WEBVTT - The Apollo ETF Landing 0:00:06.120 --> 0:00:06.920 Well can a trillions. 0:00:06.920 --> 0:00:11.680 I'm Joel Webert and I'm Eric Belchernis. 0:00:12.920 --> 0:00:13.080 Eric. 0:00:13.119 --> 0:00:15.960 There's this universe that we've really never talked about on 0:00:16.640 --> 0:00:19.640 trillions because there haven't been ETFs to really talk about. 0:00:19.760 --> 0:00:22.959 But it's called private credit. Private credit is kind of 0:00:23.160 --> 0:00:26.840 post financial crisis. It has only gotten bigger. There's a 0:00:26.840 --> 0:00:30.159 lot of non bank institutions that are big names. They 0:00:30.200 --> 0:00:34.320 have a ton of money. The growth has been really interesting, 0:00:34.880 --> 0:00:37.600 and now it looks like they're starting to I the 0:00:37.640 --> 0:00:38.639 ETF world. 0:00:39.000 --> 0:00:41.879 Yeah, I always think of private credit and private equity, 0:00:42.040 --> 0:00:44.960 which I think collectively are in the ballpark of thirteen trillion, 0:00:45.600 --> 0:00:48.479 as sort of like the stuff only people in the 0:00:48.560 --> 0:00:52.040 know can get, you know, like the party, the real party. 0:00:52.200 --> 0:00:54.640 That's the institutional Yeah, that's in the back by the pool, 0:00:56.120 --> 0:00:58.920 not the party for the plubs. And so a lot 0:00:58.960 --> 0:01:03.200 of these firms our intermediaries in this area, and the 0:01:03.320 --> 0:01:07.520 end user is typically large institutions, acid owners who have 0:01:07.520 --> 0:01:11.240 a ton of money, pensions, endowments, hedge funds. There's been 0:01:11.280 --> 0:01:13.520 a couple news items in the past year that show 0:01:14.319 --> 0:01:16.399 a lot of people trying to democratize this. 0:01:17.440 --> 0:01:18.600 Whoever can bridge the. 0:01:18.560 --> 0:01:22.720 Gap between all that private stuff and the retail investor 0:01:23.560 --> 0:01:25.320 is probably going to make out big time. So the 0:01:25.319 --> 0:01:28.959 incentive to bridge that gap is there and enter ETFs. 0:01:29.720 --> 0:01:33.679 Everybody likes their stuff in ETFs. So there's this sort 0:01:33.720 --> 0:01:36.920 of race for the prize right now with these issuers, 0:01:36.920 --> 0:01:39.080 including black Rock, to say, how can we get this 0:01:40.160 --> 0:01:42.560 it's a paradox. How can we get this totally i 0:01:42.640 --> 0:01:46.720 liquid thing into this vehicle that is very liquid? And 0:01:47.000 --> 0:01:50.080 this is the puzzle that the issuers are trying to solve. 0:01:50.200 --> 0:01:54.360 And there is an interesting design put forward in the 0:01:54.360 --> 0:01:57.120 past couple of weeks by State Street and Apollo, which 0:01:57.640 --> 0:02:00.040 really was earth shattering. I've talked to people in the 0:02:00.320 --> 0:02:03.480 and this got people buzzing. You know, we saw a 0:02:03.480 --> 0:02:06.240 couple of filings right after. So there's going to be 0:02:06.240 --> 0:02:08.320 this sort of race. I'll ave the bitcoin race to 0:02:08.440 --> 0:02:10.000 get there first. 0:02:10.120 --> 0:02:10.480 All right. 0:02:10.520 --> 0:02:12.400 To help us talk about that race, we're gonna be 0:02:12.480 --> 0:02:17.400 joined by vil Donna Hirik, an ETF reporter with Bloomberg News, 0:02:17.600 --> 0:02:22.000 this time on trillions saving private assets. 0:02:23.040 --> 0:02:24.440 To Donna, welcome to trillions. 0:02:24.600 --> 0:02:25.560 Am I allowed to laugh? 