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Edwin Conway on BlackRock Alternative Investors (Podcast) · Masters in Business

• 0:02
  Speaker 1: This is mesters in Business with very results on Bloomberg Radio.
• 0:09
  Speaker 1: This week, on the podcast Man, I have an extra
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  Speaker 1: special guest. Edwin Conway runs all of alternatives for Black Rocks.
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  Speaker 1: His title is Global Head of Alternative Investors, and he
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  Speaker 1: covers everything from structured credit, to real estate, to hedge
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  Speaker 1: funds to you name it. Uh. The group runs over
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  Speaker 1: three hundred billion dollars and he has been a driving
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  Speaker 1: force into making this a substantial portion of black rocks
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  Speaker 1: nine trillion dollars in total assets. Uh. The opportunity set
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  Speaker 1: that exists for alternatives, even for a firm like black
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  Speaker 1: Rock that specializes in public markets, is potentially huge, and
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  Speaker 1: black Rock wants a big piece of it. I found
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  Speaker 1: this conversation to be absolutely fascinating, and I think you
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  Speaker 1: will also so, with no further ado, my conversation with
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  Speaker 1: black Rocks Head of Alternatives, Edwin Conway. This is Masters
• 1:10
  Speaker 1: in Business with very renaults on Bloomberg Radio. My extra
• 1:16
  Speaker 1: special guest this week is Edwyn Conway. He is the
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  Speaker 1: global head of black Rocks Alternative Investors, which runs about
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  Speaker 1: three hundred billion dollars in assets. He is a team
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  Speaker 1: of over eleven hundred professionals to help him manage those assets.
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  Speaker 1: Black Rocks Global alternatives include businesses that cover real estate, infrastructure,
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  Speaker 1: hedge funds, private equity, and credit. He is a senior
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  Speaker 1: managing director for black Rock. Edwin Conway. Welcome to Bloomberg. Sorry,
• 1:47
  Speaker 1: thank you for having me. So you've been in the
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  Speaker 1: financial services industry for a long time. You were a
• 1:53
  Speaker 1: credit Swiss and black Stone and now you're at black Rock.
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  Speaker 1: Tell us what the process was like breaking into the industry. Uh,
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  Speaker 1: it's an interesting when Verry I grew up in a
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  Speaker 1: very small town in the middle of Ireland, um and
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  Speaker 1: the breakthrough to the industry was one of more coincidence
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  Speaker 1: as opposed to purpose. I enjoyed the game of rugby
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  Speaker 1: for many years and through an introduction Whilston University and
• 2:26
  Speaker 1: University College Dublin in Ireland, had a chance to you know,
• 2:30
  Speaker 1: play rugby at a quite a quite a decent level
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  Speaker 1: um and get to know people that were across the industry.
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  Speaker 1: It was really through an internship and the suggestion, given
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  Speaker 1: my focus on business and financing things that you know,
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  Speaker 1: the financial services sector may be a great place to
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  Speaker 1: traverse and and get to know and literally through rugby
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  Speaker 1: connections being part of a good school, I had an
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  Speaker 1: opportunity to to to really understand, uh, what this service
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  Speaker 1: sector in many respects could provide declients and became absolutely
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  Speaker 1: intrigued with this and and what was it my my
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  Speaker 1: primary ambition in life to be in the financial services sector?
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  Speaker 1: I can definitively say no, But through the circumstance of
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  Speaker 1: a game that I love to play and be part of,
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  Speaker 1: was introduced to it through an internship and and actually
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  Speaker 1: fell in love with them. Quite quite interesting and alternative
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  Speaker 1: investments at black Rocks almost seems like a contradiction in terms.
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  Speaker 1: Most of us tend to think of black Rock as
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  Speaker 1: the giant nine trillion dollar public markets firm best known
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  Speaker 1: for E t f s and indices. Alternatives seems to
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  Speaker 1: be one of the fastest growing groups within the firm.
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  Speaker 1: This was fifty billion dollars just a few years ago.
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  Speaker 1: It's now over three billion. How has this become such
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  Speaker 1: a fast growing part of black Rock? When you look
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  Speaker 1: at the various facets which you introduced at the start party, Um,
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  Speaker 1: we've actually been in alternatives will be ad of the
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  Speaker 1: years now. Now the scale as you know which you
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  Speaker 1: can operate on the beta side of the business start
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  Speaker 1: surpasses that on the alpha side. You know, for us
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  Speaker 1: throughout the years, this was very much about how can
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  Speaker 1: we deliver investment excellence to our clients and performance and
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  Speaker 1: therefore going an opportunity somewhere else to explore an an
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  Speaker 1: alpha opportunity in alternatives, and I think being so connected
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  Speaker 1: to our clients understanding that this pivot was absolutely taking
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  Speaker 1: place not only thirty years ago, but in a very
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  Speaker 1: pronounced way today. Um, you know, we continue to invest
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  Speaker 1: in this business to support those ambitions. You know, they're
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  Speaker 1: clearly seeing this as a world that's going through a
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  Speaker 1: tremendous amount of transformation and with some of the challenges
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  Speaker 1: quite frankly in the traditional asset classes, being able to
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  Speaker 1: leverage that black Rock is a black Rock muscle to
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  Speaker 1: really explore these alpha opportunities across the various alternative asset classes.
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  Speaker 1: And in our mind wasn't imperative, um, And the imperative
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  Speaker 1: really from the firm's perspective, and you look at our
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  Speaker 1: purposes to serve those clients, so the need was coming
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  Speaker 1: from them, The necessity to have alternatives in their whole
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  Speaker 1: portfolio was was very Uh, it was very much growing
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  Speaker 1: in prominence. And you know, it's taken us thirty years
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  Speaker 1: to build this journey, and I think very quite frankly,
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  Speaker 1: we're far from being done. As you look at the industry,
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  Speaker 1: that demand is going to continue to grow. So I
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  Speaker 1: think you could expect to see from us a continued
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  Speaker 1: investment in the space because we don't believe you can
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  Speaker 1: live without alternatives in today's world. That's really that's really interesting.
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  Speaker 1: So so let's dive a little deeper into the product
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  Speaker 1: strategy for alternatives, which you are responsible for a black rock.
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  Speaker 1: Our audience is filled with potential investors. Tell them a
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  Speaker 1: little bit about what that strategy is. So we're i think,
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  Speaker 1: as you mentioned, were an excessive three billion today, um.
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  Speaker 1: And you know, when we started this business, it was
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  Speaker 1: less about you know, building a moat around private equity
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  Speaker 1: or real estate. I think Larry Things and Rob Campedo's
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  Speaker 1: vision was how do we build a platform to allow
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  Speaker 1: us to be relevant to our clients across the various
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  Speaker 1: alternative asset classes, but also within the within the confines
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  Speaker 1: of what they are permitted to do on a year
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  Speaker 1: by your basis, so to always be relevant, um, irrespective
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  Speaker 1: of where they are on their journey from respect of
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  Speaker 1: liabilities demands from liquidity demands for returns. So we took
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  Speaker 1: a different approach I think vary to most. It was
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  Speaker 1: around how do we scale into the business across Like
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  Speaker 1: you said, real estate equity and debt, infrastructure equity in
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  Speaker 1: debt and we think of that as the real assets
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  Speaker 1: platform of our business. And you take our private equity
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  Speaker 1: capabilities both in primary investing, secondary, etcetera um and then
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  Speaker 1: you have private credit and a very significant hedgehunt platform.
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  Speaker 1: So we think all of these have a real role
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  Speaker 1: and and depending on clients liquidity needs and and risk appetite,
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  Speaker 1: our goal was to over the years really build into
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  Speaker 1: this to allow us solve for these challenging needs that
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  Speaker 1: our clients have. I think it's an industry right and
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  Speaker 1: over the many years that alternatives have been in existence,
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  Speaker 1: this has been about return enhancement initially, I think fundamentally
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  Speaker 1: the changes around the receptivity to the role of alternatives
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  Speaker 1: and a client's portfolio has really changed. So we've watched
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  Speaker 1: it vary. From this is we are in the pursuit
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  Speaker 1: of a very total return or absolute return type of
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  Speaker 1: an objective to now resilience and our portfolio, yield an income,
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  Speaker 1: and so things that probably weren't perceived as valuable in
• 7:56
  Speaker 1: the past. Because your traditional asset classes will play a
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  Speaker 1: more profound role. UM alternatives have stepped up in many
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  Speaker 1: respects in the needs to provide more than just total return.
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  Speaker 1: So we're taking the approach of how do you have
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  Speaker 1: a more holistic approach to this, how do we really
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  Speaker 1: build a global multi alternatives capability UM and and try
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  Speaker 1: to partner and I think that's the important word for us,
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  Speaker 1: try to partner with our clients in a way that
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  Speaker 1: we can deliver that our performance, but delivered in a
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  Speaker 1: way that probably our clients haven't been used to in
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  Speaker 1: this industry before because unfortunately, but as we know, it
• 8:37
  Speaker 1: has had its challenges with regard to secrecy, transparency, and
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  Speaker 1: so many other aspects. Now we need to help the
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  Speaker 1: industry mature and and really that was our audition. What
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  Speaker 1: our clients needs first, build around that and really be
• 8:52
  Speaker 1: relevant in all aspects of what we're not, they're doing
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  Speaker 1: or trying to accomplish on behalf of the people that
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  Speaker 1: they support and represent. So we'll talk a little bit
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  Speaker 1: about transparency and secrecy and those sorts of things later
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  Speaker 1: but right now I have to ask, what I guess
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  Speaker 1: is kind of an obvious question, this growth that you've
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  Speaker 1: achieved within black Rock for non public asset allocation within
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  Speaker 1: a portfolio, what is this coming at expense of it?
