WEBVTT - Apollo Global Management President Jim Zelter Talks Tariffs

0:00:02.360 --> 0:00:06.680
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:06.800 --> 0:00:08.560
<v Speaker 2>Joining us now for the next thirty minutes or so,

0:00:08.800 --> 0:00:12.720
<v Speaker 2>the perfect guest. Jim's out, the president of Apollo Global Management. Jim,

0:00:12.720 --> 0:00:13.320
<v Speaker 2>it's good to see you.

0:00:13.320 --> 0:00:15.040
<v Speaker 3>Good morning, Good morning as always.

0:00:14.720 --> 0:00:16.880
<v Speaker 2>Congratulations on the new time talk because someone's focused to

0:00:16.880 --> 0:00:17.720
<v Speaker 2>you for a number of months.

0:00:17.760 --> 0:00:21.240
<v Speaker 3>Thank you. It's been a long journey and I appreciate

0:00:21.280 --> 0:00:21.919
<v Speaker 3>the note.

0:00:22.000 --> 0:00:24.920
<v Speaker 2>Well, let's get straight into it. You've called it macro paralysis.

0:00:25.040 --> 0:00:25.759
<v Speaker 2>What is it now?

0:00:26.680 --> 0:00:29.040
<v Speaker 3>Well, it is. I mean I sit here this morning

0:00:29.240 --> 0:00:32.839
<v Speaker 3>and this really can't be a surprise. The reality of

0:00:32.840 --> 0:00:35.000
<v Speaker 3>the surprise is a little bit more painful for everybody

0:00:35.040 --> 0:00:39.040
<v Speaker 3>to digest. But this administration was very clear during the

0:00:39.080 --> 0:00:42.920
<v Speaker 3>campaign what their objective was. They really wanted to revitalize

0:00:42.960 --> 0:00:47.280
<v Speaker 3>American industry. They wanted to bring back manufacturing, focus on energy,

0:00:47.320 --> 0:00:52.160
<v Speaker 3>focus on industrial renaissance, and tariffs, as Amrita said, tariff's

0:00:52.360 --> 0:00:55.480
<v Speaker 3>taxes and deregulation with a three legged stool. And right

0:00:55.520 --> 0:00:58.840
<v Speaker 3>now the focus is on tariffs. They have been probably

0:00:58.880 --> 0:01:01.560
<v Speaker 3>signaling I know you have Secretary Lutnik on later on

0:01:01.560 --> 0:01:04.600
<v Speaker 3>this morning, but they've been signaling this was the dialogue.

0:01:04.720 --> 0:01:07.720
<v Speaker 3>This is obviously a long negotiation, but again, this was

0:01:07.840 --> 0:01:10.960
<v Speaker 3>part of the administration's agenda. This is what they wanted

0:01:10.959 --> 0:01:13.440
<v Speaker 3>to accomplish. They've been very clear in the communication. So

0:01:13.959 --> 0:01:16.680
<v Speaker 3>the pain of the announcement is being felt this morning

0:01:16.680 --> 0:01:20.679
<v Speaker 3>in the market. But again I'm not saying preaching patients

0:01:21.160 --> 0:01:24.440
<v Speaker 3>and perspective, but certainly this should not be a surprise.

0:01:24.560 --> 0:01:28.040
<v Speaker 3>And I think now as we think about the big

0:01:28.080 --> 0:01:30.280
<v Speaker 3>trends in the last twenty thirty years, the first of

0:01:30.319 --> 0:01:34.600
<v Speaker 3>which is globalization. Globalization is not going to be like

0:01:34.640 --> 0:01:36.640
<v Speaker 3>we have seen it in the past. It's a new

0:01:36.640 --> 0:01:40.760
<v Speaker 3>global world order. How the US manufacturing and financial base

0:01:40.800 --> 0:01:43.640
<v Speaker 3>fits into that as a TBD, but certainly it's going

0:01:43.680 --> 0:01:45.559
<v Speaker 3>to be one that plays out over the next several months.

0:01:45.680 --> 0:01:48.200
<v Speaker 2>I can't think of many people outside of you and

0:01:48.240 --> 0:01:50.800
<v Speaker 2>the team, more down into the c suite and corporate America.