0:02:25.720 --> 0:02:27.760 Yes, yes you are. 0:02:27.840 --> 0:02:28.720 That was Eric's idea. 0:02:28.800 --> 0:02:30.560 You know, first of all, we just want to say 0:02:30.760 --> 0:02:33.040 first time officially on the show. We've talked about you 0:02:33.080 --> 0:02:36.160 and your reporting before, so thanks for being here and 0:02:36.200 --> 0:02:37.080 looking forward to having you on. 0:02:37.200 --> 0:02:39.280 By the way, it's not possible this is your first time. 0:02:39.880 --> 0:02:43.600 I am yeah, just after that's good. 0:02:43.600 --> 0:02:45.440 Sort of like you know, like what is the universe 0:02:45.520 --> 0:02:47.680 expanding into? I can't get my mind around that. I 0:02:47.680 --> 0:02:49.480 can't get my mind around the fact that you haven't 0:02:49.480 --> 0:02:51.120 been on, Like it just doesn't make sense. 0:02:51.160 --> 0:02:52.760 I've known you for almost seven years now. 0:02:53.520 --> 0:02:54.600 Thanks for the So. 0:02:54.760 --> 0:02:55.760 We're paying it forward. 0:02:55.800 --> 0:02:57.799 We're going to hear from you much more often now, 0:02:58.240 --> 0:03:00.400 So talk to us about this race and what it 0:03:00.400 --> 0:03:01.320 looks like so far. 0:03:01.639 --> 0:03:04.960 I actually really like Eric's comparison to the bitcoiny tf 0:03:05.040 --> 0:03:09.359 hrase because so we have this filing from Apollo and 0:03:09.440 --> 0:03:12.680 State Street. Everybody's trying to figure out how to make 0:03:13.919 --> 0:03:17.680 private assets which aren't liquid, which are not liquid, so 0:03:17.720 --> 0:03:18.880 they're illequid. 0:03:20.200 --> 0:03:20.679 Exactly. 0:03:20.880 --> 0:03:24.880 They do not trade as as often as the SEC 0:03:26.040 --> 0:03:28.320 would need them to be trading in order for the 0:03:28.360 --> 0:03:31.120 SEC to say that they are liquid. Because what the 0:03:31.160 --> 0:03:35.160 SEC says is something is illiquid if you cannot sell 0:03:35.200 --> 0:03:38.360 it within seven days, and with a lot of this stuff, 0:03:38.360 --> 0:03:40.720 that would be really hard to do with the bitcoiny 0:03:40.760 --> 0:03:43.440 tf hrase, it took years and years. It took longer 0:03:43.440 --> 0:03:46.520 than a decade before Blackrock came out with their filing 0:03:46.560 --> 0:03:49.600 and said, Okay, we're going to have this survey. It 0:03:49.680 --> 0:03:53.760 was called the Surveillance Sharing Agreement, and everybody said, huh, okay, 0:03:53.800 --> 0:03:57.040 Blackrock figured out a way to potentially make the BITCOINYTF 0:03:57.040 --> 0:04:00.560 happen the same type of thing. How and here with 0:04:00.600 --> 0:04:03.160 Apollo in State Street where they came out with their 0:04:03.160 --> 0:04:07.680 filing and people said, Okay, potentially this is a way 0:04:08.160 --> 0:04:13.240 to make the SEC happy when it comes to providing 0:04:14.000 --> 0:04:17.960 quote unquote ill liquid stuff to the broader public in 0:04:18.200 --> 0:04:21.960 the ETF wrapper because as Eric said, everybody wants ETFs. 0:04:22.520 --> 0:04:26.039 Everybody wants the retail share of this because retail just 0:04:26.120 --> 0:04:29.960 hasn't been able to buy into this stuff. And I said, 0:04:30.000 --> 0:04:33.600 quote unquote illiquid because we can talk about how actually 0:04:33.720 --> 0:04:38.559 this filing is structured and whether or not it will 0:04:38.560 --> 0:04:40.400 make the SEC happy before. 0:04:40.120 --> 0:04:40.640 We do that. 0:04:41.080 --> 0:04:45.480 What else happened after this Apollo State Street announcement, Well, there. 0:04:45.400 --> 0:04:48.400 Was just a lot of questions on Okay, what's the 0:04:48.440 --> 0:04:51.159 trick here, because there has been a couple like quote 0:04:51.160 --> 0:04:53.840 private ETFs. But what they tend to do is they 0:04:53.839 --> 0:04:56.479 invest in closed then funds or BDCs which have connections 0:04:56.520 --> 0:05:01.920 to private credit. But that's using that's a indirect. Then 0:05:01.920 --> 0:05:04.040 there's ones that say, okay, we're private dec we will 0:05:04.040 --> 0:05:08.560 invest in microcap stocks that have similar characteristics. So everything 0:05:08.640 --> 0:05:11.560 so far has been indirect. This is the first one 0:05:11.600 --> 0:05:13.719 