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  Speaker 1: Are these dollars that are being moved from public assets
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  Speaker 1: into private assets or are you just competing with other
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  Speaker 1: private investors. It's it's it's really both what what you
• 9:40
  Speaker 1: are seeing from our clients. If I take a step
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  Speaker 1: back UM today the institutional client community, and you think
• 9:49
  Speaker 1: about the the retirement conundrum we're all facing around the world.
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  Speaker 1: Right it's such an awful challenge when you think how
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  Speaker 1: we'll prepare people are for that eventual stepping back from
• 10:00
  Speaker 1: the workplace, and then you know, longevity is your friend,
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  Speaker 1: but can also be a very very difficult thing to
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  Speaker 1: obviously live with if you're not prepared to retirement. The
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  Speaker 1: typical tension plan today Verry is allocating about twenty five
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  Speaker 1: eight percent in alternatives, predominantly private markets. UM. What they're
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  Speaker 1: telling us is that's increasing quite substantially going forward. But
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  Speaker 1: you know the funding for that, that alpha pursued for
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  Speaker 1: that diversification, and that yield is coming from six income
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  Speaker 1: assets it's coming from equity assets. So there's a real
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  Speaker 1: rebalancing that's been taking place over the past number of years,
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  Speaker 1: and quite frankly, the evolution, and I think the innovation
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  Speaker 1: that's taken place, particularly the past ten years in alternatives
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  Speaker 1: has been really profound. So the days where you just
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  Speaker 1: invest in in a global fund, they still exist, but
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  Speaker 1: now you can concentrate your efforts on sector exposure, industry exposures,
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  Speaker 1: g A, graphic exposures, and I think the the menu
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  Speaker 1: of things our clients can now have access to has
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  Speaker 1: just been so greatly enhanced, and so the benefit is that,
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  Speaker 1: but I think in some in some respects are the
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  Speaker 1: next question is, well, with all of those choices, how
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  Speaker 1: do you build the right portfolio for our client's needs,
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  Speaker 1: knowing that each one of our client's needs are different.
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  Speaker 1: So I would say it's absolutely coming from the public side.
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  Speaker 1: We're very thankful those that have had a multi year
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  Speaker 1: journey with us on the public side are now allocating
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  Speaker 1: capital to us now on the private side too, because
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  Speaker 1: I do think the the industry, given that change, given
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  Speaker 1: that evolution, and given the complexity of these private assets,
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  Speaker 1: our clients are looking to quite frankly, do more with
• 11:50
  Speaker 1: fewer managers because of that complexion of the industry and
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  Speaker 1: the complexity that comes with it quite quite interesting and
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  Speaker 1: and I it's pretty easy to see why large institutions
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  Speaker 1: might be rotating away from things like treasuries or tips
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  Speaker 1: because there's just no yield there. Um. Are you seeing
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  Speaker 1: inflows coming in from the public equity side? Also, the
• 12:16
  Speaker 1: markets put together a pretty good string of years. Yeah,
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  Speaker 1: it absolutely has. And in many respects, I think you know,
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  Speaker 1: we've had a multi year period where there was big
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  Speaker 1: questions around the alpha that can be generated, for example,
• 12:32
  Speaker 1: from active equities. The question was active or passive. I
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  Speaker 1: think what what we've all realized is that at times
• 12:40
  Speaker 1: when politility introduces itself, which is frequent, even independent of
• 12:45
  Speaker 1: what's been done from a fiscal and monetary standpoint, that
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  Speaker 1: these alpha speaking strategies on the traditional side still make
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  Speaker 1: a lot of sense. Um. And so, you know, as
• 12:57
  Speaker 1: we think about what's what's happening here the transition of
• 13:02
  Speaker 1: assets um from both passive and active strategies to alternatives,
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  Speaker 1: it's really to create better balance. It's not that there's
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  Speaker 1: there's a lack of relevance anymore in the public side
• 13:16
  Speaker 1: it's just quite frankly that the growth of the private
• 13:18
  Speaker 1: asset base has grown so substantially. Um Now, I moved
• 13:23
  Speaker 1: married to the US in and you know, it's interesting
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  Speaker 1: when you look back at today you start to recognize
• 13:32
  Speaker 1: the equity markets and what was available to invest in.
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  Speaker 1: You know, the number of investable opportunities has shrunk by
• 13:39
  Speaker 1: forty plus percent, which that compression is extraordinarily high. But
• 13:45
  Speaker 1: yet you've seen obviously the equity markets grow in stature
• 13:48
  Speaker 1: and significance and prominence, but you're having more concentration risks
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  Speaker 1: with some of the big public entities. The converse is
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  Speaker 1: true though on the on the private side, just this
• 13:59
  Speaker 1: explosion of enterprise and innovation, employment creation, and then I
• 14:03
  Speaker 1: believe opportunities that has been real. So I look at
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  Speaker 1: the public side, the investable universe is measured in the thousands,
• 14:11
  Speaker 1: and the private side is measured in the millions. And
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  Speaker 1: I think part of the part of the thing our
• 14:16
  Speaker 1: clients are are not struggling with with what they're really
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  Speaker 1: recognizing with with enterprises staying private for longer, if not forever,
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  Speaker 1: and with this growth of the opportunity set both in
• 14:28
  Speaker 1: debt and equity in the private market side. You really
• 14:32
  Speaker 1: can't forego this opportunity. It has to be part of
• 14:35
  Speaker 1: your going forward concern and asset allocations. And I think
• 14:39
  Speaker 1: this is why we're seeing that transformation. And it's not
• 14:42
  Speaker 1: because equities and fixed thinking just aren't relevant anymore. They're
• 14:47
  Speaker 1: very relevant, but they're relevant now in a total portfolio,
• 14:51
  Speaker 1: whole portfolio context beside alternatives. So let's discuss this opportunity
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  Speaker 1: set of alternatives. Where are you guys at black Rock
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  Speaker 1: seeing demand, what sectors and from what sorts of clients
• 15:07
  Speaker 1: are are are is this demand increasing? We're very fortunate
• 15:11
  Speaker 1: varied today there isn't a single piece of our business
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  Speaker 1: within within black Rock Alternatives that isn't growing. And quite
• 15:20
  Speaker 1: frankly too, it's it's it's really up to us to
• 15:22
  Speaker 1: deliver on the investment objectives that are set forth for
• 15:26
  Speaker 1: those clients. I think on the back of strong absolute
• 15:31
  Speaker 1: and relative performance. UM. You know, thankfully, our our clients
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  Speaker 1: luck to us um to to help them as as
• 15:40
  Speaker 1: they think about what they're doing, as they're exploring more
• 15:43
  Speaker 1: in the alternatives areas. As you know, certainly the private
• 15:49
  Speaker 1: equity and real estate allocations are quite mature in many
• 15:52
  Speaker 1: of our client's portfolios, but they've been around for many decades.
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  Speaker 1: I think that the areas where we're seeing let's call
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  Speaker 1: it outside um demand an opportunity said just by virtue
• 16:06
  Speaker 1: of this small allocations on a relative basis that exist
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  Speaker 1: today is really around infrastructure vary and it's around private credit.
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  Speaker 1: So to caveat that, I think all of the areas
• 16:18
  Speaker 1: are certainly growing, and thankfully for us that's true where
• 16:22
  Speaker 1: we're looking at clients and we believe they're underinvested, would
• 16:25
  Speaker 1: believe they're underinvested in those two asset classes infrastructure both
• 16:29
  Speaker 1: debt and equity, and in private credit. And as you
• 16:33
  Speaker 1: think about you know why that is. The attributes that
• 16:37
  Speaker 1: they bring to our clients really important. And in a
• 16:41
  Speaker 1: world where your correlations and understanding those correlations is important,
• 16:47
  Speaker 1: these are definitely diversifying assets. In the world where you're
• 16:50
  Speaker 1: seeing trillions of dollars quite frankly, you're providing little to
• 16:54
  Speaker 1: know or even there's negative yield um you know, those
• 16:57
  Speaker 1: short folds are real, and people need yield, they need income.
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  Speaker 1: These assets tend to provide that. So the diversification it
• 17:04
  Speaker 1: comes from these assets. The yield can come from these assets.
• 17:08
  Speaker 1: And because of the immaturity of these asset classes UM,
• 17:13
  Speaker 1: independent of the capital that's flowing in, we still consider
• 17:16
  Speaker 1: them relatively white space. You're not crowded out. UM. There's
• 17:22
  Speaker 1: much room for development in the markets and with our
• 17:25
  Speaker 1: client's portfolios, and to us that's exciting because it presents opportunities.
• 17:29
  Speaker 1: So for at the highest level, you know, they're the
• 17:34
  Speaker 1: two areas who believe are most underdeveloped in our clients.
• 17:37
  Speaker 1: So let's talk about both of those areas well. We'll
• 17:39
  Speaker 1: talk about structured credit in a few minutes. I think
• 17:42
  Speaker 1: everybody kind of understands what what that is. What when
• 17:47
  Speaker 1: you say infrastructure as a sector, how does that UM
• 17:51
  Speaker 1: show up as an investment are And obviously I have
• 17:55
  Speaker 1: infrastructure on the brand because we're recording this not too
• 17:58
  Speaker 1: long after the giant Infrastructure Bill has been passed. Tell
• 18:02
  Speaker 1: us a little bit about what alternative investments in infrastructure
• 18:07
  Speaker 1: looks like. Yeah, it's you know, it's really in its
• 18:11
  Speaker 1: infancy and and and what do the underlying investments look like.