0:01:51.320 --> 0:01:54.000
<v Speaker 2>How are they planning for the changes in the global

0:01:54.000 --> 0:01:56.240
<v Speaker 2>economy that you and the team are anticipating A plans

0:01:56.280 --> 0:01:58.520
<v Speaker 2>going ahead? Do they on hold? Are they totally derailed?

0:01:58.600 --> 0:02:02.200
<v Speaker 3>Yeah? Listen, I've used that's the term macro paralysis, because

0:02:02.240 --> 0:02:04.680
<v Speaker 3>I think we came into the year the busiest folks

0:02:04.720 --> 0:02:06.240
<v Speaker 3>on Wall Street were supposed to be the M and

0:02:06.280 --> 0:02:09.320
<v Speaker 3>A bankers and the ECM folks, and that has not

0:02:09.480 --> 0:02:13.919
<v Speaker 3>taken place, and so the pace of broad activity in

0:02:13.960 --> 0:02:17.119
<v Speaker 3>the public markets has certainly been muted. And I think

0:02:17.120 --> 0:02:19.440
<v Speaker 3>this really plays into and I've been on the show

0:02:19.480 --> 0:02:22.519
<v Speaker 3>before talking about the role of public markets and the

0:02:22.639 --> 0:02:25.600
<v Speaker 3>role of private markets, and not just private credit, but

0:02:25.680 --> 0:02:28.720
<v Speaker 3>overall private markets, and you're going to see this will

0:02:28.760 --> 0:02:32.320
<v Speaker 3>be a turning point where private markets play a larger

0:02:32.400 --> 0:02:34.239
<v Speaker 3>role for a lot of these corporates that are still

0:02:34.520 --> 0:02:36.680
<v Speaker 3>they have long term plans, whether it's what's going on

0:02:36.760 --> 0:02:41.120
<v Speaker 3>in technology, energy mining, a lot of US domestics. Who's

0:02:41.200 --> 0:02:45.160
<v Speaker 3>going to finance this reshoring? That's part of the master plan?

0:02:45.480 --> 0:02:48.280
<v Speaker 3>So no doubt, I think in c suites and in

0:02:48.360 --> 0:02:53.120
<v Speaker 3>boardrooms there's vision, there's a desire, but the practical reality

0:02:53.200 --> 0:02:54.840
<v Speaker 3>is things have come to a stop. And I know

0:02:54.880 --> 0:02:57.400
<v Speaker 3>you're going to have Torston on later on today the

0:02:57.600 --> 0:03:01.119
<v Speaker 3>soft data. When you see what's going on on with consumers,

0:03:01.200 --> 0:03:07.400
<v Speaker 3>consumer concern, corporate concern, it's really certainly it's amazing what

0:03:07.440 --> 0:03:11.120
<v Speaker 3>the President has been able to do in seventy five days,

0:03:11.639 --> 0:03:14.120
<v Speaker 3>what four hundred basis points didn't do over two or

0:03:14.160 --> 0:03:16.399
<v Speaker 3>three years. As I said here, a couple of years ago,

0:03:16.400 --> 0:03:19.840
<v Speaker 3>we talked about the tightening of financial conditions. It didn't happen.

0:03:20.120 --> 0:03:23.320
<v Speaker 3>The US consumer led in a massive rally and a

0:03:23.400 --> 0:03:27.240
<v Speaker 3>strength in the US economy in seventy five days. Talk

0:03:27.320 --> 0:03:29.600
<v Speaker 3>of today has really slowed down the economy. So the

0:03:29.720 --> 0:03:33.800
<v Speaker 3>soft data and anecdotes would tell you that we have

0:03:34.240 --> 0:03:36.280
<v Speaker 3>the recession went from a one to five to one

0:03:36.280 --> 0:03:39.160
<v Speaker 3>in three. That now, depending on who you talk to,

0:03:39.200 --> 0:03:42.160
<v Speaker 3>it's north of fifty percent. It's probably fifty percent going

0:03:42.240 --> 0:03:44.280
<v Speaker 3>higher depending on what happens on the ninth.

