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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. We had Lift earnings

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Speaker 1: last night, UM which had guidance that was subdued, UM

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Speaker 1: eclipsing the first ever profit, sort of milestone, and now

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Speaker 1: we have and the shares are down significantly, and now

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Speaker 1: we have Uber coming out after the bell tonight. So

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Speaker 1: let's bring in man deep seeing senior tech industry analysts

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Speaker 1: for Bloomberg Intelligence, to talk about, you know, what we

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Speaker 1: saw yesterday and what we expect tonight. I know that

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Speaker 1: Lift had its first profit and it's popular maybe amongst

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Speaker 1: the kids. For me, I'm doing like eighty dollars and

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Speaker 1: Uber rides a day here and I feel like they

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Speaker 1: better knock it out of the park tonight. Well, so

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Speaker 1: the good thing about you know, this space is at

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Speaker 1: least they're just two competitors. It's a duopoly Uber and Lift.

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Speaker 1: You contrast that with food delivery where you've got you know,

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Speaker 1: five or six vendors trying to compete, uh for I

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Speaker 1: would say a pretty small market at this point of time.

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Speaker 1: So the print we saw it Lift had, you know,

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Speaker 1: it was a mixed bag in the sense that the

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Speaker 1: bright spot was profitability, as we alluded to. But I

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Speaker 1: think the whole pricing aspect of it is kind of

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Speaker 1: worrisome because at the end of the day, how much

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Speaker 1: can you pass on to the customers and then it

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Speaker 1: starts to weigh on the volume growth, so especially LIFT customers.

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Speaker 1: Isn't Lift kind of a discount Uber? Isn't that the idea? No?

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Speaker 1: I I think these companies have sort of rationalized the

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Speaker 1: pricing so they're not trying to compete on prices or

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Speaker 1: undercut each other. It's and and that's why I mentioned

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Speaker 1: about a police So the good thing is you can

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Speaker 1: have you know, two competitors, one with sixty percent share,

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Speaker 1: the other one with and still both can do well.

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Speaker 1: But to your point about the food delivery space being

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Speaker 1: more crowded, Uber's in that too. It has Uber Eats,

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Speaker 1: and I wonder, you know if Lift it's kind of

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Speaker 1: like correlated with the reopening in a positive way, and

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Speaker 1: right demand going up, is that going to be bad

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Speaker 1: for Uber because Uber eats demand maybe going down? Yes,

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Speaker 1: Uber definitely has a tougher comp when it comes to

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Speaker 1: food delivery, and you're not gonna see that sort of

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Speaker 1: growth which we saw during the pandemic. So if will

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Speaker 1: offset there, you know the pickup in ride sharing, and

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Speaker 1: that's why they are now kind of doubling down in

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Speaker 1: the freight space with this recent acquisition of Transplace. So

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Speaker 1: in my mind, Uber wants to be that diversified player,

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Speaker 1: the scale player. But there aren't many revenue synergies between

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Speaker 1: these businesses, Like their synergy between ride sharing and food

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Speaker 1: delivery is minimal. Like these are both commodity services. You know,

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Speaker 1: user still gravitate towards the Lewis price options. So I

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Speaker 1: just feel Uber has a tougher kind of task in

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Speaker 1: terms of convincing investors that yes, the three businesses make

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Speaker 1: sense under one umbrella, and you know there will be

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Speaker 1: more profitable as a result of that. But we'll see.

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Speaker 1: What is who takes lift rather than Uber? I take

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Speaker 1: it because my credit card gives me ten times points

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Speaker 1: on Lift. But that's basically my only rational Is there

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Speaker 1: a lift black. Can you are you going to be

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Speaker 1: able to get into an escalate or whatever with the

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Speaker 1: lift or is lift because I've always thought lit was

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Speaker 1: just like some dude's regular car, so I'm gonna go

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Speaker 1: out and get in somebody's Corolla. Rather, they have tiered pricing,

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Speaker 1: they have tiered service levels, and uh, that's the business models.