saying we're gonna give you the real deal. And we 0:05:13.760 --> 0:05:16.720 know from the bitcoin race people don't want the derivative 0:05:16.800 --> 0:05:19.320 or the indirect. They want it the real way. 0:05:19.880 --> 0:05:21.080 I want what they get. 0:05:21.240 --> 0:05:23.839 Yeah, I want the same thing, and so the apollo 0:05:24.080 --> 0:05:27.520 is the is the difference here. They're huge in this industry, 0:05:27.800 --> 0:05:31.280 their name is on the label, and they're gonna basically 0:05:31.760 --> 0:05:34.600 make a market in the private credit portion of the portfolio. 0:05:34.680 --> 0:05:38.360 They promise to buy it back if there's a selloff. 0:05:38.880 --> 0:05:42.800 That's that's I mean, that's a liquidity backstop. That's major. 0:05:42.960 --> 0:05:46.640 And that's the puzzle that State Street has solved. Now 0:05:47.120 --> 0:05:49.760 how much is actually private credit? This is a baby step, 0:05:50.279 --> 0:05:52.800 but I think people will respond favorably this because remember, 0:05:52.920 --> 0:05:55.320 all the advisors out there can't really get this. So 0:05:55.360 --> 0:05:58.080 they can say to their clients, hey, I'm getting I'm 0:05:58.080 --> 0:05:59.279 getting you to the real party. 0:05:59.440 --> 0:05:59.640 Yeah. 0:05:59.720 --> 0:06:02.000 Yeah, And then they're gonna get it through this ETF, 0:06:02.000 --> 0:06:03.680 which anybody can get, but they'll they're gonna make a 0:06:03.760 --> 0:06:05.560 show of it, and it's it's gonna work. 0:06:06.120 --> 0:06:08.679 Has anybody ever attempted anything like that backs up before? 0:06:09.560 --> 0:06:09.600 No. 0:06:10.960 --> 0:06:13.040 I mean, the only thing that was somewhat similar in 0:06:13.120 --> 0:06:17.400 my view is the non transparent active structure where some 0:06:17.480 --> 0:06:20.840 of them were in like brought blind trusts and some 0:06:21.000 --> 0:06:23.320 were even proxy portfolios, and market maker sort of had 0:06:23.360 --> 0:06:26.320 to figure their way out not having all the information 0:06:26.920 --> 0:06:29.120 or having it fed to them in certain ways, and 0:06:29.240 --> 0:06:33.839 they work fine. And one other thing I'll say about 0:06:33.960 --> 0:06:35.600 why I think this will be no big deal is that, 0:06:36.200 --> 0:06:38.680 let's just say, even the fifteen percent that's completely a 0:06:38.760 --> 0:06:43.560 liquid goes completely a liquid. The ETF still trades, and 0:06:43.800 --> 0:06:46.080 in March twenty twenty, when COVID happened, there was a 0:06:46.120 --> 0:06:49.240 ticker called hyd which was Vanak High Yield Municipal Bond, 0:06:49.920 --> 0:06:51.560 And to me, this is the canary in the coal mind. 0:06:51.839 --> 0:06:54.440 It traded at a twenty nine percent discount to nav 0:06:54.800 --> 0:06:58.200 sometimes and today it's taken in a billion dollars since then, 0:06:58.320 --> 0:07:00.240 and it trades just as much. In other words words, 0:07:00.839 --> 0:07:04.040 I think people really have a lot of trust that 0:07:04.160 --> 0:07:06.520 the ETF industry will not do them wrong. And then 0:07:06.520 --> 0:07:09.320 if the price is a little below NAV, that is 0:07:09.400 --> 0:07:12.080 the best price I can get based on the incentive 0:07:12.120 --> 0:07:15.280 to arbitrage, and possibly they'll even go the NAV probably 0:07:15.360 --> 0:07:18.040 isn't even right. Then they trust the ETF that much, 0:07:18.120 --> 0:07:20.520 and HYD to me proves it. So I think the 0:07:20.640 --> 0:07:23.680 audience is certainly ready. It's the question is the SEC 0:07:23.920 --> 0:07:26.360 approves it or not. But I think it's a really 0:07:26.400 --> 0:07:28.920 good idea, and I like the idea of getting Apollo 0:07:29.080 --> 0:07:32.160 into the industry, you know, to have them involved is 0:07:32.240 --> 0:07:32.920 also maybe it's