0:03:44.360 --> 0:03:46.240
<v Speaker 1>There's a lot to unpack there. I want to go

0:03:46.280 --> 0:03:48.200
<v Speaker 1>back to something that you said that this shouldn't have

0:03:48.240 --> 0:03:52.120
<v Speaker 1>been a surprise to anyone, and maybe the objective shouldn't

0:03:52.120 --> 0:03:55.640
<v Speaker 1>have been a surprise, but the execution is raising some

0:03:55.760 --> 0:04:00.680
<v Speaker 1>questions for people about how it is going to be through.

0:04:00.840 --> 0:04:03.080
<v Speaker 1>Is there anything about what you have seen over the

0:04:03.120 --> 0:04:06.960
<v Speaker 1>past week that makes you materially change some of your

0:04:07.000 --> 0:04:10.160
<v Speaker 1>strategy about how you go forward, how you advise the

0:04:10.200 --> 0:04:10.760
<v Speaker 1>c suite.

0:04:10.800 --> 0:04:13.000
<v Speaker 3>Sure, well, let's just go through two or three things

0:04:13.240 --> 0:04:16.720
<v Speaker 3>about investing today, and a lot depends on the portfolio

0:04:16.839 --> 0:04:19.640
<v Speaker 3>or the liabilities you manage. If you run a domestic

0:04:20.120 --> 0:04:23.040
<v Speaker 3>US long short fund, this is obviously much more fundamental.

0:04:23.800 --> 0:04:26.680
<v Speaker 3>We're a long term, long duration investor with a lot

0:04:26.720 --> 0:04:29.080
<v Speaker 3>of investment great assets. So when you look around the

0:04:29.080 --> 0:04:33.440
<v Speaker 3>globe right now, is anything cheap not really. Our rates

0:04:33.480 --> 0:04:35.960
<v Speaker 3>probably going to be notwithstanding the rate move in the

0:04:36.000 --> 0:04:39.200
<v Speaker 3>last twenty four hours, Are rates going to be materially

0:04:39.279 --> 0:04:41.200
<v Speaker 3>higher over the next few years And they have been

0:04:41.320 --> 0:04:45.360
<v Speaker 3>because of deglobalization probably, And then you have to weigh

0:04:45.440 --> 0:04:50.800
<v Speaker 3>the geopolitics. So certainly your risk parameters and how you

0:04:50.839 --> 0:04:54.080
<v Speaker 3>want to calibrate risk has certainly gone up the last

0:04:54.080 --> 0:04:57.120
<v Speaker 3>several months, and the idea of the hurdle of an

0:04:57.160 --> 0:05:00.080
<v Speaker 3>equity return has certainly gone up the last several months.

0:05:00.360 --> 0:05:03.560
<v Speaker 3>And with base rates high and getting a coupon, it's

0:05:03.600 --> 0:05:06.600
<v Speaker 3>all about your calibration of risks. So certainly this has

0:05:06.680 --> 0:05:10.480
<v Speaker 3>taken a situation where in terms of what you can

0:05:10.520 --> 0:05:13.720
<v Speaker 3>get in base rates, in terms of bonds, in terms

0:05:13.800 --> 0:05:16.680
<v Speaker 3>of fixed income, in terms of fixed income replacement, it

0:05:16.800 --> 0:05:20.000
<v Speaker 3>certainly made the equity risk premium a lot higher. And

0:05:20.080 --> 0:05:22.960
<v Speaker 3>certainly for us we are in the private equity business,

0:05:22.960 --> 0:05:25.320
<v Speaker 3>where we are in the equity business, and for us

0:05:25.400 --> 0:05:28.120
<v Speaker 3>as risk premiums Arisen. It's a really high heartle for

0:05:28.160 --> 0:05:29.359
<v Speaker 3>equity these days, which.

0:05:29.240 --> 0:05:31.960
<v Speaker 1>Raises a question, especially if Apollo has really seen the

0:05:32.000 --> 0:05:35.000
<v Speaker 1>debt portion of your business grow and exceed what you

0:05:35.000 --> 0:05:37.760
<v Speaker 1>see in the equity, is that only set to expand,

0:05:37.920 --> 0:05:41.920
<v Speaker 1>especially if rates are going to remain structurally higher in

0:05:41.960 --> 0:05:43.000
<v Speaker 1>this new regime.

