WEBVTT - BI Weekend: US Bank Earnings, Toyota’s EV Future 0:00:00.240 --> 0:00:07.200 Bloomberg Audio Studios, Podcasts, radio news. 0:00:09.480 --> 0:00:13.480 This is Bloomberg Intelligence with Alex Steele and Paul Sweeney. 0:00:13.520 --> 0:00:16.760 The real our performance has been the US corporate high yields. 0:00:16.920 --> 0:00:19.279 Are the companies lean enough? Have they trimmed all the fats? 0:00:19.360 --> 0:00:22.520 The semiconductor business is a really cyclical. 0:00:22.120 --> 0:00:26.120 Business, breaking market headlines and corporate news from across the globe. 0:00:26.239 --> 0:00:28.760 Do investors like the M and A that we've seen? 0:00:29.040 --> 0:00:32.080 These are two big time blue chip companies. 0:00:32.400 --> 0:00:35.839 Window between the peak and cut changing super fast. 0:00:36.000 --> 0:00:41.280 Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio. 0:00:41.440 --> 0:00:44.080 On Today's Bloomberg Intelligence Show, We're going to dig inside 0:00:44.080 --> 0:00:47.040 the big business stories impacting Wall Street and global markets. 0:00:47.360 --> 0:00:49.760 Each and every week we provide in depth research and 0:00:49.840 --> 0:00:51.680 data on some of the two thousand companies and one 0:00:51.720 --> 0:00:55.680 hundred and thirty industries our analysts cover worldwide, And today 0:00:55.800 --> 0:00:58.240 we'll look at what to expect in the media streaming 0:00:58.240 --> 0:01:01.400 space in twenty twenty five. Plus we'll discuss why Toyota's 0:01:01.440 --> 0:01:03.520 recent success may be getting in the way of its 0:01:03.600 --> 0:01:06.960 evy future. But first we turn to US bank earnings. 0:01:07.120 --> 0:01:10.080 The four giant lenders that reported full year results Wednesday 0:01:10.160 --> 0:01:13.480 notch their second most profitable year ever in twenty twenty four. 0:01:13.600 --> 0:01:17.160 They include JP Morgan, City, Goldman Sachs, and Wells Fargo. 0:01:17.520 --> 0:01:21.720 The results were driven by interest rate moves, investment banking fees, 0:01:21.760 --> 0:01:24.600 and trading revenue. For more, guest host Matt Miller and 0:01:24.640 --> 0:01:28.480 Nora Melinda spoke with Alison Williams Bloomberg Intelligence, senior analysts 0:01:28.480 --> 0:01:31.399 for global banks and asset managers, and they started by 0:01:31.400 --> 0:01:34.240 asking Allison about City Group's outlook for twenty twenty five. 0:01:34.600 --> 0:01:38.279 Well, I think they sort of notched down their return 0:01:38.360 --> 0:01:40.960 on tangible equity target in the near term, but I 0:01:40.959 --> 0:01:45.039 think it's realistic. You know, it's interesting, even Goldman Sachs, 0:01:45.040 --> 0:01:49.680 who had like a blowout quarter, really strong numbers. It's 0:01:49.840 --> 0:01:53.800 tough to see them. You know, they say they have 0:01:53.880 --> 0:01:56.320 a path to reach their target. But I think what 0:01:56.360 --> 0:01:59.280 all these banks did was after twenty twenty one, which 0:01:59.320 --> 0:02:01.160 was a blowout year, you saw a lot of people 0:02:01.280 --> 0:02:04.800 raise their targets, but at these very bullish targets. And 0:02:05.000 --> 0:02:07.840 JP Morgan has met their targets. But for everybody else, 0:02:08.160 --> 0:02:10.520 you know, it's tough and even with the markets as 0:02:10.560 --> 0:02:11.160 strong as. 0:02:11.000 --> 0:02:11.680 They are, so. 0:02:13.280 --> 0:02:16.200 But targets were pretty high, right, yeah, I mean Shannali 0:02:16.800 --> 0:02:20.560 keeps telling me that JP Morgan missed on equities trading, 0:02:20.880 --> 0:02:22.720 but equities trading rose. 0:02:23.919 --> 0:02:27.639 Right I think because I think because they restated their numbers, 0:02:27.880 --> 0:02:32.080 and so if you look at the restatement, what happened 0:02:32.120 --> 0:02:35.200 was they shifted a little bit from equities to thick 0:02:35.760 --> 0:02:38.520 and so I think that's why it appears that they 0:02:39.000 --> 0:02:42.480 missed on the equities line but really beat on FICK 0:02:43.280 --> 0:02:46.360 and explained to her fixed income. 