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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Joining us right now is Daval.

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Speaker 3: Patrick is the former governor of Massachusetts and now a

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Speaker 3: senior advisor at the private investment firm the Vistria Group.

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Speaker 3: It's also co director of the Center for Public Leadership

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Speaker 3: at the Harvard Kennedy School.

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Speaker 2: Daval, great to have you.

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Speaker 3: Here, and I want to kind of pick up absolutely,

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Speaker 3: and I want to pick up where we left off

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Speaker 3: with our last guest, Mark Lipscholtz. Of course a pioneer

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Speaker 3: in the private credit space. You have a long history

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Speaker 3: in the investment space, particularly on the private equity side,

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Speaker 3: and now of course in your role at the Vistria Group. Here,

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Speaker 3: how is business right now?

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Speaker 2: Business is good.

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Speaker 4: You know, we are facing some of the same challenges

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Speaker 4: everyone else is. But because we take a view of

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Speaker 4: long term value, which is, you know, how do you

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Speaker 4: build an economy company by company that is good not

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Speaker 4: just for shareholders as cordon as that is, but also

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Speaker 4: for employees, for members of the community, for the environment.

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Speaker 4: And I think that shift in thinking about capitalism as

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Speaker 4: being more inclusive is exactly what the vistory of Group

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Speaker 4: is about. And frankly, where lots of our trends are pointing.

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Speaker 4: So from that perspective, I think our prospects are very

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Speaker 4: very good.

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Speaker 3: Well, can you give us some specific examples of potential

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Speaker 3: investment opportunities with the idea of inclusive capitalism, the idea

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Speaker 3: of making an impact, because I'm sure as you know, Devaul,

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Speaker 3: and we've come a long way over the last four

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Speaker 3: years where everybody seemed to be talking about or reimagining

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Speaker 3: of capitalism, to today where we have this huge pushback

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Speaker 3: where now everyone just wants to keep their head down

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Speaker 3: and not say anything.

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Speaker 2: Well, I don't know how huge it is.

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Speaker 4: It may be a few leaders who are trying to

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Speaker 4: keep their heads down, but it takes some courage really

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Speaker 4: to lead us to the next place. And frankly, there

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Speaker 4: are a lot of secular trends, especially from young people,

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Speaker 4: who are insisting that capitalism cannot be just about a

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Speaker 4: few winners and everyone else being losers. That we have

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Speaker 4: to have a way of thinking about value that includes

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Speaker 4: the interests of all of those affected. And frankly, what

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Speaker 4: we have seen in our own investment here is that

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Speaker 4: there's a premium to be harvested.

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Speaker 2: For that for everybody.

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Speaker 4: So we're investing in some sectors that are inherently impactful.

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Speaker 4: That is healthcare for example, knowledge and learning or education generally,

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Speaker 4: financial services, the kinds of things that are fundamental for

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Speaker 4: people being able to lift themselves and their families into

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Speaker 4: the middle class and to sustain themselves there. And we

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Speaker 4: are measuring both financial return and the ways in which

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Speaker 4: we can drive that, and they very much connected social

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Speaker 4: or environmental impact. And we've been able to deliver both

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Speaker 4: the superior returns and measurable, meaningful and lasting impact. I

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Speaker 4: think that's exactly what capitalism ought to be and can be.

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Speaker 1: Same time, healthcare plus private equity have equaled a lot

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Speaker 1: of negative headlines in recent years.

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Speaker 2: And we've seen we've been following that yet.

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Speaker 1: Yeah, and we've seen regulators take a closer look into

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Speaker 1: this sector and the involvement of private equity firms. What

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Speaker 1: kind of level of screening. What's your sense of regulators

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Speaker 1: devoting resources into looking into private markets and their investments

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Speaker 1: in this space since this is a space you are

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Speaker 1: pretty active.

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Speaker 4: In, so Scarlet, the first thing I want to say

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Speaker 4: is I want to acknowledge that the regulators and others

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Speaker 4: who are policy bakers have reason to be concerned about

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Speaker 4: what's going on in healthcare. Not all of that is

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Speaker 4: attributable to or because of private equity. We have a

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Speaker 4: really fractured, overly complicated healthcare system that is often about

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Speaker 4: sick care and that healthcare.