• 18:14
  Speaker 1: I think traditionally you would consider it as and part
• 18:18
  Speaker 1: of the bill that has just been announcing roads, bridges, airports,
• 18:24
  Speaker 1: some of these hard assets, some of the core infrastructure
• 18:27
  Speaker 1: investments that have been around for actually quite some time.
• 18:31
  Speaker 1: The interesting thing is the the industry is evolved so
• 18:33
  Speaker 1: much and but the need for infrastructure is so great
• 18:37
  Speaker 1: across both developed and emerging economies. UM. It's it's become
• 18:44
  Speaker 1: something that if done the right way, the attributes we
• 18:48
  Speaker 1: just spoke of can really have a very strong effect
• 18:50
  Speaker 1: on our client's portfolios. So beyond the core that we
• 18:54
  Speaker 1: just mentioned what we've seen a tremendous demand as a
• 18:57
  Speaker 1: result of this energy transition. You're really seeing a spike
• 19:01
  Speaker 1: in activity and the necessity to transition industry to cleaner
• 19:05
  Speaker 1: technologies UM, a movement not away completely from fossil fuels,
• 19:10
  Speaker 1: but integrating new types of clean energy. And as a result,
• 19:15
  Speaker 1: you've seen a lot of demand on a global basis
• 19:18
  Speaker 1: for wind and solar and quite frankly, that's why even
• 19:22
  Speaker 1: at black Rock albeit UH ten twelve years ago, we
• 19:27
  Speaker 1: really established a capability there to help with that transition,
• 19:31
  Speaker 1: to think about how do we use these technologies, solar
• 19:36
  Speaker 1: panels and wind farms to generate clean forms of energy
• 19:41
  Speaker 1: for utilities where in some cases they're mandated to procure
• 19:44
  Speaker 1: this type of this type of power. UM. And when
• 19:48
  Speaker 1: you think about pre contracting with utilities for long duration
• 19:53
  Speaker 1: that to me spells vary. Uh. You know, good risk
• 19:57
  Speaker 1: mitigation and management, and a ability to get access to
• 20:02
  Speaker 1: clean forms of energy that throw off field that can
• 20:05
  Speaker 1: be very complementary to your traditional asset classes, but for
• 20:09
  Speaker 1: very long periods of time. And so you know, the
• 20:12
  Speaker 1: benefits for us of these these assets is that they
• 20:15
  Speaker 1: are long in duration, they are yield enhancing, they're definitely diversifying.
• 20:21
  Speaker 1: And so for us, you know, we're we've got about
• 20:23
  Speaker 1: let's call it two hundred and eighty assets around the
• 20:27
  Speaker 1: world that we're managing that literally generates this this clean electricity,
• 20:32
  Speaker 1: I think to give the relevance of how much I
• 20:35
  Speaker 1: believe today it's enough to power the country of Spain, um.
• 20:39
  Speaker 1: And that's really that's really changing. So you're seeing governments,
• 20:43
  Speaker 1: so from a policy standpoint, be seeing governments really embracing
• 20:46
  Speaker 1: new forms of energy, transitioning out of bunker fuels, for example,
• 20:50
  Speaker 1: of burning diesels which really spew emissions into the into
• 20:54
  Speaker 1: the into the environment. Um. But it's really around modernizing
• 20:59
  Speaker 1: for the future. So developed an emerging economies like want
• 21:03
  Speaker 1: to retain capital, they want to attract new capital and
• 21:07
  Speaker 1: by having the proper infrastructure to support industry is a
• 21:10
  Speaker 1: really really important thing. Now on the back of that too,
• 21:15
  Speaker 1: one thing we've learned from COVID is that the necessity
• 21:18
  Speaker 1: to really bring e commerce into how you conduct your
• 21:22
  Speaker 1: business is so important. And I think from the theme
• 21:26
  Speaker 1: of digitization within infrastructure too with a huge part. So
• 21:30
  Speaker 1: it's not just the energy transition that you're seeing, it's
• 21:33
  Speaker 1: not just roads and bridges, but by allowing businesses to
• 21:37
  Speaker 1: connect to a global consumer, allowing children be educated from home,
• 21:45
  Speaker 1: you know, allowing experiences that span geographies and boundaries in
• 21:49
  Speaker 1: a digital form is so important, not just for commerce,
• 21:53
  Speaker 1: between so many other aspects. And so when you think
• 21:56
  Speaker 1: about cable, fiber optics, as you think about all the
• 21:59
  Speaker 1: other things even outside of power that enable us to
• 22:03
  Speaker 1: conduct commerce, to educate um. There are many examples where Barrey,
• 22:09
  Speaker 1: you can build resilience into your portfolio because that need
• 22:13
  Speaker 1: is not measured in years. Actually the shortfall of capital
• 22:16
  Speaker 1: is measured in the trillions, so which means this is uh,
• 22:19
  Speaker 1: this is a multidecade opportunity set from our vantage point
• 22:23
  Speaker 1: and one which our clients should really avail of. Quite
• 22:27
  Speaker 1: quite an interesting and I mentioned in passing structured credit.
• 22:32
  Speaker 1: Tell us a little bit about what that opportunity looks like.
• 22:35
  Speaker 1: I think of this as a space that is too
• 22:39
  Speaker 1: big for local banks but too small for Wall Street
• 22:44
  Speaker 1: to finance. Is that an oversimplification? What what is going
• 22:49
  Speaker 1: on in that space? I probably couldn't have said it better. Variation.
• 22:53
  Speaker 1: It's it's we can go back to just even the
• 22:56
  Speaker 1: investi the universe, I mean the the the tens of
• 23:01
  Speaker 1: thousands um companies. Just if we take North America that
• 23:08
  Speaker 1: our private that have great leadership, that really have strategic
• 23:13
  Speaker 1: vision um and are at the in some cases at
• 23:18
  Speaker 1: the start of their growth life cycle, or even if
• 23:22
  Speaker 1: they maintain they have a very credible and viable business
• 23:25
  Speaker 1: for the future, they still need capital. And you're you're
• 23:29
  Speaker 1: absolutely right. With the retreat of the banks from this
• 23:33
  Speaker 1: space through various regulations that have come after the global
• 23:37
  Speaker 1: financial crisis, you've seen the asset managers in many respects
• 23:41
  Speaker 1: working behalf of our clients, both wealth and institutional, becoming
• 23:44
  Speaker 1: the new lenders of choice. And and when we when
• 23:48
  Speaker 1: we think about that opportunity set, then it's really understanding
• 23:53
  Speaker 1: the client's desire for risk, right for something maybe on
• 23:57
  Speaker 1: a lower risk side, from middle market lending or middle
• 24:00
  Speaker 1: market enterprises where you know you can support that organization
• 24:05
  Speaker 1: through its growth cycle, all the way to some higher
• 24:08
  Speaker 1: yielding obviously with more risk assets on the opportunistic or
• 24:11
  Speaker 1: even the special situation side. But it spans many things.
• 24:17
  Speaker 1: I'm going back to the comment area around the evolution
• 24:19
  Speaker 1: of the space you know, private credit today and what
• 24:23
  Speaker 1: you can do has changed so profoundly. It spans the
• 24:26
  Speaker 1: liquidity spectrum, it spans the risk spectrum. And the great
• 24:30
  Speaker 1: news is with the number of companies both here and abroad,
• 24:35
  Speaker 1: the opportunity set is has been enriched every single day. Um.
• 24:39
  Speaker 1: And we're certainly seeing particularly going back to the question,
• 24:42
  Speaker 1: are some of these assets coming from the traditional side,
• 24:46
  Speaker 1: the public side when we think of private credit, you
• 24:49
  Speaker 1: are seeing private credit now being incorporated in fixed income allocations. Um.
• 24:54
  Speaker 1: You know, this is a is a yielding asset, this
• 24:57
  Speaker 1: is these are dead instruments, these are structures were creating.
• 25:00
  Speaker 1: We're trying to be flexible and dynamic with these clients.
• 25:03
  Speaker 1: But it really is an area where we think it
• 25:06
  Speaker 1: really is still act, it's at its infancy relevant to
• 25:09
  Speaker 1: where it can potentially be. That's that's really quite quite interesting.
• 25:14
  Speaker 1: Let's let's stick with that concept of of money rotating
• 25:18
  Speaker 1: away from fixed income. I have to imagine clients are
• 25:23
  Speaker 1: starved for yields. So so what are the popular substitutes
• 25:27
  Speaker 1: for this is? Is it primarily structured credit? Is it
• 25:31
  Speaker 1: real estate? How do you respond to an institution that says, hey,
• 25:36
  Speaker 1: I'm not getting any sort of realistic coupon on my bonds.
• 25:41
  Speaker 1: I need a substitute. Yeah, it's it's it's it's all
• 25:46
  Speaker 1: of those in many respects. And I think to the
• 25:51
  Speaker 1: role even around now, at a time where people have
• 25:54
  Speaker 1: questions around inflation, how do you substitute this yield efficiency
• 25:59
  Speaker 1: or certainly make up for that shortfall? How do you
• 26:02
  Speaker 1: think about a world where we're increasingly seeing inflation not
• 26:06
  Speaker 1: as a transitory thing, but it feels certainly quasi permanent.