0:02:46.520 --> 0:02:48.440 Okay, what's acronym? 0:02:48.800 --> 0:02:49.080 Thank you? 0:02:49.160 --> 0:02:52.600 Yeah, it's an acronym that also doesn't do well in Germany. 0:02:53.760 --> 0:02:55.680 Yeah, I'm not sure what it would be, although Deutsche 0:02:55.680 --> 0:02:58.079 Bank only does fick with oneesay because. 0:02:57.840 --> 0:02:59.720 They're not that good man. 0:03:00.080 --> 0:03:03.440 So who's the front runner here and who are the laggards? 0:03:03.639 --> 0:03:07.600 So you know, JP Morgan really continues to post the 0:03:07.680 --> 0:03:10.960 leading returns of the group. As I said, there, you know, 0:03:11.040 --> 0:03:13.639 exceeding their target in the near term. We expect they'll 0:03:13.639 --> 0:03:17.239 meet their target again next year. But I would say 0:03:17.280 --> 0:03:19.920 that for I say you that all the banks really 0:03:20.000 --> 0:03:22.560 had a good quarter. And it's not just the quarter, 0:03:22.639 --> 0:03:26.200 it's the guidance and so net interest income coming in 0:03:26.240 --> 0:03:27.320 better than expected. 0:03:28.760 --> 0:03:30.600 You know, WELLS. 0:03:30.280 --> 0:03:33.440 Fargo and JP Morgan in particular raising their guidance for 0:03:33.440 --> 0:03:37.400 a net interest income for next year. With the City Group, 0:03:37.640 --> 0:03:41.560 as we pointed out, you know, they had the buyback 0:03:41.640 --> 0:03:44.000 is about fourteen percent of their market cap, So that's 0:03:44.080 --> 0:03:47.600 pretty significant. I mean, keep in mind the valuation at 0:03:47.600 --> 0:03:51.240 City and so that's why I think investors are even 0:03:51.280 --> 0:03:52.640 more excited about that. 0:03:52.720 --> 0:03:55.880 Well, you know what, that brings up an interesting question. 0:03:56.360 --> 0:04:00.960 We have the inauguration and will be a different regulatory regime. 0:04:01.480 --> 0:04:05.880 Not just throwing out the Basil three endgame, but I 0:04:05.920 --> 0:04:08.160 wonder if these banks are going to be able to 0:04:08.200 --> 0:04:10.360 do more buybacks, Are they going to be able to 0:04:10.360 --> 0:04:12.080 pay more in dividend? Are they gonna be able to 0:04:12.080 --> 0:04:13.160 return more cash? 0:04:13.200 --> 0:04:17.240 To show that is that is definitely the thesis. 0:04:16.839 --> 0:04:17.320 If you will. 0:04:17.360 --> 0:04:19.400 And so a lot of the run up that we 0:04:19.480 --> 0:04:24.640 saw in the banks was due to this lighter regulatory environment. 0:04:24.680 --> 0:04:27.320 A big part of that, to your point, is the 0:04:27.400 --> 0:04:31.960 capital rules. So Basil three endgame as we call it. 0:04:31.839 --> 0:04:32.559 Sounds like a movie. 0:04:32.680 --> 0:04:35.520 Yes, right, so it will eventually happen. 0:04:35.800 --> 0:04:36.320 I mean. 0:04:37.640 --> 0:04:39.960 For the banks, it's probably a good thing actually, if 0:04:39.960 --> 0:04:43.680 it happens under the current administration, because the current administration, 0:04:44.680 --> 0:04:49.159 as we know, is very US focused, and a lot 0:04:49.160 --> 0:04:52.159 of the issues that the banks had with the capital 0:04:52.200 --> 0:04:56.920 rules was that it was very punitive versus some other jurisdictions. 0:04:57.120 --> 0:04:59.359 So it felt like it put them at a disadvantage. 0:04:59.440 --> 0:05:02.320 Especially it's something like prime brokerage, and that's not a 0:05:02.320 --> 0:05:06.560 business that regulators are necessary. You know, regulators generally they're 0:05:06.600 --> 0:05:10.000 looking to protect the smaller banks and do things, and 0:05:10.040 --> 0:05:13.280 you know they're not as concerned with trading and prime brokerage. 0:05:14.240 --> 0:05:19.480 But to the extent that this at this administration, you know, 0:05:19.960 --> 0:05:22.200 we would see the lighter rules come through. 0:05:22.320 --> 0:05:24.520 It could be good to get them solidified. 