WEBVTT - Bloomberg Businessweek Weekend - June 21st, 2024 0:00:02.440 --> 0:00:07.600 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.119 --> 0:00:12.520 This is Bloomberg Business Week inside from the reporters and 0:00:12.680 --> 0:00:16.280 editors who bring you America's most trusted business magazine, plus 0:00:16.360 --> 0:00:20.280 global business, finance and tech news as it happens. Bloomberg 0:00:20.320 --> 0:00:25.440 Business Week with Caro Messer and Tim Stenebek on Bloomberg Radio. 0:00:26.640 --> 0:00:29.440 Hi, everyone, Welcome to the Bloomberg Business Wee Weekend podcast 0:00:29.640 --> 0:00:32.199 Top of Mine. This past week, we saw Nvidia at 0:00:32.240 --> 0:00:34.840 one point top Microsoft and Apple as the world's most 0:00:34.880 --> 0:00:38.440 valuable company, reaching a new record. It's since fallen back 0:00:38.479 --> 0:00:41.519 behind Microsoft and now along with Apple, the three are 0:00:41.640 --> 0:00:43.600 pretty much neck and neck. When it comes to market 0:00:43.600 --> 0:00:47.120 cap it's pretty close still and Vidia up around eight 0:00:47.200 --> 0:00:50.080 hundred percent since the beginning of twenty twenty three. 0:00:50.120 --> 0:00:52.479 And speaking of records, the S and P five hundred 0:00:52.520 --> 0:00:55.160 and the NASDAC notching all time highs. This past week 0:00:55.200 --> 0:00:58.400 has more Wall Street firms piled on the bullish equity call, 0:00:58.840 --> 0:01:02.000 and as make of America's institutional clients piled into US 0:01:02.000 --> 0:01:04.319 equities for the second week in a row, were on 0:01:04.360 --> 0:01:07.160 the market An investing environment from two individuals whose firms 0:01:07.160 --> 0:01:10.400 oversee trillions of dollars in assets and client money. 0:01:10.160 --> 0:01:14.120 Plus the alt MBA with the CEO of Ability and 0:01:14.319 --> 0:01:18.160 the CEO of ALT Finance on helping HBCU students explore 0:01:18.160 --> 0:01:20.000 a future in the world of private equity. 0:01:20.240 --> 0:01:22.160 Also, he had a front row seat to the AIDS 0:01:22.200 --> 0:01:25.440 crisis and the pandemic. What the nation's top infectious disease 0:01:25.480 --> 0:01:29.039 doctor says about being on call and advising seven presidents 0:01:29.080 --> 0:01:32.080 through it all. We're talking about doctor Anthony Fauci, and 0:01:32.120 --> 0:01:34.840 we reflect on the complicated journey of acceptance for the 0:01:34.959 --> 0:01:37.920 LGBTQ community with the CEO of Glad. 0:01:38.160 --> 0:01:39.880 All of that to come, we begin with the world 0:01:39.920 --> 0:01:43.000 of asset management. I was in Nashville earlier this month 0:01:43.040 --> 0:01:46.200 for bny Mel and Pershing Insight twenty twenty four. It's 0:01:46.240 --> 0:01:49.040 a gathering for the wealth management industry, and at it 0:01:49.080 --> 0:01:51.600 I moderated a keynote with two senior execs in the 0:01:51.640 --> 0:01:54.920 asset management business who see so much and who shared 0:01:54.960 --> 0:01:57.800 their outlook and views on everything from AI and ALTS 0:01:57.840 --> 0:02:01.720 to debt, deglobalization, demographic cinjia politics, and I'm going to 0:02:01.760 --> 0:02:02.440 say a lot more. 0:02:02.640 --> 0:02:06.760 Han Caryl's panel, Jenny Johnson, President and CEO at Franklin 0:02:06.840 --> 0:02:10.959 Templeton and Hanika SMI's senior executive vice president and global 0:02:11.000 --> 0:02:14.280 head of Investment Management at bny Mellon. The conversation began 0:02:14.360 --> 0:02:16.680 with what is top of mind when it comes to 0:02:16.720 --> 0:02:17.679 the macro environment. 0:02:18.240 --> 0:02:20.760 Everybody's talking about kind of the whether you have five 0:02:20.880 --> 0:02:25.000 or three or six d's, but I'll start with the d's. Look, 0:02:25.080 --> 0:02:27.640 demographics is going to be key, and it's going to 0:02:27.639 --> 0:02:33.760 be develop economies have aging demographics and or developed economies 0:02:33.760 --> 0:02:38.760 have aging demographics, and developing tend to have younger demographics 0:02:38.760 --> 0:02:41.480 except for China obviously, and it's going to have. 0:02:41.480 --> 0:02:42.480 An impact on investing. 0:02:42.520 --> 0:02:45.120 There's going to be opportunities, but it's also going to 0:02:45.200 --> 0:02:48.600 drag down economies as a younger smaller workforce has to 0:02:48.680 --> 0:02:53.560 support the folks that are older, and then those economies 0:02:53.600 --> 0:02:56.120 that are developing with it, like India. Fifty six percent 0:02:56.120 --> 0:02:58.440 of the population of India one point four trillion people 0:02:58.720 --> 0:03:01.359 is under the age of twenty five. So as long 0:03:01.400 --> 0:03:04.880 as they can educate them right, they can be participating 0:03:04.919 --> 0:03:09.600 in it. So demographics is important. Obviously, I'll call it disinflation, 0:03:09.720 --> 0:03:11.720 so we can say r d's. Obviously, where the interest 0:03:11.800 --> 0:03:19.120 rate environment goes, you know, the supply chain. Sort of 0:03:19.200 --> 0:03:23.640 reorienting supply chains is going to be I think opportunity 0:03:23.639 --> 0:03:27.160 from an investment standpoint. It's also inflationary. There's a reason 0:03:27.200 --> 0:03:30.960 we were in China, the China plus one story. You 0:03:30.960 --> 0:03:33.160 were in China because it was cheap. Right, So as 0:03:33.160 --> 0:03:36.840 soon as you start to decouple and you know, change 0:03:36.840 --> 0:03:39.960 your supply chain, you're going to end up adding some 0:03:40.160 --> 0:03:42.600 costs to that, not to mention tariffs and others from 0:03:42.960 --> 0:03:45.640 geopolitical decarbonization, right. 0:03:45.720 --> 0:03:45.960 You know. 0:03:46.480 --> 0:03:48.920 Unfortunately in the US it is a it's become this 0:03:49.280 --> 0:03:53.720 red and blue state conversation. You know, obviously, Honkey, you're 0:03:53.720 --> 0:03:56.040 based in London. You go to Europe, it is still 0:03:56.040 --> 0:03:58.200 a huge focus and the reality is over ninety percent 0:03:58.200 --> 0:04:00.920 of the world's you know, governments that could ninety percent 0:04:00.920 --> 0:04:04.080 of the world GDP have committed to net zero. Whether 0:04:04.120 --> 0:04:06.920 they get there or not as irrelevant, but they're focused 0:04:06.960 --> 0:04:10.240 on investing on that. And then finally, I'll call it 0:04:10.280 --> 0:04:15.560 digitization is just this. We're living in a massive technological 0:04:16.000 --> 0:04:19.640 advanced age with AI things like blockchain and those are 0:04:19.680 --> 0:04:21.760 going to drive investment results. 0:04:21.839 --> 0:04:24.000 And then I got to throw in US debt. 0:04:24.279 --> 0:04:27.480 I don't think we're talking enough about the longer term 0:04:27.520 --> 0:04:29.640 impact of US debt. 0:04:29.880 --> 0:04:31.159 I feel like it's safe to say that all of 0:04:31.200 --> 0:04:34.600 us have spent our careers a few years ago, a 0:04:34.640 --> 0:04:37.279 few decades ago, where it came up in every market conversation, 0:04:37.560 --> 0:04:38.320 then it went away. 0:04:38.440 --> 0:04:40.359 It is back, and I feel like with a vengeance. 0:04:40.400 --> 0:04:42.479 All right, Hanaga, let's go to you in terms of 0:04:42.560 --> 0:04:43.359 the global macro. 0:04:43.800 --> 0:04:47.440 Yeah, so Jenny summed up, summed it up very well, 0:04:47.480 --> 0:04:49.680 and we're sort of seeing the same trends. I was 0:04:49.720 --> 0:04:52.240 actually quite interested to see that the audience here, so 0:04:52.480 --> 0:04:55.960 you know, you think about the trends actually feel optimistic 0:04:56.160 --> 0:04:57.240 about investing. 0:04:57.320 --> 0:04:58.120 Are you surprised? 0:04:58.839 --> 0:05:01.799 Well, yes and no. And I would say the ones 0:05:01.880 --> 0:05:04.360 that you know, we take a step back and think 0:05:04.400 --> 0:05:08.400 about these trends trans create uncertainty, but trends can Those 0:05:08.760 --> 0:05:13.120 trends and uncertainty can also create opportunities, right, because when 0:05:13.160 --> 0:05:18.279 there's more volatility in markets and in responses, people will 0:05:18.320 --> 0:05:24.600 respond differently, have different needs, and that can create investment opportunities. Now, 0:05:24.680 --> 0:05:28.279 having said that, in this world of what appears to 0:05:28.320 --> 0:05:33.240 be this inflation, although there's some conflicting data sort of 0:05:33.279 --> 0:05:36.640 coming out where of course all keenly watching what the 0:05:36.720 --> 0:05:39.279 various central banks around the world are going to do. 0:05:39.320 --> 0:05:42.520 I think the ECB is coming out tomorrow, the FAT 0:05:42.720 --> 0:05:47.000 next week. We have an expectation that generally we're still 0:05:47.000 --> 0:05:51.279 at rates higher for longer, but we are expecting, with 0:05:51.400 --> 0:05:57.120 the information that is starting to come out tighter sort 0:05:57.120 --> 0:06:03.839 of lower tighter employment, that we are expecting to see 0:06:04.040 --> 0:06:07.760 some cuts later in the year. But we're not going 0:06:07.800 --> 0:06:10.880 to go back as low as where we've come from. 0:06:10.920 --> 0:06:12.640 And I do think we're going to get back to 0:06:12.720 --> 0:06:17.040 an environment we're having higher interest rates is more to 0:06:17.200 --> 0:06:19.919 norm than the environment we've come out of. 0:06:20.120 --> 0:06:21.559 One thing I want to ask you, and I think 0:06:21.640 --> 0:06:24.560 you know, we have the conversation that hey, folks, it 0:06:24.600 --> 0:06:27.080 was the low rate environment or zero rate environment that 0:06:27.160 --> 0:06:30.200 was the abnormality. Yes, right, that what we're doing right 0:06:30.200 --> 0:06:32.039 now is getting back to normal. Having said that, you 0:06:32.080 --> 0:06:37.000 have a generation of investors advisors who were used. 0:06:36.839 --> 0:06:38.920 To this disinflationary environment. 0:06:39.360 --> 0:06:41.719 How does that let me come back to you first, 0:06:42.040 --> 0:06:44.159 you know, how do we need to kind. 0:06:44.000 --> 0:06:44.800 Of address that. 0:06:44.880 --> 0:06:48.360 How do we have the smart conversation around that, you know, 0:06:48.440 --> 0:06:50.320 in terms of investing in what it needs. 0:06:50.320 --> 0:06:52.080 So it's two ways, right, to sort of how we 0:06:52.160 --> 0:06:54.760 deal with it's in our own organizations. We do. I'm 0:06:54.800 --> 0:06:57.279 sure you have it as well, Jenny. In our own organizations, 0:06:57.360 --> 0:07:01.360 people who have only been investing trained investors this side 0:07:01.400 --> 0:07:06.040 of the GFC. I'm of the generation that was also investing. Well, 0:07:06.120 --> 0:07:07.240 good for all. 0:07:07.279 --> 0:07:09.320 It's a lot of ideas. 0:07:08.920 --> 0:07:13.040 And actually I call it these investor management is actually, 0:07:13.080 --> 0:07:18.320 thankfully an sector in which experience really matters, and you 0:07:18.400 --> 0:07:20.640 sort of do realize that they're is such a thing 0:07:20.680 --> 0:07:23.000 as cycles. But it does mean that we need to 0:07:23.400 --> 0:07:26.440 educate not only our own investors, but also our end 0:07:26.520 --> 0:07:30.160 clients in terms of what this type of environment seat 0:07:30.200 --> 0:07:34.400 of having positive interest rates, let's call it that means 0:07:34.560 --> 0:07:38.200 for investors, and what it means for asset allocation. So 0:07:38.320 --> 0:07:42.600 we're spending a lot of time educating our end client, 0:07:42.720 --> 0:07:45.960 our advisors, but also our own our own workforce. 0:07:46.600 --> 0:07:49.800 Jenny, your thoughts on that, well, I mean, the reality is, 0:07:49.800 --> 0:07:52.160 I think we're getting into what historically is a more 0:07:52.440 --> 0:07:54.840 normal interest rate environment, and if you look at it, 0:07:56.240 --> 0:07:59.960 you know the economy has actually been able to absorb 0:08:00.120 --> 0:08:02.760 or the rates increases pretty. 0:08:02.440 --> 0:08:05.400 Well, uh, pretty agressive in the last year, right. 0:08:05.320 --> 0:08:06.560 Yeah, very aggressive. 0:08:06.840 --> 0:08:08.720 I mean I described to people as like, you know, 0:08:08.800 --> 0:08:10.960 of course you're going to see it slowing down data. 0:08:11.160 --> 0:08:14.920 They jammed on the brakes, right, you know exactly, it's whiplash. 0:08:15.000 --> 0:08:16.040 But we're also in. 0:08:16.040 --> 0:08:18.680 The camp and I caveat it with that Franklin Templeton. 0:08:18.800 --> 0:08:22.000 So we're one point six trillion, but we have we 0:08:22.040 --> 0:08:26.320 have five different UH CIOs who have slightly different views. 0:08:26.560 --> 0:08:29.440 I macro economic CIOs out of a slightly different views. 0:08:29.440 --> 0:08:32.000 So I'm gonna it's a little bit like debate there, Oh, 0:08:32.120 --> 0:08:35.439 huge debate that matter of fact, that is insisted that, 0:08:35.920 --> 0:08:38.760 especially the ones that are the furthest apart to make 0:08:38.760 --> 0:08:41.480 sure that at least having an internal debate on it. 0:08:41.559 --> 0:08:44.640 But you know I tend to and and it's obviously 0:08:44.679 --> 0:08:50.040 converged over time, but you know, rates are higher for longer. Uh. 0:08:50.080 --> 0:08:53.320 The economy has definitely absorbed it pretty well. 0:08:53.920 --> 0:08:54.360 Uh. 0:08:54.440 --> 0:08:56.600 And you know, if we if I were to guess, 0:08:56.840 --> 0:08:59.360 I think it's maybe just one rate increase this year, 0:09:00.400 --> 0:09:02.800 and if I had to take a second gas, I'd say. 0:09:02.640 --> 0:09:03.559 It could even be zero. 0:09:03.800 --> 0:09:07.120 You know that it's more towards inflation being a little 0:09:07.120 --> 0:09:09.559 bit stickier and harder for the FED to truly get 0:09:10.600 --> 0:09:14.520 under control than probably, and I know there's some weaker 0:09:14.600 --> 0:09:15.600 data coming out, but. 0:09:16.480 --> 0:09:18.800 It has some services today pretty strong. 0:09:18.920 --> 0:09:21.800 Yeah, but I think you're right because they're also to 0:09:21.880 --> 0:09:25.679 your earlier point. There continues to be inflationary pressure from 0:09:27.000 --> 0:09:30.520 animating from the supply chain as well. Right, So you 0:09:30.600 --> 0:09:33.520 look at also the conflicts around the world, which is 0:09:33.559 --> 0:09:36.520 putting pressure. Certainly we've seen its being based in London 0:09:36.559 --> 0:09:39.079 on our doorstep. We've seen it an energy price, We've 0:09:39.080 --> 0:09:42.200 seen it in food prices. It's coming down a bit. 0:09:42.320 --> 0:09:45.040 We're seeing that the Middle East conflict at the moment 0:09:45.160 --> 0:09:48.040 is also putting pressure on supply chain. You and I 0:09:48.160 --> 0:09:53.720 were talking earlier about aviation, Carol and flights. I mean, 0:09:54.000 --> 0:09:58.360 you can't just simply fly where. Airlines can't have to 0:09:58.559 --> 0:10:01.600 reroot where they go. My flight, you know, anytime I 0:10:01.640 --> 0:10:04.760 go to Japan from long and we're now the flight 0:10:04.960 --> 0:10:07.680 is taking an extra toon half hours because we're not 0:10:07.760 --> 0:10:10.880 going over Russia. So think about the costs of the time, 0:10:11.000 --> 0:10:14.439 the cost of fuel, and you know those costs will 0:10:14.559 --> 0:10:17.200 have to get passed on in the price of goods. 0:10:17.280 --> 0:10:20.560 So it's it's that inflationary pressure I think is still there. 0:10:20.679 --> 0:10:22.440 These big go ahead, I just go uf. 0:10:22.520 --> 0:10:24.600 I was gonna say, one of the advantages that all 0:10:24.640 --> 0:10:27.000 you have is you're from all different places in the US, 0:10:27.880 --> 0:10:30.200 because you know, sometimes you get I always say my 0:10:30.280 --> 0:10:32.000 mother was a doctor, and she said one thing that 0:10:32.000 --> 0:10:34.280 always bothered her as about doctors is sometimes they didn't 0:10:34.320 --> 0:10:35.960 just look at what was in front of them. They 0:10:36.000 --> 0:10:38.560 always had to be proven through research. And sometimes it's 0:10:38.600 --> 0:10:40.840 obvious in front of you if you talk about the 0:10:40.960 --> 0:10:44.360 environment around you. I bought a truck for the farm 0:10:44.400 --> 0:10:48.120 this weekend. And I used to finance. I ran a 0:10:48.160 --> 0:10:51.000 financing company of autos, and so whenever I bought a car, 0:10:51.280 --> 0:10:53.199 I go into the dealership and say, show me your 0:10:53.240 --> 0:10:55.560 invoice and we'll start there and work our way up. 0:10:56.600 --> 0:11:00.200 It was let's start at manufacturers suggested retail price, and 0:11:00.240 --> 0:11:02.400 we'll tell you what fees we added. And it took 0:11:02.480 --> 0:11:05.000 me three months of walking out. I finally asked, somebody 0:11:05.000 --> 0:11:06.360 in California, can you see what. 0:11:06.320 --> 0:11:07.000 You can get there? 