• 26:10
  Speaker 1: Um These are a lot of questions we're getting, and
• 26:14
  Speaker 1: certainly real estate is an important part of how they
• 26:18
  Speaker 1: think about inflation protection, how clients think about yield. But
• 26:23
  Speaker 1: quite frankly too, we've we've gone through something none of
• 26:26
  Speaker 1: us really had thought about, a global pandemic. And as
• 26:31
  Speaker 1: I think about real estate, just how you allocate to
• 26:34
  Speaker 1: the sector. You know, what was very heavily influenced with
• 26:39
  Speaker 1: retail assets, high streets, our shopping behaviors and habits have changed.
• 26:45
  Speaker 1: We all occupied offices for obviously many many years pre
• 26:49
  Speaker 1: the pandemic. The shape of how we operate and how
• 26:52
  Speaker 1: we do that has changed. So I think some of
• 26:55
  Speaker 1: the underlying investment investments have changed. Or you've seen heavily
• 27:01
  Speaker 1: waiting towards office space to leisure travel in the past.
• 27:06
  Speaker 1: Actually now you've seen a rotation in some respects out
• 27:09
  Speaker 1: of those, just given some of the uncertainties around what
• 27:12
  Speaker 1: the future holds as we come come through a really
• 27:15
  Speaker 1: difficult time. But the great thing about this sector is
• 27:19
  Speaker 1: between senior living, between student housing, between logistics and so
• 27:24
  Speaker 1: many other parts. There are ways in real estate to
• 27:28
  Speaker 1: capture where there's where there's demands. So still a robust
• 27:34
  Speaker 1: opportunity set and we do think can absolutely be yield enhancing.
• 27:39
  Speaker 1: We mentioned infrastructure. Even if you think about and we
• 27:43
  Speaker 1: mentioned O E c D and and non O E
• 27:46
  Speaker 1: c D emerging and and developed. You know, and I
• 27:50
  Speaker 1: think about Asia in particular just as a subset of
• 27:53
  Speaker 1: the world in which we're living in. You know, that
• 27:55
  Speaker 1: is a two point six trillion dollar alternative market today
• 27:59
  Speaker 1: growing at a fift keger um, and quite frankly, the
• 28:05
  Speaker 1: all growth is driven by the large economic growth in
• 28:09
  Speaker 1: the region. So even from a regional perspective, if we pivot,
• 28:13
  Speaker 1: you know, it houses fifty seven percent of the world's
• 28:16
  Speaker 1: population and yet delivers seven percent of the world's economic role.
• 28:22
  Speaker 1: So I think think of that, and then with regard
• 28:26
  Speaker 1: to to infrastructure and goes back to that, this is
• 28:30
  Speaker 1: truly a global phenomenon. So we just even take that sector, Barry,
• 28:34
  Speaker 1: you realize that the way to maintain that type of growth,
• 28:39
  Speaker 1: to attract capital, to keep capital, it really requires an
• 28:44
  Speaker 1: investment of significance amount of money to be able to
• 28:49
  Speaker 1: sustain that. And you know when you have forty two
• 28:52
  Speaker 1: million people in a pack migrating to cities in the year.
• 28:55
  Speaker 1: Going back to digitization, that's an important things. So when
• 29:01
  Speaker 1: I say we're so much at the infancy and infrastructure,
• 29:04
  Speaker 1: I really mean it. Um. It can be water, it
• 29:07
  Speaker 1: can be sewage systems, it can be digital, it can
• 29:10
  Speaker 1: be rows. There's so much to this um and then
• 29:14
  Speaker 1: even down to the regional perspective, it's it's a it's
• 29:17
  Speaker 1: a need that doesn't just exist in the US. So
• 29:20
  Speaker 1: for these assets. These tend to be long and duration.
• 29:24
  Speaker 1: There's both equity and debt and on the death side,
• 29:27
  Speaker 1: quite frankly, very few outside of our insurance clients and
• 29:30
  Speaker 1: their general accounts are taking advantage of the debt opportunity
• 29:34
  Speaker 1: and as we both know, to finance these projects that
• 29:37
  Speaker 1: are becoming more plentiful every single day across the world,
• 29:42
  Speaker 1: including like I said, an a pack in scale um.
• 29:45
  Speaker 1: There's an opportunity on both sides, and I think that's
• 29:48
  Speaker 1: where the asset mix change happened. It's recognizing that the
• 29:52
  Speaker 1: attributes of these assets can have a role. The attributes
• 29:56
  Speaker 1: of these assets can potentially replace some of these traditional assets,
• 30:01
  Speaker 1: and I think you're going to see it grow. So
• 30:03
  Speaker 1: infrastructure to us is really equity and debt um. And
• 30:07
  Speaker 1: then on the credit side, like like I mentioned it
• 30:09
  Speaker 1: again too, it's a very very big and growing market
• 30:14
  Speaker 1: and certainly the biggest area today and from our advantage
• 30:18
  Speaker 1: point is middle market landing from a scale opportunity standpoint,
• 30:22
  Speaker 1: so you know, we think much more to come in
• 30:25
  Speaker 1: all of those spaces. Really interesting, and let's just stay
• 30:29
  Speaker 1: with the concept of of public versus private um. That
• 30:35
  Speaker 1: line is kind of getting blurred in the secondary markets.
• 30:38
  Speaker 1: There's liquidly coming to for lack of a better phrase,
• 30:43
  Speaker 1: pre public equities. Tell us a little bit about that space.
• 30:47
  Speaker 1: Is that an area that is ripe for growth for
• 30:50
  Speaker 1: black Rock? Yeah, we absolutely think it is. And you're
• 30:56
  Speaker 1: you're you're absolutely correct. The secondary market is is on
• 31:00
  Speaker 1: quite substantially. If you if you even look at just
• 31:03
  Speaker 1: the private equity secondary market and what will transact this year,
• 31:07
  Speaker 1: you know, we think it will be attention in excess
• 31:10
  Speaker 1: of a hundred billion, and that's what will clear. Let's
• 31:12
  Speaker 1: not to mention what will be visible and what will
• 31:15
  Speaker 1: be what will be analyzed, um and and that speaks
• 31:19
  Speaker 1: to me, what's what's really happening and the innovation that
• 31:24
  Speaker 1: that we mentioned earlier. It's no longer about just primary exposure.
• 31:28
  Speaker 1: It's secondary exposure. And then we see all sorts of
• 31:31
  Speaker 1: interest in co investment opportunities as well. I think the
• 31:35
  Speaker 1: the the available sources of alpha and the flexibility you
• 31:41
  Speaker 1: can now have, albeit if directed and advised, I believe
• 31:45
  Speaker 1: the right way Barry can can be very helpful and
• 31:48
  Speaker 1: in the portfolio. Um so your pre I p O.
• 31:53
  Speaker 1: It is a big part of actually what we do
• 31:55
  Speaker 1: and we think about growth equity. You know, there is
• 31:59
  Speaker 1: a significant amount of capital following that space from from
• 32:03
  Speaker 1: our vantage point as one of the largest investors in
• 32:06
  Speaker 1: public equity market UM and now obviously one of the
• 32:11
  Speaker 1: largest investors in the in the private side. The bridge
• 32:14
  Speaker 1: between between private to public, there's there's a real need.
• 32:19
  Speaker 1: I p o s are not going away, and I
• 32:22
  Speaker 1: think smart informed capital to help with these journeys these
• 32:26
  Speaker 1: journeys is really as really a necessity and the need.
• 32:30
  Speaker 1: So let's talk a little bit about this recent restructuring.
• 32:33
  Speaker 1: You were first named global head of black Rock Alternate
• 32:37
  Speaker 1: Investors in April, the entire alternatives business was restructured. Tell
• 32:44
  Speaker 1: us a little bit about how that restructuring is going
• 32:48
  Speaker 1: continues to go really well Bury. When you look at
• 32:50
  Speaker 1: the the flow of assets from our clients, I think
• 32:55
  Speaker 1: hopefully that speaks to the performance we've been generating. UM.
• 32:59
  Speaker 1: You know, I joined the firm, as you know, albeit
• 33:03
  Speaker 1: eleven years ago, and being very close to the alternatives
• 33:08
  Speaker 1: franchise was as a critical thing for me, and running
• 33:11
  Speaker 1: the institutional platform to me, when you watched this migration
• 33:16
  Speaker 1: of assets towards alternatives, it was obviously very evident for
• 33:21
  Speaker 1: decades now that this is a is a critical leg
• 33:25
  Speaker 1: of the stool as our clients are thinking about their portfolios. Um,
• 33:30
  Speaker 1: we're continuing to innovate, we're continuing to invest, and thankfully
• 33:34
  Speaker 1: we'll continue to deliver a strong performance. We're growing at about,
• 33:40
  Speaker 1: you know, high double digits on an annual basis, but
• 33:44
  Speaker 1: we're trying to be purposeful to around where that growth
• 33:47
  Speaker 1: is coming from. I think the reality is when you
• 33:49
  Speaker 1: look at the competitive universe, I think the last number
• 33:53
  Speaker 1: I sold it was about thirty eight thousand alternative asset
• 33:56
  Speaker 1: managers out there today, obviously coming from hedge funds all
• 34:00
  Speaker 1: the way through through private credit and private equity. So
• 34:03
  Speaker 1: competition is real, and I do think the outcomes for
• 34:07
  Speaker 1: our clients are starting to really grow, unfortunately some in
• 34:12
  Speaker 1: some cases obviously very good, in some cases actually not great.