0:05:24.800 --> 0:05:28.640 The other thing M and A less antitrust should be 0:05:28.680 --> 0:05:30.479 good for M and A. It's actually a little bit 0:05:30.520 --> 0:05:30.720 of a. 0:05:30.800 --> 0:05:32.400 How many banks are there in the US and the 0:05:32.480 --> 0:05:33.400 United States of America. 0:05:33.440 --> 0:05:34.320 How many banks do we have? 0:05:34.600 --> 0:05:36.400 Well, it's not it's not five thousand. 0:05:36.960 --> 0:05:39.520 It's not necessarily even the bank insolidation. It's the fees 0:05:39.560 --> 0:05:41.200 that they'll make advising other people. 0:05:41.760 --> 0:05:44.480 Right. Okay, So you're saying advising M and A for 0:05:44.600 --> 0:05:47.159 other industries. Okay, I thought you were talking about in banks, 0:05:47.160 --> 0:05:50.040 because you know, in some countries they have like. 0:05:50.040 --> 0:05:51.960 Four or five, but just a couple that you can 0:05:52.000 --> 0:05:52.760 count on your hand. 0:05:52.880 --> 0:05:55.120 And this country, we have we have a lot, a lot. 0:05:55.360 --> 0:05:57.440 I mean, I'm not far off with five thousand. 0:05:57.200 --> 0:06:01.000 Right, yes, so you're not far off. But I mean 0:06:01.080 --> 0:06:04.160 the size of these g SIPs as we call them, 0:06:04.200 --> 0:06:08.000 which globally systemically important banks. I mean, the big really 0:06:08.080 --> 0:06:11.200 have gotten bigger. They have consolidated share, and they've gotten 0:06:11.240 --> 0:06:12.760 bigger globally. 0:06:14.080 --> 0:06:16.400 I don't know if Nora remembers, but there was a 0:06:16.440 --> 0:06:20.119 time when we were concerned about banks being too big 0:06:20.160 --> 0:06:22.200 to fail. Okay, I mean you were probably in middle 0:06:22.200 --> 0:06:25.520 school at the time, but now they're even bigger. I 0:06:25.560 --> 0:06:28.359 don't know that I shouldn't assume that your age is. 0:06:28.560 --> 0:06:31.280 But you know, twenty ten now is fifteen years ago, 0:06:31.440 --> 0:06:34.840 so into two thousand and eight, right, seventeen years ago. 0:06:34.920 --> 0:06:37.320 What grade were you in seventeen years ago? 0:06:37.360 --> 0:06:39.520 I don't think I'm allowed to ask, Actually forget that. 0:06:40.040 --> 0:06:42.760 In any case, these g sibs are g sibbier than ever. 0:06:43.040 --> 0:06:43.200 Right. 0:06:43.279 --> 0:06:45.680 I'm also so I keep an eye on real estate stocks, 0:06:45.680 --> 0:06:48.040 so I'm covering office rates, and one thing that I'm 0:06:48.040 --> 0:06:50.280 always looking at is return to office. So we did 0:06:50.320 --> 0:06:52.719 have JP Morgan saying that they're pushing people back into 0:06:52.760 --> 0:06:55.800 the office. What has been the general mandate and what 0:06:55.839 --> 0:06:58.440 has been the conversation for the banking industry in general? 0:06:59.160 --> 0:06:59.880 In general? 0:07:00.320 --> 0:07:02.640 You know those that are front office, if you will, 0:07:02.760 --> 0:07:04.840 that are out there. You know, we have this banking 0:07:04.839 --> 0:07:07.960 fee recovery. Banks are competing with each other, so a 0:07:07.960 --> 0:07:12.040 lot of those senior people happen in office or traveling again, right, 0:07:12.080 --> 0:07:14.600 so a lot of for investment bankers, a lot of 0:07:14.640 --> 0:07:17.320 it is not necessarily sitting in your office, but being 0:07:17.400 --> 0:07:20.480 out there and visiting clients. So we definitely saw that 0:07:20.520 --> 0:07:23.920 return to travel and JP Morgan, even though the five 0:07:24.000 --> 0:07:26.520 days a week is getting a lot of headlines, you know, 0:07:26.560 --> 0:07:28.000 the senior people at JP. 0:07:27.880 --> 0:07:30.000 Morgan have already been back. 0:07:30.920 --> 0:07:32.720 You know, people that I talked to at the company 0:07:32.760 --> 0:07:35.080 were back, you know, May of twenty twenty. They were 0:07:35.080 --> 0:07:38.040 back in their office five days a week. So yeah, 0:07:38.040 --> 0:07:40.680 so definitely there is the return to office. 