0:11:07.480 --> 0:11:10.280 I was not going to buy a car for above MSRP. 0:11:10.960 --> 0:11:12.760 And you know what, in the end, I ended up 0:11:12.760 --> 0:11:15.520 doing that. Really, it has changed so much. And so 0:11:15.760 --> 0:11:18.920 you walk into a restaurant, are they still pretty full? 0:11:19.400 --> 0:11:19.800 You guys. 0:11:19.960 --> 0:11:22.400 You know, again, you only see where you're going. But 0:11:22.480 --> 0:11:25.680 as you ask each other around, it feels like it's 0:11:25.679 --> 0:11:27.120 still pretty robust out there. 0:11:27.240 --> 0:11:29.319 It doesn't feel like I want to bring in a question. 0:11:29.440 --> 0:11:30.840 These are great questions, so thank you. 0:11:31.559 --> 0:11:35.079 What concerns do you have regarding the rise of nationalism 0:11:35.080 --> 0:11:38.360 and populism pushing us away from globalization and its effect 0:11:38.440 --> 0:11:41.280 on those emerging markets like what you folks are talking 0:11:41.280 --> 0:11:44.040 about feels like not going away anytime. 0:11:43.720 --> 0:11:44.720 Soon, agreed. 0:11:44.760 --> 0:11:47.320 And that's inflationary and that's inflataty it is no. 0:11:47.360 --> 0:11:50.000 I agree as well. I mean it's been a concern 0:11:50.040 --> 0:11:52.800 of mine and of ours for some time, this rise 0:11:52.800 --> 0:11:57.280 of nationalism, and also to benefit so our generation has 0:11:57.320 --> 0:12:00.160 already benefited from what I would call the piece and 0:12:00.280 --> 0:12:02.680 right following sort of the Second World's War, and it 0:12:02.720 --> 0:12:05.400 was all about globalization. We all read the book The 0:12:05.400 --> 0:12:08.400 World Is Flat that came out, didn't you, Jenny, Yes, 0:12:08.440 --> 0:12:12.200 I did. I read it some twenty years ago. But 0:12:12.280 --> 0:12:15.040 that is changing. We're all Jenny was talking about earlier, 0:12:15.080 --> 0:12:18.360 we were all moving manufacturing to China. That is no 0:12:18.480 --> 0:12:22.480 longer happening in sort of reshoring, and that is adding 0:12:22.520 --> 0:12:26.280 to cost as well, so it's some mix of nationalism 0:12:26.640 --> 0:12:30.839 than a much more tense geopolitical environment as well. You 0:12:30.960 --> 0:12:34.600 throw that into the mix, and it is making for 0:12:34.640 --> 0:12:40.920 a much more combustible environment that I think will provide 0:12:40.920 --> 0:12:45.600 a challenge for corporates over the long term, notwithstanding what 0:12:45.640 --> 0:12:46.440 we're seeing today. 0:12:47.120 --> 0:12:50.000 That was Hanikah Smit's and Jenny Johnson in conversation with 0:12:50.080 --> 0:12:52.960 Carol from their panel at BNY Mel and Pershing Insight 0:12:53.240 --> 0:12:55.760 earlier this month. That was in Nashville, Tennessee. 0:12:55.920 --> 0:12:58.760 Coming up more from the conversation, including the dreaded D 0:12:58.960 --> 0:13:03.160 word debt, ballooning US federal debt, the impact and what 0:13:03.320 --> 0:13:03.600 to do. 0:13:03.760 --> 0:13:06.880 You're listening to Bloomberg BusinessWeek. This is Bloomberg. 0:13:07.760 --> 0:13:11.280 You're listening to the Bloomberg Business Week podcast. Catch us 0:13:11.320 --> 0:13:14.559 live weekday afternoons from two to five pm. Easter Listen 0:13:14.600 --> 0:13:16.760 on Apple car Play and then Bright Auto with a 0:13:16.760 --> 0:13:20.480 Bloomberg Business Act or watch us live on YouTube. 0:13:21.320 --> 0:13:24.320 This past week, the non partisan Congressional Budget Office ramped 0:13:24.360 --> 0:13:27.160 up its estimate for this year's US budget deficit by 0:13:27.200 --> 0:13:30.719 twenty seven percent to almost two trillion dollars, sounding a 0:13:30.760 --> 0:13:34.600 fresh alarm about an unprecedented trajectory for federal borrowing. The 0:13:34.679 --> 0:13:37.720 CBO sees the deficit reaching one point nine two trillion 0:13:37.760 --> 0:13:40.680 dollars in twenty twenty four this year, up from one 0:13:40.720 --> 0:13:44.960 point six y nine trillion in twenty twenty three. Longer term, 0:13:45.160 --> 0:13:48.200 US national debt set to top fifty six trillion dollars 0:13:48.200 --> 0:13:51.480 by twenty thirty four as rising spending and interest expenses 0:13:51.520 --> 0:13:54.280 outpaced tax revenues. A lot of numbers throwing in at everybody, 0:13:54.360 --> 0:13:56.440 The bottom line is US federal debt. 0:13:56.679 --> 0:13:59.200 It's growing, yeah, and I think for many people they 0:13:59.240 --> 0:14:02.080 would argue that it's becoming a crisis. On that, we 0:14:02.160 --> 0:14:05.600 continue with Jenny Johnson, president and CEO at Franklin Templeton, 0:14:05.760 --> 0:14:08.880 and Hanikah Smith's senior executive VP and Global head of 0:14:08.960 --> 0:14:12.440 Investment Management at BNY Mellon, who sat down with Carol 0:14:12.480 --> 0:14:16.280 at the recent BNY melon Pershing Insight Conference in Nashville, Tennessee. 0:14:16.840 --> 0:14:19.640 We are not at thread of not being the reserve currency. 0:14:19.720 --> 0:14:22.040 We're going to continue to be to reserve currency because 0:14:22.040 --> 0:14:24.680 there's nowhere else and anybody's going to go. The question 0:14:24.920 --> 0:14:28.520 is you still need buyers of debt and seventy percent 0:14:28.560 --> 0:14:31.240 of US debt is going to come in the next 0:14:31.240 --> 0:14:33.480 six years is going to turn over. Unfortunately, what we 0:14:33.520 --> 0:14:37.320 didn't do is lock in long term US treasuries when 0:14:37.680 --> 0:14:42.200 rates were really low, and right now that six that 0:14:42.320 --> 0:14:45.840 seventy percent, we're paid about two point four percent interest 0:14:45.960 --> 0:14:50.360 on it. The US Budget Office predicts the next ten 0:14:50.440 --> 0:14:52.680 years in debt the cost of interest is three point 0:14:52.760 --> 0:14:58.240 five percent. Okay, that probably one percent difference crowds out 0:14:58.320 --> 0:15:00.480 so much spending. We're already this year will spend more 0:15:00.480 --> 0:15:03.720 on interest than we will on defense spending. So the 0:15:03.840 --> 0:15:05.920 question for all of you is to think about, well, 0:15:06.120 --> 0:15:07.840 where does that money come from? And has to come 0:15:07.840 --> 0:15:13.120 from corporations, mutual funds, insurance companies, or it comes from 0:15:13.120 --> 0:15:17.359 the Fed right and the Fed quietly they were reducing 0:15:17.560 --> 0:15:21.280 their balance sheet ownership of treasuries ninety five billion a month. 0:15:21.400 --> 0:15:23.000 They quietly moved that down. 0:15:22.800 --> 0:15:25.680 To retiring sixty billion, and now they're down to twenty 0:15:25.680 --> 0:15:28.000 five billion rate. It's because they worry about the Treasury mark, 0:15:28.320 --> 0:15:31.640 and so it's it just becomes a crowding out of 0:15:31.680 --> 0:15:34.240 other investments. And so you have to ask yourself out, 0:15:34.280 --> 0:15:36.680 what price does somebody say I'm not going to invest here, 0:15:36.920 --> 0:15:38.080 I'm going to go buy treasures. 0:15:38.120 --> 0:15:38.800 I love that you do it. 0:15:38.800 --> 0:15:40.640 We had a story on Bloomberg recently and I talked 0:15:40.640 --> 0:15:43.000 about longevity and the need for government to issue more debt, 0:15:43.000 --> 0:15:44.640 will need to higher rates, the impact we'll have on 0:15:44.720 --> 0:15:48.000 investors seeking out more productive ways to fund their penton 0:15:48.080 --> 0:15:51.600 liabilities and so on. So basically, you know, fewer bonds, 0:15:51.600 --> 0:15:54.480 more stocks and commodities. Hanneka come on in on this 0:15:54.600 --> 0:15:58.040 issue of debt and how that impacts perhaps you know, 0:15:58.120 --> 0:16:02.360 investment portfolios, retail institutional over the longer term. 0:16:02.680 --> 0:16:07.960 Well generally, helping clients understand how to manage for retirement 0:16:08.120 --> 0:16:09.840 is of course a very big topic. I'm sure it's 0:16:09.840 --> 0:16:13.240 a very big topic that is keeping everyone here in 0:16:13.280 --> 0:16:17.320 the coming days very very occupied. Right. The funding gap 0:16:17.400 --> 0:16:20.960 that exists both as an individual level and also at 0:16:21.000 --> 0:16:25.360 a state level that governments around the world can't really fund, 0:16:25.760 --> 0:16:29.200 is well understood. It's then what we do about it, right, 0:16:29.280 --> 0:16:34.520 and how we as investment managers offer better solutions to 0:16:34.680 --> 0:16:37.200 the advisors to work with their clients so they can 0:16:37.240 --> 0:16:42.480 actually have retire well with income. And with that, you 0:16:42.640 --> 0:16:47.359 have to have a portfolio that doesn't consist of securities 0:16:47.440 --> 0:16:51.160 but also provides income and has an opportunity for growth 0:16:51.200 --> 0:16:54.600 as well, which gets you into a combination of equity 0:16:54.600 --> 0:16:57.560 investing and possibly alternative investing, which is of course the 0:16:57.600 --> 0:17:00.520 strength that's been long underway and as a manage, but 0:17:00.600 --> 0:17:03.200 you need to have a more holistic view in terms 0:17:03.200 --> 0:17:06.360 of what you want to achieve as you move into 0:17:06.400 --> 0:17:10.560 a retirement and how you're going to meet effectively your 0:17:10.640 --> 0:17:12.760 liabilities once you're in retirement. 0:17:12.880 --> 0:17:14.600 Well, it makes me bring up kind of the debate 0:17:14.640 --> 0:17:17.159 over active versus passive. Right, It's been so easy, it 0:17:17.160 --> 0:17:18.920 feels like, for so long to just kind of buy 0:17:18.920 --> 0:17:21.200 the market by the index, right, But it does feel 0:17:21.240 --> 0:17:23.560 like with some of these big the de's that you 0:17:23.640 --> 0:17:25.919 laid out the big issues that you're going to have 0:17:25.960 --> 0:17:30.840 to be more selective in terms of reaching those retirement goals. 0:17:30.920 --> 0:17:32.320 Is that fair well? 0:17:32.359 --> 0:17:35.760 Active and passive is about costs and about outperformance. Right. 0:17:35.800 --> 0:17:38.919 So when you're in active, which we both are, but 0:17:39.000 --> 0:17:41.800 we also have be in my run, we also offer 0:17:42.720 --> 0:17:47.760 indexing products. So it's about how you both deliver outperformance 0:17:47.880 --> 0:17:51.560 and outperformance relative to market to clients, which is the 0:17:51.600 --> 0:17:54.880 active piece, but also how you combine it with passive 0:17:54.960 --> 0:17:56.960 so you can do it in a cost effective manner. 0:17:56.960 --> 0:17:59.399 So I think there's a room for both in client 0:17:59.480 --> 0:18:03.560 portfolio and it's really important to have those. But once 0:18:03.600 --> 0:18:06.880 you look at active, we also see that not that 0:18:07.160 --> 0:18:13.560 the majority of active managers underperform, right, It's really important 0:18:13.600 --> 0:18:16.760 to focus on performance. We're pleased to say that on 0:18:16.880 --> 0:18:20.720 the whole, our equity focused managers and fixed income managers 0:18:20.840 --> 0:18:23.600 do outperform over the long term, and that's critical. 0:18:24.160 --> 0:18:25.320 I mean, but I think what we. 0:18:25.600 --> 0:18:27.800 Have a guest on and forgive me, but like I'll 0:18:27.800 --> 0:18:29.640 look at someone's performance, I'm like, why are we talking 0:18:29.640 --> 0:18:32.359 to this person? They've underperformed for the past five years. 0:18:32.480 --> 0:18:36.120 Yes, all right, but all of you guys are responsible 0:18:36.160 --> 0:18:39.840 for risk adjusted returns because actually what happens the average 0:18:39.840 --> 0:18:42.960 investor is they love to be able to get the 0:18:43.040 --> 0:18:46.359 ride up. What kills them is the downside gas. And 0:18:46.560 --> 0:18:50.640 if you look at and this is where look, passive 0:18:50.920 --> 0:18:55.439 is inevitably going to outperform in lumpy markets like the 0:18:55.520 --> 0:18:59.920 Magnificent seven and momentum markets right where the more you 0:19:00.200 --> 0:19:02.040 put into the same stocks they go up. 0:19:02.119 --> 0:19:04.320 It's going to tend to outperform. 0:19:04.080 --> 0:19:08.359 Because a conscious risk adjusted manager is going to look 0:19:08.400 --> 0:19:13.480 at the magnificent seven in twenty twenty three and say, ooh, 0:19:13.760 --> 0:19:16.000 I think I should underweight these because I'm worried. And 0:19:16.000 --> 0:19:17.800 by the way, if you did, it ended up being 0:19:17.800 --> 0:19:18.680 a really good trade. 0:19:18.760 --> 0:19:20.160 You were underperforming. 0:19:20.480 --> 0:19:24.640 But now you're performing well because there. 0:19:23.920 --> 0:19:24.480 Was a flip. 0:19:24.520 --> 0:19:26.280 And if you look at the I think the market 0:19:26.359 --> 0:19:29.280 is healthier now than it was in twenty twenty three. 0:19:29.680 --> 0:19:33.439 It's broadening out. Their earnings are broadening out. You know, 0:19:33.840 --> 0:19:36.359 in twenty twenty three, it was rarely the Magnificent seven 0:19:36.760 --> 0:19:39.399 that was having earning growth and everything else was actually 0:19:39.400 --> 0:19:43.320 negative earnings. Now you've seen that come down dramatically, and 0:19:43.359 --> 0:19:46.080 it's the rest and you know, the rest of the 0:19:46.600 --> 0:19:49.000 four hundred and ninety three that have had positive earnings. 0:19:49.040 --> 0:19:51.240 And then if you look at the Russell two thousand, 0:19:51.920 --> 0:19:55.320 that earnings projects is like up thirteen percent this year 0:19:55.359 --> 0:19:58.280 and in twenty twenty five it's projected to go up 0:19:58.359 --> 0:20:01.119 to thirty one percent. We had to check the data twice, right, 0:20:01.200 --> 0:20:03.359 that's on the Rustle two thousand companies. 0:20:03.400 --> 0:20:06.320 I've heard more people talk about the Russell But because. 0:20:05.880 --> 0:20:09.520 You've had this underperformance in small cap, because everybody's been 0:20:09.520 --> 0:20:13.119 so focused on the big, you know, and the video 0:20:13.200 --> 0:20:15.479 is probably the only one in that group that's actually 0:20:15.880 --> 0:20:20.080 predicting continued growth, big growth in earnings. The other one's 0:20:20.119 --> 0:20:23.240 expansion has mostly been by market cap. So you know, 0:20:23.320 --> 0:20:27.280 again the active passive your job is risk adjusted returns 0:20:27.440 --> 0:20:31.200 for the experience of the you know, the entire trip. 0:20:31.320 --> 0:20:33.439 And I always say it's a little bit akin to 0:20:34.400 --> 0:20:35.840 if you were buying a car. I don't know why 0:20:35.880 --> 0:20:39.560 I've got two car analysis, but you know, if somebody 0:20:39.560 --> 0:20:43.800 said to you, drive down this road at the cheapest 0:20:43.800 --> 0:20:47.400 per mile, it's flat, it's straight, and it's well paved, 0:20:47.760 --> 0:20:50.600 you'd go with a car without any safety features. But 0:20:50.680 --> 0:20:52.879 if your journey of life takes you over the mountain 0:20:52.880 --> 0:20:56.160 in a snowstorm, you're gonna wish you had those safety features. 0:20:56.440 --> 0:21:00.720 And that's what looking at concentration risk, you know, sector versification, 0:21:01.400 --> 0:21:05.440 public privates. You know, that's the lifetime experience of investing, 0:21:05.880 --> 0:21:09.760 and that's what the active advisor and the active manager 0:21:09.800 --> 0:21:10.320 has to bring you. 0:21:10.400 --> 0:21:13.840 The tab No, I agree with you, but I also 0:21:14.320 --> 0:21:16.560 it's not about just one thing, right, So it's to 0:21:16.560 --> 0:21:19.840 combinate how you bring those active and passive solutions together 0:21:19.960 --> 0:21:23.600 to both manage to cost as well as all the 0:21:23.600 --> 0:21:25.760 factors that you were just setting. 