WEBVTT - 0423 Surveillance Radio Podcast 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.240 on Apple car Play or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.799 Business App. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:27.160 or watch us live on YouTube. 0:00:27.640 --> 0:00:32.880 Why don't you bring it in? Zuke the map? Oh 0:00:32.920 --> 0:00:34.120 I didn't live over the lake. 0:00:34.280 --> 0:00:35.960 Well, that's a lot of other places. 0:00:36.000 --> 0:00:38.280 It's very zugi okay, very good. Is that how you 0:00:38.440 --> 0:00:40.280 pronounce it? It is zuke okay? 0:00:40.320 --> 0:00:42.199 Close you you got it. 0:00:42.280 --> 0:00:47.240 Tom Anastajia, Amarrossa, chief investment strategists at Partners Group Anastagia, Boy, 0:00:47.240 --> 0:00:49.680 we were just mentioning this that the socks index has 0:00:49.680 --> 0:00:52.280 had such a rip over the last sixteen days of 0:00:52.360 --> 0:00:52.879 games here. 0:00:52.960 --> 0:00:55.240 Indeed, so tech is now back. 0:00:55.000 --> 0:00:56.720 Being the driver for this market. Is that where we 0:00:56.760 --> 0:00:57.240 are these things? 0:00:57.320 --> 0:00:58.560 Yes, you know, I think what's happening. 0:00:58.560 --> 0:01:01.680 Paul's investors can't really figure out when the end of 0:01:01.680 --> 0:01:04.000 the ceasefire, when the end of the conflict is going 0:01:04.000 --> 0:01:05.440 to be in the Middle East, And in the meantime, 0:01:05.480 --> 0:01:08.160 they're focusing on what they can control where they can't observe, 0:01:08.240 --> 0:01:11.760 and that is artificial intelligence, And I will say the 0:01:11.880 --> 0:01:15.600 total addressable market for AI just keeps on expanding this 0:01:15.680 --> 0:01:18.759 year with the move from conversational AI to augentic AI 0:01:18.920 --> 0:01:21.520 to glimpses of physical AI. And what do you need 0:01:21.560 --> 0:01:24.840 for all of that is semiconductors. And so that's why 0:01:24.959 --> 0:01:26.720 investors keep flocking to the space. 0:01:27.040 --> 0:01:29.200 So as we step back, I mean, it looks like, 0:01:30.080 --> 0:01:31.640 I don't know, we're all in the same boat trying 0:01:31.640 --> 0:01:33.080 to figure out what's going to happen in ARAM. But 0:01:33.120 --> 0:01:35.120 I think what we can at least in the near term, 0:01:35.560 --> 0:01:38.120 it's higher for longer energy costs. Yeah, and we're starting 0:01:38.160 --> 0:01:40.080 to say, like a number of companies call that at most, 0:01:40.080 --> 0:01:42.400 notably the airlines and maybe you know they've been calling 0:01:42.400 --> 0:01:45.280 out and really calling out the cost incremental costs for energy. 0:01:45.360 --> 0:01:47.760 How does that factor into kind of your outlook for 0:01:47.960 --> 0:01:50.840 these markets? If we do have a higher energy sector 0:01:50.880 --> 0:01:51.880 for longer. 0:01:51.640 --> 0:01:52.200 That's right. 0:01:52.280 --> 0:01:54.400 I mean, I think the really critical distinction for the 0:01:54.480 --> 0:01:57.120 market is how high and for how long? 0:01:57.320 --> 0:01:57.480 You know? 0:01:57.520 --> 0:02:00.200 I think if oil is at one hundred hundred and 0:02:00.240 --> 0:02:03.320 twenty bar you know, dollars a barrel for a long time, 0:02:03.680 --> 0:02:06.440 then this is going to drive material cost inflation but 0:02:06.720 --> 0:02:09.520 we're talking about oil being at eighty or ninety dollars 0:02:09.560 --> 0:02:11.160 a barrel, which is sort of the new normal. 0:02:11.400 --> 0:02:13.480 I think that's more than manageable for companies. 