0:07:41.080 --> 0:07:41.480 Office. 0:07:41.480 --> 0:07:44.600 Commercial real estate, as you know, was a big concern, 0:07:45.200 --> 0:07:49.840 but we're we're definitely seeing some stabilization there all right. 0:07:49.840 --> 0:07:53.200 Thanks to Alison Williams, Bloomberg Intelligence Senior Analyst, global banks 0:07:53.200 --> 0:07:56.360 and asset managers. We move next to the streaming business. 0:07:56.400 --> 0:07:59.040 We heard recently that Walt Disney, Fox, and Warner Brothers 0:07:59.040 --> 0:08:02.840 Discovery scrapped plans to create a joint sports streaming service 0:08:02.920 --> 0:08:06.240 called Venue Sports, and the company said they instead want 0:08:06.240 --> 0:08:09.520 to focus on their existing online offerings instead. For more 0:08:09.640 --> 0:08:11.760 host Paul Sweeney and Normal Linda were joined by Gethera 0:08:11.800 --> 0:08:15.360 Monkannathan Bloomberg intelligence analyst on US Media, and they first 0:08:15.400 --> 0:08:17.840 asked Etha what Venue was to be and why the 0:08:17.880 --> 0:08:19.880 parties decided not to go through with it. 0:08:20.040 --> 0:08:24.640 So Venue was really this skinny sports service that that 0:08:24.760 --> 0:08:28.560 was having content from Disney, Fox, and Warner Brothers. It 0:08:28.640 --> 0:08:32.840 was supposed to launch last year. But Fubo, which is 0:08:32.960 --> 0:08:36.720 another player in the space, they're a digital PayTV service provider, 0:08:37.160 --> 0:08:40.480 they actually had filed a lawsuit against Venues saying that 0:08:40.520 --> 0:08:44.560 it kind of blocks competition, and so you know, because 0:08:44.559 --> 0:08:47.440 of that, there was an injunction which had blocked the 0:08:47.559 --> 0:08:50.960 launch of Venue. Now, in a somewhat of a surprising move, 0:08:51.200 --> 0:08:54.760 Disney actually merged Hulu Live Tv, which is its own 0:08:55.440 --> 0:08:58.880 digital PATV service, with Fubo, and as part of that deal, 0:08:58.960 --> 0:09:03.199 Fubo actually agreed to drop litigation, which potentially, i mean theoretically, 0:09:03.200 --> 0:09:06.000 on paper, it kind of cleared the way for the 0:09:06.080 --> 0:09:07.080 launch of venues. 0:09:07.080 --> 0:09:10.840 So this move, or this announcement rather is somewhat. 0:09:10.520 --> 0:09:13.520 Of a head scratcher because we really thought that they had, 0:09:13.600 --> 0:09:15.520 you know, kind of put everything in place to actually 0:09:15.559 --> 0:09:17.040 go ahead with the launch of venue. But you know, 0:09:17.080 --> 0:09:20.280 Direct TV and Dish had also come up with their 0:09:20.320 --> 0:09:23.120 own concerns, and they had said that, you know, antitrust 0:09:23.280 --> 0:09:26.200 concerns regarding Venue were actually still very much in place, 0:09:26.200 --> 0:09:28.280 which kind of suggests to us that maybe Disney, Fox 0:09:28.320 --> 0:09:31.360 and Warner Brothers said that it's really not worth all 0:09:31.400 --> 0:09:34.720 of this, you know, legal and time resources being spent 0:09:34.760 --> 0:09:36.360 on Venue, so let's just crap the whole thing. 0:09:36.760 --> 0:09:38.080 We're in also expecting this. 0:09:38.760 --> 0:09:40.080 Nobody was really expecting this. 0:09:40.200 --> 0:09:42.240 I mean, first of all, nobody was really expecting that 0:09:42.280 --> 0:09:44.840 whole fuboat Disney move, but really that kind of seemed 0:09:44.840 --> 0:09:47.920 like this perfect setup for actually a go ahead on Venue. 0:09:47.960 --> 0:09:50.079 So this obviously, this is the kind of our second 0:09:50.080 --> 0:09:52.400 big shock this week, but it really kind of goes 0:09:52.440 --> 0:09:55.680 to prove to us, you know, despite everybody kind of 0:09:55.720 --> 0:09:59.960 wanting to make this transition into you know, streaming pauls. 0:10:00.080 --> 0:10:02.040 You very well know there are so many legal and 0:10:02.120 --> 0:10:04.120 logistical complications associated with it. 0:10:04.120 --> 0:10:05.679 I mean we've seen that time and time again. 