0:21:25.440 --> 0:21:27.440 Out its goals, its costs, it's a lot of things. 0:21:27.480 --> 0:21:31.600 Yeah, but it's also concentration and risk management because clients 0:21:31.640 --> 0:21:34.520 hate nothing more than actually losing money, and they rather 0:21:34.640 --> 0:21:36.520 forego some upsides than losing money. 0:21:36.640 --> 0:21:39.040 Use that's something interesting to me in the back, and 0:21:39.320 --> 0:21:43.120 I was talking like knowing when to sell is also 0:21:43.160 --> 0:21:45.560 an important aspect a portfolio management. 0:21:45.600 --> 0:21:47.560 Yes, and I know, like everybodys at market. 0:21:47.320 --> 0:21:47.760 Time do it. 0:21:48.160 --> 0:21:49.919 I get that, But there is a point where you 0:21:49.960 --> 0:21:52.440 say good gains, maybe. 0:21:52.160 --> 0:21:54.399 I lock it in, yes, right, yes, And that's a 0:21:54.400 --> 0:21:54.760 part of it. 0:21:54.760 --> 0:21:57.120 It's the heart. It's one of the harder things to do. 0:21:57.359 --> 0:21:59.320 And I think I mentioned to here there was an 0:21:59.359 --> 0:22:01.520 interesting artic and the economist I don't know if you saw, 0:22:01.640 --> 0:22:04.400 Jenny that came at this weekend, which was showing talking 0:22:04.400 --> 0:22:07.120 about some research how hard it is for active managers 0:22:07.119 --> 0:22:11.680 to sell. So as a sort of sector, we're very 0:22:11.720 --> 0:22:14.639 good in making the case to buy, we're not always 0:22:14.760 --> 0:22:18.240 as disciplined when it comes to making the case to sell. 0:22:18.560 --> 0:22:20.440 And I think you should all our view is you 0:22:20.520 --> 0:22:24.320 should always look at a moment in time and determine 0:22:24.600 --> 0:22:28.640 where they're continuing to own a security will still generate 0:22:28.760 --> 0:22:32.199 upside from that moment in time, rather than look at 0:22:32.200 --> 0:22:35.880 the cumulative return or bank It comes perhaps a little 0:22:35.920 --> 0:22:38.720 bit from my own background in private markets, where you 0:22:38.800 --> 0:22:42.919 really tend to only have very rare opportunities to sell 0:22:43.440 --> 0:22:47.639 and generally the experience once you're better of selling early 0:22:48.080 --> 0:22:50.720 than holding on selling. 0:22:50.520 --> 0:22:51.240 Late too late. 0:22:51.800 --> 0:22:56.040 Question, have we hit a point of mania in the market, 0:22:56.080 --> 0:22:58.680 getting closing all the optimistic outlooks in the room? 0:22:59.280 --> 0:23:00.720 You know, if you look at the ratio of the 0:23:00.800 --> 0:23:04.880 non mag seven, it's still higher than average, right, So 0:23:05.240 --> 0:23:08.720 that would indicate that the market's pretty fully priced, except 0:23:08.720 --> 0:23:11.560 that you have earnings revision. I mean, earnings projections have 0:23:11.600 --> 0:23:14.840 been pretty good, and earnings revisions up is actually higher 0:23:14.920 --> 0:23:15.760 than average. 0:23:16.320 --> 0:23:18.680 You see things like productivity games. 0:23:18.480 --> 0:23:20.600 All the time ties on the markets, chasing all tied 0:23:20.640 --> 0:23:21.679 ties with the well. 0:23:21.680 --> 0:23:25.560 That's where again like i'd probably underweight that what has 0:23:25.640 --> 0:23:28.680 traditionally been the big winners And look at these other 0:23:28.720 --> 0:23:31.240 sectors and that's why you hear like small cap mid 0:23:31.280 --> 0:23:35.919 cap you know, kind of that technology that's not those 0:23:36.080 --> 0:23:40.080 big MAG seven type. So I think there's opportunities that. 0:23:40.040 --> 0:23:40.600 Are still there. 0:23:40.680 --> 0:23:43.560 And then I think when you go think about international, Uh, 0:23:43.720 --> 0:23:47.119 it's markets that are benefiting from this deglobalization of this, 0:23:47.320 --> 0:23:51.080 you know, decoupling the supply chain. So there's definitely it's 0:23:51.119 --> 0:23:53.879 it's about where you choose. And honestly, you know, like 0:23:54.320 --> 0:23:55.399 things like China. 0:23:55.520 --> 0:23:57.959 I actually think you're starting to see some green shoots 0:23:57.960 --> 0:23:58.480 in China. 0:23:58.600 --> 0:24:02.000 Finally, yeah, finally, and and you know they're pretty focused 0:24:02.320 --> 0:24:04.720 on when they want to do something, you know, to 0:24:04.760 --> 0:24:06.320 be able to do it, so you know there could 0:24:06.320 --> 0:24:08.560 there could even be opportunities open up there. And if 0:24:08.560 --> 0:24:10.360 you look at India which has had a huge run 0:24:10.640 --> 0:24:14.439 and what a surprise with the relection, So you know, 0:24:14.680 --> 0:24:15.480 again I think it's going. 0:24:15.480 --> 0:24:17.080 To be chopping. It's about where you choose. 0:24:17.359 --> 0:24:18.600 Market mania. What are you thinking? 0:24:19.320 --> 0:24:22.080 I think Jenny just explained it. Well, it is always 0:24:22.080 --> 0:24:24.640 going to There is mania in certain sectors, but it's 0:24:25.320 --> 0:24:28.280 not everywhere. It's been very much underpinned by the Magnificent 0:24:28.359 --> 0:24:32.280 Seven that we're very well aware of, so we focus 0:24:32.440 --> 0:24:35.480 very much away from that. But it's been hard. We've 0:24:35.480 --> 0:24:39.680 seen it in our portfolio. Is because those seven, when 0:24:39.720 --> 0:24:42.960 you look at twenty three, have really driven the upside 0:24:43.040 --> 0:24:45.920 and that is what investors on the whole have been chasing. 0:24:46.359 --> 0:24:48.680 But I think I think I'm with Jenny. I think 0:24:48.720 --> 0:24:50.800 it's going to turn to me. Some of it brought 0:24:50.840 --> 0:24:52.959 me back to the nineties. I used to come to 0:24:53.040 --> 0:24:56.200 New York and I always thought, you know, the symptom 0:24:56.240 --> 0:24:58.520 of mark and mania. I was sitting in those days, 0:24:58.560 --> 0:25:01.480 not in an uber Rickneyello and the cab driver asking 0:25:01.520 --> 0:25:03.760 me about Internet. So, oh, you're an investor, one about 0:25:04.040 --> 0:25:06.240 right and that stops right and you think online were 0:25:06.400 --> 0:25:08.399 We really are in a bubble. But we thought that 0:25:08.520 --> 0:25:10.280 for a long time, and I was part of an 0:25:10.320 --> 0:25:13.600 organization at the time which was focused on value. Is very, 0:25:13.680 --> 0:25:16.439 very hard. It's not this similar when your clients are 0:25:16.520 --> 0:25:20.720 chasing growth, so you have to keep looking at underlying fundamentals. 0:25:21.119 --> 0:25:24.080 That was Honikah Smith's and Jenny Johnson in conversation with 0:25:24.160 --> 0:25:27.680 Carol from their panel at bny Melon Pershing Insite conference 0:25:27.880 --> 0:25:28.800 in Nashville, Tennessee. 0:25:29.000 --> 0:25:31.119 Still had more of the conversation as we tackle the 0:25:31.160 --> 0:25:35.680 future of asset management, everything from tokenization to artificial intelligence, 0:25:36.080 --> 0:25:39.960 and how investment advisors are adjusting to all of these disruptions. 0:25:40.119 --> 0:25:41.480 More on Bloomberg Business Week. 0:25:41.840 --> 0:25:52.919 This is Bloomberg you're listening to the Bloomberg Business Week podcast. 0:25:53.240 --> 0:25:56.639 Listen live each weekday starting at two pm Eastern Apple 0:25:56.680 --> 0:26:00.040 Car Play and Royd Auto with the Bloomberg Business and You, 0:26:00.040 --> 0:26:03.200 and also listen live on Amazon Alexa from our flagship 0:26:03.240 --> 0:26:07.400 New York station, Just Say Alexa Play Bloomberg eleven thirty. 0:26:08.160 --> 0:26:12.199 Goodbye sixty forty Portfolio, Hello, sneakers and rare cars. The 0:26:12.240 --> 0:26:15.280 new rich are trading long standing investing tactics for more 0:26:15.320 --> 0:26:19.479 crypto heavy portfolios and a passion for collectibles. Roughly ninety 0:26:19.480 --> 0:26:22.440 four percent of gen Z and millennial investors are interested 0:26:22.440 --> 0:26:25.600 in collecting items such as watches, rare cars, and sneakers. 0:26:25.760 --> 0:26:28.240 That's according to a new survey of wealthy Americans by 0:26:28.240 --> 0:26:29.200 Bank of America. 0:26:29.280 --> 0:26:32.520 As we wrap Carol's conversation at the bny Mellon Pershing 0:26:32.520 --> 0:26:36.080 Insight Summit with Jenny Johnson, president and CEO at Franklin 0:26:36.080 --> 0:26:40.040 Templeton and Hanikah Smitt's, Senior Executive vice president and Global 0:26:40.040 --> 0:26:43.000 head of Investment Management at bny Mellan, we hear more 0:26:43.160 --> 0:26:46.240 on how things are changing and what investors are demanding. 0:26:46.760 --> 0:26:49.320 Talk a little bit more about what investors are really 0:26:49.359 --> 0:26:51.760 interested in today. We talk about a portfolio has a 0:26:51.760 --> 0:26:56.320 lot of moving parts credit, growth, value, income, all the assets. Jenny, right, 0:26:56.359 --> 0:26:57.560 there's lots of pieces to this. 0:26:57.920 --> 0:27:01.040 Well, when we talk about the maybe secular trends that 0:27:01.080 --> 0:27:05.000 I think are happening that are then informing sort of 0:27:05.040 --> 0:27:06.959 what your investments. I mean, in the ends, we as 0:27:06.960 --> 0:27:09.760 an industry talk about our benchmarks and this, and clients 0:27:09.840 --> 0:27:12.199 like do I have enough money to retire? Can I 0:27:12.200 --> 0:27:13.479 help my kids pay for their colleagues? 0:27:13.560 --> 0:27:13.679 Right? 0:27:13.680 --> 0:27:16.479 I mean that they have very specific goals, right, But 0:27:16.720 --> 0:27:20.040 you look at the big secular trends. One is private 0:27:20.119 --> 0:27:23.320 credit is here to stay. Banks are just because of 0:27:23.359 --> 0:27:26.000 the capital requirements that have been imposed on banks, they're 0:27:26.040 --> 0:27:28.320 not lending like they used to lend, and the private 0:27:28.320 --> 0:27:30.800 market has stepped in. And I don't have the same 0:27:30.920 --> 0:27:34.280 worry of this concept of shadow banking that you often 0:27:34.280 --> 0:27:37.600 hear about that because it's not like it's such a massive, 0:27:37.640 --> 0:27:40.800 bigger number. It's just it's moved from banks balance sheets 0:27:41.160 --> 0:27:45.200 into really funds that are you know, the investor knows 0:27:45.200 --> 0:27:47.160 their ill liquid so you don't have to worry about 0:27:47.160 --> 0:27:47.840 a run on it. 0:27:48.400 --> 0:27:49.920 So private credits here to stay. 0:27:50.160 --> 0:27:52.560 Private equity, I mean the fact is companies are just 0:27:52.600 --> 0:27:55.440 not going public as quickly. If you can remain as 0:27:55.440 --> 0:27:59.040 a private company and monetize you know, holdings for your 0:27:59.080 --> 0:28:01.440 employees and things, which is what's been able to happen. 0:28:01.800 --> 0:28:03.320 You see it in the data there. Just there's half 0:28:03.359 --> 0:28:05.560 the number of public companies and six times the number. 0:28:05.320 --> 0:28:06.639 Of about entrepreneurs. 0:28:06.680 --> 0:28:08.240 They're like, why would I go public? 0:28:08.240 --> 0:28:10.159 Why do I have to go do my earnings report 0:28:10.200 --> 0:28:13.000 every quarter when I need to invest in technology that 0:28:13.040 --> 0:28:16.600 may not pay off for three to five years. I'd 0:28:16.720 --> 0:28:18.720 rather be private to be able to do that. So 0:28:18.800 --> 0:28:20.600 I think those are the big trends, and now it's 0:28:20.640 --> 0:28:24.320 about managers figuring out how do they deliver that in 0:28:24.359 --> 0:28:29.400 a full portfolio, understanding the various characteristics of these kind 0:28:29.440 --> 0:28:34.080 of new segments and bring together a full portfolio too too. 0:28:34.160 --> 0:28:36.200 Sorry if I had jump in here, because now you're 0:28:36.200 --> 0:28:39.360 really looking at the trade offs between risk on risk 0:28:39.440 --> 0:28:42.360 managements and liquidity. Right, that is the biggest I've been 0:28:42.400 --> 0:28:46.560 on both sides, public and private, and we oversee like 0:28:46.720 --> 0:28:50.360 Jenny does, but today's worlds as well, both public and 0:28:50.440 --> 0:28:52.520 private investments. And by the way, it's not just that 0:28:52.600 --> 0:28:56.480 fewer companies are going public, there's also been the dlisting trends, 0:28:56.480 --> 0:29:01.640 so generally there's fewer public securities available today while the 0:29:01.680 --> 0:29:05.360 market caps are larger, so in a portfolio sense, you 0:29:05.360 --> 0:29:09.320 can still achieve your goals. The opportunities available to public 0:29:09.440 --> 0:29:13.200 investors are fewer, that's just the fact. So you have 0:29:13.280 --> 0:29:17.600 to increase your exposure to the to the real economy 0:29:17.640 --> 0:29:20.440 outside of public markets as well. It's really how you 0:29:20.520 --> 0:29:23.960 do it. And this is where the liquidity or access 0:29:24.000 --> 0:29:25.520 to liquidity comes in. 0:29:25.840 --> 0:29:28.600 It's a different liquidity, it's a very different you're a 0:29:28.640 --> 0:29:29.240 plane vanilla. 0:29:29.280 --> 0:29:32.360 It's an organized market, it's not a it's obviously not 0:29:32.400 --> 0:29:35.280 a liquid market. So you can create liquidity, but that 0:29:35.720 --> 0:29:38.680 might not always be the right thing when there's a crisis, 0:29:38.760 --> 0:29:40.920 because you end up being a forced seller and you 0:29:40.960 --> 0:29:44.000 may not achieve the right results for your client. So 0:29:44.160 --> 0:29:46.600 for us, in our roles, it's all about making sure 0:29:46.640 --> 0:29:49.280 our end clients understand is that we work with the 0:29:49.720 --> 0:29:53.440 advisors and all of you and the audience here to 0:29:53.720 --> 0:29:58.480 educate you so you can optimally allocate to the underlying 0:29:58.560 --> 0:30:02.760 asset classes. And the exciting part is they are available 0:30:03.080 --> 0:30:05.760 to the end clients, which wasn't really the case ten 0:30:05.760 --> 0:30:07.840 to fifteen years ago if we've been set here. 0:30:08.320 --> 0:30:11.520 Just to add to what Hanka said, you know, I 0:30:11.560 --> 0:30:14.960 think that the next phase of this private markets right 0:30:15.000 --> 0:30:17.440 now you kind of get it delivered in model portfolios 0:30:17.440 --> 0:30:18.800 with allocations and sleeves. 0:30:19.440 --> 0:30:21.080 There are vehicles. 0:30:21.160 --> 0:30:21.320 You know. 0:30:21.360 --> 0:30:24.120 The forty AC mutual fund, for example, allows up to 0:30:24.160 --> 0:30:28.080 fifteen percent illiquids because the sleeves still require somebody to 0:30:28.120 --> 0:30:29.280 be a qualified investor. 0:30:29.720 --> 0:30:31.680 Our Franklin Growth equity. 0:30:31.320 --> 0:30:34.080 Team has been investing in late stage venture in their 0:30:34.160 --> 0:30:36.880 mutual funds because they basically were running the numbers are like, 0:30:36.920 --> 0:30:40.200 we don't get the old IPO allocations that we used 0:30:40.240 --> 0:30:42.720 to get, and so they started to do because they're 0:30:42.720 --> 0:30:46.000 based in Silicon Valley, started to do these investments there. 0:30:46.160 --> 0:30:48.080 I think you're going to see more of that trend, 0:30:48.400 --> 0:30:51.440 and I think you're going to start to potentially see 0:30:51.440 --> 0:30:53.800 people use think what is it the thirty three Act 0:30:53.880 --> 0:30:57.600 or something where it was commodities. It's what the original 0:30:57.600 --> 0:30:59.920 gray scale bitcoin was in, but you have more flexibil 0:31:00.600 --> 0:31:02.400 I think you're going to start to see those types 0:31:02.440 --> 0:31:05.320 of vehicles where you're going to see a combination. So 0:31:05.360 --> 0:31:07.959 it's a one ticket, but it has a combination of 0:31:08.080 --> 0:31:09.160 ill liquid and liquid. 0:31:09.480 --> 0:31:11.520 Well, that's what I want to ask you the democratization 0:31:11.560 --> 0:31:13.720 of assets. Do you think in terms of private credit 0:31:13.760 --> 0:31:18.480 all assets, we need to increase the access for astor set. 0:31:18.640 --> 0:31:22.240 I actually think that you potentially. I know my teams 0:31:22.280 --> 0:31:24.840 internally probably don't love this, but I think potentially you're 0:31:24.880 --> 0:31:27.880 going to start to see fixed income teams the research 0:31:28.280 --> 0:31:32.000 for traditional fixed income and private credit to probably be combined. 