• 34:16
  Speaker 1: So our focus are really much on how how can
• 34:20
  Speaker 1: we deliver performance, how can we be a partner. And
• 34:25
  Speaker 1: I think we've been rewarded with the trust and the
• 34:27
  Speaker 1: faith their clients have on us because they're seeing something
• 34:31
  Speaker 1: different I think from us. Now, the scale of the
• 34:34
  Speaker 1: business that you mentioned earlier really gives us tentacles into
• 34:38
  Speaker 1: the market that I believe allows us to access what
• 34:42
  Speaker 1: I think is the new Alpha, which is in many
• 34:45
  Speaker 1: respects given the heft of competition, Sourcing and originating new
• 34:50
  Speaker 1: investments is certainly harder. But for us sitting in or
• 34:56
  Speaker 1: having our Alternatives team sitting in fifty offices around the
• 35:00
  Speaker 1: world really investing in the markets because that's the market
• 35:04
  Speaker 1: they grew up with and have relationships within. I think this,
• 35:09
  Speaker 1: this network value that we have is something that's quite special,
• 35:15
  Speaker 1: and I think in the world that's becoming increasingly competitive,
• 35:19
  Speaker 1: we're going to continue to use and harness that network
• 35:21
  Speaker 1: value to pursue opportunities. And thankfully, as a result of
• 35:26
  Speaker 1: the partnership we've been we've been pursuing with our clients.
• 35:30
  Speaker 1: Like we've we're certainly looking for opportunities and investments in
• 35:34
  Speaker 1: our funds, but because of the brand, I think, because
• 35:36
  Speaker 1: of the successes, opportunity seeks us as much as we
• 35:40
  Speaker 1: seek opportunity, and that has been something that you know,
• 35:45
  Speaker 1: we look at an ongoing basis and feel very privileged
• 35:48
  Speaker 1: to actually have that inbound flow as well. Really really
• 35:52
  Speaker 1: quite interesting. There was a quote of yours I found
• 35:56
  Speaker 1: while while doing some prep for this conversation that I
• 35:59
  Speaker 1: have to have you and on quote the relationship between
• 36:02
  Speaker 1: black Rocks, alternative capabilities and wealth firms marked a large
• 36:07
  Speaker 1: opportunity for growth in the coming years. This was back
• 36:11
  Speaker 1: in so the first part of the question is was
• 36:15
  Speaker 1: your expectations correct? Did you did you see the sort
• 36:19
  Speaker 1: of growth you were hoping for? And more broadly, how
• 36:23
  Speaker 1: large of an opportunity is alternatives not just for Black
• 36:29
  Speaker 1: Rock but for the entire investment industry. Yeah, it's It's
• 36:33
  Speaker 1: been very much an institutional opportunity, says up until now.
• 36:38
  Speaker 1: And there's so much to be done still to to
• 36:42
  Speaker 1: really democratize alternatives. And we we certainly joke around making
• 36:46
  Speaker 1: alternatives less alternative. Actually, even the normenclature we use and
• 36:51
  Speaker 1: how we describe it doesn't kind of make sense anymore.
• 36:54
  Speaker 1: It's such a core an important allocation to our clients, Barry,
• 36:58
  Speaker 1: that just calling it alternate the seems wrong. Um, I
• 37:02
  Speaker 1: just think about the institutional clients its ranges. I think,
• 37:05
  Speaker 1: as I mentioned on our some of our more conservative clients,
• 37:08
  Speaker 1: which would be pension plans which really have liquidity needs
• 37:13
  Speaker 1: on a monthly basis because of the liabilities they have
• 37:16
  Speaker 1: to think about, you know, at about twenty five plus
• 37:19
  Speaker 1: percent in private markets to endowments, foundations, family offices going
• 37:24
  Speaker 1: to fifty plus. So's it's a really important part and
• 37:29
  Speaker 1: has been for now many years, the institutional climate, communities outcomes.
• 37:34
  Speaker 1: I think the thing that we use an industry have
• 37:37
  Speaker 1: to change is alternatives has to be for the many,
• 37:42
  Speaker 1: not for the few. And quite frankly, it's been for
• 37:46
  Speaker 1: the view and as we talked about some of the
• 37:48
  Speaker 1: attributes and the important attributes of these asset classes. To
• 37:52
  Speaker 1: think that, you know, those who have been less fortunate
• 37:57
  Speaker 1: in their careers can't access things that and enrich their
• 38:01
  Speaker 1: future retirement outcomes, to me is a failing UM and
• 38:05
  Speaker 1: we have to address that. That comes from regulation changes,
• 38:08
  Speaker 1: it comes from structuring of new products, it comes from education,
• 38:14
  Speaker 1: and it comes from this this this knowledge transmission where
• 38:18
  Speaker 1: UM clients in the wealth segment can understand the role
• 38:22
  Speaker 1: of alternatives in the context of what that can do
• 38:26
  Speaker 1: as they invest in equities and fixed income too, and
• 38:29
  Speaker 1: we think that's a big shortfall. So the journey today
• 38:32
  Speaker 1: just to give you a sense as we look at
• 38:35
  Speaker 1: our clients in Europe on the wealth side on average,
• 38:38
  Speaker 1: as you look from what we would call accredited investors
• 38:40
  Speaker 1: all the way through to more ultra high net worth individuals,
• 38:44
  Speaker 1: their allocation to alternatives we believe stands it around two
• 38:47
  Speaker 1: to three of their total portfolio. In the US, we
• 38:51
  Speaker 1: believe it stands at three to five. So most of
• 38:56
  Speaker 1: those intermediaries we speak to our partners who are who
• 38:59
  Speaker 1: are porting and serving the wealth channel, they have certainly
• 39:03
  Speaker 1: an ambition to help their clients grow that to twenty
• 39:06
  Speaker 1: percent and potentially even beyond that. So when I look
• 39:09
  Speaker 1: at that gap of let's call it two to three
• 39:13
  Speaker 1: in in a in a market that just given the
• 39:16
  Speaker 1: explosion and wealth around the world, I think the last
• 39:20
  Speaker 1: numbers I saw this is a sixty trillion dollar market um.
• 39:25
  Speaker 1: That speaks to the shortfall relative to the ambition. And
• 39:30
  Speaker 1: you know, how has it been going. We have a
• 39:33
  Speaker 1: number of things and capabilities we've set up to allow
• 39:36
  Speaker 1: for this market to experience hopefully private equity, hedge funds,
• 39:42
  Speaker 1: credit and infrastructure in ways they haven't in the past.
• 39:46
  Speaker 1: We've done it in the US, we're doing it now
• 39:48
  Speaker 1: in Europe. But I will say various this is still
• 39:51
  Speaker 1: very much at the start of the journey. Wealth is
• 39:55
  Speaker 1: a really important part of our future given our business.
• 39:59
  Speaker 1: Quite frankly, ninety plus percent institutional today, but we're looking
• 40:04
  Speaker 1: to change that by hopefully democratizing these asset classes, and
• 40:08
  Speaker 1: I'm making it so much more accessible than that of
• 40:10
  Speaker 1: the past. So we we hinted at this before, but
• 40:14
  Speaker 1: I'm going to ask the question outright, how significant is
• 40:19
  Speaker 1: interest rates to clients risk appetites. How much of the
• 40:24
  Speaker 1: current low rate environment are driving people to move chunks
• 40:30
  Speaker 1: of their assets from fixed income UH to alternatives. It's
• 40:36
  Speaker 1: really significant, Verry Um. I think that the transition of
• 40:41
  Speaker 1: these portfolios UM is quite profound. So you're and I
• 40:47
  Speaker 1: think the unfortunate thing in some respects as this transition happens, UM,
• 40:53
  Speaker 1: is that you're introducing new variables and new risks. And
• 40:58
  Speaker 1: the reason I say it's unfortunate that I think as
• 41:00
  Speaker 1: an industry, this goes back to the education around the
• 41:04
  Speaker 1: assets you want, understanding the role, understanding the various outcomes.
• 41:09
  Speaker 1: I think it is so incredibly important, and that this
• 41:13
  Speaker 1: is a time where complete transparency is needed. UH. And
• 41:18
  Speaker 1: quite frankly, we're investing capital. It's not ours as an industry.
• 41:22
  Speaker 1: We're investing our clients assets and they need to know
• 41:26
  Speaker 1: exactly the underlying investments, and you know, in good and
• 41:30
  Speaker 1: bad times, how would those assets behave? So certainly interest
• 41:35
  Speaker 1: rates are driving a flow of capital away from these
• 41:39
  Speaker 1: traditional assets you know, fixed income and absolutely in towards
• 41:44
  Speaker 1: UM real estate, infrastructure, private credit, etcetera, in the pursuit
• 41:51
  Speaker 1: of this this yield. But I do I do think
• 41:55
  Speaker 1: one of the things that's critically important for the institutional town,
• 41:59
  Speaker 1: not just the well which are newer entrance, is this
• 42:02
  Speaker 1: transmission of education of data, because that's how I think
• 42:07
  Speaker 1: you build a better balanced portfolio UM. And that's a
• 42:11
  Speaker 1: that's a real conundrum I think that the the industry
• 42:14
  Speaker 1: is facing, and certainly your clients to quite quite interesting.