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Speaker 1: So they want, you know, users who are not that

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Speaker 1: price sensitive to pay up and for the service, and

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Speaker 1: so they are launching and that there's not a huge

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Speaker 1: differentiation to Uber when it comes to the actual core business. Yeah,

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Speaker 1: I mean they are both copying each other. Anytime one

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Speaker 1: comes up with a better feature of the other ones copies.

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Speaker 1: But again, the point is they're just two. In food,

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Speaker 1: you've gotten five or six vendors all doing the same least.

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Speaker 1: We have five or six in Berlin, you know, and

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Speaker 1: more specifically for pizza, I think it's called slice, Yes

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Speaker 1: it is. We also have a ton of different grocery services.

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Speaker 1: I don't know if you had this in New York,

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Speaker 1: but I can order groceries pretty much anything you would

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Speaker 1: get at the grocery store and have it at my

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Speaker 1: door in ten minutes time. I mean, they are super fast,

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Speaker 1: that New York is probably too trafficky for that. You

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Speaker 1: can do it in two hours, I know with Amazon

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Speaker 1: and Holdings, but yeah, I mean, it takes just kind

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Speaker 1: of a long time to get anywhere in Manhattan and

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Speaker 1: Manhattan at least, um I want to pivot from talking

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Speaker 1: about groceries and food delivery to just talking about workers

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Speaker 1: and finding drivers. It's incredibly difficult for these companies right now.

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Speaker 1: How much of a headwind does that create for Uber

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Speaker 1: and Lift going forward? Yeah, so Lift mentioned last night

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Speaker 1: they spent about you know, five million on driver incentives,

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Speaker 1: and that was a contra revenue to their top line.

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Speaker 1: I guess at the end of the day, they're all

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Speaker 1: competing for that same worker pool, so they have to

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Speaker 1: you know, shell out the incentives because these are not employees.

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Speaker 1: And I think right sharing is still a better business

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Speaker 1: from a driver's perspective. In the case of food delivery,

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Speaker 1: you're getting paid lore compared to you know, the right sharing.

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Speaker 1: So from a worker perspective, I think right sharing is cleaner.

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Speaker 1: But you put more on the line, don't you, because

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Speaker 1: you have to actually lease a car. And I remember

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Speaker 1: when Uber first started, the company was only taking ten

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Speaker 1: to fifteen percent of the fair. And then you know,

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Speaker 1: after you've got your GMC yukon denally XL and we're

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Speaker 1: paying a thousand dollar least, all of a sudden the

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Speaker 1: company said, hey, we're gonna take of your fair and

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Speaker 1: it seemed incredibly unfair to me and I wouldn't as

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Speaker 1: a driver, want to be put in that position. After

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Speaker 1: I signed a lease, all of a sudden you tell

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Speaker 1: me I'm gonna make less and less money. Yeah, so

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Speaker 1: I think you're right. They can't raise the take rates

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Speaker 1: and you will see a pushback. And there is that

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Speaker 1: regulatory aspect that obviously it's always a wild card, you know,

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Speaker 1: where you could see more regulation. But at the end

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Speaker 1: of the day, they have pulled capacity and they have

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Speaker 1: the demand and that is the value out of a marketplace.

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Speaker 1: So you know the fact that there are just two

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Speaker 1: marketplaces is good for right sharing as an industry. And

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Speaker 1: if you've said two things in the past, like minute one,

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Speaker 1: regulation and two, these aren't employees that we're talking about.

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Speaker 1: This is the gig autonomy. But that's creating some problems

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Speaker 1: for uber and lift as well. How how great is

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Speaker 1: the regulatory risk on that front? That's a big risk.

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Speaker 1: I mean with these companies, the fact that they weren't

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Speaker 1: profitable at least now they're showing profitability. And the cost

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Speaker 1: side is always kind of in focus because of the

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Speaker 1: high variable costs in this business. So anytime you have

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Speaker 1: the prospect of more regulation, it will increase costs and

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Speaker 1: that is not good for you know, sustaining the profitability.

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Speaker 1: So clearly it is a big threat. But at least,

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Speaker 1: you know, as long as they can maintain the top

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Speaker 1: line growth and with you know, economies opening up, demand

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Speaker 1: coming back, I think they should be good at least

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Speaker 1: for the next one or two years. No one knows

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Speaker 1: the kind of the growth rate three or four years

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Speaker 1: down the line. I think the business models will evolve.