0:31:32.040 --> 0:31:34.720 I don't know that it's that different. Interesting at the research. 0:31:34.400 --> 0:31:37.520 At and that's the same for equities too, right, Traditionally 0:31:37.720 --> 0:31:41.000 we're all students of companies ultimately, so you can you 0:31:41.040 --> 0:31:44.760 can own a company through a listed security and fixed 0:31:45.200 --> 0:31:48.040 or or the equity markets or through the private route. 0:31:48.320 --> 0:31:50.600 But how do we deliver that to the clients is 0:31:50.600 --> 0:31:53.160 what Jenny is talking about is different, But I think 0:31:53.200 --> 0:31:55.200 what he really wanted to get to in terms of 0:31:55.200 --> 0:31:58.840 the democratization of assets, this is also a technology story 0:31:58.880 --> 0:32:02.000 because this is also about organization, right, which is going 0:32:02.040 --> 0:32:04.640 to be really helpful in delivering that. 0:32:05.320 --> 0:32:07.040 So talk to us about in terms of changes to 0:32:07.080 --> 0:32:09.360 the asset management business and what you guys are doing 0:32:09.400 --> 0:32:11.720 to help advisors play with those two. 0:32:11.840 --> 0:32:13.800 Yeah, so a big change that we started to talk 0:32:13.840 --> 0:32:17.360 about is general technology right and AI, and that's also 0:32:17.400 --> 0:32:20.200 been a trend that's been long on the way, but 0:32:20.600 --> 0:32:23.600 it has been I think turbocharged to some extent in 0:32:23.640 --> 0:32:26.840 the pandemic as well, because we all really had to 0:32:26.960 --> 0:32:30.120 think how we were engaging with clients and invest much 0:32:30.160 --> 0:32:35.080 more in technology and digital digital delivery, so how we 0:32:35.200 --> 0:32:38.840 deliver our advice is much more powered by technology. How 0:32:38.840 --> 0:32:42.520 the product wrappers have changed. I know was your grandfather 0:32:42.640 --> 0:32:46.200 who was at the start of the mutual fund industry. Unfortunately, 0:32:46.280 --> 0:32:50.480 mutual funds are no longer and that's an industry trends. 0:32:50.240 --> 0:32:51.240 Which which shocks me. 0:32:51.360 --> 0:32:54.040 My first job in business news was a mutual fund 0:32:54.040 --> 0:32:58.600 show and teaching investors about mutual funds. I'm not that old, 0:32:58.920 --> 0:33:02.160 but I am amazed that the repetitive, the rapid. 0:33:01.920 --> 0:33:02.560 Cycles that were. 0:33:02.600 --> 0:33:05.680 But it's nowts cfs and SMAs and our mas and 0:33:06.120 --> 0:33:09.480 you know, our colleagues in Pershing are the are the 0:33:09.560 --> 0:33:13.640 second largest managed account provider and we're so One of 0:33:13.640 --> 0:33:17.560 the things we're doing and even was talking about is 0:33:17.600 --> 0:33:19.720 earlier and I think you might have heard Stephanie talk 0:33:19.760 --> 0:33:23.560 about it as well, is working with Purshing on what 0:33:23.600 --> 0:33:27.240 we call being more for our clients by bringing together 0:33:27.400 --> 0:33:31.240 the technology that exists on the both platforms, simplifying the 0:33:31.280 --> 0:33:34.480 life of the advisors. It is technology enabled but also 0:33:34.680 --> 0:33:39.240 bringing in investment management capabilities and doing that in a 0:33:39.320 --> 0:33:43.280 very cost effective manner. And the more that all of 0:33:43.320 --> 0:33:47.160 you end up doing for your clients with us, actually 0:33:47.200 --> 0:33:50.160 the more cost efficient it is going to be to 0:33:50.200 --> 0:33:52.480 the order of sort of forty percent discount. And I 0:33:52.480 --> 0:33:54.720 think that's very very meaningful. But a lot of that 0:33:54.840 --> 0:34:00.120 is really powered by technology and it's simplifying the advisor's life. 0:34:00.280 --> 0:34:03.240 And what it means is that the news advisors can 0:34:03.280 --> 0:34:06.440 actually spend more time with your end clients, which we 0:34:06.520 --> 0:34:08.160 know is really important. 0:34:07.680 --> 0:34:09.520 Which begs the question that came up on the call 0:34:10.200 --> 0:34:14.719 with one of you guys, the next generation, next gen advisor, 0:34:14.880 --> 0:34:15.760 is it even human? 0:34:16.160 --> 0:34:19.480 You know, money is emotional to people, and you probably 0:34:19.480 --> 0:34:21.520 have a lot of clients that are actually capable of 0:34:21.560 --> 0:34:23.759 managing their own money. But the more money you get, 0:34:23.880 --> 0:34:26.640 the more you realize it is it's not a part 0:34:26.640 --> 0:34:31.160 time job. Number one, and number two, the individual in 0:34:31.200 --> 0:34:34.520 the end wants assurances and there's an emotional component of it. 0:34:34.640 --> 0:34:37.439 So in nineteen ninety seven, the cover of Business Weeks 0:34:37.440 --> 0:34:39.000 said the Internet was going to be the death of 0:34:39.040 --> 0:34:41.759 the broker, and everybody's been calling the death of the. 0:34:41.680 --> 0:34:43.279 Pipers boom our Business Week. 0:34:43.520 --> 0:34:46.239 Anyway, I go ahead, you know, I just I don't 0:34:46.280 --> 0:34:47.680 see it. I don't think you know. 0:34:47.719 --> 0:34:50.360 And I always say, quantum investing works until it doesn't. 0:34:50.440 --> 0:34:53.239 You know, historical data of the last ten years works 0:34:53.280 --> 0:34:55.760 until the FED changes their mind and does something different, 0:34:56.000 --> 0:34:58.040 and then it affects it, and so you need it's 0:34:58.040 --> 0:35:01.799 that hybrid. It becomes a tool, and in the end, 0:35:02.160 --> 0:35:05.880 I think the client wants to be serviced. What the 0:35:05.920 --> 0:35:08.040 advisor is doing today is a lot more than they 0:35:08.040 --> 0:35:09.440 had to do in the past. They used to be 0:35:09.719 --> 0:35:13.320 just investment advisors. Now you're all really life planners for people. 0:35:14.200 --> 0:35:16.400 They probably have some clients that ask you to educate 0:35:16.440 --> 0:35:19.719 their next generation and engage with the next generation. You 0:35:19.760 --> 0:35:22.880 do a financial plan, so all those things still require 0:35:22.960 --> 0:35:24.200 that kind of human touch. 0:35:24.600 --> 0:35:27.120 Is that the smart conversation around AI, I mean AI 0:35:27.200 --> 0:35:33.440 correct into every conversation, not new generative AI, LMS, machine learning. 0:35:33.640 --> 0:35:35.680 It does take things to a different level. I mean, 0:35:35.880 --> 0:35:40.360 what is the smart kind of thought that these folks. 0:35:40.200 --> 0:35:44.400 Investments subject to us. It is about how you use it. 0:35:44.400 --> 0:35:47.279 It is very very smart where where we are using 0:35:47.360 --> 0:35:49.680 it and testing it and being my melon as well. 0:35:49.760 --> 0:35:52.600 I have my co pilot, but I also see with 0:35:52.800 --> 0:35:56.200 that that I need to train my co pilot for 0:35:56.280 --> 0:36:00.160 it to actually improve. It's still about pattern recognition. 0:36:00.960 --> 0:36:03.279 You actually spend time with your head of AI right 0:36:03.280 --> 0:36:04.480 to really understand this. 0:36:04.760 --> 0:36:06.719 Yeah, no, I was so. 0:36:06.840 --> 0:36:08.560 I ran the technology group for a while, so I 0:36:08.560 --> 0:36:11.680 have a decent background in technology, so I wanted to 0:36:11.760 --> 0:36:15.160 learn more about AI. And after I'd spent about an 0:36:15.160 --> 0:36:16.799 hour every two weeks going through it, and I finally 0:36:16.800 --> 0:36:18.120 got to the point I was like, okay, I got 0:36:18.120 --> 0:36:20.759 the machine learning. It's kind of regression analysis. I can 0:36:20.840 --> 0:36:24.080 understand a little bit on large language models and how 0:36:24.120 --> 0:36:25.400 you group these words. 0:36:25.480 --> 0:36:25.680 This and that. 0:36:25.760 --> 0:36:28.880 And then we finally got into a certain level and 0:36:28.960 --> 0:36:31.760 I said, I have reached the maximum capacity of my brain. 0:36:31.960 --> 0:36:34.200 I think that I am not smart enough to go 0:36:34.239 --> 0:36:36.080 to the next level. But what I will say is, 0:36:36.120 --> 0:36:39.760 if you look in history on technological advances, the first 0:36:39.760 --> 0:36:43.239 thing that has done is that you optimize what you 0:36:43.320 --> 0:36:46.239 do today. That's the stage we're in. We're all figuring out, 0:36:46.360 --> 0:36:49.920 you know, this spot can do this. It's that next line. 0:36:50.080 --> 0:36:51.840 And by the way, most of the investment returns in 0:36:51.920 --> 0:36:54.520 AI have been around the picks and shovels, the videos, 0:36:54.800 --> 0:36:58.319 the Microsoft c Amazon's those who are surrounding to be 0:36:58.480 --> 0:37:01.600 supportive of the tool. What's going to happen is the 0:37:01.719 --> 0:37:05.120 companies in various sectors who really figure out how to 0:37:05.239 --> 0:37:09.080 leverage AI as a competitive advantage in their business are 0:37:09.120 --> 0:37:10.680 going to be the winners, and others are going to 0:37:10.719 --> 0:37:12.799 fall off because they're not going to keep up. But 0:37:12.880 --> 0:37:15.000 the problem is just we're like at that stage where 0:37:15.040 --> 0:37:16.960 you got your iPhone and you said, oh, it's pretty cool. 0:37:17.000 --> 0:37:19.560 I've got, you know, a flashlight and a phone and 0:37:19.719 --> 0:37:23.759 music and a camera. But what we didn't all appreciate 0:37:24.000 --> 0:37:28.160 is that Apple was unlocking the creativity of the people, right, 0:37:28.480 --> 0:37:30.600 but it took time for people to understand how to 0:37:30.680 --> 0:37:32.880 use it to You didn't even know all the apps 0:37:32.920 --> 0:37:35.160 that you needed that you need today, that you actually 0:37:35.239 --> 0:37:37.560 needed when it first came out. That's where we are 0:37:37.760 --> 0:37:41.719 with AI. We don't yet know when you start to 0:37:42.320 --> 0:37:46.040 combine models, because a large language model takes a whole 0:37:46.080 --> 0:37:50.080 different programming team than an AI that's looking at images 0:37:50.200 --> 0:37:55.080 or an AI that's doing quantitative You know the chat 0:37:55.120 --> 0:37:58.919 GPT is great at language, it's terrible at maths. Right, 0:37:59.000 --> 0:38:00.920 That's tough technology problem to solve. 0:38:01.280 --> 0:38:04.200 Our thanks to Jenny Johnson, president and CEO at Franklin 0:38:04.239 --> 0:38:08.040 Templeton and Anika Smith's Senior Executive VP and Global Head 0:38:08.040 --> 0:38:11.720 of Investment Management at bny Mellon. That from Carrol's panel 0:38:11.880 --> 0:38:15.400 at the bny Mellon Pershing Insight earlier this month in Nashville. 0:38:15.719 --> 0:38:18.320 Catch the full chat at bnymellon dot com. 0:38:19.040 --> 0:38:22.560 You're listening to the Bloomberg Business Week podcast. Catch us 0:38:22.600 --> 0:38:25.840 live weekday afternoons from two to five pm. Easter Listen 0:38:25.880 --> 0:38:28.960 on Applecardplay and then Broun Auto with a Bloomberg Business 0:38:28.960 --> 0:38:31.680 act or watch us live on YouTube. 0:38:32.960 --> 0:38:34.640 Plenty. A head in our second hour of the weekend 0:38:34.760 --> 0:38:38.959 edition of Bloomberg Business Week, including acceptance of the LGBTQ 0:38:39.080 --> 0:38:42.000 plus community with the president and CEO of GLAD and 0:38:42.360 --> 0:38:45.800 how this year's Pride Month festivities come at a complicated time. 0:38:46.160 --> 0:38:48.960 Plus the doctor who's been on call through some of 0:38:49.000 --> 0:38:53.000 the US's toughest health crises and on call for seven presidents, 0:38:53.239 --> 0:38:54.960 Doctor Anthony Fauci, will be with us. 0:38:55.120 --> 0:38:57.719 First up this hour, we like to talk about alternatives 0:38:57.760 --> 0:39:01.400 here at Bloomberg and as Bloomberg BusinessWeek contributor Rob Mandelbaum 0:39:01.440 --> 0:39:04.040 recently wrote in a story for Bloomberg Business Week, the 0:39:04.120 --> 0:39:07.760 development of alternative and online MBA programs is in vogue 0:39:07.760 --> 0:39:11.960 today as traditional business schools simultaneously grow more expensive and 0:39:12.120 --> 0:39:12.880 less popular. 0:39:13.160 --> 0:39:16.320 One company offering such a program is the corporate training 0:39:16.360 --> 0:39:19.759 firm Ability, which has a comprehensive business skills course that 0:39:19.880 --> 0:39:23.520 stylized as a twelve week MBA. The program is built 0:39:23.560 --> 0:39:26.720 around simulations of real life business and management decision making. 0:39:26.920 --> 0:39:30.120 For more on this alternative NBA, we're joined by Bloomberg 0:39:30.160 --> 0:39:34.160 New Senior editor Dimitro Cassanides and the CEO Ability Beyond, 0:39:34.239 --> 0:39:34.960 Bill Hart. 0:39:35.120 --> 0:39:37.120 The truth is there in the US right now, one 0:39:37.200 --> 0:39:39.919 hundred and fifty thousand new MBAs every year and over 0:39:39.960 --> 0:39:43.560 a million new management positions. So close to ninety percent 0:39:43.880 --> 0:39:47.680 of new managers never set foot in a MBA in 0:39:47.719 --> 0:39:50.880 the Hollard Halls of Harvard or other NBA schools, and 0:39:50.960 --> 0:39:53.680 so there's this huge gap of people that have an 0:39:53.719 --> 0:39:57.120 undergraduate degree in history and biology but are moving into 0:39:57.200 --> 0:40:00.600 corporate jobs and need to understand what an statement, what 0:40:00.600 --> 0:40:02.600 a balance she looks like. As they become a leader 0:40:02.680 --> 0:40:04.799 of people, they need to understand how to manage others. 0:40:04.880 --> 0:40:08.320 They need to understand how to collaborate in cross functional projects. 0:40:08.600 --> 0:40:12.000 And so there's this need where ninety percent of the 0:40:12.000 --> 0:40:15.560 people moving into these leadership roles don't have the time, 0:40:15.560 --> 0:40:17.440 don't have the energy to get it to be your 0:40:17.560 --> 0:40:20.680 heea perhaps or the money exactly, Demeter, I want. 0:40:20.520 --> 0:40:22.680 To bring you into it when this came across your 0:40:22.719 --> 0:40:25.040 desk when you're talking to Rob, what is it that 0:40:25.080 --> 0:40:28.040 you wanted to know about in kind of what is 0:40:28.080 --> 0:40:29.920 going on? And what do you want to ask our guests? 0:40:29.960 --> 0:40:32.120 Yeah, I mean the first question was what are you 0:40:32.160 --> 0:40:34.720 intending to do because you're calling it the twelve week MBA, 0:40:35.520 --> 0:40:37.279 But beyond that, it was really to get a better 0:40:37.320 --> 0:40:39.640 sense of what can you reasonably teach in that period 0:40:39.640 --> 0:40:40.600 of time and. 0:40:40.520 --> 0:40:41.359 How can you do it? 0:40:41.800 --> 0:40:45.560 They're doing it, you know, largely online. You know, what 0:40:45.600 --> 0:40:47.400 are we going to see in the way of these programs, 0:40:47.480 --> 0:40:49.560 because I think there is It's not just the number 0:40:49.560 --> 0:40:51.920 of positions that jorn mentions, there's the interest and the 0:40:51.960 --> 0:40:55.480 desire to move into those positions. Because of the potential 0:40:55.520 --> 0:40:58.400 that they offer for earnings and more. And yet business 0:40:58.400 --> 0:41:02.759 schools are incredibly expect so you know, what can you 0:41:02.840 --> 0:41:06.239 actually train for in the way that you're training and 0:41:06.520 --> 0:41:08.080 is that really going to make a difference when they 0:41:08.160 --> 0:41:10.839 land in that job? Is it actually going to serve them? 0:41:11.000 --> 0:41:14.160 Great question, And the truth is in twelve weeks, it's 0:41:14.160 --> 0:41:16.719 also not just twelve weeks. It's part it's part time, 0:41:16.840 --> 0:41:20.360 and it's virtual. So it is a very short certificate program. 