0:10:05.960 --> 0:10:08.520 You know, there was this short form video service called Queebi, 0:10:09.160 --> 0:10:11.839 which basically was kind of dead or arrival. We had 0:10:11.840 --> 0:10:14.320 CNN Plus again never really took off the ground. So 0:10:14.320 --> 0:10:17.680 so many of these services, Yes, theoretically they're good, but 0:10:17.800 --> 0:10:20.000 practically it becomes almost impossible to implement. 0:10:20.360 --> 0:10:23.520 Can you update us on what disney strategy is for 0:10:24.360 --> 0:10:25.720 ESPN in the streaming world? 0:10:26.760 --> 0:10:29.000 Yeah, Now, I think all eyes now that this whole 0:10:29.080 --> 0:10:33.440 venue thing is off, I think all eyes are on ESPN. 0:10:33.600 --> 0:10:36.880 So the big move that happens this year, it happens 0:10:36.920 --> 0:10:39.960 in fall of twenty twenty five, when Disney is preparing 0:10:40.000 --> 0:10:44.160 to launch what they call the flagship ESPN product, which 0:10:44.240 --> 0:10:46.800 is all of the ESPN content, all of the Marquee 0:10:46.800 --> 0:10:50.760 Sports content actually going direct to consumer. Now, the big 0:10:50.800 --> 0:10:53.320 news that we're still kind of waiting for Paul is 0:10:53.400 --> 0:10:55.839 what the price point is going to be. So we 0:10:55.920 --> 0:10:59.000 knew that Venue Sports was priced at about forty three 0:10:59.040 --> 0:11:02.160 dollars a month, but that included, you know, obviously content 0:11:02.240 --> 0:11:06.320 from Fox Waterer Brothers and Disney just kind of looking, 0:11:06.480 --> 0:11:09.920 you know, crunching some numbers. We think that this new 0:11:09.960 --> 0:11:13.079 Disney ESPN service could be priced anywhere from about twenty 0:11:13.080 --> 0:11:15.520 two to twenty five dollars a month. So then the 0:11:15.600 --> 0:11:17.599 question is, you know, how many people are going to 0:11:17.640 --> 0:11:22.319 subscribe to the service and will it potentially help Disney 0:11:22.559 --> 0:11:25.640 to offset all of the losses that they're seeing on 0:11:25.640 --> 0:11:28.480 the linear TV side. We think over time it will, 0:11:28.520 --> 0:11:29.920 but it's still a little bit of a weight and 0:11:30.040 --> 0:11:32.160 wash because we really need that price point. 0:11:32.600 --> 0:11:35.000 So how big could this really be if they were 0:11:35.040 --> 0:11:36.600 to launch this ESPN product. 0:11:37.720 --> 0:11:39.680 We think it can be really really big. 0:11:39.840 --> 0:11:44.920 So remember right now we have about seventy million PayTV households, 0:11:45.240 --> 0:11:48.680 but there are totally one hundred and thirty million TV households, 0:11:48.679 --> 0:11:51.360 so that means sixty million households are actually not even 0:11:51.400 --> 0:11:54.720 subscribing to a PATV service. So we think that, you know, 0:11:54.800 --> 0:11:58.800 the ESPN product potentially can capture a lot of both 0:11:58.880 --> 0:12:01.680 the PATV household on as well as the ones that 0:12:01.720 --> 0:12:04.320 we call cord never's or you know, cord cutters who 0:12:04.360 --> 0:12:07.839 have just completely left the TV ecosystem. So the way 0:12:07.880 --> 0:12:09.600 that we're kind of modeling it out is we think 0:12:09.600 --> 0:12:12.199 that this service gets about, you know, ten twelve million 0:12:12.240 --> 0:12:15.360 subscribers by the end of next year, potentially reaches almost 0:12:15.440 --> 0:12:18.080 thirty forty million subscribers over the next few years. But 0:12:18.080 --> 0:12:20.040 again no, a lot of that is going to depend 0:12:20.040 --> 0:12:23.400 on exactly where they price the product and also what 0:12:23.440 --> 0:12:25.840 content would they offer. Do they go out and license 0:12:26.040 --> 0:12:28.640 more content from let's say some of their peers like 0:12:28.679 --> 0:12:30.000 you know Fox or Warden Brothers. 0:12:30.360 --> 0:12:34.280 Thanks to gethr Maranganathan, Bloomerg Intelligence analyst on US Media. 