0:02:13.680 --> 0:02:16.040 And I would say we're in that ladder camp, which 0:02:16.080 --> 0:02:19.320 is look, the conflict will eventually be resolved and the 0:02:19.360 --> 0:02:22.200 straight up Horo moves most likely will be opened up. 0:02:22.240 --> 0:02:24.600 But what will end up with our inventory levels that 0:02:24.639 --> 0:02:29.359 are sufficiently depleted, So that does require a higher cost 0:02:29.360 --> 0:02:32.160 of a barrel, but again eighty or ninety dollars. Now, 0:02:32.160 --> 0:02:34.320 at Partners Group, we have been thinking about what this 0:02:34.440 --> 0:02:37.320 means for a variety of our portfolio companies. And I 0:02:37.400 --> 0:02:40.320 will say, you know, very few of our portfolio companies, 0:02:40.360 --> 0:02:43.760 eight out of sixty five have some sort of commodity 0:02:43.840 --> 0:02:47.320 or oil exposure. But even that exposure, it's minimal and 0:02:47.440 --> 0:02:51.440 it can be mitigated with cost pass throughs and contractual appligations. 0:02:51.520 --> 0:02:53.440 Of sixty five companies in. 0:02:53.440 --> 0:02:56.200 Our private equity direct portfolio. 0:02:55.800 --> 0:02:59.240 That's a hell of a conference call when you're on 0:02:59.320 --> 0:03:02.120 linked up with six. It's like the lights to deserve 0:03:02.240 --> 0:03:02.959 when she does that. 0:03:03.480 --> 0:03:06.880 So, Anastasia, so let's talk about earning share. We're kind 0:03:06.880 --> 0:03:08.440 of got rake smack in the middle of earning season 0:03:08.520 --> 0:03:11.920 right here. Earnings have been really good again, and I've seen, 0:03:12.200 --> 0:03:15.280 you know, analysts take their estimates up, which seems kind 0:03:15.320 --> 0:03:17.119 of strange in environment where there's so muchunsertainy. 0:03:17.120 --> 0:03:18.799 How do you think about the earning picture out there. 0:03:18.919 --> 0:03:21.080 I think it's been stellar. I think it's been a 0:03:21.240 --> 0:03:22.400 rock star earning season. 0:03:22.400 --> 0:03:24.160 I mean, really, you've never seen it's nuts. 0:03:24.560 --> 0:03:26.520 I mean, no matter where you look at, Tom, you know, 0:03:26.560 --> 0:03:29.040 eighty eight percent of the companies are beating expectations. 0:03:29.040 --> 0:03:30.560 A surprise is ten percent. 0:03:30.800 --> 0:03:32.440 And you know we used to slice and dice it 0:03:32.480 --> 0:03:34.360 and say, well, Max even are doing great, the rest 0:03:34.440 --> 0:03:38.720 or not. Now everybody's actually delivering ten percent plus earnings growth, 0:03:38.880 --> 0:03:41.200 and Nvidia is a standout there. 0:03:41.200 --> 0:03:43.360 So I think it's a really robust earning season. 0:03:43.760 --> 0:03:46.680 And it really goes back to the point that companies 0:03:46.800 --> 0:03:50.600 can withstand oil inflation because they've passed that through and 0:03:50.640 --> 0:03:53.280 also they have hedges in place, so at the moment, 0:03:53.520 --> 0:03:55.040 it's back to economic strength. 0:03:55.040 --> 0:03:56.520 That's the message we're doing. 0:03:56.520 --> 0:04:00.360 Psycho it' psych doctor, Tom Folks, it's Boolberg surveillance doctor. 0:04:01.320 --> 0:04:05.560 When you were sitting in a classroom absolutely killing it 0:04:05.600 --> 0:04:09.960 at the University of New Mexico. What was the optimism 0:04:10.120 --> 0:04:13.720 then that you had that you clearly have now is 0:04:13.760 --> 0:04:16.360 you've led in this bull market. I want you to 0:04:16.440 --> 0:04:21.039 talk to the gloom crew and to explain the amoroso 0:04:21.240 --> 0:04:26.240 visceral optimism that was the third row in a finance class. 0:04:26.400 --> 0:04:27.920 I don't even know where the university. 0:04:28.360 --> 0:04:31.400 It's next to Arizona, right it is, And it was 0:04:31.440 --> 0:04:32.920 always the first row. 0:04:32.560 --> 0:04:32.760 It was. 0:04:36.080 --> 0:04:37.159 Always the first row. 0:04:37.240 --> 0:04:39.400 But you know, look, I mean, if we think about, 0:04:39.600 --> 0:04:42.560 you know, the basics of the US economy, the US 0:04:42.720 --> 0:04:45.480 or global stock market, it's about the earnings growth, It's 0:04:45.480 --> 0:04:48.839 about the multiple and what drives that earning growth growth. 