarten, by the way you are doing 0:15:23.920 --> 0:15:26.800 we're doing kids accounts in kindergarten and Atlanta public schools. 0:15:26.800 --> 0:15:28.960 I mean, and you're working with employee. I mean, you're 0:15:29.000 --> 0:15:33.680 making a difference. Right, people are really learning about the 0:15:33.720 --> 0:15:36.280 financial system and understanding how they can make it work 0:15:36.320 --> 0:15:36.640 for them. 0:15:36.720 --> 0:15:36.960 Yeah. 0:15:37.000 --> 0:15:39.960 So now we've told major employers, so Doug McMillan and 0:15:40.000 --> 0:15:42.600 the CEO of Walmart not co sharing financial literacy for all. 0:15:42.800 --> 0:15:45.120 Our mission is again eighty percent of the fortune five 0:15:45.160 --> 0:15:47.800 hundred to embed financial literacy into their business plan. So 0:15:47.840 --> 0:15:50.080 this is not public affairs or community affairs. This is 0:15:50.080 --> 0:15:52.720 a serious business. We say, this is what healthcare was 0:15:52.760 --> 0:15:55.880 forty or fifty years ago, financial well being inside the workplace. 0:15:56.080 --> 0:15:58.800 So then Delta CEO comes to us and says, this 0:15:58.840 --> 0:16:00.800 is something relevant to our people. There are folks who 0:16:00.800 --> 0:16:03.280 said this is important. We'll give a thousand dollars, sorry, 0:16:03.400 --> 0:16:06.520 invest one thousand dollars to every one of our workers 0:16:06.520 --> 0:16:09.440 who go through financial coaching for an emergency savings account. 0:16:09.520 --> 0:16:12.200 Because sixty four percent of Americans, Carol, don't have four 0:16:12.240 --> 0:16:14.840 hundred dollars for an unplanned event that affects their ability 0:16:14.880 --> 0:16:17.640 to focus on the job, their ability. They're stressed out 0:16:17.640 --> 0:16:20.160 on the job, they're not paying attention. So he's like, 0:16:20.200 --> 0:16:23.040 I want there, I want all share of mind. I 0:16:23.080 --> 0:16:26.520 don't want them stressed out. He achieved a year's worth 0:16:26.560 --> 0:16:29.000 of financial well being coaching targets in two months with 0:16:29.080 --> 0:16:32.400 this program. So he had ninety thousand employees at Delta, 0:16:32.760 --> 0:16:34.920 and I can't go through an airport now without two 0:16:34.960 --> 0:16:37.480 things happening. A Delta employee is saying, I got my 0:16:37.560 --> 0:16:40.160 thousand dollars or I'm in my coaching sessions right now. 0:16:40.200 --> 0:16:42.960 Thank you or the TSA agents screaming out the credit 0:16:43.000 --> 0:16:43.520 score to me. 0:16:44.640 --> 0:16:47.880 But how great is that? Listen? Fifteen seconds left. Final 0:16:47.920 --> 0:16:49.560 thought to anybody who's listening. 0:16:49.680 --> 0:16:51.040 You can be the change we want to see in 0:16:51.040 --> 0:16:54.320 the world. Figure out how you can help call Operation Hope. Volunteer, 0:16:54.440 --> 0:16:56.800 become a member, become a donor become a partner. This 0:16:56.960 --> 0:16:59.360 is this is about making free enterprise work for all 0:16:59.400 --> 0:17:01.680 of God's show. This is silver rights. This is not 0:17:01.720 --> 0:17:04.720 about red or blue race. I mean politics are black 0:17:04.800 --> 0:17:08.560 or white. It's about green economics, more of it for all, GDP, 0:17:08.720 --> 0:17:11.800 for America, and truly by getting more people in the game. 0:17:12.080 --> 0:17:14.560 I love it, make so much sense. 0:17:14.640 --> 0:17:16.560 Love all you guys, Appreciate you. We want you at 0:17:16.560 --> 0:17:17.399 our whole global form. 0:17:17.400 --> 0:17:19.320 By the way, all right, John O'Brien, you're special. 0:17:19.760 --> 0:17:24.359 You're a special You're listening to the Bloomberg Business Week Podcast. 0:17:24.600 --> 0:17:27.680 Catch us live weekday afternoons from three to six Easter 0:17:27.960 --> 0:17:31.720 on Bloomberg Radio, the Bloomberg Business App, and YouTube. You 0:17:31.760 --> 0:17:35.040 can also listen live on Amazon Alexa from our flagship 0:17:35.080 --> 0:17:39.000 New York station Just Say Alexa, playing Bloomberg eleven thirty, 0:17:40.840 --> 0:17:41.680 and I want to get right. 0:17:41.560 --> 0:17:43.359 To our next guest. He's the co founder of the 0:17:43.359 --> 0:17:47.479 French asset manager TKO Capital. They've got over fifteen billion 0:17:48.000 --> 0:17:51.879 US in assets under management. We welcome Matthew Chabron. He 0:17:51.960 --> 0:17:53.600