0:41:20.560 --> 0:41:23.360 It's not a full MBA. Of course, it is not 0:41:23.480 --> 0:41:26.319 meant to be. The truth is though, that most people 0:41:26.400 --> 0:41:28.600 don't need all of the things that you learn in 0:41:28.640 --> 0:41:30.880 a two year program in business. This is not like 0:41:31.040 --> 0:41:34.240 law school or medical school, where you don't want a lawyer, 0:41:34.360 --> 0:41:37.480 you don't want a doctor operating on you without a 0:41:37.520 --> 0:41:40.160 full degree. It is very clear that there are a 0:41:40.160 --> 0:41:43.799 lot of business leaders that are extremely successful without ever 0:41:43.880 --> 0:41:48.040 having had an MBA. So unlike those other professional certificates, 0:41:48.280 --> 0:41:52.600 there isn't necessarily the need to learn two years worth 0:41:52.640 --> 0:41:56.040 of study. And so for many people who don't have 0:41:56.080 --> 0:41:59.160 the luxury of going back to an MBA, there's an alternative. 0:41:58.719 --> 0:42:00.160 To build a one to meet you said that These 0:42:00.160 --> 0:42:02.399 are people that aren't going to be CEO, but are 0:42:02.400 --> 0:42:04.680 going to be other type of managers. Like, who is 0:42:04.719 --> 0:42:05.000 this for? 0:42:05.800 --> 0:42:09.800 It's for anyone that is moving into leadership roles in companies, 0:42:09.840 --> 0:42:12.439 always planning to move into leadership roles over the next 0:42:12.680 --> 0:42:13.279 five ten years. 0:42:13.360 --> 0:42:15.560 Or is it like an executive you know program? 0:42:15.680 --> 0:42:18.640 It's like that, but it's not for executives, right, So 0:42:18.680 --> 0:42:21.400 the executive MBAs are very expensive. They're twenty thousand and 0:42:21.440 --> 0:42:24.400 thirty thousand dollars. Sometimes this program is two thousand dollars, 0:42:24.640 --> 0:42:27.040 so it's a it's the price of a conference that 0:42:27.120 --> 0:42:29.520 someone can go to. So it's meant for people that 0:42:29.719 --> 0:42:32.600 are not at the executive's level level, at the executive 0:42:32.680 --> 0:42:36.400 level yet, but that are thinking about maybe becoming a 0:42:36.440 --> 0:42:40.520 team manager or are starting to manage others, starting to 0:42:40.600 --> 0:42:43.959 get into leadership roles where understanding and income statement balance 0:42:44.000 --> 0:42:45.480 sheet is becoming more important. 0:42:45.680 --> 0:42:45.879 Right. 0:42:45.960 --> 0:42:48.200 I do want to know about the content of the courses, 0:42:48.320 --> 0:42:51.160 because one thing that I found so interesting about Rob's piece, 0:42:51.480 --> 0:42:54.759 Bjorn is the gamification here and the idea that you're 0:42:54.800 --> 0:42:57.480 sort of competing with other folks and AI is kind 0:42:57.480 --> 0:43:01.400 of the backdrop here. Explain what the course work is 0:43:01.480 --> 0:43:04.080 because it's it's not necessarily what you'd find in a 0:43:04.120 --> 0:43:05.680 quote unquote traditional business school. 0:43:05.920 --> 0:43:07.680 Yeah, and I think that's the other disruption that I 0:43:07.680 --> 0:43:10.799 think is happening now. So the in the twelve week NBA, 0:43:10.840 --> 0:43:13.759 there are no lectures, there are no power points, there 0:43:13.840 --> 0:43:17.040 is no e learning. In those twelve weeks, you're actually 0:43:17.120 --> 0:43:20.320 in a simulated environment where you become CEO of a company. 0:43:20.360 --> 0:43:23.120 You have to compete with others and virtual teams, and 0:43:23.160 --> 0:43:27.000 it's super fun, super engaging and allows you to see 0:43:27.040 --> 0:43:30.279 business from different vantage points vantage point CEO, vantage point 0:43:30.280 --> 0:43:34.000 of VP of sales operations and learn by doing, learn 0:43:34.040 --> 0:43:37.920 by making mistakes and then having a facilitator who comes 0:43:37.960 --> 0:43:40.880 in and points out what mistakes were made as the 0:43:41.000 --> 0:43:42.239 teams competed with each other. 0:43:42.400 --> 0:43:45.399 Facilitator being another person or is this like another part 0:43:45.440 --> 0:43:45.759 of AI. 0:43:46.360 --> 0:43:49.759 No, there's actually real These are not AI facilitators. It's 0:43:49.800 --> 0:43:52.840 actually real facilities. We actually have a lot of business 0:43:52.840 --> 0:43:55.719 school professors as well as retired executives that teach in 0:43:55.760 --> 0:43:56.920 the curricular. 0:43:57.040 --> 0:44:00.439 But everything is all entirely online and remote. I mean, 0:44:00.760 --> 0:44:03.440 are they missing something by not having that sort of 0:44:03.520 --> 0:44:07.480 in person human element. I mean even schools today that 0:44:07.520 --> 0:44:10.480 have had very successful online programs, they're trying to find 0:44:10.480 --> 0:44:12.880 a way to incorporate something where the people are coming together. 0:44:13.320 --> 0:44:16.120 You know, it's a fantastic question. And we actually started 0:44:16.120 --> 0:44:18.400 the twelve week MBA as an in person program and 0:44:18.440 --> 0:44:20.760 then when the pandemic hit, we didn't have a choice 0:44:20.800 --> 0:44:24.479 of moving online, but was really interesting and fascinating. This fall, 0:44:24.520 --> 0:44:27.640 we're actually moving part of it back into the classroom, 0:44:27.920 --> 0:44:31.960 so we're going to have a capstone experience that people 0:44:32.000 --> 0:44:34.799 can fly into based in Austin, Texas. So it's going 0:44:34.840 --> 0:44:37.640 to be an Austin at least the first one, but 0:44:37.640 --> 0:44:40.440 we're going to actually slightly modify the curriculum from an 0:44:40.480 --> 0:44:42.920 all online curriculum to have at least one weekend where 0:44:42.960 --> 0:44:45.560 people get together and have that in person experience. 0:44:45.840 --> 0:44:48.440 And that was based on was it feedback, I mean again, 0:44:48.480 --> 0:44:50.600 a feeling that there's something that they're missing out on 0:44:50.640 --> 0:44:53.120 when they're not in person, and there's an aspect of 0:44:53.160 --> 0:44:55.360 this education that really does need to you need to 0:44:55.360 --> 0:44:56.200 connect with people. 0:44:56.360 --> 0:44:59.520 Yeah, I think so much of education is social. It's 0:44:59.560 --> 0:45:02.920 a difference between knowledge transfer and education is actually that 0:45:03.000 --> 0:45:05.399 social environment. And there's some of it that you can 0:45:05.400 --> 0:45:07.960 recreate online, and I think we've done a pretty good 0:45:08.040 --> 0:45:12.319 job creating some of these virtual simulations and competitions, but 0:45:12.440 --> 0:45:16.920 there's something that is so important about this human element 0:45:16.960 --> 0:45:19.880 when you're in person, when you're at the bar after 0:45:20.000 --> 0:45:23.120 the competition, and you can debrief with your peer, and 0:45:23.160 --> 0:45:24.040 so we want to bring that. 0:45:24.040 --> 0:45:26.840 Back our Thanks to beor Bill Hart, CEO of Ability, 0:45:27.040 --> 0:45:29.920 and Dimitro Cassinid's Bloomberg News Senior editor. 0:45:31.440 --> 0:45:35.320 You're listening to the Bloomberg Business Week podcast. Listen live 0:45:35.400 --> 0:45:38.600 each weekday starting at two pm Eastern Dot applecar Play 0:45:38.600 --> 0:45:41.480 and Android Auto with the Bloomberg Business ad. You can 0:45:41.520 --> 0:45:44.719 also listen live on Amazon Alexa from our flagship New 0:45:44.840 --> 0:45:49.800 York station, Just Say Alexa Play Bloomberg eleven thirty from. 0:45:49.680 --> 0:45:53.759 An alternative NBA program to All Finance, the nonprofit which 0:45:53.800 --> 0:45:56.320 is also helping to train the next generation of professional 0:45:56.320 --> 0:46:00.280 financial investors by working with students at historically black colorges 0:46:00.280 --> 0:46:03.120 in universities, also known as HBCUs. 0:46:03.120 --> 0:46:06.440 Marcus Shaw's president and CEO at All Finance, which has 0:46:06.480 --> 0:46:09.200 a ten year, ninety million dollar commitment to reduce the 0:46:09.320 --> 0:46:12.840 underrepresentation of people of color in the world of private equity. 0:46:12.960 --> 0:46:16.399 So All Finance is a nonprofit that was seeded by 0:46:16.560 --> 0:46:19.640 areas oak Tree and Apollo really to address what we 0:46:19.760 --> 0:46:24.600 believe are unfortunate underrepresentation in the alternative investment industry. That's 0:46:24.640 --> 0:46:28.799 private equity, private credit, real estate, infrastructure, all of your 0:46:28.840 --> 0:46:33.280 non traditional investment asset classes. And so those three companies 0:46:33.320 --> 0:46:36.160 decided that in the wake of George Floyd and a 0:46:36.239 --> 0:46:39.040 lot of the racial conversations that were happening back in 0:46:39.040 --> 0:46:42.279 twenty twenty one, that they wanted to actually commit to 0:46:42.800 --> 0:46:46.880 solving the problem by developing a broader pool of talent 0:46:47.120 --> 0:46:49.200 from historically black colleges and universities. 0:46:49.280 --> 0:46:51.879 So I'm so glad you brought up the history here 0:46:51.920 --> 0:46:54.320 because we spent a lot of time on our program 0:46:54.360 --> 0:46:57.080 and here at Bloomberg News as well, going through the 0:46:57.120 --> 0:47:00.000 promises that companies made in the wake of the twenty 0:47:00.080 --> 0:47:02.920 twenty protests after the murder of George Floyd, and also 0:47:02.960 --> 0:47:07.520 the pushback, especially in recent months to these DEI efforts 0:47:07.520 --> 0:47:11.000 as well, which have been well documented according to changes 0:47:11.080 --> 0:47:14.120 in company filings as well. I'm wondering if you're still 0:47:14.160 --> 0:47:17.080 seeing the same support from these companies that you were 0:47:17.080 --> 0:47:18.120 seeing four years ago. 0:47:18.560 --> 0:47:21.879 So absolutely. We're continuing to see that support, not only 0:47:21.880 --> 0:47:24.480 in terms of dollars, but in support in terms of 0:47:24.520 --> 0:47:28.600 commitment from the professionals that work there. And from my perspective, 0:47:28.680 --> 0:47:31.360 this is really about talent. No matter what business you're in, 0:47:31.400 --> 0:47:33.680 whether you're in the news business, you're in tennis, you're 0:47:33.680 --> 0:47:36.480 an athlete, no matter what you are, what you want 0:47:36.520 --> 0:47:38.880 to see is the best talent. And so if we 0:47:38.880 --> 0:47:41.560 can do that in sports, which is the ultimate meritocracy, 0:47:41.920 --> 0:47:44.160 why shouldn't we do it in other arenas? 0:47:44.400 --> 0:47:46.120 And do they stay in the industry? 0:47:46.160 --> 0:47:48.359 Do you have like you know some can you share 0:47:48.440 --> 0:47:51.319 with us, like how their careers progress, and like you 0:47:51.360 --> 0:47:54.240 know what's like the uh I guess attrition so speak? 0:47:54.320 --> 0:47:57.400 Yeah, so you know, we have early signals. We graduated 0:47:57.440 --> 0:48:00.840 our first class last year. We had fourteen seniors graduated. 0:48:01.160 --> 0:48:03.800 All of those seniors are still working in and around 0:48:03.800 --> 0:48:06.680 the industry. They're finding early success to their firms. I 0:48:06.719 --> 0:48:09.120 think one thing that we all know is the first 0:48:09.200 --> 0:48:12.279 year of being an analyst in financial services is very, 0:48:12.360 --> 0:48:14.880 very tough, right, you know, I think it's equivalent to 0:48:14.920 --> 0:48:17.480 being a resident in medical school, or maybe you know, 0:48:17.520 --> 0:48:20.840 your first week at boot camp in the armed forces. 0:48:20.560 --> 0:48:23.799 It's it's tough whether no matter what your background is. 0:48:24.080 --> 0:48:27.360 So I think what we're seeing is success because students 0:48:27.400 --> 0:48:30.880 feel more comfortable, They've built relationships, they have understanding of 0:48:30.880 --> 0:48:33.120 what the workplace looks like, and so we've been able 0:48:33.160 --> 0:48:36.480 to galvanize some of the risk that students normally would 0:48:36.480 --> 0:48:39.200 experience by building this incredible network around them. 0:48:39.560 --> 0:48:42.360 Okay, speaking of backgrounds, a little more about you. You 0:48:42.400 --> 0:48:46.080 spent twenty years in nonprofit. In finance, you were at 0:48:46.160 --> 0:48:50.360 Height Analytics, Piedmont Investor Advisors, Bank of America's Securities. I 0:48:50.400 --> 0:48:55.000 want to know why alternatives of all parts of the 0:48:55.000 --> 0:48:58.680 finance ecosystem, all parts of Wall Street, why is private 0:48:58.680 --> 0:49:01.399 equity and alternative investments place you wanted to focus on 0:49:01.760 --> 0:49:02.600 for all finances. 0:49:02.800 --> 0:49:05.800 It's a great question, and I think, as with other things, 0:49:06.280 --> 0:49:09.960 the evolution of an industry breeds interests and breeds innovation. 0:49:10.880 --> 0:49:13.840 When I came out of business school, sales and trading 0:49:13.920 --> 0:49:17.200 cash sales and trading inequities was incredibly important. I mean, 0:49:17.280 --> 0:49:19.919 you saw people coming out of business school that wanted 0:49:19.960 --> 0:49:21.799 to be a trader on a cash equities desk. You 0:49:21.840 --> 0:49:25.200 saw people that were traditional fixed income roles. You fast 0:49:25.239 --> 0:49:27.600 forward twenty or twenty five years to where we are now. 0:49:28.480 --> 0:49:32.960 The most interesting, the most erudite people on Earth are 0:49:33.000 --> 0:49:36.080 working in alternatives. They're working in private equity, they're working 0:49:36.120 --> 0:49:39.040 in private credit. Private credit is an industry, a subsector 0:49:39.080 --> 0:49:41.879 of alternatives that we've seen incredible growth in just three 0:49:41.960 --> 0:49:45.239 years from the beginning of this organization to where we 0:49:45.280 --> 0:49:47.880 are now. We have students that are going into private 0:49:47.920 --> 0:49:50.480 equity direct and landing private market deals in the credit 0:49:50.680 --> 0:49:54.000 space that didn't know about it when they started college. 0:49:54.280 --> 0:49:56.239 You know, talk about as well, how much this even 0:49:56.280 --> 0:49:59.280 just affects you know more like not in the alternative space, 0:49:59.280 --> 0:50:01.319 but just you know, right Wall Street banks, and like 0:50:01.520 --> 0:50:04.560 what if anything, if you have a relationship with increasing 0:50:04.600 --> 0:50:08.400 diversity at mainstream, more mainstream financial. 0:50:07.920 --> 0:50:12.720 Firms, It's all part of the ecosystem. And traditionally, in alternatives, 0:50:12.800 --> 0:50:16.720 folks would go through analyst programs at a traditional bulgracket bank, 0:50:16.880 --> 0:50:19.840 they go through associate recruiting, and they would then find 0:50:19.880 --> 0:50:22.759 their way into a private equity firm or a private 0:50:22.800 --> 0:50:25.960 creaditut real estate or infrastructure. What we're seeing now, and 0:50:26.000 --> 0:50:28.360 some of this is just a supply and demand dynamic. 0:50:28.640 --> 0:50:30.880 Some of this is the growth of the industry that 0:50:31.080 --> 0:50:34.600 many alternative investment firms are starting their own analysts programs 0:50:34.840 --> 0:50:38.120 because they need talent earlier. Or Again, this is not 0:50:38.360 --> 0:50:41.520 strictly about diversity. This is about talent. It's you know, 0:50:41.719 --> 0:50:44.759 I use the analogy of sports a lot, because they're 0:50:44.800 --> 0:50:47.040 wins and losses. In sports, it's ones and zero. It's 0:50:47.040 --> 0:50:50.280 fairly binary. If we look at success in the business 0:50:50.280 --> 0:50:53.920 world the same way, we'll recognize that bring talent from 0:50:54.040 --> 0:50:57.560 all corners of the earth, from all experiences will increase 0:50:57.600 --> 0:51:00.239 our outcomes. And so for banks, I think I think 0:51:00.360 --> 0:51:03.480 they started to see this early on, but as their 0:51:03.520 --> 0:51:07.040 clients right, some of these alternative investment shops are doubling 0:51:07.080 --> 0:51:09.120 down on that. I think banks are encouraged to do 0:51:09.239 --> 0:51:09.560 the same. 0:51:10.280 --> 0:51:13.480 Marcus, I want to talk about your background and then 0:51:13.520 --> 0:51:16.400 how it plays into what you're doing at ALT Finance. 0:51:17.040 --> 0:51:21.360 You have a dual degree from Georgia Tech, but also 0:51:21.440 --> 0:51:27.520 an HBCU Morehouse, Yes, in electrical engineering and mathematics mathematics, 0:51:27.920 --> 0:51:29.560 and then you went off and got an MBA over 0:51:29.560 --> 0:51:32.520 at Duke. Talk a little bit about HBCUs and why 0:51:32.520 --> 0:51:35.720 you're focused on HBCUs as the pipeline for all finance. 