0:05:43.520 --> 0:05:45.880
<v Speaker 3>There's a reason why we positioned our business the way

0:05:45.880 --> 0:05:48.960
<v Speaker 3>we have over the last five to seven years, not

0:05:49.000 --> 0:05:51.839
<v Speaker 3>suspecting a day like this would occur. But the reality

0:05:51.880 --> 0:05:54.640
<v Speaker 3>is around the globe you have millions and millions of

0:05:54.680 --> 0:05:58.000
<v Speaker 3>folks that are ill prepared, unfortunately for their retirement their pension.

0:05:58.320 --> 0:06:01.360
<v Speaker 3>I was in Asia and Australia last week. Even as

0:06:01.360 --> 0:06:04.560
<v Speaker 3>well as the superannuation funds have done for Australia, they

0:06:04.560 --> 0:06:07.560
<v Speaker 3>do not really have a system on post accumulation and

0:06:07.600 --> 0:06:10.440
<v Speaker 3>post retirements. And so around the globe and even in

0:06:10.440 --> 0:06:13.279
<v Speaker 3>this country, eleven thousand people a day are becoming sixty

0:06:13.360 --> 0:06:17.000
<v Speaker 3>or turning sixty five. We're ill prepared for the pension

0:06:17.440 --> 0:06:19.520
<v Speaker 3>system of tomorrow in terms of the needs. And that's

0:06:19.600 --> 0:06:24.880
<v Speaker 3>why listen what's being written recently about public about private markets,

0:06:24.920 --> 0:06:28.440
<v Speaker 3>certainly in Larry Fink's letter, it's a tune that we've

0:06:28.480 --> 0:06:32.320
<v Speaker 3>been talking about the last several years about changing market structure,

0:06:32.680 --> 0:06:36.280
<v Speaker 3>the role of private markets with retirement systems financing. What

0:06:36.720 --> 0:06:40.640
<v Speaker 3>this administration is putting forth. We think we're primed to

0:06:40.640 --> 0:06:43.120
<v Speaker 3>be a position of First and Maine in what's going

0:06:43.160 --> 0:06:46.440
<v Speaker 3>on right now, but certainly a wake up call for

0:06:46.480 --> 0:06:47.560
<v Speaker 3>retirees around the globe.

0:06:47.640 --> 0:06:49.920
<v Speaker 2>Jim, let's talk about Europe. There's been a major sentiment

0:06:49.960 --> 0:06:52.760
<v Speaker 2>shift towards the European side of financial markets and a

0:06:52.880 --> 0:06:54.960
<v Speaker 2>pullback from the United States. For a long time, we

0:06:55.000 --> 0:06:58.240
<v Speaker 2>talked about so called US exceptionalism, and one big feature

0:06:58.240 --> 0:07:01.200
<v Speaker 2>of that, maybe even the secret source Jeff Bezos himself

0:07:01.240 --> 0:07:05.240
<v Speaker 2>said it is risk seeking capital, abundant markets, really really

0:07:05.279 --> 0:07:08.720
<v Speaker 2>deep markets, tons of liquidity. Is any of that under threat?

0:07:09.240 --> 0:07:11.520
<v Speaker 3>Well, I think that what you're seeing is maybe not

0:07:11.680 --> 0:07:14.800
<v Speaker 3>the US going down, but also parts of our globe

0:07:14.840 --> 0:07:17.440
<v Speaker 3>coming up. I mean the Drogy letter that was put

0:07:17.440 --> 0:07:20.000
<v Speaker 3>out last September that everybody had in the file. They've

0:07:20.040 --> 0:07:21.960
<v Speaker 3>quickly pulled it out the last three or four weeks

0:07:22.360 --> 0:07:27.680
<v Speaker 3>because certainly this administration has woken woken Europe up, and

0:07:27.760 --> 0:07:30.000
<v Speaker 3>as they wake up, they're saying, how do we create

0:07:30.040 --> 0:07:34.160
<v Speaker 3>an economic environment where capital can grow, capital being created

0:07:34.200 --> 0:07:37.320
<v Speaker 3>for growth companies. Think about a securitization market. You've got

0:07:37.640 --> 0:07:42.040
<v Speaker 3>a twenty three trillion economy with a nascent securitization market.