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Speaker 2: So I want to make that point first of all.

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Speaker 4: Secondly, I think there are a number of proposals we've

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Speaker 4: seen out there, including ones from the federal government, on

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Speaker 4: a set of principles around health private equity and it's

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Speaker 4: involvement in healthcare that frankly, we've been doing already and

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Speaker 4: seem to make sense to us.

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Speaker 2: We're taking a closer look at them.

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Speaker 4: We're scrutinizing those and other proposals against our own set

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Speaker 4: of our own playbook, if you will, with respect to

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Speaker 4: how we invest in, why we invest in, what our

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Speaker 4: expectations are of the companies that we invest in in

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Speaker 4: terms of building them from where they are today to

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Speaker 4: where they need to be. But that is what inclusive

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Speaker 4: capitalism is or ought to be about. I think the

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Speaker 4: best and most effective regulation is not no regulation. It

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Speaker 4: is regulation that is working alongside those of us who

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Speaker 4: are trying to do the right thing and those of

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Speaker 4: who are affected by what we're trying to do to

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Speaker 4: make sure we get things in the right balance.

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Speaker 3: You know, Deval, given all that you said, and I

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Speaker 3: don't mean to put you on the spot here, but

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Speaker 3: I do want to get your thoughts on the passing

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Speaker 3: recently of someone that I know you were close to

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Speaker 3: and that a lot of us really followed in this space.

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Speaker 3: And that's the passing on Christopher Adley. I mean, he

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Speaker 3: really sort of espouse for years, for decades, really the

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Speaker 3: idea of how to create a more inclusive economy, a

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Speaker 3: more inclusive society here and I kind of wonder, and

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Speaker 3: forgive me that this is the wrong question, but where

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Speaker 3: are those thought leaders today? Where is that leadership today

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Speaker 3: coming from to sort of push us forward?

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Speaker 4: You know, first of all, Chris was a teacher and

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Speaker 4: a friend and a colleague of mine. And my heart

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Speaker 4: goes out to his family and to his professional family,

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Speaker 4: which is huge because we're all feeling that loss.

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Speaker 2: He believed, as I do, that we oughtn't have.

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Speaker 4: You know, we should be thinking about how to improve

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Speaker 4: our society from the perspective of one sector alone. Right,

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Speaker 4: It's not going to be government alone that solves the

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Speaker 4: big challenges that face humankind. And I say that as

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Speaker 4: someone who was a policymaker and believes in the role

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Speaker 4: of government. It's not going to be the not for

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Speaker 4: profit sector alone. It's going to take all of us,

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Speaker 4: including the business and commercial sector, and so taking that

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Speaker 4: broader view about how we include and are conscious of

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Speaker 4: and manage around all of the interests that are affected

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Speaker 4: by business and by our commercial interests is critical, and

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Speaker 4: it is how we will actually solve problems. It's been

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Speaker 4: a false choice for a long time that you had

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Speaker 4: to trade return for impact, that business could just do

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Speaker 4: what it did and only should do what it did

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Speaker 4: to deliver financial return for owners, and the consequences of

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Speaker 4: that would fall on government or the not for profit sector,

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Speaker 4: by the way, all of which we all also pay

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Speaker 4: for today. The scope and scale of our challenges as such,

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Speaker 4: it's going to take all sectors pulling in the same direction.

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Speaker 4: And that's what inclusive caplism is about. Chris was right

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Speaker 4: about it in his time. I think there are many

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Speaker 4: many of us, including the as yet undiscovered young people,

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Speaker 4: who have been forcing these questions, sometimes in very different

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Speaker 4: language that we have to learn to listen to as well.

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Speaker 1: All right, Daval, we really appreciate your joining us to day.

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Speaker 1: Daval Patrick is the former governor of Massachusetts, and of course,

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Speaker 1: he is the current co director of the Harvard County

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Speaker 1: School of Central for Public Leadership and the senior advisor

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Speaker 1: of the Vistria Group.