a. 0:07:32.920 --> 0:07:36.040 Big Wall Street name to not be in the mix 0:07:36.360 --> 0:07:38.800 they'll done. And we should actually be pretty clear about this. 0:07:38.880 --> 0:07:41.520 We don't totally know the mechanics about how these things 0:07:41.560 --> 0:07:44.520 will work. But what do we think that this Apollo 0:07:44.680 --> 0:07:46.520 State Street ETF would hold. 0:07:47.600 --> 0:07:52.680 So the perspectus says it would be eighty percent investment 0:07:52.760 --> 0:07:57.400 grade stuff and twenty percent potentially high yield stuff. However, 0:07:57.760 --> 0:08:01.680 and this is another one of those outstandings questions. State 0:08:01.720 --> 0:08:05.720 Street it looks like is able to say XYZ is 0:08:05.880 --> 0:08:09.360 investment grade, so they are able to do that, and 0:08:09.600 --> 0:08:12.240 it's unclear whether or not you'd actually have a ratings 0:08:12.280 --> 0:08:14.760 agency involved to be able to say, okay, yes, this 0:08:14.920 --> 0:08:18.640 is investment grade. So another outstanding question on that front. 0:08:19.040 --> 0:08:22.200 Who else has expressed interest in joining the race? 0:08:22.640 --> 0:08:25.800 So there's a couple of other filers. One is an 0:08:25.840 --> 0:08:30.600 issuer named Bond Blocks. They filed for Colo ETF, which 0:08:30.920 --> 0:08:32.600 actually is a little bit different from what we were 0:08:32.600 --> 0:08:36.360 talking about with Apollo and State Street. But I really 0:08:36.360 --> 0:08:39.079 would say the Apollo and State Street ETF is the 0:08:39.160 --> 0:08:41.959 big one, not only because they were the first ones 0:08:42.160 --> 0:08:45.040 to put out the filing, but also because we're talking 0:08:45.040 --> 0:08:49.439 about two really big Wall Street names. And I want 0:08:49.480 --> 0:08:51.280 to go back to what Eric was saying about the 0:08:51.360 --> 0:08:56.880 fifteen percent. So the SEC requires illiquidtive investments to be 0:08:57.000 --> 0:09:01.559 capped at fifteen percent for a fund. Thinking, according to 0:09:01.679 --> 0:09:05.559 some analysts and strategists and people who are watching this 0:09:05.760 --> 0:09:09.160 race is that State Treed and Apollo might not necessarily 0:09:09.640 --> 0:09:12.920 need to be sticking to the fifteen percent cap, because 0:09:12.960 --> 0:09:15.680 if they were needing to stick to the fifteen percent cap, 0:09:16.000 --> 0:09:19.559 they would have already filed and launched such a product 0:09:19.880 --> 0:09:23.119 by now. And I actually want to give some analysts 0:09:23.200 --> 0:09:25.920 at morning Star credit for this. The way that they 0:09:25.960 --> 0:09:29.760 were looking at the prospectus and analyzing it is that 0:09:29.880 --> 0:09:32.720 they are thinking that really stay treat and Apollo might 0:09:32.760 --> 0:09:36.360 not need to be sticking to that cap. Of course, 0:09:36.440 --> 0:09:40.160 we just still have just the one filing so far, 0:09:40.360 --> 0:09:44.640 so we'll probably be learning more information in due time. 0:09:45.440 --> 0:09:47.160 So this is something I missed, and I got to 0:09:47.200 --> 0:09:52.320 give Brian Moriarty and Ryan Jackson, who are morning Star. 0:09:52.720 --> 0:09:55.560 They wrote a great piece on this. I learned a lot, 0:09:55.640 --> 0:09:58.640 to be honest, I thought the fifteen percent was all 0:09:58.679 --> 0:10:00.840 they could do, but I see your point point. If 0:10:00.920 --> 0:10:03.280 they can say that it's liquid because Apollo's there, then 0:10:03.320 --> 0:10:04.600 you can go beyond the fifteen percent. 0:10:04.960 --> 0:10:08.480 Exactly. You have to remember that like every day, the. 0:10:09.000 --> 0:10:13.079 Japan ETF has its underlyings frozen like every single day. 0:10:13.640 --> 0:10:16.360 Then there's been cases like Egypt where the Arabs spring, 0:10:16.640 --> 0:10:19.359 the Egyptian stock market closed for three or four months. 