0:07:42.440 --> 0:07:45.560
<v Speaker 3>And I think this administration has woken up Europe in

0:07:45.640 --> 0:07:49.320
<v Speaker 3>terms of thinking about how they actually fund, finance and

0:07:49.400 --> 0:07:52.920
<v Speaker 3>grow in this industrial renaissance that's going around the globe

0:07:52.960 --> 0:07:55.880
<v Speaker 3>right now. So it's certainly been a massive wake up call,

0:07:55.920 --> 0:07:59.320
<v Speaker 3>and I think again you're going to see private market

0:07:59.360 --> 0:08:03.080
<v Speaker 3>solutions or many of these countries, companies and industries, not

0:08:03.120 --> 0:08:06.000
<v Speaker 3>only in the US but in Western Europe as they

0:08:06.280 --> 0:08:07.480
<v Speaker 3>rise to the challenge.

0:08:07.720 --> 0:08:11.040
<v Speaker 1>One discussion point has been that US exceptionalism is predicated

0:08:11.080 --> 0:08:14.080
<v Speaker 1>both on the AI trade as well as fiscal stimulus

0:08:14.480 --> 0:08:17.760
<v Speaker 1>that's going into reverse a bit maybe at the same

0:08:17.760 --> 0:08:20.560
<v Speaker 1>time that the fiscal expansion is going on in places

0:08:20.600 --> 0:08:22.560
<v Speaker 1>like Europe, in places like China. How much do you

0:08:22.600 --> 0:08:26.200
<v Speaker 1>see that continuing in terms of market performance and something

0:08:26.240 --> 0:08:27.200
<v Speaker 1>that you're willing to follow.

0:08:28.040 --> 0:08:31.560
<v Speaker 3>Well, what you're really addressing is mostly on the equity performance,

0:08:31.600 --> 0:08:34.200
<v Speaker 3>in the public equity performance where public equity dollars go.

0:08:35.000 --> 0:08:39.760
<v Speaker 3>Certainly there's been a massive amount of global investment in

0:08:39.840 --> 0:08:42.559
<v Speaker 3>the US equity markets in the S and P, and

0:08:42.600 --> 0:08:45.120
<v Speaker 3>that's going to be muted as there's a global pullback

0:08:45.160 --> 0:08:47.560
<v Speaker 3>as investors think about other parts of the globe right now.

0:08:47.600 --> 0:08:50.160
<v Speaker 3>But the bigger question, which you're really getting at, is

0:08:50.480 --> 0:08:52.720
<v Speaker 3>if a recession coming into If I was here six

0:08:52.720 --> 0:08:54.559
<v Speaker 3>months ago, we would have said a recession in twenty

0:08:54.559 --> 0:08:57.760
<v Speaker 3>five twenty six was one in five, and now that's

0:08:57.760 --> 0:09:00.720
<v Speaker 3>certainly one and two, if not higher. What's going on

0:09:00.760 --> 0:09:03.280
<v Speaker 3>over the next several weeks. The other scenario is the

0:09:03.280 --> 0:09:06.319
<v Speaker 3>stagflation scenario that went from a one in six one

0:09:06.320 --> 0:09:09.000
<v Speaker 3>and seven to probably one in five right now one

0:09:09.040 --> 0:09:11.600
<v Speaker 3>in four, And that's the concern that's got to be

0:09:11.600 --> 0:09:14.560
<v Speaker 3>the concern of policy makers in the US but also

0:09:14.600 --> 0:09:15.240
<v Speaker 3>around the globe.

0:09:15.320 --> 0:09:17.080
<v Speaker 1>Just building on that, before it sounded like you didn't

0:09:17.080 --> 0:09:18.160
<v Speaker 1>think the FED could cut rates.

0:09:18.200 --> 0:09:19.160
<v Speaker 2>You said that this is going to be.

0:09:19.160 --> 0:09:21.760
<v Speaker 1>A permanently higher rate environment, and that happens with both

0:09:21.800 --> 0:09:25.000
<v Speaker 1>the US as well as Europe. Why you think that

0:09:25.000 --> 0:09:27.600
<v Speaker 1>they're destined to allow that kind of scenario.