• 42:18
  Speaker 1: So so let's talk a little bit about the differences
• 42:22
  Speaker 1: between investing in in the private side versus the public markets.
• 42:26
  Speaker 1: The most obvious one has to be the illiquidity. You know,
• 42:30
  Speaker 1: when you buy stocks or bonds, you get a print
• 42:33
  Speaker 1: every micro second, every tick, but most of these investments
• 42:37
  Speaker 1: are only marked quarterly or annually. What does this i
• 42:42
  Speaker 1: liquidity do when you're interacting with clients, how do you
• 42:47
  Speaker 1: how do you discuss this with them and how do
• 42:49
  Speaker 1: they perceive? Uh? Some of the challenges of illquid investments
• 42:57
  Speaker 1: over the over the number past number of day case,
• 43:00
  Speaker 1: it's I think our clients have largely held too much
• 43:04
  Speaker 1: liquidity in their portfolios. Like, so, what what we are
• 43:08
  Speaker 1: finding is the ability to take on I liquidity risk
• 43:13
  Speaker 1: and obviously in pursuit of that premium above the traditional markets.
• 43:17
  Speaker 1: I mean, I think the sentiment there is an absolute
• 43:19
  Speaker 1: right one that transition towards private market exposure, we think
• 43:24
  Speaker 1: is is an important one just given the return objectives
• 43:29
  Speaker 1: the majority of our client's need. But then also again
• 43:32
  Speaker 1: most importantly now with geopolicy, with uncertainty, with interest rate uncertainty,
• 43:39
  Speaker 1: inflation uncertainty, going back to the resilience point, the characteristics
• 43:44
  Speaker 1: now by introducing these assets into the mix is important
• 43:48
  Speaker 1: and I think that's that that point is is maybe hort.
• 43:52
  Speaker 1: I'll expand on as we're talking to clients using the
• 43:56
  Speaker 1: Aladdin systems, and as you know, we bought the Front technologys,
• 44:00
  Speaker 1: albeit a couple of years ago. By allowing I think
• 44:04
  Speaker 1: great data and technology to help our clients understand these
• 44:09
  Speaker 1: assets in the context of how they should own them
• 44:13
  Speaker 1: relative to their liquidity needs, their risk tolerances, and the
• 44:19
  Speaker 1: return expectations. We're really trying to use tech and data
• 44:23
  Speaker 1: to provide a better understanding and comprehension of the outcomes.
• 44:28
  Speaker 1: And as we continue to introduce these concepts and these
• 44:32
  Speaker 1: approaches by the way that there's as you know so
• 44:34
  Speaker 1: used to in the traditional side, it's it's giving them
• 44:38
  Speaker 1: more comfort around what they should and can't expect, and
• 44:42
  Speaker 1: that to me is a really important part of what
• 44:45
  Speaker 1: we're doing. So you know, we've released recently new technology
• 44:48
  Speaker 1: to the wealth sector because you know, quite frankly we
• 44:51
  Speaker 1: mentioned it before, the sixty forty portfolio is a thing
• 44:55
  Speaker 1: of the past um and that that introduction of about
• 44:59
  Speaker 1: into alternatives. We applaud our our partners who are suggesting
• 45:03
  Speaker 1: that to their clients, we think is something they have
• 45:06
  Speaker 1: to do. What we're doing to support that is really
• 45:09
  Speaker 1: bringing thought, leadership, education, but also portfolio construction techniques and
• 45:16
  Speaker 1: and data to bear in that conversation. And this goes
• 45:20
  Speaker 1: back to it's no longer an alternative, right, this is
• 45:23
  Speaker 1: a core allocation. So the comprehension of what it is
• 45:26
  Speaker 1: you own the behavior of the assets in good and
• 45:29
  Speaker 1: bad times is so necessary and that's become a very
• 45:33
  Speaker 1: big thing, uh with regard to our activities bar because
• 45:36
  Speaker 1: you know, our clients are looking to understand better when
• 45:40
  Speaker 1: you're talking about assets that are very complex in their nature.
• 45:43
  Speaker 1: Huh So, is now fifty twenty something along those lines, yes,
• 45:50
  Speaker 1: really really intriguing. Uh So, So what are clients really
• 45:54
  Speaker 1: looking for these days? We we talked about yield, are
• 45:57
  Speaker 1: they also looking for downside protect on the equity side
• 46:01
  Speaker 1: or inflation hedges? You hinted at how broad are the
• 46:06
  Speaker 1: demands of clients in the alternative space. It's yeah, it's
• 46:12
  Speaker 1: it ranges the gamut. And even you know, we didn't
• 46:16
  Speaker 1: speak to even hedge funds. We've had you know, differing
• 46:21
  Speaker 1: levels of interest in the hedge fund world for for years.
• 46:25
  Speaker 1: Um and I quite frankly think some degree of disappointment
• 46:28
  Speaker 1: to Barry with with regard to the alpha the returns
• 46:31
  Speaker 1: that were produced relative to the cost. It's a tough
• 46:34
  Speaker 1: space to say the very least exactly right. But when
• 46:38
  Speaker 1: when you start to see volatility introducing itself, you can
• 46:43
  Speaker 1: really see where skill plays a critical factor. So where
• 46:49
  Speaker 1: we are absolutely seeing in the hedge fund space a
• 46:52
  Speaker 1: resurgence of interest and demand by virtue of those who
• 46:56
  Speaker 1: really have honed in on their skills, who have demonstrated
• 47:01
  Speaker 1: an up and down markets, an ability to protect and
• 47:03
  Speaker 1: preserve capital, but importantly in a low not uncorrelated way,
• 47:08
  Speaker 1: build attractive risk adjusted returns. We're starting to see more
• 47:13
  Speaker 1: activity there again too, I think with an alternatives you've
• 47:17
  Speaker 1: really seen a predominant demand coming from from privates. These
• 47:22
  Speaker 1: private markets, like you said, have grown so extraordinarily fast,
• 47:26
  Speaker 1: and the opportunity set is rich. The reality too, on
• 47:30
  Speaker 1: the public side, which is where hedge funds operate, they
• 47:35
  Speaker 1: continue to in large part do a really good job.
• 47:39
  Speaker 1: The the issue with our industry now, with the thirty
• 47:42
  Speaker 1: eight thousand managers is how do you distill all the information,
• 47:47
  Speaker 1: how do you think about your needs as a client
• 47:50
  Speaker 1: and pick a manager can deliver the outcomes. And just
• 47:53
  Speaker 1: to give you a sense that the difference now between
• 47:56
  Speaker 1: a top performing private equity manager, so a top court
• 48:00
  Speaker 1: versus the bottom quartile, the difference can be measured in
• 48:03
  Speaker 1: tens of percent, whereas if you look at the public
• 48:07
  Speaker 1: equity side, for example, a large cap manager top quartile
• 48:11
  Speaker 1: versus bottom quartile, it's measured in hundreds of basis points.
• 48:15
  Speaker 1: So there there is definitely a world that has started
• 48:19
  Speaker 1: where the outcomes our clients will experience can be great
• 48:23
  Speaker 1: as they pursue yield as they pursue diversification, inflation protection, etcetera.
• 48:31
  Speaker 1: I think the caveat that I would say is, you know,
• 48:35
  Speaker 1: the outcomes can vary greatly, so manager underwriting and the
• 48:39
  Speaker 1: importance of it now, I think really is is something
• 48:42
  Speaker 1: to pay attention to because if you do have that
• 48:45
  Speaker 1: bottom performing at the bottom quartile manager, it will it
• 48:49
  Speaker 1: will affect your your outcomes obviously, and that's the basic
• 48:52
  Speaker 1: thing we collectively have to to face. So let's talk
• 48:55
  Speaker 1: a little bit about real estate. UM, there are a
• 48:57
  Speaker 1: couple of different areas of investment on the private side.
• 49:02
  Speaker 1: Rent to own was a very large one, and we've seen,
• 49:06
  Speaker 1: um some lesser by the flip al go driven approaches.
• 49:12
  Speaker 1: Tell us what black Rock is doing in the real
• 49:14
  Speaker 1: estate space and how many different approaches are you bringing
• 49:19
  Speaker 1: to bear on this? Yeah, we think it's it's both
• 49:23
  Speaker 1: equity and death UM. Because again, no different to the
• 49:28
  Speaker 1: infrastructure side, these projects need to be financed. But on
• 49:32
  Speaker 1: the if you think about the sectors in which you
• 49:36
  Speaker 1: can avail of the opportunity, you know, you've no doubt
• 49:40
  Speaker 1: heard a lot and I mentioned earlier this demand for
• 49:43
  Speaker 1: logistics facilities. UH, the explosion of shopping online and having
• 49:50
  Speaker 1: until we've obviously had the supply chain disruption, an ability
• 49:54
  Speaker 1: to have nearly immediate satisfaction because the delivery of the
• 49:58
  Speaker 1: good to your home has become so readily available. Uh,
• 50:03
  Speaker 1: it's it's a very different consumer experience. So the explosion
• 50:08
  Speaker 1: and the need for logistics facilities to support this type
• 50:11
  Speaker 1: of behavior of the consumers is really an area that
• 50:15
  Speaker 1: will continue to be a great interest to us. And
• 50:18
  Speaker 1: then you think to think about the transformation of of business, um,
• 50:23
  Speaker 1: and you think about the aging worlds unfortunately, um, you know,
• 50:28
  Speaker 1: you can look at various economies where our populations are
• 50:31
  Speaker 1: decreasing and quite frankly, we're getting older. And so when
• 50:36
  Speaker 1: you when you think in the context of that, senior
• 50:38
  Speaker 1: living facilities becomes a really important part, not just as
• 50:43
  Speaker 1: part of the health care solution that will come with it,
• 50:46
  Speaker 1: but also from living as well. So you know, single
• 50:49
  Speaker 1: family multifamily opportunities continue to be something that you know,
• 50:53
  Speaker 1: the world looks at because there is really the shortfall
• 50:57
  Speaker 1: of available properties for people to to live in and
• 51:01
  Speaker 1: as the community has evolved to support the growing age
• 51:06
  Speaker 1: of the population, tremendous opportunity there too. But we won't
• 51:10
  Speaker 1: give up on office space. It really isn't going away.