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Speaker 1: I noticed the other day I wrote down I took

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Speaker 1: the subway down to Grand Central station as I was

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Speaker 1: heading out to Bronxfie to look at houses, and it

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Speaker 1: was empty. There was almost nobody on the subway. It

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Speaker 1: was unbelievable. On the four or five six here usually

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Speaker 1: it's packed. Yes, so they have taken share from a

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Speaker 1: lot of the public transportation, and the use cases for

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Speaker 1: these companies keep evolving. I mean, the whole aspect of

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Speaker 1: right sharing, like there isn't any sharing right now. Hopefully

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Speaker 1: at at some point it will come back. But you know,

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Speaker 1: these companies have evolved, and I think the use cases

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Speaker 1: will emerge and that should help you know, at these uh,

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Speaker 1: these companies to maintain relevance. All right. Our producer Charlie

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Speaker 1: Bulmer writs in that his seven train this week was

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Speaker 1: more packed than it's ever been, So maybe I was

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Speaker 1: just very off peak as I headed down to Grand Central.

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Speaker 1: Man Deep, thanks very much for joining us. Man Deep Sing,

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Speaker 1: senior tech industry analyst at Bloomberg Intelligence, talking to us

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Speaker 1: about Uber out after the bell. This is Bloomberg. I

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Speaker 1: am just looking forward to what we got going on

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Speaker 1: today and we have a lot. Let's bring in Jennifer

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Speaker 1: Epstein right now, political reporter from Bloomberg News. We've got

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Speaker 1: her on the line from Washington, d C. To talk. Well,

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Speaker 1: there's a lot of talk about, but I guess Jennifer.

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Speaker 1: The first issue is the Biden administration. The c d

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Speaker 1: C eviction moratorium. It looked like it was over, and

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Speaker 1: now it looks like they're extending it until October thirteenth.

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Speaker 1: Although the President himself said there's not really very strong

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Speaker 1: constitutional grounds for this Yeah, it's actually October three or

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Speaker 1: two months from yesterday, UM, when the CDC Director um

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Speaker 1: signed this order, and it's trying to be a bit

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Speaker 1: more narrow and really focused on the rise of the

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Speaker 1: delta variant, and what the CDC Director says is the

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Speaker 1: public health threat that comes with people potentially being evicted

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Speaker 1: from their homes and then you know, ending up in

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Speaker 1: shelters or on the streets, um, where there could potentially

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Speaker 1: be more spread of the virus and you might see

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Speaker 1: in if people were living in their own homes. But

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Speaker 1: why do they care enough today and not like Saturday? Like,

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Speaker 1: why not deal with this before? Yeah, well, it certainly

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Speaker 1: seems like this did come up as a bit of

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Speaker 1: a surprise for the administration. As much as they had

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Speaker 1: known the deadline was coming, they were also very focused

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Speaker 1: on on the infrastructure bill, and you know, it's really

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Speaker 1: they seem to have also been caught a bit by

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Speaker 1: surprise by the very rapid spread of the delta variant

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Speaker 1: and all of that sort of created this pressure. And

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Speaker 1: then at the same time time you had these uh

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Speaker 1: small group of House Democrats really backed by the entirety

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Speaker 1: of the House Democratic Caucus saying uh in the last

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Speaker 1: few days at the end of last week. This is

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Speaker 1: something that has to be done. You have to help

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Speaker 1: these people out, um, you know. And so the administration

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Speaker 1: found a way to do it. It just took them

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Speaker 1: a bit longer than I think that advocates and and

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Speaker 1: other outside people would have liked to have seen. And

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Speaker 1: it may not be constitutional. I mean, we can always

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Speaker 1: find way to do things. If it's not constitutional. It's

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Speaker 1: just really not helpful, is it. Yeah. Well, the President

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Speaker 1: I think is somebody who was very cautious about those things.