0:51:36.160 --> 0:51:39.400 So HBCUs are an important part of the fabric of 0:51:39.440 --> 0:51:43.600 this country. They have produced leaders in this country for 0:51:43.680 --> 0:51:46.680 the past one hundred and fifty years. And I mean 0:51:47.400 --> 0:51:50.600 the and when you're talking about diversity and bringing talent, 0:51:50.680 --> 0:51:55.880 about defining a strategy specifically around HBCUs, this critical pool 0:51:56.200 --> 0:51:59.520 to success. In fact, HBCUs it's a federal designation under 0:51:59.560 --> 0:52:03.920 the Civil Act, right, So this is about identifying students 0:52:03.960 --> 0:52:07.879 at schools that have historically produced leaders and bringing them 0:52:07.880 --> 0:52:11.480 into the economy. One of the things that I experienced 0:52:11.520 --> 0:52:14.520 in Morehouse and you know, my time there was something 0:52:14.719 --> 0:52:17.160 that I look upon as the finest years of my life, 0:52:17.840 --> 0:52:20.080 is that really you go to that school to be 0:52:20.120 --> 0:52:22.799 bred as a leader. That's the focus. If you want 0:52:22.800 --> 0:52:24.920 to be a great warfighter, you go to the Service Academy. 0:52:25.040 --> 0:52:26.920 You want to be a great physician, you go to 0:52:27.000 --> 0:52:29.200 John Hopkins. You want to be a great tech leader, 0:52:29.239 --> 0:52:32.480 you go to Stanford or you know wherever. But if 0:52:32.520 --> 0:52:35.319 you really want to learn how to lead, Morehouse was 0:52:35.360 --> 0:52:37.160 a great school for me. And so I look at 0:52:37.160 --> 0:52:41.239 that school and my time there as really development in 0:52:41.320 --> 0:52:43.799 leadership and not just leadership of people that look like me. 0:52:44.080 --> 0:52:47.000 The leadership of all people because it creates an opportunity 0:52:47.040 --> 0:52:47.399 for you. 0:52:47.440 --> 0:52:48.919 Did you feel like when you were getting your MBA 0:52:49.040 --> 0:52:50.400 and you were around a bunch of people who were 0:52:50.480 --> 0:52:53.040 basically in school to become leaders, you were a step 0:52:53.040 --> 0:52:54.040 ahead of them. 0:52:54.239 --> 0:52:56.640 Yeah. I mean I think for me it was because 0:52:56.640 --> 0:52:59.840 of the experiences, the lived experiences that I had morehouse 0:52:59.840 --> 0:53:02.920 with part of that, but the human element, right, My 0:53:03.000 --> 0:53:06.120 background traditionally was engineering as an engineer, and went to 0:53:06.120 --> 0:53:09.560 business school and fell into finance and financial assets. For 0:53:09.640 --> 0:53:11.040 what we covered for a long time, it's what you 0:53:11.040 --> 0:53:14.680 guys talk about in earnings. But the more complicated and 0:53:14.840 --> 0:53:19.280 honestly the more important asset is humans. Why do humans 0:53:19.320 --> 0:53:21.200 do what they do? How do they make decisions? How 0:53:21.200 --> 0:53:24.279 do they think about risk? And ultimately everything else is 0:53:24.320 --> 0:53:28.000 a derivative of that. Being able to bring that experience 0:53:28.160 --> 0:53:31.239 to Duke to the future school of business, having some 0:53:31.280 --> 0:53:33.600 of that developed at Morehouse, having some of that developed 0:53:33.640 --> 0:53:36.319 my parents. My father was a military officer, my mother 0:53:36.680 --> 0:53:39.600 was a school teacher. It's basically eighteen years of a 0:53:39.680 --> 0:53:41.600 lesson in how to deal with people. I went to 0:53:41.600 --> 0:53:44.239 a Quaker school how to deal with people peacefully? Right, 0:53:45.680 --> 0:53:49.040 It really creates a pathway for you to think about 0:53:49.040 --> 0:53:51.360 how to solve big problems like what we're doing at 0:53:51.360 --> 0:53:51.920 all Finance. 0:53:52.120 --> 0:53:54.720 So tell us then, if you're right now a student 0:53:54.880 --> 0:53:58.040 at an HBCU, how do you get involved with All Finance, 0:53:58.120 --> 0:54:00.000 Like where is the connection? 0:54:00.280 --> 0:54:00.440 You know? 0:54:00.480 --> 0:54:02.960 At what level of your studies and is this going 0:54:03.000 --> 0:54:04.240 to help you also get. 0:54:04.080 --> 0:54:06.919 An internship for a job? Like how does the process work? 0:54:07.120 --> 0:54:09.800 Yeah, so All Finance Number one, I would point everybody 0:54:09.800 --> 0:54:13.279 to our website allfinance dot com. That's l FI n 0:54:13.400 --> 0:54:16.440 A n CE dot com. There you can learn more 0:54:16.440 --> 0:54:18.560 about our program. So we have two programs that we 0:54:18.640 --> 0:54:21.320 run and really put our focus on today. One is 0:54:21.360 --> 0:54:24.279 our Fellowship, which is a multi year program focused on 0:54:24.360 --> 0:54:28.320 students at eight of our partner HBCUs, Clark Atlanta University, 0:54:28.360 --> 0:54:33.000 Morehouse College, Spelman College, Howard University, North Carolina, and t FAMU, 0:54:33.400 --> 0:54:35.120 Hampton University, and Morgan State. 0:54:35.160 --> 0:54:37.480 So that was eight accounted eight got it? 0:54:37.520 --> 0:54:37.879 Got them? 0:54:37.960 --> 0:54:40.719 Yeah, got them. So we have eight schools that we 0:54:40.800 --> 0:54:44.800 work with directly. Our program has quickly become one of 0:54:44.840 --> 0:54:47.920 the standout co curricular programs at those schools and so 0:54:47.960 --> 0:54:50.640 students apply to that. We just went for our fourth 0:54:50.719 --> 0:54:54.399 round or our fourth cohort, and we have fifty seven 0:54:54.400 --> 0:54:56.640 incredible students from all eight of those schools that are 0:54:56.719 --> 0:54:58.960 joining our platform. But if you're at one of the 0:54:59.040 --> 0:55:02.320 other one hundred or ninety four, HBC use that exists, 0:55:02.360 --> 0:55:04.480 or they're one hundred and foards of ninety six, I'm sorry, 0:55:04.800 --> 0:55:07.840 HBC use that exists. We have a platform called the 0:55:07.880 --> 0:55:11.320 All Finance Institute, which we partnered with the Warden School 0:55:11.320 --> 0:55:14.160 of Business at the University of Pennsylvania to develop a 0:55:14.160 --> 0:55:18.040 co curricular digital platform that gives students access to both 0:55:18.360 --> 0:55:24.560 non academic and academic content supporting their development in finance, 0:55:25.040 --> 0:55:26.800 investments and alternative investments. 0:55:26.880 --> 0:55:30.799 Are you getting gender diversity because there's a challenge on 0:55:30.840 --> 0:55:33.279 Wall Street, Yes, when it comes to the balance of 0:55:33.320 --> 0:55:34.960 men and women, And I'm wondering if you see that 0:55:34.960 --> 0:55:37.280 in private equity as well outside of your program. 0:55:37.440 --> 0:55:40.759 So that does exist outside of our program. They're fantastic 0:55:40.880 --> 0:55:43.920 organizations like Girls who Invest incredible shout outs to the 0:55:43.960 --> 0:55:46.439 work that they're doing. We actually have a few Girls 0:55:46.440 --> 0:55:51.040 who Invest fellows also in our program. So doesn't need 0:55:51.080 --> 0:55:53.760 to be competition amongst groups that are trying to increase 0:55:53.800 --> 0:55:54.759 the talent pool right. 0:55:54.800 --> 0:55:56.840 Instern sectionality, as we say. 0:55:56.680 --> 0:56:02.960 The intersectionality Molly, great word, thank you. Intersectionality is really 0:56:03.160 --> 0:56:07.880 where the recipe for success can be multiplied, right in 0:56:07.960 --> 0:56:10.040 terms of what All Finance is doing, and this is 0:56:10.440 --> 0:56:13.080 a byproduct of working with HBCUs where there is an 0:56:13.160 --> 0:56:17.800 over representation of women and on HBCU campuses. Black women 0:56:17.840 --> 0:56:20.839 are one of the highest and fastest educated group of 0:56:20.840 --> 0:56:22.920 people in the United States, and so the fact that 0:56:22.920 --> 0:56:25.960 they show up on HBCU campuses is really a win win. 0:56:26.680 --> 0:56:28.719 Forty five percent of the women in our program or 0:56:28.760 --> 0:56:31.040 forty five percent of the fellows in our program are women, 0:56:32.080 --> 0:56:35.440 which I would put that number up against any financial 0:56:35.480 --> 0:56:36.800 services firm. 0:56:37.000 --> 0:56:39.279 I wouldn't think it's anywhere near fifty to fifty. 0:56:39.080 --> 0:56:43.120 Right, And so by working with an organization like All Finance, 0:56:43.200 --> 0:56:46.120 not only are you getting incredible diverse talent, but you're 0:56:46.160 --> 0:56:48.360 also making sure that you're getting well trained women. 0:56:48.840 --> 0:56:49.240 Totally. 0:56:49.400 --> 0:56:52.400 Yeah, I mean what are I mean, what do you 0:56:52.440 --> 0:56:54.879 hear specifically from the women? Then as far as their 0:56:54.920 --> 0:56:58.440 feedback and coming into some of these workplace settings. 0:56:59.320 --> 0:57:02.680 It's a challenge, right. I think that you know, number one, 0:57:03.200 --> 0:57:06.040 being a minority, but also being a gender minority or 0:57:06.080 --> 0:57:08.160 being a woman not a gender minority in the grand scheme, 0:57:08.200 --> 0:57:14.840 because I think there's there is are challenges, and a 0:57:14.880 --> 0:57:18.960 lot of those challenges are culture driven, right, and the 0:57:19.000 --> 0:57:22.400 firms aren't a monolith. Some firms have really really strong 0:57:22.440 --> 0:57:25.040 inclusive cultures. I like to think that our partners areas 0:57:25.040 --> 0:57:28.120 Oaksture and Apollo have incredibly inclusive cultures and have done 0:57:28.280 --> 0:57:31.600 very very well and continue to do well in welcoming 0:57:31.600 --> 0:57:34.240 women into the workplace. But the industry in and of 0:57:34.280 --> 0:57:35.600 itself has had challenges. 0:57:36.040 --> 0:57:38.800 Why do you think that you've been so successful when 0:57:38.800 --> 0:57:42.120 it comes to the gender balance with the with the 0:57:42.160 --> 0:57:46.600 fellows compared to the recruiting at some of these firms. 0:57:46.960 --> 0:57:50.640 We're very intentional about it. I mean, if something, if 0:57:50.680 --> 0:57:54.600 there is a pool and I see that we don't 0:57:54.640 --> 0:57:57.479 have what I believe is a representative number of women 0:57:57.520 --> 0:58:01.080 in the pool, we put more effort into recruiting really 0:58:01.120 --> 0:58:04.240 great women into our program. Right. Then once you're in 0:58:04.280 --> 0:58:06.920 the program, we put a lot of effort into making 0:58:06.960 --> 0:58:10.840 sure that everybody has the shared time to grow and develop. Right, 0:58:10.920 --> 0:58:13.320 that we don't let time. We try not to let 0:58:13.400 --> 0:58:16.560 people dominate time, right, We try not to let the 0:58:16.720 --> 0:58:22.280 natural inertia of a male dominated industry filter its way 0:58:22.360 --> 0:58:23.240 into our program. 0:58:23.320 --> 0:58:23.440 Right. 0:58:23.800 --> 0:58:26.320 We believe that our program is a position of growth 0:58:26.640 --> 0:58:29.720 for men and for women, for sophomores, for juniors and seniors, 0:58:29.960 --> 0:58:32.120 and that in order for us to maximize the total 0:58:32.160 --> 0:58:34.240 output of what we're trying to do, we have to 0:58:34.280 --> 0:58:37.520 make sure that we allow maximum opportunity for everybody that's involved. 0:58:37.720 --> 0:58:40.600 Last thirty here for you, Marcus. So this marks year 0:58:40.640 --> 0:58:42.880 four of the initial ten year commitment by those three 0:58:42.920 --> 0:58:46.120 founding firms. What do we look at for the next 0:58:46.120 --> 0:58:47.560 ten years they sign up for more. 0:58:48.040 --> 0:58:51.440 Look, I think they appreciate what we're doing, but the 0:58:51.520 --> 0:58:54.920 reality is the burden of what we're doing should not 0:58:54.960 --> 0:58:57.800 follow on three firms. There are thousands of firms that 0:58:57.840 --> 0:59:01.520 are doing this across the globe. We'd love to have 0:59:01.600 --> 0:59:04.600 global reach, but they're firms right here in New York City, 0:59:04.920 --> 0:59:08.680 right around this office that would benefit from a partnership 0:59:08.680 --> 0:59:09.560 with all Finance. 0:59:09.280 --> 0:59:12.720 And you'd accept that partnership right away. Very are you 0:59:12.840 --> 0:59:13.640 getting incoming? 0:59:13.720 --> 0:59:16.600 We are getting incoming. The proof is in the putting, 0:59:16.640 --> 0:59:20.320 as one of our HBCU presidents said, and I thought 0:59:20.320 --> 0:59:23.120 I might get that tattooed on me. But he said, 0:59:23.120 --> 0:59:26.440 you've proven the concept, right. We've proven the thesis. We 0:59:26.560 --> 0:59:29.520 get a significant amount of inbound calls with people interested 0:59:29.560 --> 0:59:32.720 about how to work with our fellows. But I think 0:59:32.880 --> 0:59:36.400 the reality is the returnal investment is happening for the 0:59:36.400 --> 0:59:39.720 firms that made the commitment. You cannot do this for free, 0:59:39.840 --> 0:59:41.760 and so we want other firms to make a commitment 0:59:41.760 --> 0:59:42.080 as well. 0:59:42.120 --> 0:59:44.080 And I imagine next time you're with us, we might 0:59:44.160 --> 0:59:47.080 have some more firms who have signed on. Marcus Shaw, 0:59:47.120 --> 0:59:49.240 President and CEO over at Halt Finance. 0:59:53.600 --> 0:59:57.080 You're listening to the Bloomberg Business Week podcast. Catch us 0:59:57.160 --> 1:00:00.360 live weekday afternoons from two to five pm Eastern Listen 1:00:00.440 --> 1:00:02.600 on Apple, card Play and The brout Otto with a 1:00:02.600 --> 1:00:06.960 Bloomberg Business act or warned us live on YouTube. 1:00:07.360 --> 1:00:11.440 Doctor Anthony Fauci became a household name during the COVID pandemic. However, 1:00:11.480 --> 1:00:14.280 his journey to becoming at the top infectious disease doctor 1:00:14.320 --> 1:00:17.760 in the United States started decades before, and really to 1:00:17.920 --> 1:00:20.440 his childhood back in Brooklyn, New York and living with 1:00:20.520 --> 1:00:23.560 his family above his dad's pharmacy, the Fauci Pharmacy. 1:00:23.840 --> 1:00:26.000 He was a basketball player in high school, went on 1:00:26.040 --> 1:00:28.400 to become a doctor and then spent fifty four years 1:00:28.440 --> 1:00:31.439 at the National Institutes of Health, thirty eight of them 1:00:31.560 --> 1:00:34.240 as the Director of the National Institutes of Allergy and 1:00:34.280 --> 1:00:38.240 Infectious Diseases. During that time, he advised seven presidents on 1:00:38.360 --> 1:00:43.080 various diseases, including AIDS, Ebola, SARS, COVID nineteen and more. 1:00:43.560 --> 1:00:46.160 Doctor Fauci writes about it all in his new memoir 1:00:46.520 --> 1:00:49.400 On Call, a Doctor's Journey in Public Service. 1:00:49.760 --> 1:00:52.320 You kept a lot of notes, and I'm curious, we 1:00:52.360 --> 1:00:56.080 are curious what it was like going through that those notes, 1:00:56.120 --> 1:00:59.920 putting this book together, going back to your notes of 1:00:59.920 --> 1:01:03.680 the AIDS crisis, or STARS or COVID for that matter, 1:01:03.840 --> 1:01:07.800 anything anytime in particular that made you stop, that really 1:01:07.840 --> 1:01:09.080 took you back in a big way. 1:01:09.440 --> 1:01:12.680 When you remember things in your mind forty years down 1:01:12.720 --> 1:01:15.680 the pike and you go back over some of the 1:01:15.720 --> 1:01:18.840 notes that you made back in very stressful times, like 1:01:18.920 --> 1:01:24.400 those terrible early years of HIV, when I was spending 1:01:24.440 --> 1:01:27.960 most of my time taking care of desperately ill, mostly young, 1:01:28.160 --> 1:01:33.240 otherwise previously healthy gay men who were suffering terribly and 1:01:33.280 --> 1:01:39.760 then almost inevitably dying. It really brings back. What I've described, 1:01:39.840 --> 1:01:42.960 and I mean that honestly is almost a post traumatic 1:01:43.680 --> 1:01:47.280 stress feeling of my goodness. I went through that, and 1:01:47.320 --> 1:01:49.800 I had to suppress all of those feelings. And then 1:01:49.840 --> 1:01:53.320 when you start to write your memoir, in order to 1:01:53.360 --> 1:01:55.680 write it properly, you have to go back and re 1:01:55.800 --> 1:02:00.480 examine those experiences and re examine those feelings. So we 1:02:00.640 --> 1:02:03.240 you know, what I went through was a journey, but 1:02:03.400 --> 1:02:06.880 writing the memoir was itself a journey for me. 1:02:07.200 --> 1:02:07.360 You know. 1:02:07.400 --> 1:02:10.640 I want to stay on this topic here because I 1:02:10.680 --> 1:02:12.880 think it's fair to say there's a generation out there 1:02:12.920 --> 1:02:15.600 that really has no idea about the AIDS health crisis, 1:02:16.160 --> 1:02:18.080 and we should remind people there have been more than 1:02:18.120 --> 1:02:21.680 eighty six million HIV infections throughout the world forty million deaths. 