• 51:15
  Speaker 1: And I've even think about our younger generation here in
• 51:17
  Speaker 1: Black Rock. They love being in New York, they love
• 51:21
  Speaker 1: being in London, they love being in Hong Kong. So
• 51:24
  Speaker 1: the shape and the footprint may change slightly, but the
• 51:27
  Speaker 1: necessity to be in the major financial centers it still exists.
• 51:32
  Speaker 1: But how we wait the risks has definitely changed, certainly
• 51:36
  Speaker 1: for the for the short term and medium term future um.
• 51:40
  Speaker 1: But real estate continues to be very a critical part
• 51:43
  Speaker 1: of how we express our our thoughts around the investment
• 51:47
  Speaker 1: opportunity set, but clients largely do this themselves. To the
• 51:51
  Speaker 1: direct investing from the clients is quite significant because they
• 51:54
  Speaker 1: too see this as still a rich investment ground all
• 51:59
  Speaker 1: the one that has changed quite a bit as a
• 52:00
  Speaker 1: result of COVID. H Well, I'm I'm fascinated by the
• 52:05
  Speaker 1: real estate issue, especially having seen some massive construction take
• 52:11
  Speaker 1: place in cities pre pandemic. Look over in Manhattan at
• 52:16
  Speaker 1: Hudson Yards, and look at what's taking place, uh in London,
• 52:20
  Speaker 1: not not just um the center of London, but all
• 52:24
  Speaker 1: but all around it. And I'm forced to admit the
• 52:29
  Speaker 1: future is going to look somewhat different than the past,
• 52:33
  Speaker 1: with some hybrid combination of collaborative work in the office
• 52:38
  Speaker 1: and remote work from home when it's convenient. That sort
• 52:42
  Speaker 1: of suggests that we now have an excess of capacity
• 52:47
  Speaker 1: in office space. Do you see it that way? Or
• 52:50
  Speaker 1: is this just something that we're going to grow into
• 52:53
  Speaker 1: and and just the nature of working in offices is changing,
• 52:58
  Speaker 1: but offices are not going away. Yeah, I I do
• 53:02
  Speaker 1: think there's it's a very valid point in that in
• 53:06
  Speaker 1: certain cities you will see access and others we just
• 53:10
  Speaker 1: don't vary UM And quite frankly, as a firm to
• 53:15
  Speaker 1: as you know, we have adopted flexibility with our teams.
• 53:20
  Speaker 1: Now we're very fortunate the technologies in which we created
• 53:23
  Speaker 1: a black Rock has just become such an amazing enabler,
• 53:27
  Speaker 1: not just to help us, as we mentioned, manage the portfolios,
• 53:30
  Speaker 1: help us with better portfolio construction, understand risks, but also
• 53:35
  Speaker 1: to communicate with our clients. You know, I think we've
• 53:37
  Speaker 1: we've all witnessed and experienced a way to have connectivity
• 53:42
  Speaker 1: UM that allows one to believe that commerce can exist
• 53:48
  Speaker 1: beyond the boundaries of one building. You know, however, I
• 53:52
  Speaker 1: do look at our property portfolios and even the things
• 53:54
  Speaker 1: that we're doing. You know, rent collections still being extraordinarily high.
• 54:00
  Speaker 1: Occupancy now getting back up to pre pandemic levels, not
• 54:04
  Speaker 1: in all cities, but in many the major ones that
• 54:06
  Speaker 1: have reopened. And certainly the demand for people to just socialize,
• 54:11
  Speaker 1: that that that demand for human connectivity is really high.
• 54:15
  Speaker 1: It's palpable, right, we see it here to the smiles
• 54:17
  Speaker 1: and people's faces are back in the office, conversing together,
• 54:20
  Speaker 1: innovating together. Um. You know, when people were feeling unsafe, unquestionably,
• 54:26
  Speaker 1: I think the question marks around the role of office
• 54:29
  Speaker 1: space was really brought to bear. But as we're coming
• 54:32
  Speaker 1: through this um, as you've seen vaccine rates change, have
• 54:36
  Speaker 1: you've seen the infection rates fall, as you've seen confidence grow,
• 54:41
  Speaker 1: the return to work is really happening, and turned to
• 54:43
  Speaker 1: work to office work is really happening, albeit now with
• 54:47
  Speaker 1: degrees of flexibility. So going back to the I, I
• 54:52
  Speaker 1: do believe in certain areas you're seeing a surplus, but
• 54:55
  Speaker 1: in many areas you're absolutely seeing a deficit. And the
• 55:00
  Speaker 1: reason I say that we are seeing occupancy in certain
• 55:03
  Speaker 1: buildings at such a high level and frankly to demand
• 55:07
  Speaker 1: from more space being so high, um, it's uneven. And
• 55:11
  Speaker 1: this goes back to then you know, where do you
• 55:14
  Speaker 1: invest our clients capital, making sense of those trends, predicting
• 55:19
  Speaker 1: where you will see resilience versus stress, and building that
• 55:23
  Speaker 1: into the portfolio consequences as you as you better risk,
• 55:26
  Speaker 1: manage and mitigate. Very interesting and so we are seeing
• 55:31
  Speaker 1: this transition across a lot of different segments of investing.
• 55:36
  Speaker 1: Are you seeing any products that were or or investing
• 55:40
  Speaker 1: styles that was once thought of as primarily institutional that
• 55:45
  Speaker 1: are sort of working their way towards the retail side
• 55:49
  Speaker 1: of things, meaning going from institutional to accredited to mom
• 55:55
  Speaker 1: and pop investors. Um. Well, certainly the past private equity
• 56:03
  Speaker 1: was was really an asset class for institutional investors, and
• 56:08
  Speaker 1: I think that's that has changed in a very profound way.
• 56:14
  Speaker 1: I mentioned earlier, Sorry that regulation has become a bit
• 56:18
  Speaker 1: more adoptive, but it also has hurt in many respects
• 56:21
  Speaker 1: and providing this access and I think the perception of
• 56:25
  Speaker 1: owning and be part of this liquid investment opportunities that
• 56:30
  Speaker 1: it was hard to stomach because many didn't under understand
• 56:33
  Speaker 1: the attributes and a lot of could brain and I
• 56:35
  Speaker 1: think we've been trying to solve for that, and what
• 56:39
  Speaker 1: you're seeing now with with regulators understanding that the difference
• 56:43
  Speaker 1: between if we take it quite simply as you d
• 56:45
  Speaker 1: D versus DC, the differences between the options you have
• 56:51
  Speaker 1: as a participant in in a retirement plan are so
• 56:55
  Speaker 1: vastly different that and I think there's a broad recognition
• 56:59
  Speaker 1: now that there's needs to be more equity with regard
• 57:01
  Speaker 1: to what happens there and private equity being a really
• 57:05
  Speaker 1: established part of the alternatives marketplace was once I think,
• 57:10
  Speaker 1: really believed to be an institutional asset class, but albeit
• 57:14
  Speaker 1: now has become much more accessible to wealth. We've seen
• 57:18
  Speaker 1: it by structuring UM activities in Europe working with the
• 57:23
  Speaker 1: regulators there. Now we're being able to provide private equity
• 57:27
  Speaker 1: exposure to clients across the continent and they're really getting
• 57:32
  Speaker 1: access to what was historically very much an institutional asset class.
• 57:37
  Speaker 1: And I do think the receptivity is extraordinarily high. Just
• 57:40
  Speaker 1: throughout people's careers they have seen wealth being created as
• 57:45
  Speaker 1: a result of engineering a great outcome with great management
• 57:49
  Speaker 1: teams in a great business, and I do believe the
• 57:54
  Speaker 1: receptivity towards private equity is high. As as an example,
• 57:57
  Speaker 1: in the US too. You know, working with the various
• 58:02
  Speaker 1: intermediaries and being able to wrap now private equity in
• 58:06
  Speaker 1: a forty Act fund, for example, is possible by being
• 58:10
  Speaker 1: able to deliver that too, you know, the many as
• 58:13
  Speaker 1: opposed to the few, we think has been a very
• 58:16
  Speaker 1: good success story and I think obviously appreciated by buyer
• 58:19
  Speaker 1: clients as well. So I would look at we're seeing
• 58:23
  Speaker 1: across private equity as well as private credit and quite
• 58:26
  Speaker 1: frankly infrastructure. You're seeing now regulation that's becoming more appreciative
• 58:33
  Speaker 1: of these asset classes. You're seeing a more a greater
• 58:36
  Speaker 1: level of openness and willingness to allow for these assets
• 58:39
  Speaker 1: to be part of many people's experiences across their investment portfolio.