0:04:48.920 --> 0:04:51.200 And what I'm excited about today is that you have 0:04:51.800 --> 0:04:55.119 multiple engines of growth playing out in the economy. Maybe 0:04:55.160 --> 0:04:57.720 that's what's really different is this is now a multi 0:04:57.800 --> 0:05:00.800 engine economy unlike we've had for quite so time. You've 0:05:00.800 --> 0:05:04.280 got the consumer side that is really really doing well 0:05:04.320 --> 0:05:07.640 despite the higher gasoline prices. You've got the corporate side, 0:05:07.720 --> 0:05:09.200 tom that we just talked about. 0:05:09.279 --> 0:05:10.760 But also we've got the. 0:05:10.600 --> 0:05:14.200 US economy that's sixty three percent less oil intensive. 0:05:13.760 --> 0:05:14.240 Than it was. 0:05:14.520 --> 0:05:16.560 So that's why it's able to shake it off, and 0:05:16.600 --> 0:05:19.320 then we have the AI capec story, which you know, 0:05:19.320 --> 0:05:22.640 by the way, AI CAPEX investing is driven thirty five 0:05:22.680 --> 0:05:24.960 to forty five percent of economic growth over the last 0:05:24.960 --> 0:05:27.800 couple of quarters or several quarters, and I don't see 0:05:27.839 --> 0:05:31.120 that stopping. So you have a lot of engines that 0:05:31.560 --> 0:05:34.479 are working, and so how can you be, you know, 0:05:34.720 --> 0:05:38.040 overly pessimistic against against that environment. 0:05:38.720 --> 0:05:39.440 What is the. 0:05:39.320 --> 0:05:41.080 AI story from your perspective these days? 0:05:41.120 --> 0:05:41.920 Because initially in. 0:05:41.839 --> 0:05:44.840 The first year or two, it was just whoever's investing 0:05:44.880 --> 0:05:46.480 in it, that's who we're going to go, and whether 0:05:46.520 --> 0:05:48.600 it's the chip names or whatever. Now it seems like 0:05:48.640 --> 0:05:51.320 the market's trying to differentiate between some winners and losers, 0:05:51.360 --> 0:05:53.359 and they threw out some software companies earlier in the 0:05:53.400 --> 0:05:54.320 year of the SaaS companies. 0:05:54.440 --> 0:05:55.560 How do you guys think about it now? 0:05:55.760 --> 0:05:58.320 Yeah, so clearly we've been thinking about AI for a 0:05:58.440 --> 0:06:01.360 number of years. We have a dead catered effort to 0:06:01.440 --> 0:06:05.240 infuse AI into our portfolio companies. In the market, something 0:06:05.279 --> 0:06:08.719 like thirty five percent of CEOs or companies are embedding 0:06:08.760 --> 0:06:11.960 AI adopting AI. For US, ninety percent of our portfolio 0:06:12.000 --> 0:06:15.040 companies have an AI initiative. So, having said that we've 0:06:15.040 --> 0:06:16.840 been thinking about for a while, and you're exactly right. 0:06:16.920 --> 0:06:21.039 It is a bifurcation story. Some companies will absolutely. 0:06:20.440 --> 0:06:21.559 Be disrupted by AI. 0:06:21.720 --> 0:06:24.039 So when we sit in our global Investment committee, that's 0:06:24.120 --> 0:06:27.839 always the question, will this company be helped or heard 0:06:27.880 --> 0:06:31.960 by artificial intelligence? Now pivoting to software, though, you know, 0:06:32.240 --> 0:06:34.760 I think the market through everything out with the bathwater 0:06:34.800 --> 0:06:36.880 and said everything you know software is dead and is dead. 0:06:36.920 --> 0:06:39.560 Now that is not the case. That is not our review. 0:06:39.839 --> 0:06:43.320 I think some software companies will be disproportionately more impacted 0:06:43.360 --> 0:06:46.600 than others. But if you think about software, what does 0:06:46.640 --> 0:06:50.120 software have is profit margin? Gross profit margin for software 0:06:50.120 --> 0:06:53.160 companies is seventy five percent. So do you think these 0:06:53.200 --> 0:06:55.720 companies around the world are sitting there and waiting for 0:06:55.760 --> 0:06:57.960 a gentic AI to come for them and do nothing 0:06:57.960 --> 0:06:58.360 about it? 0:06:58.640 --> 0:06:59.440 Or are they investing? 