0:09:27.800 --> 0:09:30.800
<v Speaker 3>No, but I think they have a When you look

0:09:30.840 --> 0:09:34.240
<v Speaker 3>at the balance of the dual mandate right now, it's

0:09:34.400 --> 0:09:37.000
<v Speaker 3>certainly much more challenging. Certainly the White House is going

0:09:37.080 --> 0:09:40.240
<v Speaker 3>to want to see them cut rates. But and certainly

0:09:40.280 --> 0:09:44.040
<v Speaker 3>some of the economic data in terms of slower growth,

0:09:44.080 --> 0:09:48.000
<v Speaker 3>would portray that to be the next move. I think

0:09:48.000 --> 0:09:49.760
<v Speaker 3>the Fed is going to have to practice much more

0:09:49.800 --> 0:09:50.880
<v Speaker 3>patience in here, Lisa.

0:09:50.880 --> 0:09:53.520
<v Speaker 2>This is the number one question in financial markets right now.

0:09:53.679 --> 0:09:57.080
<v Speaker 2>Is that Fed put constraint because of higher inflation further

0:09:57.120 --> 0:09:57.600
<v Speaker 2>down the road?

0:09:57.840 --> 0:09:59.880
<v Speaker 1>Right now, the market is betting that, No, it is not,

0:10:00.200 --> 0:10:02.360
<v Speaker 1>because what you are seeing is more than three rate cuts,

0:10:02.679 --> 0:10:05.040
<v Speaker 1>almost four rate cuts being priced into the market by

0:10:05.120 --> 0:10:06.960
<v Speaker 1>year end, with some like City saying that they're going

0:10:07.000 --> 0:10:10.120
<v Speaker 1>to accelerate them, and others like Morgan Stanley taking away

0:10:10.160 --> 0:10:12.760
<v Speaker 1>their call key question at a time we're coming off

0:10:12.760 --> 0:10:13.920
<v Speaker 1>a real inflationary bomp.

0:10:14.200 --> 0:10:14.360
<v Speaker 3>Jim.

0:10:14.400 --> 0:10:16.520
<v Speaker 2>We caught up with a Treasury secretary yesterday in the

0:10:16.559 --> 0:10:19.280
<v Speaker 2>immediate aftermath of the announcement from the President, and he

0:10:19.320 --> 0:10:21.959
<v Speaker 2>was asked by a Marie about the equity market selloff

0:10:22.160 --> 0:10:25.040
<v Speaker 2>since February, the highst of the year, and he pointed

0:10:25.040 --> 0:10:26.720
<v Speaker 2>to the nastack and said, it seems like a Max

0:10:26.760 --> 0:10:29.839
<v Speaker 2>seven problem and not a MAGA problem. Now you can

0:10:29.840 --> 0:10:32.160
<v Speaker 2>push back against that, pour some cold water over it,

0:10:32.240 --> 0:10:34.080
<v Speaker 2>but he has kind of got a point. There's something

0:10:34.080 --> 0:10:36.439
<v Speaker 2>else going on here outside of just trade.

0:10:36.720 --> 0:10:39.320
<v Speaker 3>Well that goes back to my point earlier, like you

0:10:39.320 --> 0:10:41.920
<v Speaker 3>know when you look around, like what as an investor

0:10:42.000 --> 0:10:46.080
<v Speaker 3>right now, are things cheap? No, they've gone down in price,

0:10:46.480 --> 0:10:49.200
<v Speaker 3>But don't confuse a price move with something being cheap.

0:10:49.640 --> 0:10:52.000
<v Speaker 3>And it was a marketplace that the mag seven took

0:10:52.000 --> 0:10:54.400
<v Speaker 3>the market up, and now the mag seven is taken

0:10:54.440 --> 0:10:57.080
<v Speaker 3>the market down. But again, this is a very very

0:10:57.080 --> 0:10:59.280
<v Speaker 3>complex economy. And again this is the big theme that

0:10:59.320 --> 0:11:01.360
<v Speaker 3>we've been talking for years. And I know we're talking

0:11:01.400 --> 0:11:04.600
<v Speaker 3>about financial markets in the equity market, but these public

0:11:04.679 --> 0:11:08.280
<v Speaker 3>markets only reflect a very very small portion of the