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Speaker 1: And that's sort of why he was reluctant to just

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Speaker 1: go out and announce an extension last week. Uh and

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Speaker 1: kind of back in the Supreme Court, uh to it,

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Speaker 1: you know. And and he he doesn't, you know, always

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Speaker 1: have the best filter for things, and so he kind

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Speaker 1: of said that yesterday that this is something that might

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Speaker 1: not pass muster in the courts, but it's something that

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Speaker 1: the administration kind of had no choice politically but to

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Speaker 1: try out. At the very least, they've bought a little

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Speaker 1: bit of time, a couple of days, a couple of

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Speaker 1: weeks while this works its way uh in court. And

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Speaker 1: and and the other issue here is really that the

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Speaker 1: Treasury Department's efforts to get out over forty billion dollars

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Speaker 1: in rental aid have been uh pretty slow so far

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Speaker 1: because it's something where treasurism worth working with state and

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Speaker 1: local governments, and that has all just taken a lot

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Speaker 1: of time to get up and running. This money from

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Speaker 1: the Recovery Act that passed in March, and they were

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Speaker 1: only able to get one point five billion of that

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Speaker 1: out uh two renters in the month of June. So

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Speaker 1: you know, they're hoping that that rationale that that's taken

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Speaker 1: so long, which is something uh that Justice Kavanaugh did

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Speaker 1: Court uh weighing in on this. He was not actually

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Speaker 1: a part of the the um major the majority ruling

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Speaker 1: on this, but uh that that is something that that

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Speaker 1: they are hoping that that maybe they can kind of

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Speaker 1: thread the legal legal argument there and have that uh

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Speaker 1: way of getting ahead of so speaking of legal arguments

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Speaker 1: and what a president does or does not have power

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Speaker 1: to do, obviously, at the end of the day, this

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Speaker 1: issue comes back to the pandemic. That is why there

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Speaker 1: are millions of people facing the potential loss of their home.

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Speaker 1: Is there anything else that President Biden has it in

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Speaker 1: his power to do. In terms of the vaccination front, Yes,

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Speaker 1: he's finally mandated that that federal workers need to get

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Speaker 1: vaccinated or be tested all the time. But is there

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Speaker 1: anything else? Yeah, I think the administration is continuing to

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Speaker 1: look for more things to do. Um. They're looking for

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Speaker 1: other areas of the federal government besides sort of the

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Speaker 1: executive branch employees um who are covered by by the

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Speaker 1: order last week, to uh, potentially more public health kind

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Speaker 1: of workers who are not necessarily a part of that

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Speaker 1: initial order. I think the administration is also uh just

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Speaker 1: looking at at the the approval process for the vaccines.

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Speaker 1: You know, it seems like, uh we saw Dr Fauci

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Speaker 1: last night saying that could be just two weeks away

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Speaker 1: from fives or getting final approval um with with the

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Speaker 1: sd A. And that's something where um, the administrative the

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Speaker 1: White House is going to stay out of that because

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Speaker 1: they don't want there to be any appearance of of

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Speaker 1: political pressure on these public health agencies. UM. But that itself,

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Speaker 1: I think would would be a pretty significant move forward

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Speaker 1: because there are lots of people at least right now

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Speaker 1: who are saying, I don't want to do anything until

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Speaker 1: that A fully approves it, so that in of itself

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Speaker 1: could be a pretty big um move forward. And then UM,

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Speaker 1: you know, I think I think the administration is just

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Speaker 1: gonna kind of the for any little uh, you know,

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Speaker 1: pocket of people it can get to, uh to try

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Speaker 1: to to try to get more people back to native Jennifer,

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Speaker 1: thanks for spending some time with us. Jennifer Epstein is

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Speaker 1: Bloomberg News political reporter coming to us out of Washington,

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Speaker 1: d C. Now, there has been a ton of M

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Speaker 1: and A activity today alone. Um, we saw a big

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Speaker 1: uh deal in the telecom space with Apollo. We saw

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Speaker 1: UM a big deal in soccer La Liga. Ten percent

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Speaker 1: of that I went to CVC. Um we saw a

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Speaker 1: huge like a seventeen billion dollar deal. What was that?