0:07:00.200 --> 0:07:03.000 I just did this study, This is Bobsige years ago 0:07:03.080 --> 0:07:06.320 at Lara Sterns and Bank of America. Are you ready? 0:07:06.520 --> 0:07:11.080 I did a fibonacci retrace Mellboy from peak of Microsoft 0:07:11.520 --> 0:07:15.200 in August of last year. I guess down to the 0:07:15.240 --> 0:07:18.680 bottom here, which is the gloom of March of this 0:07:18.840 --> 0:07:24.640 year in Anastasia it's perfectly done a Fibonacci retlacement to 0:07:24.840 --> 0:07:28.160 thirty eight percent up from the bottom. I mean it's 0:07:28.360 --> 0:07:32.240 it's not even halfway back through the peak enthusiasm. Is 0:07:32.240 --> 0:07:36.480 that sector still cheap? Is identified by Microsoft, which, yeah, 0:07:36.520 --> 0:07:39.720 it's come back, but it's not even halfway back, you know. 0:07:40.000 --> 0:07:43.440 I think the sector is also seeing divergence and dispersion, 0:07:43.560 --> 0:07:46.920 and I think you have to parse through the hyperscalers. 0:07:47.120 --> 0:07:47.320 You know. 0:07:47.360 --> 0:07:49.760 The areas that I think are doing well is the 0:07:49.760 --> 0:07:52.760 cloud business, whether it's Microsoft, Wather, it's Google, whether it's Amazon. 0:07:53.080 --> 0:07:55.880 You know, that's projected to accelerate twenty three percent or 0:07:55.920 --> 0:07:58.760 more this year and further into next year. So that's 0:07:58.800 --> 0:08:00.800 the part of the business I think we can like, 0:08:01.240 --> 0:08:03.800 you know, the big question for the likes of Microsoft 0:08:03.920 --> 0:08:06.200 is the software. And I was just sitting in a 0:08:06.240 --> 0:08:09.520 break room with your upcoming guest where we're talking about 0:08:09.560 --> 0:08:11.560 the use of Claud and the use of GROC and 0:08:11.560 --> 0:08:14.320 the use of other tools, and how some of those 0:08:14.360 --> 0:08:17.560 applications are great for charts, you know, some of those 0:08:17.560 --> 0:08:20.520 applications are great for formatting and fetching data. So what 0:08:20.560 --> 0:08:24.480 does that do to the traditional you know, database and 0:08:24.560 --> 0:08:29.520 software type applications. So what's to excel, Well, it's supplants. 0:08:29.560 --> 0:08:32.560 It it makes you or it brings up the. 0:08:32.640 --> 0:08:35.040 VBA for dummies like me, so you could dump it 0:08:35.120 --> 0:08:35.880 right in right. 0:08:36.200 --> 0:08:38.760 It allows you to s give ahead. 0:08:38.800 --> 0:08:41.640 Were you completely fluent VBA at fifteen or were you 0:08:41.679 --> 0:08:44.360 flown at seventeen? I was not. 0:08:44.640 --> 0:08:46.480 But you know what, my team now is very ffluent. 0:08:46.800 --> 0:08:51.720 Your team, we don't have a team. So whatever, claude, perplexity, whatever, 0:08:52.120 --> 0:08:52.600 that's the. 0:08:52.640 --> 0:08:55.040 Team right, that is the extended team for. 0:08:55.360 --> 0:08:58.240 It helps you do excel right, to close the loop. 0:08:58.880 --> 0:09:01.040 It helps you to excel at helps you fetch the 0:09:01.120 --> 0:09:04.120 data in a much you know, more timely matter. It 0:09:04.240 --> 0:09:07.400 helps you come up with a charts much quicker than 0:09:07.400 --> 0:09:12.040 you might have done otherwise. It's not a replacement. It 0:09:12.160 --> 0:09:13.840 is an extension. I would say. 0:09:14.240 --> 0:09:16.920 So when you were Duke, was like the entire class 0:09:16.960 --> 0:09:20.960 all VBA and you were like, yes, exactly. I looked 0:09:20.960 --> 0:09:23.400 at VBA and my eyes clazed over. Yeah I was 0:09:23.440 --> 0:09:24.200 not that. I was a guy. 0:09:24.240 --> 0:09:26.719 I just got up and I picked up a can 0:09:26.840 --> 0:09:29.480 of course three two beer and said, okay, let's do this. 0:09:29.760 --> 0:09:31.360 That probably didn't help at the station. 