0:12:34.360 --> 0:12:36.240 Coming up, We're going to break down why the investment 0:12:36.280 --> 0:12:40.280 company black Rock attracted record client cash last year. You're 0:12:40.320 --> 0:12:43.760 listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth 0:12:43.800 --> 0:12:46.280 research and data on some of the two thousand companies 0:12:46.280 --> 0:12:49.280 and one hundred and thirty industries. You can access Bloomberg 0:12:49.320 --> 0:12:52.640 Intelligence through Bigo. I'm a terminal, I'm Alex Steel, and 0:12:52.720 --> 0:12:53.800 this is Bloomberg. 0:12:58.480 --> 0:13:02.280 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:13:02.360 --> 0:13:05.320 weekdays at ten am Easter on Apple CarPlay and the 0:13:05.360 --> 0:13:08.400 Android Auto with the Bloomberg Business app. Listen on demand 0:13:08.400 --> 0:13:14.280 wherever you get your podcasts, or watch us live on YouTube. 0:13:13.280 --> 0:13:15.720 We moved next to earnings results from the investment company 0:13:15.720 --> 0:13:18.480 black Rock. This week, we heard the black Rock attracted 0:13:18.520 --> 0:13:21.240 an annual record of six hundred and forty one billion 0:13:21.280 --> 0:13:24.640 dollars in client cash. The number show the firm's global 0:13:24.679 --> 0:13:28.559 reach as it integrates multi billion dollar acquisitions and reshapes 0:13:28.600 --> 0:13:31.600 its leadership. For more, guest host John Tucker and Normal 0:13:31.600 --> 0:13:35.480 Linda spoke to Neil Sipes, Bloomberg Intelligence financials analyst, and 0:13:35.520 --> 0:13:38.720 they asked him how much assets under management Blackrock had now. 0:13:38.840 --> 0:13:41.800 The number now is eleven point six trillion. Wow, that's 0:13:42.000 --> 0:13:45.079 chilling with the tee, right the t And what's really 0:13:45.080 --> 0:13:48.680 interesting is you know that number, you know, blows people's 0:13:48.720 --> 0:13:51.320 minds away, especially if they're not following the name closely. 0:13:51.880 --> 0:13:53.880 You think about the rule of seventy two, how many 0:13:53.920 --> 0:13:56.520 years it takes to double. Their assets have grown ten 0:13:56.559 --> 0:14:00.040 percent a year over the past seven years, So that 0:14:00.120 --> 0:14:02.400 how we've sort of gotten here. Twenty seventeen we were 0:14:02.440 --> 0:14:06.240 at six trillion. Now we're at eleven point six trillion, so, 0:14:07.320 --> 0:14:10.200 you know, effectively doubling a lot of that of course's markets, 0:14:10.600 --> 0:14:12.439 but with black Rock, what we know is sort of 0:14:12.520 --> 0:14:17.079 premium organic growth that's net inflows of client assets. That's 0:14:17.120 --> 0:14:18.040 been their strong suit. 0:14:18.559 --> 0:14:21.040 Neil, As we look at earnings, what were your biggest 0:14:21.040 --> 0:14:22.400 takeaways for this company? 0:14:22.720 --> 0:14:26.240 Yeah, I think the biggest takeaway was that at eleven 0:14:26.280 --> 0:14:29.800 point six trillion dollars, the question of can you still 0:14:29.880 --> 0:14:33.360 grow at that scale is sort of answered here and 0:14:33.400 --> 0:14:35.960 we've seen that, you know, the two hundred billion in 0:14:36.040 --> 0:14:39.840 long term flows in client assets, that's eight percent long 0:14:39.920 --> 0:14:43.240 term organic growth. That's one of their best quarters in 0:14:43.280 --> 0:14:46.120 a handful of years, and it's at the point where 0:14:46.120 --> 0:14:49.440 they've been the biggest they've ever been. So they're proving that, 0:14:49.800 --> 0:14:52.280 you know, the bigger they get, the growth is still there. 0:14:52.520 --> 0:14:54.040 And a lot of that speaks to sort of the 0:14:54.080 --> 0:14:56.840 breadth of that franchise where we know they have the 0:14:56.880 --> 0:15:01.040 massive eye shares franchise, the legacy sort of active mutual 0:15:01.040 --> 0:15:04.000 fund franchise, and now that push into private markets. 