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Speaker 1: We saw um VC no VC properties buying MGM Growth

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Speaker 1: Properties seventeen point two billion dollars. And but you were

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Speaker 1: pointing out Square and after pay started the week off

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Speaker 1: with a bang on Monday, the biggest acquisition ever for

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Speaker 1: an Australian company twenty nine billion dollars. And I think

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Speaker 1: since the beginning of July you said more than like

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Speaker 1: five billion, fifty billion dollars and deals have been done,

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Speaker 1: so it's a great time to bring in uh Thad Malik.

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Speaker 1: He is the chair of Global Mergers and Acquisitions, the

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Speaker 1: practice Global Mergence Acquisition Practice at Paul Hastings and he

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Speaker 1: can talk to us about you know, this this incredible

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Speaker 1: growth that thanks for joining us. Um Is this peaking now?

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Speaker 1: Is this going to slow down? Or are we just

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Speaker 1: gonna look at you know, record M and A activity

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Speaker 1: this year? Yeah? Thanks Matt and Kaylee. Nice to be here.

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Speaker 1: Appreciate the opportunity right now. It's interesting, you've got pretty

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Speaker 1: much the perfect confluence of events for continued activity. You

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Speaker 1: alluded to some of it earlier in terms of rate reviews,

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Speaker 1: in terms of what people are seeing in terms of rates,

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Speaker 1: but more importantly, markets don't really like uncertainty when it

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Speaker 1: comes to M and A and so with some of

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Speaker 1: the pandemic challenges waning and with the vaccinations increasing, that's

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Speaker 1: gotten people a little less uncomfortable about what's coming down

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Speaker 1: the road. And it's pretty much the perfect influence of

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Speaker 1: a ends. I think you're going to start to see

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Speaker 1: a little bit of a shift and you're starting to

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Speaker 1: see this on the anti trust side, Folks are starting

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Speaker 1: to focus a little bit more than they have in

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Speaker 1: the past, And just yesterday the FTC indicated that the

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Speaker 1: crush of deals is so large that they're not able

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Speaker 1: to get through their review in thirty days for some deals,

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Speaker 1: and so that puts people in a little bit of limbo.

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Speaker 1: But for now, I'd say we have a wary eye

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Speaker 1: trained on horizon. But things are still trending positive. But

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Speaker 1: it's not even just that the deal approval process could

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Speaker 1: be slow. The Biden administration has signaled that it wants

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Speaker 1: to be a lot tougher on competition in general. How

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Speaker 1: how much of a headwind is that to the M

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Speaker 1: and A market. I think it's going to be a

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Speaker 1: particular headwind for those that are in industries that they

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Speaker 1: fixed their sights on. The regulators tend to follow a

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Speaker 1: pretty well worn path. They try to communicate a little

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Speaker 1: bit of where they're they're coming, and you see some

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Speaker 1: of that in his executive order, and particularly for the

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Speaker 1: large tech companies and those that are perceived to have

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Speaker 1: large market presence. I think that scrutiny is going to continue,

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Speaker 1: and I think you can add on top of that

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Speaker 1: prank like some of what you're seeing in terms of

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Speaker 1: the sciffiest review, the foreign review of key industries and

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Speaker 1: deals in that space. So I think that is going

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Speaker 1: to be a continuing challenge right now, that's probably the

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Speaker 1: biggest potential disruptor that folks are looking at, but more

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Speaker 1: could be coming. Well. Taxes is the other right um,

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Speaker 1: at least, I'm not sure which way that pushes things,

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Speaker 1: because we've seen a number of deals already, some very

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Speaker 1: big deals due to the fact that private ownership saw

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Speaker 1: maybe a jump in capital gains coming and wanted to

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Speaker 1: get out ahead of it. Absolutely, and one of the

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Speaker 1: things that they've learned, I mean in the past when

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Speaker 1: this has happening, in particular for the private equity sponsors,

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Speaker 1: there's been a surge of activity to try to beet

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Speaker 1: the increase. And one of the issues that they've been

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Speaker 1: discussing is whether they make that sort of retroactive so

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Speaker 1: to a certain extent that's got people a little I

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Speaker 1: don't want to say destabilized, but again cautious about what

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Speaker 1: they're looking at. So in particular for the sponsors, that

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Speaker 1: becomes a very pressing concern. What's the hottest industry right

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Speaker 1: now for murger activity? Basically anything technology related, whether you

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Speaker 1: call it digitization or digitalization, however you refer to it.