0:10:19.520 --> 0:10:20.839 And EGPT traded on. 0:10:21.040 --> 0:10:23.839 So even if eighty percent of it was private and 0:10:23.960 --> 0:10:27.560 got a little rough or even frozen again, it would 0:10:27.559 --> 0:10:29.640 trade like a cloth then fund. But if Apollo's going 0:10:29.679 --> 0:10:31.520 to step in and give a market, that wouldn't even happen. 0:10:32.200 --> 0:10:35.760 So I guess it's a leap of faith. But Polo 0:10:35.880 --> 0:10:38.800 is a huge firm and oother thing. If the question is, 0:10:38.840 --> 0:10:40.880 well they buy it back in a crisis, right? First 0:10:40.920 --> 0:10:43.199 of all, I've known that ETF investors tend to not 0:10:43.440 --> 0:10:47.040 go they're pretty diamond handsish. They tend to not sell 0:10:47.040 --> 0:10:50.000 a lot when the price goes down or maybe ten 0:10:50.040 --> 0:10:52.280 percent of people, so no big deal. But let's just 0:10:52.280 --> 0:10:55.360 say eighty percent ran for the door. Apollo might be 0:10:55.520 --> 0:10:57.280 smart enough to know that's when you should buy it. 0:10:57.960 --> 0:11:00.520 You know, institutions know you want to buy STUFE when it's. 0:11:00.360 --> 0:11:01.040 In a fire sale. 0:11:01.360 --> 0:11:04.320 So they may be happy to take the private credit 0:11:04.360 --> 0:11:07.160 all retail's hands after it has a downturn and buy 0:11:07.200 --> 0:11:07.800 it on the cheap. 0:11:09.320 --> 0:11:09.480 You know. 0:11:09.559 --> 0:11:12.319 So there's a couple we don't know they're thinking here. 0:11:12.760 --> 0:11:14.760 The question morning Star Rose, and I don't know the 0:11:14.840 --> 0:11:17.319 answer totally is what does Apollo get out of this? 0:11:17.440 --> 0:11:19.239 Do they get a cut of the expense ratio. 0:11:19.840 --> 0:11:22.120 As some people the restrant? I mean, they're taking a 0:11:22.240 --> 0:11:23.480 ton of risk here. 0:11:23.840 --> 0:11:26.240 Yeah, so maybe, but do they really need that money? 0:11:26.280 --> 0:11:28.760 You know the private business that they're all yeah, you know, 0:11:28.880 --> 0:11:29.840 millionaires and billionaires. 0:11:29.880 --> 0:11:30.719 Do they really need this? 0:11:31.960 --> 0:11:34.720 Somebody theorized that Apollo was doing this so they could 0:11:34.760 --> 0:11:38.120 dump the less desirable stuff onto retail, sort of like 0:11:38.240 --> 0:11:41.760 exit liquidity. But I would hope that State Street being 0:11:41.800 --> 0:11:43.960 a fiduciary and being part of this, and their name 0:11:44.040 --> 0:11:46.760 comes first. By the way, would you know, make sure 0:11:46.840 --> 0:11:50.040 that they're a check and balance on that. This is 0:11:50.559 --> 0:11:53.559 again a question that has no answer yet because you 0:11:53.600 --> 0:11:55.560 can't get these people to talk about their filings until 0:11:55.679 --> 0:11:56.600 the ATF comes out. 0:11:57.440 --> 0:11:59.880 Yeah, so there's those questions plus a bunch of other ones, 0:12:00.080 --> 0:12:02.560 and we have critics sort of pointing to a bunch 0:12:02.600 --> 0:12:06.079 of the gaps in knowledge in terms of what we 0:12:06.320 --> 0:12:11.120 know how this ETF would potentially work, and we're likely 0:12:11.200 --> 0:12:14.280 to find out more information as time goes on. What 0:12:14.400 --> 0:12:17.439 we do know is just looking at the prospectus, is 0:12:18.000 --> 0:12:21.880 Apollo would be originating and pricing the stuff, It would 0:12:21.880 --> 0:12:24.240 be selling it to Stage Street, and then it would 0:12:24.240 --> 0:12:27.360 also be buying it back if Stage Treat asks it to. 0:12:28.160 --> 0:12:30.959 And then the filing also mentions a daily limit in 0:12:31.040 --> 0:12:33.599 terms of what Apollo would be buying back, and we 0:12:33.679 --> 