0:15:04.120 --> 0:15:06.840 As a client of Blackrock, how much money am I 0:15:06.920 --> 0:15:08.720 making with my stuff? 0:15:09.600 --> 0:15:09.800 Yeah? 0:15:09.800 --> 0:15:11.960 Well, I guess it's going to depend what sort of 0:15:12.000 --> 0:15:14.880 products you're investing in, but a lot of what they've 0:15:15.120 --> 0:15:18.120 sort of typically done or legacy when you think of 0:15:18.160 --> 0:15:21.000 Blackrock as a lot of those beta type products, the 0:15:21.080 --> 0:15:24.000 simple I shares ETFs that are going to track an 0:15:24.040 --> 0:15:26.600 index or an index mutual fund that you might find 0:15:27.120 --> 0:15:29.480 in your four oh one K or in your retirement plans. 0:15:30.160 --> 0:15:33.520 So that's going to vary buy product. But what I 0:15:33.560 --> 0:15:36.240 think is a bigger story in asset management as well 0:15:36.360 --> 0:15:39.560 is the fees that are associated with those types of products. 0:15:39.600 --> 0:15:42.520 So we know that Blackrock is huge in that sort 0:15:42.520 --> 0:15:45.600 of passive realm. That's where fees are lowest, but we 0:15:45.680 --> 0:15:48.200 know that's where investor demand is, so that's where those 0:15:48.240 --> 0:15:51.200 assets are growing quickest. On the other side, in the 0:15:51.240 --> 0:15:53.960 asset management industry, we call it the Barbell strategy. 0:15:54.320 --> 0:15:54.720 Passive. 0:15:54.760 --> 0:15:57.480 On one side, that's low fee, high growth. On the 0:15:57.520 --> 0:16:00.200 other side, you have the higher fee, high growth, and 0:16:00.240 --> 0:16:01.080 that's private market. 0:16:01.240 --> 0:16:03.280 I guess what I'm asking is what is the secret 0:16:03.320 --> 0:16:06.080 sauce that attracts so many clients to them? Is it 0:16:06.240 --> 0:16:08.920 the low fee aspect of this? 0:16:09.120 --> 0:16:12.320 Yeah, I think it's a combination of both both performance 0:16:12.480 --> 0:16:15.920 and sort of competition on price. Right, Blackrock has the 0:16:15.920 --> 0:16:19.200 scale to be competitive on price, so they can effectively 0:16:19.280 --> 0:16:23.520 either undercut competitors or at least justify you know, the 0:16:23.560 --> 0:16:28.200 fees with performance where necessary, and you have Blackrock, that's 0:16:28.200 --> 0:16:32.080 pretty much embedded with all financial services, all at financial 0:16:32.080 --> 0:16:36.160 institutions across the world, wealth advisors down to the self 0:16:36.160 --> 0:16:40.640 directed brokers, you know, defined contribution providers, all of that 0:16:40.720 --> 0:16:45.480 sort of makes their products permeate pretty much everyone's portfolios, 0:16:45.520 --> 0:16:47.680 from retail all the way up to institutional. 0:16:47.920 --> 0:16:51.040 So Neil Blackrock also mentioned the announced that we were 0:16:51.040 --> 0:16:53.400 going to be having a shake up and management. So 0:16:53.800 --> 0:16:56.840 one of its most senior executives, Mark Weedman, will be 0:16:56.920 --> 0:16:58.080 exiting this spring. 0:16:58.120 --> 0:17:01.240 And why would shake things up are going so well, right, 0:17:01.400 --> 0:17:02.440 don't shake anything. 0:17:02.760 --> 0:17:06.560 He was also seen as a potential successor for Larry Fink, 0:17:06.640 --> 0:17:07.240 the CEO. 0:17:07.480 --> 0:17:08.480 So what are. 0:17:08.400 --> 0:17:11.040 Conversations like, what are you hearing in terms of how 0:17:11.080 --> 0:17:13.720 people think about who could potentially replace the CEO? And 0:17:13.760 --> 0:17:16.080 if there's any sort of you know, instability there. 0:17:16.400 --> 0:17:20.399 Yeah, I don't necessarily view these headlines as as a 0:17:20.920 --> 0:17:24.399 you know, indication of instability. I think we know that 0:17:24.440 --> 0:17:28.040 Blackrock has a pretty strong bench. You are, you know, 0:17:28.119 --> 0:17:31.600 at times going to see higher profile people depart certain firms. 