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Speaker 1: People are recognizing, particularly with the work from home dynamics,

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Speaker 1: that they need to upgrade their systems and capabilities and

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Speaker 1: anything related to technology, whether that's improving your supply chain,

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Speaker 1: whether that's improving your metrics, finding new ways of generating

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Speaker 1: revenue from data that your your products push off, anything

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Speaker 1: that's related to that. There's a recognition that you need

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Speaker 1: to be moving forward and oftentimes buying it is cheaper

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Speaker 1: than building it and certainly faster. Does it help that

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Speaker 1: there is no interest rate risk here? I mean not

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Speaker 1: only are rates low negative to low, but they're never

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Speaker 1: going up again. Well, they the cycles tend to move

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Speaker 1: in cycles, so as some point there will be the

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Speaker 1: inevitable sort of come up and but no, certainly right now.

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Speaker 1: That's a significant driver again for the sponsors in particular

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Speaker 1: with rates being low, they can reset their expectations in

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Speaker 1: terms of deals. And there's a lot of activity right now.

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Speaker 1: I mean, there's what we're seeing on the service provider

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Speaker 1: side from the investment banks. What the FTC did, which

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Speaker 1: is basically recognize what the service providers have been seeing.

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Speaker 1: There's a lot of activity trying to get pushed through

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Speaker 1: right now as quickly as possible, because people don't want

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Speaker 1: to get caught, you know, catching the follow knife, so

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Speaker 1: to speak, when the inevitable cycle turns. All right, Dad,

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Speaker 1: thanks so much for joining us time to talk about

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Speaker 1: and it was great having you. Hopefully get you back

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Speaker 1: on soon. Daddy's Malik there is the chair of Global

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Speaker 1: Mergers and Acquisitions at Paul Hastings talking to us about

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Speaker 1: this m and a market which has just been incredible.

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Speaker 1: You know, one of the deals I forgot to mention

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Speaker 1: was Betsy Cohen did another back deal today and I

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Speaker 1: think she's done at least twelve billion dollars worth of

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Speaker 1: Financial Services Act deal. So when you bring spacks into it,

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Speaker 1: it just is an incredible market um and the growth

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Speaker 1: has been um pretty outstanding. M A go by the way,

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Speaker 1: it's one of my favorite functions on the Bloomberg terminal

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Speaker 1: and it's a great way to see. For example, you

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Speaker 1: can click on forgo for the league table and you

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Speaker 1: can see how many deals have been done year to

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Speaker 1: date or in the last month of Tetra highly recommen

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Speaker 1: using it. M A go. This is Bloomberg Now to

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Speaker 1: bringing Kate. Hello Global chief investment officer at Russell Investments

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Speaker 1: to talk a little bit about E S G investing

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Speaker 1: to us Kate, it's interesting because there are a few

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Speaker 1: different ways investors can go with E S G And

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Speaker 1: I guess it depends. Do you have to decide if

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Speaker 1: you want to UM chase returns or make a difference. Yeah.

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Speaker 1: I think it's UM the blend of financial, non financial

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Speaker 1: and regulatory drivers that are making people kind of go

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Speaker 1: in one direction versus another. Yeah. I think increasingly the

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Speaker 1: ability to kind of prove out that you leading in

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Speaker 1: certain directions you can have a positive or at least

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Speaker 1: not a negative impact on returns UM will start to

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Speaker 1: kind of play through UM. But I do think there,

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Speaker 1: you know, your needs to be kind of that balanced

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Speaker 1: focus of that primary objective. What is it? Is it

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Speaker 1: about having the impact or is it about returns just

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Speaker 1: so you can calibrate how much you go in one

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Speaker 1: direction versus the other? Do we have enough data to

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Speaker 1: make E S G investments? I feel like a lot

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Speaker 1: of this stuff has been pretty opaque. But is that changing? Yeah, Yeah,

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Speaker 1: I think it's a great question. UM. And I think