0:12:37.000 actually just don't know what that amount would be, whether 0:12:37.120 --> 0:12:41.400 or not it would be a dollar amount or a percentage. So, 0:12:41.600 --> 0:12:44.880 for instance, if they're buying back a million dollars worth 0:12:44.920 --> 0:12:47.719 of stuff or ten million dollars worth of stuff, what 0:12:47.960 --> 0:12:52.400 happens if the fund grows to a billion dollars in 0:12:52.520 --> 0:12:56.880 assets and then Apollo is buying back just one million. Still, 0:12:57.040 --> 0:13:00.679 So those are some of the outstanding questions, And again 0:13:00.920 --> 0:13:03.800 I want to give credit to morning Star for pointing 0:13:03.840 --> 0:13:05.880 this one out as well as they did in one 0:13:05.920 --> 0:13:07.760 of their analysis pieces recently. 0:13:14.040 --> 0:13:18.160 To be clear, here, they've filed, Now how long are 0:13:18.240 --> 0:13:20.520 we waiting? How long was bitcoin? The Bitcoin raise? 0:13:21.400 --> 0:13:24.320 Well, this is different because it's not a thirty three act, 0:13:25.480 --> 0:13:25.760 it's a. 0:13:25.920 --> 0:13:29.360 General Well we're just saying worst case scenario. 0:13:29.559 --> 0:13:32.640 Yeah, okay, best case scenario seventy five days minus ten, 0:13:32.679 --> 0:13:34.680 which we already went through, so like sixty five days 0:13:35.120 --> 0:13:38.280 that would be if it gets approved. When you file something, 0:13:38.559 --> 0:13:42.920 the SEC either says something and you have to rejigger 0:13:42.960 --> 0:13:45.560 the filing or they say nothing and it just goes. 0:13:45.800 --> 0:13:48.199 It goes through. So my guess is the SEC will 0:13:48.360 --> 0:13:50.199 call them and work something out. Maybe they'll have to 0:13:50.200 --> 0:13:51.480 tweak stuff, but. 0:13:51.559 --> 0:13:53.679 If the SEC is fine as is, it will just 0:13:53.800 --> 0:13:56.800 launch in sixty five days or so, and there we go. 0:13:57.120 --> 0:13:59.680 So when this happens, we will be talking about it again. 0:14:00.200 --> 0:14:02.240 I'm very curious about how they answer some of these 0:14:02.280 --> 0:14:03.120 technical questions. 0:14:03.360 --> 0:14:05.640 One thing that should be pointed out is that up 0:14:05.760 --> 0:14:08.439 until now, when people had this idea of private credit 0:14:08.520 --> 0:14:11.360 or private equity, they've gone to these interval funds, which 0:14:11.400 --> 0:14:13.120 are like mutual funds, but you can only get in 0:14:13.160 --> 0:14:16.520 and out like quarterly or every half year, and they thought, Okay, 0:14:16.559 --> 0:14:18.360 this is the better vehicle for this type of ill 0:14:18.360 --> 0:14:19.160 liquid investment. 0:14:19.840 --> 0:14:21.520 The problem is nobody wants this. 0:14:21.720 --> 0:14:26.280 It's like putting music in an eight track cassette tape, like, yeah, 0:14:26.280 --> 0:14:27.920 it could be the best song, but like, no one's 0:14:27.960 --> 0:14:30.560 gonna go just the vehicle to deliver it is so bad. 0:14:31.160 --> 0:14:33.720 Interval funds the average fee is like one point five percent. 0:14:33.800 --> 0:14:36.800 The fees are so high in these things. The returns 0:14:36.840 --> 0:14:37.400 aren't great. 0:14:37.560 --> 0:14:39.240 I'm, you know, not to say what. 0:14:39.240 --> 0:14:41.240 They should benchmarked against, but I just sorted through them, 0:14:41.280 --> 0:14:43.560 and I'm like, I can sort of see why people 0:14:43.600 --> 0:14:46.200 don't want interval funds. Kathy Wood has one for ARC 0:14:46.640 --> 0:14:49.600 that she does private equity investing in that's an interval fund, 0:14:49.640 --> 0:14:52.360 and nobody really cares. And this came out around the 0:14:52.520 --> 0:14:55.800 arc hype. So I think when people say, well, this 0:14:55.880 --> 0:14:57.640 should be in a different fund, I'm like, I don't know. 0:14:58.240 --> 