Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Joining us right now is Daval.
Speaker 3: Patrick is the former governor of Massachusetts and now a
Speaker 3: senior advisor at the private investment firm the Vistria Group.
Speaker 3: It's also co director of the Center for Public Leadership
Speaker 3: at the Harvard Kennedy School.
Speaker 2: Daval, great to have you.
Speaker 3: Here, and I want to kind of pick up absolutely,
Speaker 3: and I want to pick up where we left off
Speaker 3: with our last guest, Mark Lipscholtz. Of course a pioneer
Speaker 3: in the private credit space. You have a long history
Speaker 3: in the investment space, particularly on the private equity side,
Speaker 3: and now of course in your role at the Vistria Group. Here,
Speaker 3: how is business right now?
Speaker 2: Business is good.
Speaker 4: You know, we are facing some of the same challenges
Speaker 4: everyone else is. But because we take a view of
Speaker 4: long term value, which is, you know, how do you
Speaker 4: build an economy company by company that is good not
Speaker 4: just for shareholders as cordon as that is, but also
Speaker 4: for employees, for members of the community, for the environment.
Speaker 4: And I think that shift in thinking about capitalism as
Speaker 4: being more inclusive is exactly what the vistory of Group
Speaker 4: is about. And frankly, where lots of our trends are pointing.
Speaker 4: So from that perspective, I think our prospects are very
Speaker 4: very good.
Speaker 3: Well, can you give us some specific examples of potential
Speaker 3: investment opportunities with the idea of inclusive capitalism, the idea
Speaker 3: of making an impact, because I'm sure as you know, Devaul,
Speaker 3: and we've come a long way over the last four
Speaker 3: years where everybody seemed to be talking about or reimagining
Speaker 3: of capitalism, to today where we have this huge pushback
Speaker 3: where now everyone just wants to keep their head down
Speaker 3: and not say anything.
Speaker 2: Well, I don't know how huge it is.
Speaker 4: It may be a few leaders who are trying to
Speaker 4: keep their heads down, but it takes some courage really
Speaker 4: to lead us to the next place. And frankly, there
Speaker 4: are a lot of secular trends, especially from young people,
Speaker 4: who are insisting that capitalism cannot be just about a
Speaker 4: few winners and everyone else being losers. That we have
Speaker 4: to have a way of thinking about value that includes
Speaker 4: the interests of all of those affected. And frankly, what
Speaker 4: we have seen in our own investment here is that
Speaker 4: there's a premium to be harvested.
Speaker 2: For that for everybody.
Speaker 4: So we're investing in some sectors that are inherently impactful.
Speaker 4: That is healthcare for example, knowledge and learning or education generally,
Speaker 4: financial services, the kinds of things that are fundamental for
Speaker 4: people being able to lift themselves and their families into
Speaker 4: the middle class and to sustain themselves there. And we
Speaker 4: are measuring both financial return and the ways in which
Speaker 4: we can drive that, and they very much connected social
Speaker 4: or environmental impact. And we've been able to deliver both
Speaker 4: the superior returns and measurable, meaningful and lasting impact. I
Speaker 4: think that's exactly what capitalism ought to be and can be.
Speaker 1: Same time, healthcare plus private equity have equaled a lot
Speaker 1: of negative headlines in recent years.
Speaker 2: And we've seen we've been following that yet.
Speaker 1: Yeah, and we've seen regulators take a closer look into
Speaker 1: this sector and the involvement of private equity firms. What
Speaker 1: kind of level of screening. What's your sense of regulators
Speaker 1: devoting resources into looking into private markets and their investments
Speaker 1: in this space since this is a space you are
Speaker 1: pretty active.
Speaker 4: In, so Scarlet, the first thing I want to say
Speaker 4: is I want to acknowledge that the regulators and others
Speaker 4: who are policy bakers have reason to be concerned about
Speaker 4: what's going on in healthcare. Not all of that is
Speaker 4: attributable to or because of private equity. We have a
Speaker 4: really fractured, overly complicated healthcare system that is often about
Speaker 4: sick care and that healthcare.