0:09:31.520 --> 0:09:33.640 What screens well, for you guys today, I don't know 0:09:33.640 --> 0:09:37.280 if it's a it's an industry, a sector, a factor. 0:09:37.679 --> 0:09:39.000 What's attractive you guys. 0:09:39.480 --> 0:09:42.760 Yeah, we are thematic investors, so we're constantly thinking of 0:09:42.920 --> 0:09:45.560 themes that are here to stay for the next several years. 0:09:45.760 --> 0:09:49.319 And you know what really does jump out today is 0:09:49.440 --> 0:09:55.800 this theme of energy efficiency, energy independence, energy diversification. And again, 0:09:55.840 --> 0:09:58.640 as we think about the higher price of oil, some 0:09:58.679 --> 0:10:01.439 of our portfolio companies and to benefit from that because 0:10:01.440 --> 0:10:05.120 they're the energy infrastructure business. Longer term, also some of 0:10:05.120 --> 0:10:08.280 our portfolio companies that are likely to benefit maybe provide 0:10:08.360 --> 0:10:10.680 energy efficiency. What if we are in a higher for 0:10:10.760 --> 0:10:13.400 longer energy costs, you need to really focus on that. 0:10:13.800 --> 0:10:17.160 You know, we focus on energy diversification, maybe it's bio 0:10:17.480 --> 0:10:20.600 energy versus regular energy. And we also focus on the 0:10:20.640 --> 0:10:25.160 resiliency and the security of the energy infrastructure. And if 0:10:25.160 --> 0:10:28.040 you think about some of the pipeline businesses, especially in 0:10:28.080 --> 0:10:31.760 the US, Mexico, you know, North America, those are really 0:10:31.760 --> 0:10:34.680 well positioned not only near term to capture the upside 0:10:34.679 --> 0:10:38.480 and volumes, but longer term because clearly security of energy 0:10:38.520 --> 0:10:41.800 supply is paramount to everything we're talking about, including AI. 0:10:42.920 --> 0:10:45.440 So it's interesting here. I mean, are you concerned about 0:10:45.559 --> 0:10:48.160 valuation in this market? Because we hadn't you know, that 0:10:48.320 --> 0:10:50.040 sell off early in the year and people were even 0:10:50.040 --> 0:10:53.000 making a call boy, the market is cheaper. You know, 0:10:53.080 --> 0:10:55.800 it's not cheap, but it's cheaper. But now we've ripped 0:10:55.960 --> 0:10:58.559 right back up again. Is valuation and concern for you? 0:10:58.720 --> 0:11:01.559 Yeah? Look, I'm not overlying erarned about public market valuations. 0:11:01.559 --> 0:11:03.800 I'll tell you why. But I also want to highlight 0:11:04.000 --> 0:11:07.319 the fact that private equity is actually trading. We're pricing 0:11:07.360 --> 0:11:11.640 at a fifteen year low invaluations relative to public markets. 0:11:11.720 --> 0:11:15.080 So just to extend both of those points. You know, 0:11:15.120 --> 0:11:17.920 if you think about public market valuations, if you look 0:11:17.920 --> 0:11:21.040 at MAC seven, what's happened there is in the last 0:11:21.160 --> 0:11:23.679 year or two. It's not actually multiple expansion, but it 0:11:23.760 --> 0:11:24.920 has been earnings growth. 0:11:25.000 --> 0:11:26.360 So for that reason, I'm. 0:11:26.160 --> 0:11:29.040 Not overly worried about the level of valuations there. If 0:11:29.040 --> 0:11:30.680 you look at the rest of the S and P 0:11:30.720 --> 0:11:33.920 five hundred or MSCI all country world, you have seen 0:11:34.040 --> 0:11:36.920 quite a lot of multiple expansion. But the reason I'm 0:11:36.920 --> 0:11:39.280 not concerned about that is because you do have economic 0:11:39.320 --> 0:11:42.040 growth that is doing well, and you do have the 0:11:42.120 --> 0:11:44.640 earnings growth that's accelerating as well, so I think we 0:11:44.679 --> 0:11:47.880 can grow into those valuations. But again back to my 0:11:48.000 --> 0:11:52.120 point on private equity. You know, private equity multiples or 0:11:52.160 --> 0:11:56.079 at about twelve times of so EVIT EBITDA versus about 0:11:56.120 --> 0:11:59.080 fifteen or sixteen, which is the public market comp That 0:11:59.240 --> 0:12:03.160 means you're the lowest level. You have the largest valuation 0:12:03.280 --> 0:12:07.560 discount on private equity in about fifteen years. So you know, 0:12:07.559 --> 0:12:09.800 so I think the complement of the two can be 0:12:09.880 --> 0:12:11.320 really attractive for investors. 