0:15:02.120 ETFs are where it's at. So I do see the 0:15:02.240 --> 0:15:04.640 need to get it in here. And again, what people 0:15:04.680 --> 0:15:07.360 won't mention, and it has not been mentioned even in 0:15:07.400 --> 0:15:12.240 the Morning's article, is trust. You know, people underrate how 0:15:12.360 --> 0:15:16.040 much investors trust the ETF world because take out some 0:15:16.160 --> 0:15:18.680 of these senior loan ETFs like BKLN. Some of these 0:15:18.880 --> 0:15:21.880 things don't settle for like a month, and in the 0:15:21.920 --> 0:15:24.720 high yield HyG is so super popular, most of those 0:15:24.760 --> 0:15:26.920 bonds don't trade every day. So we have a lot 0:15:26.960 --> 0:15:29.520 of experience putting in liquid stuff into an ETF and 0:15:29.560 --> 0:15:33.160 everybody seems fine with it in order. And when I 0:15:33.280 --> 0:15:37.440 say fine, they trust arbitrage to do its thing and 0:15:37.600 --> 0:15:41.520 deliver them a price that's about fair minus. 0:15:41.280 --> 0:15:43.200 What the arb person needs to make a little money 0:15:43.840 --> 0:15:44.440 for themselves. 0:15:45.480 --> 0:15:47.200 But one of the things that's providing trust here is 0:15:47.240 --> 0:15:50.360 the name State Street, which is a name that everybody knows. 0:15:50.560 --> 0:15:53.400 In ETF world. We often talk about, you know, is 0:15:53.920 --> 0:15:56.680 there a zone here that vanguard or the black rocks 0:15:56.720 --> 0:15:59.360 of the world can't touch if if State Street and 0:15:59.360 --> 0:16:01.960 Apollo show so that you can do this, how protected 0:16:02.080 --> 0:16:03.760 is this space? Is there going to be a feeding 0:16:03.800 --> 0:16:05.920 frenzy and you're going to see the Vanguards and the 0:16:05.960 --> 0:16:07.880 black Rocks come in and try and find partners. 0:16:09.080 --> 0:16:11.560 It's interesting Vanguard did partner with the private equity firm 0:16:12.080 --> 0:16:15.520 because they Vanguard's also an advisor, but they didn't put 0:16:15.600 --> 0:16:18.160 a fund out that was private equity. But Vanguard has 0:16:18.240 --> 0:16:20.680 tiptoed in this area for sure. I don't see them 0:16:20.720 --> 0:16:24.160 doing anything like this. They don't need this, you know, 0:16:24.320 --> 0:16:26.360 the fisher jumping in the boat. They're not structured the 0:16:26.360 --> 0:16:30.560 same as everybody else. Blackrock is like always. 0:16:30.200 --> 0:16:32.040 On the hunt for new revenue streams. I mean they 0:16:32.080 --> 0:16:34.120 are relentless. They die for every loose ball. 0:16:34.720 --> 0:16:37.200 I bet there are whiteboard meetings at Blackrock as we 0:16:37.320 --> 0:16:40.360 speak trying to figure this out. Blackrock recently brought Prequin, 0:16:40.920 --> 0:16:43.120 which a lot of people thought was to get into 0:16:43.200 --> 0:16:45.240 this business, and I think was it Larry Fink or 0:16:45.320 --> 0:16:48.800 somebody at Blackrock said we want to democratize private markets. 0:16:49.720 --> 0:16:52.720 The other interesting thing is that it is State Street 0:16:53.360 --> 0:16:57.360 and they have a new head of ETFs Anapaglia, and 0:16:58.000 --> 0:17:00.760 it seems like they're taking a bit of a shift 0:17:01.400 --> 0:17:04.400 towards the type of stuff that they're willing to put out. 0:17:04.840 --> 0:17:07.840 So since she's joined the firm, they actually have put 0:17:07.880 --> 0:17:11.520 out filings or even put out crypto ETFs, so it 0:17:11.560 --> 0:17:13.919 looks like they're looking to do more with that. They 0:17:14.000 --> 0:17:18.480 also partnered with Galaxy, a crypto firm that used to 0:17:18.560 --> 0:17:22.520 work with in Vesco where she came from, and now 0:17:22.600 --> 0:17:25.399 we have this filing as well, So it seems like 0:17:26.080 --> 0:17:30.880 they are looking to like Eric