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Speaker 1: particularly on the climate side, the data availability and some

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Speaker 1: of the approaches for kind of testing the impact of

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Speaker 1: climate on different sectors or different types of metrics is

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Speaker 1: getting a lot better and it's accelerating really quickly, and

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Speaker 1: so I think a big area you know, needs to

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Speaker 1: be to really stift through those different data options, test out,

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Speaker 1: you know, the impact it's having on asset pricing, because

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Speaker 1: we might not see that for quite some time, but

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Speaker 1: you can kind of scenario kind of test your way

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Speaker 1: into different paths that you know it could take. But

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Speaker 1: the data is starting to know much better quickly, particularly

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Speaker 1: on the climate side. Before we get it deeper there,

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Speaker 1: I want to understand outsourced ce io UM investment solutions.

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Speaker 1: What exactly is that? Yeah, so it's largely defined benefit

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Speaker 1: plans and diamonds and foundations and hospital the systems that

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Speaker 1: are looking to outsource their investment program. In most cases

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Speaker 1: it's because they, you know, want to focus on their

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Speaker 1: core competencies, maybe want to up there with mandrink game

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Speaker 1: and or just have a partner to help navigate the

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Speaker 1: market and the in terms of actually what we do

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Speaker 1: or what the O G I oh kind of universe says,

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Speaker 1: it's it's really about delivering a total solution that's customized

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Speaker 1: to particular outcomes, and so it's not just stout being

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Speaker 1: a benchmark. The often it's focused on like the fundergradition

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Speaker 1: for a pension or particular income needs. You know that

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Speaker 1: in endowment is listening to achieve or volatility requirement, and

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Speaker 1: so you're having some flexibility and how you try to

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Speaker 1: solve those problems. It's part of that kind of O

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Speaker 1: C I O solution. How do you approach investing with

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Speaker 1: climate specifically in mind, especially considering the green spending we're

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Speaker 1: getting out of the bipart as an infrastructure plan as

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Speaker 1: well as the Democratic only plan that will likely be

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Speaker 1: pushed through before or after at some point, how do

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Speaker 1: you how do you think about what may benefit the most? Yeah,

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Speaker 1: and I think you still need to take a fairly

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Speaker 1: long term view on how this is going to impact

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Speaker 1: capitalication and um and returns and asset pricing. But as

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Speaker 1: you start to see some of these policies, you know,

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Speaker 1: kind of shifts an actual spending linked to it, it

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00:23:55,680 --> 00:23:58,119
Speaker 1: does make it easier to start to think through the

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Speaker 1: winners and losers, you know, with some of the bills

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00:24:01,000 --> 00:24:03,480
Speaker 1: that are coming through at least in the U S side,

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00:24:03,920 --> 00:24:06,399
Speaker 1: infrastructure spin and things like that that might mean a

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Speaker 1: little bit more E. S G. Just helps them think

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Speaker 1: about how you might want to allocate and where there's

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00:24:10,840 --> 00:24:15,360
Speaker 1: that tackle allocation element is is starting to be decided. Um,

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Speaker 1: But you know, I think that there's like there's just

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Speaker 1: small pieces to hind the earlier point. All of this

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00:24:19,600 --> 00:24:22,800
Speaker 1: is still early stages, and so you know, you still

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00:24:22,840 --> 00:24:26,639
Speaker 1: need to maintain diversification in terms of how you're approaching

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Speaker 1: you know, toping the portfolio, because it's not clear on

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00:24:29,960 --> 00:24:31,760
Speaker 1: kind of where this is going, and so having the

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00:24:31,760 --> 00:24:33,800
Speaker 1: frameworks and the and the tools to really kind of

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Speaker 1: understand the impact and be able to measure it. I

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00:24:35,560 --> 00:24:37,760
Speaker 1: think it's gonna be really important along the way speaking

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Speaker 1: of diversification, diversity and inclusion. I mean the idea intuitively

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00:24:42,800 --> 00:24:45,320
Speaker 1: makes sense to me. Um. I was once talking to

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Speaker 1: Mindy Grossman, who used to be the only woman on

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Speaker 1: the board at Nike, and they apparently in a giant

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00:24:51,040 --> 00:24:53,119
Speaker 1: board meeting all turned to her and asked, how can

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00:24:53,160 --> 00:24:56,760
Speaker 1: we sell more shoes to women? And the obvious answer is, duh,

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00:24:57,040 --> 00:24:59,399
Speaker 1: you need to have more women on the board. Um.