0:11:08.360 --> 0:11:11.920
<v Speaker 3>US economy. Yes, these are great growth companies or global companies,

0:11:12.240 --> 0:11:14.079
<v Speaker 3>but so much of the US economy, so much of

0:11:14.080 --> 0:11:17.679
<v Speaker 3>the European economy is private companies. And how do they

0:11:17.760 --> 0:11:20.880
<v Speaker 3>navigate this? And that's what gives us a great deal

0:11:20.920 --> 0:11:24.600
<v Speaker 3>of enthusiasm because what's going on for investors in private

0:11:24.640 --> 0:11:28.200
<v Speaker 3>markets but also for companies needing capital. There's a lot

0:11:28.240 --> 0:11:30.520
<v Speaker 3>more tools in the toolbox than there was a decade ago.

0:11:30.640 --> 0:11:32.480
<v Speaker 2>Can we just finish that on data centers which has

0:11:32.520 --> 0:11:34.800
<v Speaker 2>been a major thing. Sure, not just in public markets.

0:11:35.120 --> 0:11:37.280
<v Speaker 2>There have been some warnings about over capacity in the

0:11:37.360 --> 0:11:39.760
<v Speaker 2>last few weeks. How are you even the team navigates

0:11:39.760 --> 0:11:40.040
<v Speaker 2>in that.

0:11:41.080 --> 0:11:43.840
<v Speaker 3>We've certainly taken on much more as a debt provider

0:11:43.920 --> 0:11:46.720
<v Speaker 3>to date. Certainly those who have been around for a

0:11:46.760 --> 0:11:49.320
<v Speaker 3>few decades, you feel like you're seeing a bit of

0:11:49.320 --> 0:11:52.400
<v Speaker 3>the conversation about dark fiber from ninety eight to ninety

0:11:52.480 --> 0:11:54.240
<v Speaker 3>nine and two thousand and one, two thousand and two.

0:11:54.559 --> 0:11:58.960
<v Speaker 3>Build it and they will come. Certainly, there are economics

0:11:58.960 --> 0:12:00.720
<v Speaker 3>that still need to be developed in terms of the

0:12:00.720 --> 0:12:04.280
<v Speaker 3>economic model of the data center business. A lot of

0:12:04.280 --> 0:12:08.079
<v Speaker 3>capital has been created upfront to purchase the land, secure

0:12:08.120 --> 0:12:11.559
<v Speaker 3>the power, create the facility, but who's the long term

0:12:11.600 --> 0:12:14.400
<v Speaker 3>off take of that? Who's the long term capital? And

0:12:14.400 --> 0:12:16.240
<v Speaker 3>again this goes back to the conversation I had earlier

0:12:16.280 --> 0:12:19.680
<v Speaker 3>about the pension deficit issue. There's a tremendous amount of

0:12:19.679 --> 0:12:22.440
<v Speaker 3>long term capital that wants to be matched up with

0:12:22.559 --> 0:12:25.480
<v Speaker 3>that opportunity set. But to date we've been much more

0:12:25.559 --> 0:12:29.440
<v Speaker 3>of a debt provider. But I certainly think that questions

0:12:29.440 --> 0:12:32.480
<v Speaker 3>that were raised last week by Joe Sai pretty legitimate

0:12:32.559 --> 0:12:35.640
<v Speaker 3>questions about the long term economics and the short term

0:12:35.720 --> 0:12:39.360
<v Speaker 3>supply demand mismatch about how these things come online and

0:12:39.400 --> 0:12:40.480
<v Speaker 3>what the economics are.

0:12:40.679 --> 0:12:40.880
<v Speaker 1>Jim.

0:12:40.960 --> 0:12:42.520
<v Speaker 2>We could talk to you well, Monik, and I've got

0:12:42.520 --> 0:12:44.040
<v Speaker 2>a job to do, though we appreciate your time.

0:12:44.120 --> 0:12:45.000
<v Speaker 3>Always a driver, BUYE.

0:12:45.000 --> 0:12:46.920
<v Speaker 2>Thank you, Jim. Jim's out to there, the president of

0:12:46.920 --> 0:12:48.080
<v Speaker 2>Apollo Global Management,