mentioned with Blackrock, they're 0:17:30.920 --> 0:17:34.520 going after revenue. Potentially We're seeing sort of changes at 0:17:34.640 --> 0:17:38.040 State Street as well, like State treat is known for spy, right, 0:17:38.200 --> 0:17:41.320 so there's sort of new innovative stuff that they're looking 0:17:41.359 --> 0:17:41.520 to do. 0:17:41.760 --> 0:17:45.600 Yeah, and Pagalley is a great point because she is 0:17:46.160 --> 0:17:50.399 a a go getter, she's an ETF person, and if 0:17:50.440 --> 0:17:52.320 they're giving her the keys to run the business, I 0:17:52.359 --> 0:17:54.480 could see I get why they did this. I could 0:17:54.520 --> 0:17:56.680 see more of this kind of stuff coming down the line. 0:17:57.040 --> 0:17:59.800 You know that matters because we've seen companies where in 0:18:00.040 --> 0:18:03.240 ETF person with that kind of verve is driving the 0:18:03.280 --> 0:18:06.280 boat versus when they leave and then they put somebody 0:18:06.359 --> 0:18:09.040 from like another department or the mutual fun area. It 0:18:09.119 --> 0:18:12.600 all just slows down and it's all prevent defense again. 0:18:13.280 --> 0:18:17.159 But an it to me is aggressively an offensive minded 0:18:17.240 --> 0:18:19.159 persons industry. 0:18:19.280 --> 0:18:22.160 There's there's new blood at Vanguard too, so this whole 0:18:22.160 --> 0:18:24.120 space will be an interesting one to watch. 0:18:24.359 --> 0:18:26.600 To me, it's just different because you've got this major 0:18:26.840 --> 0:18:31.240 player in the space providing liquidity backstop in Apollo that 0:18:31.440 --> 0:18:34.479 is huge. And State Street, by the way, has had 0:18:34.560 --> 0:18:37.520 success in the past. They did this State Street Double 0:18:37.560 --> 0:18:40.600 Line ETF with Jeff Gunlock and that was successful. Gunlock 0:18:40.680 --> 0:18:43.280 now launches Double Line on his own, but that was, 0:18:43.920 --> 0:18:47.040 you know, his first foray. So State Street has done 0:18:47.080 --> 0:18:52.400 this in the past teaming up with somebody. So I'm excited, Joel. 0:18:52.440 --> 0:18:54.520 You know, I I just spent a long time on 0:18:54.600 --> 0:19:00.199 the planet Crypto and ready to move. Yeah, or new 0:19:00.240 --> 0:19:02.680 planet was a new universe because I got out before 0:19:02.720 --> 0:19:03.119 they got me. 0:19:03.320 --> 0:19:06.560 Yeah, yeah, they almost got me. They almost got me. 0:19:06.640 --> 0:19:07.960 You're gonna get Twitter hate for them. 0:19:08.520 --> 0:19:10.959 Sometimes when I when I've gained so many these crypto 0:19:11.080 --> 0:19:13.600 followers that when I tweet about like fixed income or 0:19:13.640 --> 0:19:14.520 something like, yo, what's this? 0:19:15.320 --> 0:19:15.600 Do you know? 0:19:15.680 --> 0:19:18.400 What they would call you in crypto land tourists. 0:19:18.640 --> 0:19:22.399 Yeah, they called me they called me in James, the 0:19:22.400 --> 0:19:26.560 Bloomberg boys. Ois, they call me a suit they call 0:19:26.640 --> 0:19:29.240 me a boomer. I've heard it all trad five bro. 0:19:29.600 --> 0:19:30.320 All those are true? 0:19:30.400 --> 0:19:31.320 And how much of it is true? 0:19:31.400 --> 0:19:35.080 Yeah? Wall Street The other guy called me elite Wall 0:19:35.160 --> 0:19:35.600 Street guy. 0:19:36.160 --> 0:19:36.360 Yeah. 0:19:36.640 --> 0:19:38.040 I'm like, all right, I like that. 0:19:38.440 --> 0:19:40.320 All right, So you're giving you're giving up the crypto 0:19:40.400 --> 0:19:41.520 space is the headline. 0:19:41.720 --> 0:19:44.680 No, I told people it would be percentage of it 0:19:44.680 --> 0:19:46.200 would be a ten percent of my life. 0:19:46.280 --> 0:19:48.800 It went it was like ninety. But it was always 0:19:48.840 --> 0:19:53.480 going to diversify away credit. It's hard to leave it 0:19:53.520 --> 0:19:55.320