Speaker 2: So I want to make that point first of all.
Speaker 4: Secondly, I think there are a number of proposals we've
Speaker 4: seen out there, including ones from the federal government, on
Speaker 4: a set of principles around health private equity and it's
Speaker 4: involvement in healthcare that frankly, we've been doing already and
Speaker 4: seem to make sense to us.
Speaker 2: We're taking a closer look at them.
Speaker 4: We're scrutinizing those and other proposals against our own set
Speaker 4: of our own playbook, if you will, with respect to
Speaker 4: how we invest in, why we invest in, what our
Speaker 4: expectations are of the companies that we invest in in
Speaker 4: terms of building them from where they are today to
Speaker 4: where they need to be. But that is what inclusive
Speaker 4: capitalism is or ought to be about. I think the
Speaker 4: best and most effective regulation is not no regulation. It
Speaker 4: is regulation that is working alongside those of us who
Speaker 4: are trying to do the right thing and those of
Speaker 4: who are affected by what we're trying to do to
Speaker 4: make sure we get things in the right balance.
Speaker 3: You know, Deval, given all that you said, and I
Speaker 3: don't mean to put you on the spot here, but
Speaker 3: I do want to get your thoughts on the passing
Speaker 3: recently of someone that I know you were close to
Speaker 3: and that a lot of us really followed in this space.
Speaker 3: And that's the passing on Christopher Adley. I mean, he
Speaker 3: really sort of espouse for years, for decades, really the
Speaker 3: idea of how to create a more inclusive economy, a
Speaker 3: more inclusive society here and I kind of wonder, and
Speaker 3: forgive me that this is the wrong question, but where
Speaker 3: are those thought leaders today? Where is that leadership today
Speaker 3: coming from to sort of push us forward?
Speaker 4: You know, first of all, Chris was a teacher and
Speaker 4: a friend and a colleague of mine. And my heart
Speaker 4: goes out to his family and to his professional family,
Speaker 4: which is huge because we're all feeling that loss.
Speaker 2: He believed, as I do, that we oughtn't have.
Speaker 4: You know, we should be thinking about how to improve
Speaker 4: our society from the perspective of one sector alone. Right,
Speaker 4: It's not going to be government alone that solves the
Speaker 4: big challenges that face humankind. And I say that as
Speaker 4: someone who was a policymaker and believes in the role
Speaker 4: of government. It's not going to be the not for
Speaker 4: profit sector alone. It's going to take all of us,
Speaker 4: including the business and commercial sector, and so taking that
Speaker 4: broader view about how we include and are conscious of
Speaker 4: and manage around all of the interests that are affected
Speaker 4: by business and by our commercial interests is critical, and
Speaker 4: it is how we will actually solve problems. It's been
Speaker 4: a false choice for a long time that you had
Speaker 4: to trade return for impact, that business could just do
Speaker 4: what it did and only should do what it did
Speaker 4: to deliver financial return for owners, and the consequences of
Speaker 4: that would fall on government or the not for profit sector,
Speaker 4: by the way, all of which we all also pay
Speaker 4: for today. The scope and scale of our challenges as such,
Speaker 4: it's going to take all sectors pulling in the same direction.
Speaker 4: And that's what inclusive caplism is about. Chris was right
Speaker 4: about it in his time. I think there are many
Speaker 4: many of us, including the as yet undiscovered young people,
Speaker 4: who have been forcing these questions, sometimes in very different
Speaker 4: language that we have to learn to listen to as well.
Speaker 1: All right, Daval, we really appreciate your joining us to day.
Speaker 1: Daval Patrick is the former governor of Massachusetts, and of course,
Speaker 1: he is the current co director of the Harvard County
Speaker 1: School of Central for Public Leadership and the senior advisor
Speaker 1: of the Vistria Group.