1:02:21.960 --> 1:02:23.520 There's a part in your book where you write about 1:02:23.560 --> 1:02:25.720 a visit to the White House in nineteen ninety six, 1:02:26.320 --> 1:02:29.840 nearly thirty years ago, when then President Clinton asked you 1:02:29.920 --> 1:02:34.400 why there was no HIV vaccine. Why is an HIV 1:02:34.480 --> 1:02:35.840 vaccine still so elusive. 1:02:36.280 --> 1:02:39.400 Well, it's a very unusual virus in which the body, 1:02:39.560 --> 1:02:43.720 for reasons we still don't completely understand, does not make 1:02:43.840 --> 1:02:47.960 an adequate immune response to protect from or even clear 1:02:48.360 --> 1:02:52.600 the virus from the body. Most every other pathogen that 1:02:52.680 --> 1:02:57.320 we get infected with mankind civilization, even things that have 1:02:58.400 --> 1:03:03.160 a fair degree of more teen like smallpox and measles 1:03:03.240 --> 1:03:06.320 and the crippling effect of polio. At the end of 1:03:06.320 --> 1:03:10.000 the day, most people clear those viruses from the body, 1:03:10.040 --> 1:03:14.640 and the body's immune response serves as a model for 1:03:14.840 --> 1:03:18.160 how you should make a vaccine to protect a person 1:03:18.160 --> 1:03:21.840 who's uninfected from getting infected. But we don't have that 1:03:22.000 --> 1:03:26.919 kind of a situation with HIV because once a person's infected, 1:03:27.360 --> 1:03:32.560 there are virtually no instances that are documented of someone 1:03:32.600 --> 1:03:36.880 who's actually spontaneously cleared the virus. There's a very small 1:03:37.360 --> 1:03:41.680 percentage of elite controllers who can control the virus, but 1:03:41.720 --> 1:03:45.600 there's no real evidence of anyone actually on their own, 1:03:45.680 --> 1:03:49.400 through their own immune system, clearing the virus. That's a 1:03:49.560 --> 1:03:53.800 very high bar for a vaccine to be able to do, 1:03:54.240 --> 1:03:57.600 because you want to do better than what even natural 1:03:57.640 --> 1:04:00.720 infection does. And that's the reason why, among all the 1:04:00.760 --> 1:04:04.520 difficult diseases, we just don't yet. I think we may 1:04:04.560 --> 1:04:07.480 get it because science will figure out a way to 1:04:07.560 --> 1:04:10.000 do it, but it's been very difficult because of the 1:04:10.080 --> 1:04:11.680 unique nature of HIV. 1:04:12.200 --> 1:04:15.640 I'm always amazed at doctors who are in very difficult 1:04:15.680 --> 1:04:20.160 situations and then but stay very level headed and stay cool, 1:04:20.200 --> 1:04:22.520 and you have to, I would assume, But I do 1:04:22.600 --> 1:04:27.840 think about your time with HIV and AIDS victims ultimately, 1:04:28.160 --> 1:04:30.160 you know, because you write your book, you think of 1:04:30.200 --> 1:04:33.080 the years from eighty two into the late nineteen eighties 1:04:34.320 --> 1:04:37.240 as the dark years of your medical career. I mean, 1:04:37.320 --> 1:04:40.919 you got to know a lot of these patients. How 1:04:41.520 --> 1:04:43.280 I just can't even imagine how difficult it was. 1:04:43.720 --> 1:04:46.080 Well, it was terribly difficult, I mean, and it was 1:04:46.160 --> 1:04:50.120 even made more difficult by the contrast with what I 1:04:50.200 --> 1:04:54.320 had been doing in the prior nine years before we 1:04:54.440 --> 1:04:58.040 started seeing individuals with HIV, before it was even known 1:04:58.080 --> 1:05:01.640 to be HIV in nineteen eighty one. My career had 1:05:01.680 --> 1:05:07.520 been quite successful, you know, parenthetically in developing therapies for 1:05:07.760 --> 1:05:12.680 inflammatory diseases and order immune diseases, and we developed some 1:05:12.880 --> 1:05:17.560 protocols that had diseases that were formally fatal have ninety 1:05:17.720 --> 1:05:20.640 ninety three ninety five percent remission rates. So we were 1:05:20.680 --> 1:05:25.320 on a real high, as it were, for accomplishments, and 1:05:25.360 --> 1:05:27.880 then all of a sudden you devote the rest of 1:05:27.920 --> 1:05:32.480 your medical career of taking individuals taking care of individuals 1:05:33.040 --> 1:05:37.560 to a disease. For the first several years, essentially all 1:05:37.600 --> 1:05:40.480 of our patients died with very very few exceptions. And 1:05:40.520 --> 1:05:43.520 you're right, you do get to know them, you develop 1:05:44.080 --> 1:05:49.919 a really good patient physician relationship, and you really care 1:05:49.960 --> 1:05:52.960 about them. I mean, you know, part of the art 1:05:53.160 --> 1:05:57.400 of the art and science of medicine is to care 1:05:57.520 --> 1:06:01.200 for your patients, not only care for their medical issues, 1:06:01.240 --> 1:06:04.680 but to care about them. And that was very tough, 1:06:04.920 --> 1:06:07.680 and it was several years because remember we started I 1:06:07.800 --> 1:06:11.720 did started taking care of persons with HIV in the 1:06:11.760 --> 1:06:15.680 fall of nineteen eighty one, very soon after the first 1:06:15.760 --> 1:06:20.320 cases were recognized, and then we did not get truly 1:06:20.480 --> 1:06:24.200 addic with therapy until nineteen ninety six. We got the 1:06:24.240 --> 1:06:27.960 beginnings of some therapy which kind of slowed the disease 1:06:28.080 --> 1:06:32.320 down starting in nineteen eighty seven with AZT, but it 1:06:32.360 --> 1:06:37.680 wasn't until the triple combination cocktail that showed that you 1:06:37.680 --> 1:06:41.760 could durably suppress virus to below detective level, but that 1:06:41.840 --> 1:06:46.160 wasn't until nineteen ninety six, so those were really difficult times. 1:06:46.520 --> 1:06:49.360 We're speaking with doctor Anthony Fauci, who's now a distinguished 1:06:49.400 --> 1:06:52.960 University professor at Georgetown. His new book out now. It's 1:06:53.000 --> 1:06:56.120 called On Call, A Doctor's Journey in Public Service. 1:06:55.880 --> 1:06:58.280 Doctor Fauci. In the book, you write about how former 1:06:58.320 --> 1:07:02.400 President Donald Trump way ask maybe after a tense moment 1:07:02.720 --> 1:07:04.520 or maybe an argument, are we okay? 1:07:05.080 --> 1:07:06.160 You know, and would mess it. 1:07:06.280 --> 1:07:08.120 You know, messaging would come back from his team or 1:07:08.160 --> 1:07:11.760 even Vice President Mike Pensis team too, that they love 1:07:11.800 --> 1:07:15.640 you, you know again, after maybe some tense moments. You've served 1:07:15.720 --> 1:07:19.920 seven presidents during your tenure, starting with Ronald Reagans all 1:07:19.920 --> 1:07:24.280 the way to President Biden. Are all presidential relationships complicated 1:07:24.360 --> 1:07:26.320 or was just that one in particular? 1:07:26.640 --> 1:07:29.400 No? No, this was a very and as I mentioned 1:07:29.400 --> 1:07:34.720 explicitly in the memoir, this was a complicated relationship, very 1:07:34.960 --> 1:07:38.520 unique relationship when you compare it with the relationship with 1:07:38.560 --> 1:07:42.120 other presidents, because we did in the beginning. I mean, 1:07:42.520 --> 1:07:45.720 even though right now the people who are in the 1:07:45.760 --> 1:07:48.840 Trump camp, you know, are very hostile to me, I 1:07:48.920 --> 1:07:51.880 had a very good relationship with President Trump, and we 1:07:52.280 --> 1:07:55.000 related well to each other. I describe it in the memoir. 1:07:55.080 --> 1:07:58.680 I don't know whether it was the rapport that two people, 1:07:58.920 --> 1:08:01.360 you know, who grew up in New York City to 1:08:01.520 --> 1:08:04.560 me in Brooklyn, and him and Queens had that kind 1:08:04.600 --> 1:08:08.840 of New York swagger relationship with each other, and it 1:08:08.880 --> 1:08:13.240 really was fine until I had to because of the 1:08:13.320 --> 1:08:15.840 fact that he was starting to say things that were 1:08:15.960 --> 1:08:19.720 just not correct from a public health and a scientific 1:08:20.479 --> 1:08:24.120 and medical standpoint. And I was put in a very 1:08:24.160 --> 1:08:26.760 difficult position, which I did not like, but I had 1:08:26.800 --> 1:08:30.280 to do it to preserve my own integrity as well 1:08:30.280 --> 1:08:35.320 as fulfill my responsibilities to the general public. To have 1:08:35.360 --> 1:08:38.160 to contradict him in a public way when I was 1:08:38.200 --> 1:08:41.320 asked publicly, is it going to go away like magic? 1:08:41.479 --> 1:08:45.240 And does hydroxychlorican work? Which it doesn't and it can 1:08:45.280 --> 1:08:50.160 actually harm you. That's when the relationship started to fray. 1:08:50.439 --> 1:08:52.599 And even when it did start to fray, I don't 1:08:52.640 --> 1:08:56.760 think that he wanted to have conflict with me, nor 1:08:56.800 --> 1:08:58.639 did I want to have conflict within. 1:08:59.120 --> 1:09:03.240 Well of conflict for better or for worse. You've become 1:09:03.320 --> 1:09:07.320 certainly a lightning rod in the dialogue about public health 1:09:07.320 --> 1:09:10.840 and in the dialogue about COVID, and I'm wondering if 1:09:10.880 --> 1:09:16.240 you have any regrets about your time at the as 1:09:16.280 --> 1:09:22.000 the nation's top doctor in recommendations, in recommending school closures, 1:09:22.120 --> 1:09:25.000 anything like that in hindsight, given what we know. 1:09:25.000 --> 1:09:28.840 Now well, first thing, that we were dealing with a 1:09:29.000 --> 1:09:33.920 historic catastrophic pandemic that ultimately killed one point two million 1:09:34.000 --> 1:09:37.400 Americans and more than seven million and probably closer to 1:09:37.479 --> 1:09:41.760 twenty million worldwide at the time, that we had to 1:09:41.800 --> 1:09:45.840 have that physical distancing and that's slowing down it. We 1:09:45.920 --> 1:09:49.760 used to call it flattened the curve when the recommendations, 1:09:49.800 --> 1:09:52.400 and you know, most people, because I was the communicator 1:09:53.040 --> 1:09:55.759 of that, because I had been communicating with the public 1:09:55.800 --> 1:09:59.840 for four decades about outbreaks that I was communicating with 1:09:59.880 --> 1:10:04.160 the public, there was the misinterpretation, understandably that I was 1:10:04.240 --> 1:10:08.200 making all the policy about doing things like shutting down 1:10:08.720 --> 1:10:12.639 and having physical distancing. I think at the time, when 1:10:12.640 --> 1:10:15.040 you make those decisions, you do it because you want 1:10:15.040 --> 1:10:19.160 to save lives. What the perfect decisions? No, would you 1:10:19.320 --> 1:10:21.960 like to have done a better job. Of course none 1:10:22.000 --> 1:10:25.200 of us did it perfectly, But the idea about at 1:10:25.320 --> 1:10:30.080 least slowing down and closing things for a while was 1:10:30.120 --> 1:10:34.400 the right decision. With masks, with shutting down with schools, 1:10:34.720 --> 1:10:38.760 the issue that we need to re examine importantly is 1:10:38.840 --> 1:10:41.640 how long you did that? And I think that's what 1:10:41.680 --> 1:10:44.479 we need to re examine because if you look back, 1:10:44.600 --> 1:10:47.200 I was the one that said we should open the 1:10:47.200 --> 1:10:51.160 schools as quickly and safely as we possibly could, because 1:10:51.200 --> 1:10:55.280 there is collateral damage when you keep schools closed for 1:10:55.360 --> 1:10:56.439 a long period of time. 1:10:56.600 --> 1:10:59.720 I am curious what you think the next big health 1:10:59.760 --> 1:11:02.599 crime this will be the US Surgeon General is warning about, 1:11:02.680 --> 1:11:04.679 you know, or what's put a warning on social media? 1:11:04.760 --> 1:11:07.719 For example, you know we're talking about flesh eating bacteria 1:11:07.720 --> 1:11:10.120 in Japan. What do you think is the next big 1:11:10.120 --> 1:11:12.439 health crisis and are we prepared for it? 1:11:13.400 --> 1:11:17.440 Well, you know, there are health crisises that are infectious diseases, 1:11:17.479 --> 1:11:19.640 which is my lane. I still think that we have 1:11:19.760 --> 1:11:24.599 to be very careful to be prepared better and prepared 1:11:24.640 --> 1:11:28.880 to respond to the inevitability of another pandemic of an 1:11:28.960 --> 1:11:32.960 infectious diseases because history has taught us that we've had 1:11:33.040 --> 1:11:37.200 pandemics since before recorded history, and we've had it in 1:11:37.240 --> 1:11:40.519 our own lifetime with COVID and one hundred years ago 1:11:40.640 --> 1:11:44.400 we had it with the nineteen eighteen pandemic of influenzas. 1:11:44.439 --> 1:11:47.439 So my feeling is that the thing that would be 1:11:47.520 --> 1:11:51.519 most abrupt and surprising would be another pandemic. But you 1:11:51.640 --> 1:11:56.680 can't predict that because pandemics are not predictable. But there 1:11:56.680 --> 1:11:59.080 are a lot of other health crises, some of which 1:11:59.120 --> 1:12:02.280 you mentioned yourself. I mean, I think the epidemic of 1:12:02.320 --> 1:12:05.960 OBCD in this country. I think the mental health crises, 1:12:06.479 --> 1:12:11.639 the issue with fentenol and other narcotics that are killing 1:12:11.680 --> 1:12:14.000 so many people. Yeah, those are the things that we 1:12:14.040 --> 1:12:14.879 need to address. 1:12:15.120 --> 1:12:17.600 Well, doctor Fauci, I appreciate getting some time with you. 1:12:17.720 --> 1:12:20.400 Thank you so much, Doctor Anthony Fauci. His new memoir 1:12:20.479 --> 1:12:24.120 on call, A Doctor's Journey in Public Service. Not new, 1:12:24.240 --> 1:12:25.160 it's his memoir. 1:12:25.640 --> 1:12:26.840 It is just out. 1:12:28.200 --> 1:12:32.040 You're listening to the Bloomberg Business Week podcast. Listen live 1:12:32.120 --> 1:12:35.320 each weekday starting at two pm Eastern ont applecar Play 1:12:35.360 --> 1:12:38.200 and Android Auto with the Bloomberg Business app. You can 1:12:38.240 --> 1:12:41.479 also listen live on Amazon Alexa from our flagship New 1:12:41.560 --> 1:12:46.479 York station, Just say Alexa Play Bloomberg eleven thirty tim. 1:12:46.520 --> 1:12:48.880 As you know, June is Pride month, and all across 1:12:48.880 --> 1:12:51.479 the world, millions are dotting their rainbow flag to celebrate 1:12:51.520 --> 1:12:54.840 the culture of the LGBTQ plus community. 1:12:54.400 --> 1:12:56.719 And though in the US there's been plenty of progress 1:12:56.760 --> 1:12:59.720 in the pursuit of equality, justice, and inclusion, it's also 1:12:59.800 --> 1:13:04.200 been complicated time for LGBTQ Americans as companies continue to 1:13:04.200 --> 1:13:07.800 walk a tightrope with Pride out of fear of conservative backlash. 