0:12:11.440 --> 0:12:13.480 When you're at Zoomer are you at the Park Hotel? 0:12:14.080 --> 0:12:16.640 I mean, are you Jay on air? 0:12:16.880 --> 0:12:17.840 Where it is? 0:12:17.960 --> 0:12:21.680 I'm saying, do you know they have a Shoppers brunch? 0:12:22.320 --> 0:12:26.599 You go get an outrageously priced, fancy breakfast. 0:12:26.120 --> 0:12:27.200 I don't do that. 0:12:27.320 --> 0:12:28.240 Then go shopping. 0:12:28.920 --> 0:12:30.520 I don't do that. I don't have time for that. 0:12:30.559 --> 0:12:33.440 But I will tell you, Tom, we just hosted over 0:12:33.480 --> 0:12:36.360 two hundred and fifty of our clients at the Birkenstock 0:12:36.640 --> 0:12:39.440 in around Lucerne and it was wonderful. 0:12:39.480 --> 0:12:40.679 It was a wonderful venue. 0:12:41.440 --> 0:12:45.120 More than ten million dollars in assets represented in the room, 0:12:45.280 --> 0:12:48.320 and it was a great discussion about AI and the 0:12:48.320 --> 0:12:51.559 transformation potential that it has I don't care. 0:12:51.640 --> 0:12:54.640 We don't care. All we wanted to. They want to 0:12:54.679 --> 0:12:57.720 invest in America, and I don't see that broken. With 0:12:57.840 --> 0:13:01.240 everything out there, Your bull is still intact. 0:13:01.480 --> 0:13:05.319 That is absolutely the sentiment is that the investment commitment 0:13:05.400 --> 0:13:08.040 to America, despite everything that we have out there, has 0:13:08.120 --> 0:13:08.640 not changed. 0:13:08.679 --> 0:13:10.600 It's not changing, there's no wavering on that. 0:13:11.280 --> 0:13:14.760 Having said that, we are global investors, US represents fifty 0:13:14.840 --> 0:13:19.440 or sixty percent of our investment allocations, Europe thirty twenty five, 0:13:19.559 --> 0:13:21.800 thirty percent, and the rest of it is in Asia. 0:13:21.920 --> 0:13:24.760 But that big commitment to the US is not changing. 0:13:24.880 --> 0:13:26.600 So how about when you meet with your clients, are 0:13:26.600 --> 0:13:29.680 they looking to continue to invest in private equity, in 0:13:29.720 --> 0:13:31.640 private assets that you guys manage. 0:13:32.240 --> 0:13:35.599 Yes, And I would say there's you know, there's a 0:13:35.640 --> 0:13:38.720 greater awareness of all of all that private markets have 0:13:38.760 --> 0:13:39.120 to offer. 0:13:39.240 --> 0:13:40.640 So you know, certainly there's the. 0:13:40.559 --> 0:13:43.240 Private equity opportunity and a lot of macro tailwinds for 0:13:43.280 --> 0:13:45.440 private equity right now, a lot of thematic tailwinds for 0:13:45.440 --> 0:13:49.280 private equity, a great opportunity to infuse AI and build 0:13:49.320 --> 0:13:52.080 platforms and scale those. At the same time, more and 0:13:52.080 --> 0:13:56.400 more clients are looking to diversify further into infrastructure, for example, 0:13:56.600 --> 0:14:00.960 and you know, infrastructure is perfectly position to capture the 0:14:01.040 --> 0:14:04.640 AI momentum for example, and also build the next generation 0:14:04.760 --> 0:14:08.480 infrastructure platforms meeting. It's not just one commodity and one 0:14:09.040 --> 0:14:12.080 way to produce electricity, but it's multiple commodities. 