0:17:32.359 --> 0:17:34.119 You know, Larry's been at the Helm for you know, 0:17:34.200 --> 0:17:37.639 over thirty years at this point, since co founding Blackrock, 0:17:38.080 --> 0:17:41.360 So that's always sort of been a question that's sort 0:17:41.400 --> 0:17:43.879 of in the back of investors' minds. It doesn't sound 0:17:43.960 --> 0:17:46.440 like it's you know, on the verge of being announced 0:17:47.080 --> 0:17:50.879 or anything changing, but you know, ultimately that's one person 0:17:51.080 --> 0:17:54.719 out that may have been a sort of potential heir 0:17:54.880 --> 0:17:57.840 to the CEO. But we view the bench as pretty 0:17:57.840 --> 0:17:59.600 solid and don't see that as a negative. 0:17:59.760 --> 0:18:02.240 Right, So what do you do for an encore? Larry 0:18:02.240 --> 0:18:04.720 finks this is just the beginning, I think. 0:18:04.600 --> 0:18:07.560 He said, or seventy two years old. 0:18:07.800 --> 0:18:11.040 Yeah, right, And some may even call the past twelve 0:18:11.040 --> 0:18:15.320 months the encore where he strung together three pretty sizable 0:18:15.359 --> 0:18:20.240 transactions in private markets, Global Infrastructure Partners, Prequeen, the private 0:18:20.280 --> 0:18:24.360 market's data provider, and then just recently HPS that has 0:18:24.400 --> 0:18:28.280 significantly shaken up the firm in terms of how those 0:18:28.320 --> 0:18:30.119 fees are going to be generated, where the growth is 0:18:30.160 --> 0:18:33.840 ultimately going to come from. So that's perhaps sort of 0:18:33.880 --> 0:18:37.320 the latest in the legacy of Larry Fink, and ultimately 0:18:37.320 --> 0:18:39.879 where that goes is going to be the question. But 0:18:40.320 --> 0:18:42.600 it feels like more of the same, more on the 0:18:42.640 --> 0:18:46.120 passive etf side of the business as well as now 0:18:46.119 --> 0:18:47.200 into private markets. 0:18:47.640 --> 0:18:51.080 Our thanks to Neil Sipes, Bloomberg Intelligence financials analyst, we 0:18:51.200 --> 0:18:54.320 move next to the renewable energy space. There's been growing 0:18:54.400 --> 0:18:57.680 concern that changes under a new Trump administration could undercut 0:18:57.760 --> 0:19:01.320 US policies that have spurred renewable energy, but according to 0:19:01.320 --> 0:19:04.479 Bloomberg Intelligence, greater private equity involvement and much of the 0:19:04.560 --> 0:19:07.560 S and P five hundred seeking emission cuts could offer 0:19:07.680 --> 0:19:10.439 support for more. Co host Paul Sweenie and I were 0:19:10.480 --> 0:19:14.800 joined by Margo Wenzel, Bloomberg Intelligence Senior ESG research associate. 0:19:15.119 --> 0:19:17.679 We first asked Margaret to talk about the renewable space 0:19:17.720 --> 0:19:20.240 and if it's right for some m and A and consolidation. 0:19:20.800 --> 0:19:23.760 It's a really small market. I will say it's only 0:19:23.800 --> 0:19:28.399 about two percent of total deals currently, but it's growing 0:19:28.440 --> 0:19:32.119 pretty quickly. It's grown around sixty five percent if we 0:19:32.200 --> 0:19:35.720 compare twenty twenty to twenty twenty four versus the prior decade, 0:19:36.119 --> 0:19:38.960 and if we look at the overall market zooming out 0:19:38.960 --> 0:19:41.359 a little bit that has grown around thirty percent. So 0:19:41.400 --> 0:19:45.000 there's definitely some focus there for this particular part of 0:19:45.000 --> 0:19:45.720 the market and. 0:19:45.640 --> 0:19:48.240 Does it slow down under President like Trump and administration. 0:19:49.040 --> 0:19:53.400 I think there's certainly risk for that the changing administration 0:19:54.080 --> 0:19:58.040 definitely presents some challenges. We saw President Trump talk about 0:19:58.040 --> 0:20:00.919 how there will be no wind bild out under his 0:20:01.119 --> 0:20:06.200 off show wind offshore wind YEP, which it presents a challenge. 0:20:06.200 --> 0:20:08.960 But I think we do see some longer term key 0:20:09.040 --> 0:20:12.560 drivers that could continue to propel the momentum of this market, 0:20:13.119 --> 0:20:18.560