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00:24:59,480 --> 00:25:02,359
Speaker 1: And and that's you know, I think it makes makes

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00:25:02,359 --> 00:25:05,719
Speaker 1: sense just innately, but um, do we have enough data

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00:25:05,800 --> 00:25:09,840
Speaker 1: in in asset management that shows how important diversity is

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Speaker 1: in returns. Yeah, there has been a good amount of

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Speaker 1: work done both in terms of your boards, but also

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00:25:17,160 --> 00:25:20,560
Speaker 1: like investors and where you get um whether it's you know,

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Speaker 1: gender related or other forms of diversity. You know, more

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00:25:23,640 --> 00:25:27,440
Speaker 1: kind of balanced and consistent returns um when you actually

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00:25:27,440 --> 00:25:30,720
Speaker 1: have more balanced and perspectives. And so I think that

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00:25:30,800 --> 00:25:33,600
Speaker 1: they're you know, still your consistently work that needs to

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00:25:33,600 --> 00:25:35,520
Speaker 1: be done to prove that out. But you know, you

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00:25:35,600 --> 00:25:37,840
Speaker 1: even see, you know, there's there's some work that's been

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Speaker 1: done multiple times. DA saying that women tend to be

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00:25:41,040 --> 00:25:43,560
Speaker 1: a little bit less action oriented in a good way.

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00:25:43,680 --> 00:25:46,199
Speaker 1: I they don't feel the need to overtrade the portfolio

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00:25:46,600 --> 00:25:48,720
Speaker 1: and try to your stick to the thesis and stick

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Speaker 1: to the end of the view that they have and

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00:25:51,200 --> 00:25:53,800
Speaker 1: more carefully think about making sifts. And so I do

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Speaker 1: think that their support in the asset management worlds for

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00:25:56,680 --> 00:25:59,040
Speaker 1: having that kind of diverse idea and actually impacting and

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00:25:59,040 --> 00:26:02,880
Speaker 1: be able to have more sistant and persistent returns. Kate,

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Speaker 1: we only have about twenty seconds left, but just to

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Speaker 1: get your view on the market more broadly, would you

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00:26:06,640 --> 00:26:08,960
Speaker 1: want to be getting defensive or more risk on here.

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00:26:10,240 --> 00:26:13,160
Speaker 1: We're so constructive over over the next twelve months. We're

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00:26:13,240 --> 00:26:15,960
Speaker 1: very focused on that kind of pandemic recovery trade. We're

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00:26:16,000 --> 00:26:18,600
Speaker 1: risk neutral right now, um just because of some of

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00:26:18,600 --> 00:26:21,760
Speaker 1: the volatility, but we're leaning in the cyclicals. So there

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00:26:21,800 --> 00:26:25,840
Speaker 1: it says a little bit more constructive on the markets overall. Right, right,

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Speaker 1: great to get some time with you, Kate, Thanks so

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Speaker 1: much for joining us. Kate al Hillou spent years at

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Speaker 1: JP Morgan at Goldman, success at Management, now Global Chief

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Speaker 1: Investment Officer at Russell Investments, giving us her insight on

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Speaker 1: E S G as well as diversity and inclusion, which

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00:26:41,359 --> 00:26:43,560
Speaker 1: are you know, more than just buzz buzzwords now, I

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Speaker 1: think investors are are actually demanding these things. This is Bloomberg.

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Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can

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00:26:52,520 --> 00:26:56,320
Speaker 1: subscribe and listen to interviews with Apple Podcasts or whatever

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00:26:56,400 --> 00:27:00,000
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

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Speaker 1: at Matt Miller nineteen seventy three. On Fall Sweeney, I'm

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00:27:03,760 --> 00:27:06,400
Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can

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Speaker 1: always catch us worldwide at Bloomberg Radio.