0:14:12.200 --> 0:14:13.480 It's maybe a. 0:14:13.200 --> 0:14:16.520 Battery storage that is that is also coupled with that. 0:14:16.960 --> 0:14:19.960 And then you know, private credit, I would say, you know, 0:14:20.000 --> 0:14:23.160 there's a bifurcation story in private credit. There will be 0:14:23.600 --> 0:14:27.040 most likely places of higher defaults, but at the same time, 0:14:27.320 --> 0:14:30.600 there's there are places that will weather this, and there's 0:14:30.680 --> 0:14:34.960 lots of opportunity and institutional investors are certainly not stepping 0:14:35.000 --> 0:14:36.040 away from private credit. 0:14:36.400 --> 0:14:40.240 Anastasia, thank you so much, and am Rosa with Partners 0:14:40.280 --> 0:14:46.240 Group with her enthusiasms. Stay with us. More from Bloomberg 0:14:46.360 --> 0:14:48.360 Surveillance coming up after this. 0:14:55.640 --> 0:14:59.200 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:14:59.240 --> 0:15:01.840 weekday afternoon. It's from seven to ten am e's durn 0:15:01.960 --> 0:15:05.240 Listen on Apple, Karplay and Android Otto with the Bloomberg 0:15:05.280 --> 0:15:08.000 Business app, or watch us live on YouTube. 0:15:08.440 --> 0:15:12.480 Our interview of the day Paul Sankie Legendary, I'm parsing 0:15:12.520 --> 0:15:15.600 out the hot air of a hydrocarbonage, doing it with 0:15:15.640 --> 0:15:19.760 Adams Suminski years ago at Deutsche Bank. It is sanky research. 0:15:19.960 --> 0:15:24.320 When you watch the TV, what's the biggest myth error, 0:15:24.560 --> 0:15:27.440 stupidity you hear on your world? 0:15:28.000 --> 0:15:30.280 I think that people are unaware of how bad this is, 0:15:30.720 --> 0:15:33.240 you know, certainly at a US level. It's just it's 0:15:33.320 --> 0:15:35.960 just not that much evidence of it. And as you know, 0:15:36.120 --> 0:15:39.960 the gasoline price here is actually relatively cheap globally, American 0:15:40.000 --> 0:15:43.160 incomes O higher, so the impact here is not being felt. 0:15:43.320 --> 0:15:45.640 But what we can see here Tom is a guaranteed 0:15:45.840 --> 0:15:49.400 ongoing deterioration of the situation for at least two months. 0:15:49.680 --> 0:15:51.000 And that's pretty scary for US. 0:15:51.080 --> 0:15:53.080 But the data BRN I look at in a terminal 0:15:53.120 --> 0:15:56.760 was one forty four OMG. And it's come down. Are 0:15:56.800 --> 0:16:00.320 you seeing a lessening of price pressure in the i'll 0:16:00.320 --> 0:16:02.040 call the cash the physical. 0:16:01.600 --> 0:16:04.640 Market, not really if you think about jet fuel and dislate. 0:16:04.760 --> 0:16:06.840 So that's the issue, and that's why the crude price 0:16:06.880 --> 0:16:09.680 has become so difficult to second guess, because you've lost 0:16:09.720 --> 0:16:12.440 probably six million barrels a day of refining capacity here 0:16:12.560 --> 0:16:16.080 almost directly. That's six million barrels a day of crude demand, 0:16:16.440 --> 0:16:18.440 and that, of course is why you've got this massive 0:16:19.000 --> 0:16:21.480 arbitrage between the jet price, the dislate price, and the 0:16:21.520 --> 0:16:24.160 crude price. And so what that you know, what we're 0:16:24.160 --> 0:16:25.040 really looking at. 0:16:25.000 --> 0:16:26.080 Is how jet is doing. 0:16:26.160 --> 0:16:28.680 We hit a high of three hundred dollars a barrel 0:16:28.720 --> 0:16:31.560 for jet in Asia, we come back probably down towards 0:16:31.560 --> 0:16:34.400 two hundred right now, and then you know, in Europe 0:16:34.400 --> 0:16:36.320 you've seen probably a peak of two hundred barrels a 0:16:36.400 --> 0:16:38.520 day and you're back down and holding about let's say 0:16:38.520 --> 0:16:42.160 one seventy. So these are enormous prices. Tom, that you know, 0:16:42.200 --> 0:16:44.840 that's the cutting edge, because obviously what you're really looking 0:16:44.880 --> 0:16:46.920 at the oil price and oil demand is the product. 