1:13:07.880 --> 1:13:12.800 Politically, there where five hundred anti LGBTQ bills introduced this year, 1:13:13.080 --> 1:13:16.400 with restrictions on gender affirming care for transgender youth being 1:13:16.439 --> 1:13:20.000 the most common. For her take on Pride's progress and 1:13:20.479 --> 1:13:23.439 setbacks is Sarah Kate ellis President and CEO of the 1:13:23.439 --> 1:13:27.200 Gay and Lesbian Alliance Against Defamation, commonly known as GLAD. 1:13:27.680 --> 1:13:30.519 It has been a roller coaster ride for the past 1:13:30.520 --> 1:13:34.439 ten years. Before I started, we were headed into and 1:13:34.560 --> 1:13:36.600 really did have the winds that are back at that 1:13:36.720 --> 1:13:40.840 point on marriage equality, and then we saw a real 1:13:40.960 --> 1:13:44.120 sharp backlash to that. What we do at GLAD is 1:13:44.160 --> 1:13:47.320 we do an annual KPI or measurement tool that we 1:13:47.400 --> 1:13:50.759 have called Accelerating Acceptance, and it's a piece of research 1:13:50.800 --> 1:13:54.760 that measures culture and society to understand how accepting or 1:13:54.800 --> 1:13:58.920 not accepting it is for LGBTQ people in America. Once 1:13:59.000 --> 1:14:02.840 we have marriage equality, we really saw a jump in 1:14:02.960 --> 1:14:06.360 acceptance in America. But then once we saw the twenty 1:14:06.439 --> 1:14:12.320 sixteen election, we saw it dip down acceptance for LGBTQ Americans, 1:14:12.520 --> 1:14:16.000 and ever since we've seen it continually dip down as 1:14:16.000 --> 1:14:20.800 opposed to increase. However, what we haven't seen change and 1:14:20.920 --> 1:14:24.200 has stayed the same, and it's incredibly powerful for the 1:14:24.240 --> 1:14:27.760 past ten years, is that over ninety percent of Americans 1:14:28.240 --> 1:14:33.920 believe in equality and acceptance for the LGBTQ community. So 1:14:34.000 --> 1:14:37.160 we haven't seen that ever flow, but we have seen 1:14:37.320 --> 1:14:40.679 culture ebb and flow over the past ten years. 1:14:40.760 --> 1:14:45.000 Sarah Kate, are you surprised that it hasn't been more linear? 1:14:45.360 --> 1:14:49.400 You know, honestly, after marriage equality, we really felt like, Wow, 1:14:49.520 --> 1:14:52.840 we're making so much progress. The wind is at our backs, 1:14:52.880 --> 1:14:58.200 like I said, so it was shocking, honestly, But when 1:14:58.200 --> 1:15:01.800 you look at change in in the trajectory and over 1:15:01.920 --> 1:15:05.200 long periods of time, it does ebb and flow. So 1:15:05.240 --> 1:15:08.680 I shouldn't have been surprised. But I really got caught up, honestly, 1:15:09.240 --> 1:15:13.439 in the power of progress that was happening at that time, 1:15:13.560 --> 1:15:17.479 and it was palpable in the culture acceptance for the 1:15:17.600 --> 1:15:21.120 LGBTQ community, and my wife and I were able to 1:15:21.120 --> 1:15:24.280 get married. Our kids were at our wedding, you know, 1:15:24.360 --> 1:15:26.840 so it was like it was really it felt so good, 1:15:26.920 --> 1:15:30.519 like felt as though we were finally making headway. And 1:15:30.560 --> 1:15:34.760 we have made tremendous headway. But we have seen a backlash. 1:15:34.320 --> 1:15:36.519 All right, So we have made headway. As you said, 1:15:36.720 --> 1:15:40.920 ninety percent of Americans acceptance of the LGBTQ community. Why 1:15:40.960 --> 1:15:45.400 are then we seeing five hundred anti LGBTQ bills introduced 1:15:45.760 --> 1:15:48.639 in twenty twenty four If there's such a high acceptance level, 1:15:48.680 --> 1:15:51.120 I mean, I think about all the political polling, there's 1:15:51.160 --> 1:15:54.880 nothing it feels like that's ninety percent, and yet there's 1:15:54.920 --> 1:15:58.320 all this anti LGBTQ bills being introduced. 1:15:58.560 --> 1:15:59.280 Why is that? 1:15:59.520 --> 1:16:03.280 Well, you know, I think it's the continued disconnect between 1:16:03.880 --> 1:16:08.920 a handful of politicians and the American will and want Right, 1:16:10.280 --> 1:16:14.519 a lot of politicians today don't actually stand up for 1:16:14.920 --> 1:16:18.920 the majority of Americans and where they see America going. 1:16:19.439 --> 1:16:24.280 So this is a handful of politicians who are vehemently 1:16:24.439 --> 1:16:30.120 anti LGBTQ, and these bills have been sweeping across America. Now, 1:16:30.479 --> 1:16:32.800 the great news is that I think out of the 1:16:32.800 --> 1:16:37.280 five hundred, thirty seven have passed, which is not a 1:16:37.320 --> 1:16:40.400 lot unless you live in that state and then it's 1:16:40.800 --> 1:16:44.519 you know, it's life changing for you. But the damage 1:16:44.560 --> 1:16:47.559 is done when they're proposed, and that's why we're seeing 1:16:47.640 --> 1:16:53.639 the backslide in acceptance because these bills are defining who 1:16:53.680 --> 1:16:57.599 we are as an LGBTQ community because they're being talked 1:16:57.600 --> 1:17:01.680 about in the news media by anti lgbt TQ politicians 1:17:02.240 --> 1:17:07.080 and they're especially targeting the transgender and gender non conforming communities, 1:17:07.439 --> 1:17:10.720 and that's super dangerous because it's a small community within 1:17:10.760 --> 1:17:13.960 our community. They don't have a big voice, and that's 1:17:14.000 --> 1:17:17.000 why so many of us in the community are using 1:17:17.080 --> 1:17:19.759 whenever we get a chance to talk about are talking 1:17:19.800 --> 1:17:22.559 about the trans and gender non conforming community because they've 1:17:22.600 --> 1:17:28.880 been politically used by anti LGBTQ political activists. 1:17:29.120 --> 1:17:29.479 Sir Kay. 1:17:29.520 --> 1:17:31.400 One thing that's been really surprising to me, and we're 1:17:31.400 --> 1:17:34.800 bloomberg so we go, you know, companies is the economics 1:17:34.840 --> 1:17:37.520 and businesses the lens that we look through so frequently 1:17:38.200 --> 1:17:42.839 is what's happened with companies that they had fully accepted 1:17:42.880 --> 1:17:46.040 the idea of selling pride merchandise. I'm talking about Target 1:17:46.160 --> 1:17:49.599 for examples. It's now walking this tightrope because of fear 1:17:49.640 --> 1:17:51.880 they could face backlash like they did last year. 1:17:51.960 --> 1:17:54.880 So there, you know, thank you for bringing this up, 1:17:54.920 --> 1:17:57.960 because I think there's a lot of false narratives around this. 1:17:59.080 --> 1:18:02.080 I want to say that that a couple of things. 1:18:02.160 --> 1:18:05.639 One is that what I've seen out of last year, Yes, 1:18:05.800 --> 1:18:09.920 bud Light and Target were targeted by a handful of 1:18:10.000 --> 1:18:15.440 anti LGBTQ activists that did an outsize social media campaign 1:18:16.000 --> 1:18:18.960 and it did cause some issues in the marketplace. And 1:18:19.040 --> 1:18:22.680 if you look at the latest Gravity research, the majority 1:18:22.760 --> 1:18:26.200 of corporate executives and Fortune five hundred leaders are not 1:18:26.439 --> 1:18:30.800 backing down from Pride, from their pride strategy or what 1:18:30.880 --> 1:18:33.479 they are doing. And this is something that we've always 1:18:33.560 --> 1:18:36.679 asked for and Target is doing. This is actually making 1:18:36.680 --> 1:18:40.000 it Pride three hundred and sixty five and not putting 1:18:40.080 --> 1:18:43.080 all their eggs in one pride basket, so to speak. 1:18:43.360 --> 1:18:46.760 Brands are really stepping up, they're not stepping down. And 1:18:46.800 --> 1:18:50.280 I'll tell you why. The reason is is because CEOs 1:18:50.840 --> 1:18:55.720 and boards know that thirty percent of gen g are 1:18:55.920 --> 1:19:00.280 LGBTQ and eighty percent our allies. And they're not just 1:19:00.479 --> 1:19:04.480 allies for the sake of allies. They are very active allies. 1:19:04.800 --> 1:19:08.920 And so the future generation of employees and of consumers 1:19:09.360 --> 1:19:14.280 are highly attuned to the LGBTQ community, and in order 1:19:14.360 --> 1:19:16.960 to appeal to them, you have to stand up for 1:19:17.000 --> 1:19:21.160 the community. So we work with over two hundred brands 1:19:21.200 --> 1:19:24.000 at GLAD and none of them have been backing down. 1:19:25.000 --> 1:19:27.680 So I think that there was a lot of headlines 1:19:28.080 --> 1:19:31.599 at that moment in time, but nobody really dug into 1:19:31.640 --> 1:19:34.600 the story. And when you look at the story, we 1:19:34.720 --> 1:19:37.679 haven't seen a movement from forty to five hundred companies. 1:19:37.760 --> 1:19:41.240 You have certainly played a role in media in terms 1:19:41.320 --> 1:19:45.439 of for the LGBTQ community and being aware of it. 1:19:46.400 --> 1:19:50.880 And I am curious how media has either helped or 1:19:51.000 --> 1:19:55.559 hurt in terms of acceptance and understanding by the broader public. 1:19:55.920 --> 1:19:58.400 We now refer to ourselves as a culture change because 1:19:59.280 --> 1:20:04.800 media is everywhere right and people have platforms that have 1:20:04.920 --> 1:20:09.400 never had platforms before. It's both a curse and a blessing. 1:20:10.360 --> 1:20:15.440 We've seen media really accelerate acceptance for the LGBTQ community. 1:20:15.880 --> 1:20:19.160 You know, President Biden once said that Will and Grace 1:20:19.200 --> 1:20:22.439 did more for marriage equality than anything else, And I 1:20:22.479 --> 1:20:26.240 think do you agree with that? Oh? Yeah, I mean 1:20:26.320 --> 1:20:30.280 I think in terms of when you're thinking about folks 1:20:30.320 --> 1:20:34.439 who don't know LGBTQ people and opening hearts and minds 1:20:34.479 --> 1:20:37.720 coming into your personal living At that time, it was 1:20:37.720 --> 1:20:40.280 like on TVs you didn't have phones coming into your 1:20:40.280 --> 1:20:44.719 personal living room or your personal space and laughing with 1:20:44.800 --> 1:20:49.200 you and crying with you. There's nothing that replaces that 1:20:49.680 --> 1:20:53.160 to move hearts and minds and to humanize people. And 1:20:53.200 --> 1:20:57.080 it's quite frankly, you know, we're running three ad campaigns 1:20:57.160 --> 1:21:02.519 right now, and because we understand that only thirty percent 1:21:02.560 --> 1:21:05.640 of Americans know someone who's trans, so the rest of 1:21:05.680 --> 1:21:09.080 the seventy percent of people in America are learning about 1:21:09.080 --> 1:21:14.200 transgender people through media. We have this Here we Are 1:21:14.280 --> 1:21:18.120 Now campaign, we have Protect this Kid campaign, we have 1:21:18.160 --> 1:21:21.599 all these media campaigns that we're running to introduce people 1:21:22.040 --> 1:21:25.519 in America to trans folks and humanize them. 1:21:25.680 --> 1:21:28.559 Yeah, and I do wonder how that impacts, certainly the 1:21:28.600 --> 1:21:31.719 world more broadly, that if you have that experience, you're 1:21:31.720 --> 1:21:33.599 more accepting versus maybe if you don't. 1:21:33.600 --> 1:21:35.400 I don't know, well, Sarah, Sarah Kate. That actually brings 1:21:35.479 --> 1:21:37.120 up a good point, and it's the idea that this 1:21:37.200 --> 1:21:39.479 is we're not talking about a monolith here and I'm 1:21:39.520 --> 1:21:42.920 wondering if what we're seeing right now in terms of 1:21:43.000 --> 1:21:45.479 what we were describing earlier, with the path to progress 1:21:45.560 --> 1:21:48.880 not being linear, are we seeing more resistance to the 1:21:48.960 --> 1:21:55.479 trans part of LGBTQ right now than the lesbian and 1:21:55.560 --> 1:21:56.519 gay part of it. 1:21:56.960 --> 1:22:02.200 I would say categorically yes, and that because ninety percent 1:22:02.240 --> 1:22:05.000 of Americans say they know someone who's lesbian or gay, 1:22:05.320 --> 1:22:08.919 and only thirty percent. As I said, more Americans report 1:22:09.360 --> 1:22:12.519 seeing a ghost than knowing a trans person. So I 1:22:12.640 --> 1:22:16.400 do think that because people don't know trans people that 1:22:16.479 --> 1:22:21.800 they are being targeted, and they're definitely being targeted by politicians. 1:22:22.320 --> 1:22:25.920 Most of those five hundred anti LGBTQ bills that you 1:22:26.000 --> 1:22:30.120 spoke of earlier are targeting the trans community, and for 1:22:30.160 --> 1:22:33.479 no good reason. Trans people have always been here. They 1:22:33.520 --> 1:22:37.800 have gained more visibility than ever before the trans community, 1:22:38.080 --> 1:22:42.760 and with that visibility comes fear because people don't know 1:22:42.800 --> 1:22:46.320 who they are. They're trying to understand. But once you 1:22:46.560 --> 1:22:50.439 know someone, it's really once you know someone's story, once 1:22:50.479 --> 1:22:52.760 you meet somebody, it's really hard to hate them. 1:22:53.120 --> 1:22:56.080 How do you think about the investment universe, our world 1:22:56.439 --> 1:22:59.439 that we talk about so much money. Money can bring 1:22:59.439 --> 1:23:02.960 attention to something can move the needles on things. The 1:23:03.000 --> 1:23:05.840 investing world can too, So I just I'm curious how 1:23:05.880 --> 1:23:08.840 you think about that, if there's something to connect there 1:23:09.120 --> 1:23:09.320 or not. 1:23:09.840 --> 1:23:13.639 Well, you know, I think about our disposable income right 1:23:13.760 --> 1:23:17.120 as a community is I think one point one trillion, 1:23:17.560 --> 1:23:22.200 And I think about companies understand you know a lot 1:23:22.240 --> 1:23:24.040 of times it used to be called the pink dollar. 1:23:24.680 --> 1:23:29.400 I think companies understand that there is a lot of 1:23:30.320 --> 1:23:36.040 opportunity with the LGBTQ community on every level in investment, 1:23:36.280 --> 1:23:40.040 in consumer goods, in all of it. And so I 1:23:40.080 --> 1:23:44.240 think that helps our community along the way because from 1:23:44.439 --> 1:23:47.759 early on it's been our community has been positioned mainly 1:23:47.800 --> 1:23:50.519 because the people at the forefront of our community that 1:23:50.720 --> 1:23:55.320 had their platforms were gay, white men, and they could 1:23:56.240 --> 1:24:00.800 oftentimes hide who they were in the workplace rise into 1:24:00.880 --> 1:24:04.920 great positions that enabled them to have quite a bit 1:24:04.920 --> 1:24:07.960 of income. And that has been very helpful for our 1:24:07.960 --> 1:24:14.040 community in building our economic power and political power. 1:24:14.400 --> 1:24:16.880 What's the conversation you and I are having with Carol 1:24:17.320 --> 1:24:18.120 five years from now. 1:24:18.360 --> 1:24:21.760 I think we're going to see great acceptance. We're going 1:24:21.800 --> 1:24:25.040 to see seventy percent of Americans know someone who's trans 1:24:25.160 --> 1:24:28.560 versus thirty percent, and we're going to have a more accepting, 1:24:28.720 --> 1:24:32.400 kinder society. I know we have to get there, and 1:24:32.479 --> 1:24:34.240 I know that we're in a little bit of a 1:24:34.320 --> 1:24:36.719 culture war now, but I think on the other side 1:24:36.720 --> 1:24:41.040 of it, we're all about moving forward, building, dreaming, and 1:24:41.080 --> 1:24:42.520 that is about tomorrow. 1:24:42.960 --> 1:24:45.599 You know, it's funny that I didn't hear people introduce 1:24:45.640 --> 1:24:47.799 themselves with pronouns until I went to my little brother's 1:24:47.840 --> 1:24:51.679 college graduation to show and you know, I'm forty. Yeah, 1:24:52.040 --> 1:24:54.640 wasn't done when we were in when I was in college, Like, 1:24:54.800 --> 1:24:55.840 things have changed quickly. 1:24:56.040 --> 1:24:58.720 Yeah, there's been a lot that has actually happened. I 1:24:58.760 --> 1:25:01.000 feel like in the last couple of years you left 1:25:01.960 --> 1:25:04.160 us with some hope heading you to the weekend. And 1:25:04.200 --> 1:25:07.040 I really really appreciate that. I think our audience does too. 1:25:07.280 --> 1:25:09.960 Sarah Kate, thank you so much. Really appreciate it. Sara 1:25:10.000 --> 1:25:12.920 Kate Ellis, she's Brosident and chief executive officer of GLAD 1:25:13.000 --> 1:25:17.840 joining us here in New York City. Yeah, I love that. Right, 1:25:18.040 --> 1:25:20.200 change do us happen? Right, And if you think about it, 1:25:20.240 --> 1:25:22.479 right the pronouns was a great example of right. We 1:25:22.479 --> 1:25:23.120 weren't talking about. 1:25:23.120 --> 1:25:24.920 It wasn't even on my It wasn't even on my radar. 1:25:24.960 --> 1:25:26.520 I should say, all right, everybody. 1:25:26.200 --> 1:25:28.320 You are listening and watching Bloomberg Business Week in this 1:25:28.400 --> 1:25:29.000 is Bloomberg. 1:25:30.400 --> 1:25:35.040 This is the Bloomberg Business Week podcast. I'll available on Apple, Spotify, 1:25:35.200 --> 1:25:38.400 and anywhere else you can get your podcasts. Listen live 1:25:38.479 --> 1:25:41.880 weekday afternoons from two to five pm Eastern on Bloomberg 1:25:41.920 --> 1:25:45.280 dot com, the iHeartRadio app, tune In, and the Bloomberg 1:25:45.320 --> 1:25:48.200 Business App. You can also watch us live every weekday 1:25:48.200 --> 1:25:51.360 on YouTube and always on the Bloomberg Journey alone