0:16:47.560 --> 0:16:50.080 The crude is just so complicated by the tanker situation 0:16:50.200 --> 0:16:53.040 and everything else, and it's hard to really decide where 0:16:53.040 --> 0:16:54.040 that crude price should be. 0:16:54.760 --> 0:16:57.000 Why do you say two months, Paul, and I've got 0:16:57.000 --> 0:17:00.120 a president, they're saying the war is won, just at 0:17:00.320 --> 0:17:01.080 days will get peace. 0:17:01.080 --> 0:17:03.480 Why do you suggest that pain may be long term? 0:17:03.920 --> 0:17:06.240 Because of the difference that Tom's referring to, which is 0:17:06.280 --> 0:17:09.320 the physical and the paper. So the paper will act 0:17:09.359 --> 0:17:11.760 crazy and will react to the headlines. But the physical 0:17:11.800 --> 0:17:14.800 is a physical fact, the fact of physics literally, and 0:17:14.840 --> 0:17:17.640 the physics involved tankers, and the tankers are in all 0:17:17.680 --> 0:17:18.440 the wrong places. 0:17:18.480 --> 0:17:19.520 A lot of them are trapped. 0:17:20.280 --> 0:17:23.240 Twenty percent of the capacity that's out is effectively ten 0:17:23.240 --> 0:17:26.080 percent of tankers. Plus the fact that those Middle Eastern 0:17:26.080 --> 0:17:30.119 tankers are baseload tankers. They run all year running, you know, 0:17:30.200 --> 0:17:32.720 around the clock. They're not shadow tankers, they're not you know, 0:17:32.800 --> 0:17:35.560 wobbly tankers. They are the tankers that run the baseload 0:17:35.600 --> 0:17:39.160 and they're trapped. So in that regard, the tanker situation 0:17:39.320 --> 0:17:42.359 is going to take at least four weeks to I 0:17:42.400 --> 0:17:45.320 mean even optimistically four weeks. And then of course you 0:17:45.359 --> 0:17:48.800 have the infrastructure damage that's happened within those huge facilities, 0:17:49.600 --> 0:17:52.760 you know, the LNG damage, the refrainer, any thing about 0:17:52.760 --> 0:17:56.639 that has been valid report. Tell you what's scary is 0:17:56.640 --> 0:17:59.360 if you look at that Katar LNG attack that hit 0:17:59.400 --> 0:18:02.159 two trains, the Iranians hit the two x On trains, 0:18:02.359 --> 0:18:03.960 and I think that was an accident. I think that 0:18:04.000 --> 0:18:07.200 was Russian intelligence. So there's some very scary things out there. 0:18:08.119 --> 0:18:09.680 What can the US do here? 0:18:09.440 --> 0:18:13.160 We've become in that, I guess exporter of oil here, 0:18:13.160 --> 0:18:15.919 can our guys down in Texas and Ohoma just start racking. 0:18:16.600 --> 0:18:19.400 It's actually on a panel New York Energy Format Forum 0:18:19.480 --> 0:18:22.280 this week with Case van to Hoff, the Diamondback CEO, 0:18:22.359 --> 0:18:24.639 one of the best CEOs young CEOs we've got, and 0:18:24.680 --> 0:18:26.760 he was saying, look, the future strip is seventy two 0:18:26.800 --> 0:18:28.679 dollars a barrel for next year? What am I going 0:18:28.720 --> 0:18:30.040 to do with that? I'm going to draw more for 0:18:30.080 --> 0:18:32.880 seventy two? Now that's the that's the margin ory economics. 0:18:32.920 --> 0:18:34.720 Am I going to hedge at seventy two, you know, 0:18:34.800 --> 0:18:37.320 to spend more knowing I'll get seventy two? 0:18:37.359 --> 0:18:39.879 Of course he's not. So the price is really. 0:18:39.640 --> 0:18:42.879 Disincentivizing a solution there. And then I'll just add that, 0:18:42.960 --> 0:18:47.000 you know, unfortunately, the Iranians know what they've got, and 0:18:47.040 --> 0:18:49.359 so you know what they want is a load of 0:18:49.359 --> 0:18:52.560 redline things. You know, it's literally like the US out 0:18:52.560 --> 0:18:55.480 of the US military, out of the Gulf States. I mean, 0:18:55.520 --> 0:18:59.480 these are huge asks and we've heard GCC members saying 0:18:59.480 --> 0:19:02.080 they will not pay a toll. So you got some 0:19:02.080 --> 0:19:03.359 stuff here that's intractable. 0:19:03.520 --> 0:19:06.880