• 58:45
  Speaker 1: And now with innovation around structures as an industry, we're
• 58:49
  Speaker 1: able to wrap these investments in a way that our
• 58:52
  Speaker 1: clients can really access them. So I think across the
• 58:55
  Speaker 1: board probably speaks to the innovation that's happening. But I
• 58:58
  Speaker 1: do think that accessibility has changed age in a very
• 59:00
  Speaker 1: significant way. But you've really seen it happen in private
• 59:05
  Speaker 1: equity first, and now that's spanning across these various other astrocauses.
• 59:09
  Speaker 1: Quite intriguing. I know I only have you for a
• 59:13
  Speaker 1: relatively limited period of time. So let's jump to our
• 59:16
  Speaker 1: favorite questions that we ask all of our guests, starting
• 59:20
  Speaker 1: with tell us what you've been streaming these days? Give
• 59:23
  Speaker 1: us your favorite Netflix or Amazon Prime shows. That is
• 59:29
  Speaker 1: an interesting question. I don't watch a hell of a
• 59:33
  Speaker 1: lot of TV. I gotta tell you I am. I
• 59:37
  Speaker 1: keep busy with three wonderful children and a beautiful wife,
• 59:40
  Speaker 1: and you know, between the sports activities when I do
• 59:44
  Speaker 1: watch TV, I have to tell you I'm addicted to
• 59:47
  Speaker 1: sports and having I may have mentioned it earlier. Growing
• 59:51
  Speaker 1: up playing rugby, which is not the most common sport
• 59:53
  Speaker 1: in the US. I stream NonStop the Six Nations that
• 59:59
  Speaker 1: happened in Europe, where Ireland is one of those six
• 1:00:02
  Speaker 1: nations that compete against each other on an annual basis.
• 1:00:06
  Speaker 1: Right now, they're playing a lot of sides that are
• 1:00:09
  Speaker 1: touring for the sub of the Southern Hemisphere. And to me,
• 1:00:13
  Speaker 1: the free time that I have is either enjoying golf,
• 1:00:16
  Speaker 1: are really enjoying rugby because I think it's a it's
• 1:00:19
  Speaker 1: an extraordinary sport, obviously very physical, was very enjoyable to watch,
• 1:00:23
  Speaker 1: and that that truly is my passion outside of family.
• 1:00:27
  Speaker 1: Interesting stuff. Tell us a bit about your mentors who
• 1:00:31
  Speaker 1: helped to shape your early career. Well, it even even
• 1:00:36
  Speaker 1: goes back to some of the aspects of sports. Um.
• 1:00:40
  Speaker 1: You know, playing on a team and being on a
• 1:00:45
  Speaker 1: on a field where you're you're working together. There's a
• 1:00:50
  Speaker 1: strategy involved with that. Now, I used to really appreciate
• 1:00:55
  Speaker 1: how we approached playing in all the All Ireland league. Um,
• 1:00:59
  Speaker 1: how we thought about our opponents, how we thought about
• 1:01:02
  Speaker 1: the structure, how we thought about each individual with on
• 1:01:06
  Speaker 1: a rugby field and the team having a role. They're
• 1:01:10
  Speaker 1: all different, um, but you knew your role and actually,
• 1:01:14
  Speaker 1: even starting from an early age, very thinking about and
• 1:01:17
  Speaker 1: I know it's it's it's sports, but how to build
• 1:01:20
  Speaker 1: a great team with those various skills perspectives that can
• 1:01:26
  Speaker 1: be a really really powerful combination when done well. And
• 1:01:30
  Speaker 1: certainly from an early age that allowed me to appreciate that.
• 1:01:34
  Speaker 1: Actually in the work environment, it's not too different. I
• 1:01:38
  Speaker 1: give you surround yourself with just really great people that
• 1:01:43
  Speaker 1: have high integrity, UM, that are empathetic and have a
• 1:01:48
  Speaker 1: degree of humility that you know, when working together good
• 1:01:51
  Speaker 1: things can happen. UM. And I will say, it really
• 1:01:54
  Speaker 1: started at sports, but I think of today in even
• 1:01:58
  Speaker 1: in Black Rock, you know how Larry think thinks about
• 1:02:01
  Speaker 1: the world. Um, and I think Larry truly as a visionary.
• 1:02:06
  Speaker 1: And then Rob Capito, who really helps lead the charge
• 1:02:10
  Speaker 1: across our various businesses, you know, speaking and conversing with
• 1:02:14
  Speaker 1: them on a daily basis, getting their perspectives, trying to
• 1:02:18
  Speaker 1: get inside their head and thinking about the world from
• 1:02:22
  Speaker 1: their vantage point. To me, it's it's it's a it's
• 1:02:25
  Speaker 1: a huge thing about my ongoing personal career and development.
• 1:02:28
  Speaker 1: And I really enjoy those moments because I think what
• 1:02:32
  Speaker 1: you recognize as independent of how much you think you know,
• 1:02:35
  Speaker 1: there's so much more to know. And this, this journey
• 1:02:39
  Speaker 1: is is an ever evolving one where you have to
• 1:02:42
  Speaker 1: appreciate that you will never know everything and you need
• 1:02:45
  Speaker 1: to be a student every single day. So I'll probably
• 1:02:48
  Speaker 1: cite those barriers certainly the two most important mentors in
• 1:02:53
  Speaker 1: my life today, but professionally and personally quite frankly, really
• 1:02:57
  Speaker 1: very interesting. Uh, let's talk about what you're reading these days.
• 1:03:02
  Speaker 1: Tell us about some of your favorite books and what
• 1:03:04
  Speaker 1: you're reading currently. Sorry, what I love to read. I
• 1:03:07
  Speaker 1: love to read history, believe it or not from a
• 1:03:10
  Speaker 1: very small country that seems to have exported many, many,
• 1:03:13
  Speaker 1: many people love to understand the history of Ireland. So
• 1:03:17
  Speaker 1: there's so many books. Uh. And you know, having three
• 1:03:20
  Speaker 1: children that have been born in the US and my
• 1:03:22
  Speaker 1: wife is a New Yorker, trying to help them understand,
• 1:03:26
  Speaker 1: you know, some of their history and what's made them
• 1:03:29
  Speaker 1: what they are. UM. I love delving into Irish history
• 1:03:33
  Speaker 1: and how the country has had moments of greatness and
• 1:03:36
  Speaker 1: moments of tremendous struggle. Outside of that, I really don't
• 1:03:40
  Speaker 1: enjoy science fiction or any of these books. I love reading,
• 1:03:44
  Speaker 1: um you name any paper in any magazine on a
• 1:03:48
  Speaker 1: daily basis. Unfortunately, I wake at about four thirty five
• 1:03:52
  Speaker 1: o'clock every day. I spent my first two hours of
• 1:03:54
  Speaker 1: the day just consuming as much information as possible. I
• 1:03:57
  Speaker 1: enjoy it, but it's all it's it's really investment related magazines,
• 1:04:02
  Speaker 1: not books. It's every paper that you could possibly imagine.
• 1:04:05
  Speaker 1: Barry and I just have a great appreciation for certainly
• 1:04:10
  Speaker 1: trying to be a student of the world because that's
• 1:04:12
  Speaker 1: what we're operating in. And I find that just a
• 1:04:15
  Speaker 1: very interesting avenue too, to get an appreciation to for
• 1:04:19
  Speaker 1: the not just the opportunities, but the challenges were collectively
• 1:04:22
  Speaker 1: facing as the society, and but I was as a business.
• 1:04:25
  Speaker 1: I'm with you on that mass consumption of of investing
• 1:04:30
  Speaker 1: related news. I sounds like you and I have the
• 1:04:34
  Speaker 1: same morning routine. UM, let's talk about what sort of
• 1:04:40
  Speaker 1: advice you would give to a recent college graduate who
• 1:04:43
  Speaker 1: was interested in a career of alternative investments. Well, you know,
• 1:04:52
  Speaker 1: the the the industry has, it's just gone through such
• 1:04:56
  Speaker 1: extraordinary growth, UM, and the difference when I started versus today,
• 1:05:04
  Speaker 1: the career opportunities set has changed so much. And I
• 1:05:10
  Speaker 1: think I tried to remind any one of our analysts
• 1:05:12
  Speaker 1: who come into each one of our annual classes. Right
• 1:05:16
  Speaker 1: as we bring in the new recruits, I think about
• 1:05:19
  Speaker 1: how talented they are first vary, and how privileged we
• 1:05:23
  Speaker 1: all are to one be in this industry and work
• 1:05:25
  Speaker 1: for the clients that we do. It's just such an
• 1:05:28
  Speaker 1: honor to do that. I tind of. I try to
• 1:05:30
  Speaker 1: remind them of that. UM. You know, at the end
• 1:05:33
  Speaker 1: of the day, whether you're supporting an institution, that institution
• 1:05:37
  Speaker 1: is the face of many people in the background, and
• 1:05:41
  Speaker 1: alternatives has really now become such an important part of
• 1:05:45
  Speaker 1: their experience, and we talked about earlier just this challenge
• 1:05:49
  Speaker 1: of retirement. If we do a good job these institutions
• 1:05:54
  Speaker 1: that support them any they can have hopefully a retirement
• 1:05:58
  Speaker 1: that involves you know, dignity, and they can have an
• 1:06:02
  Speaker 1: ability to do things they so wanted to do as
• 1:06:05
  Speaker 1: they worked so hard over their lives, you know, getting
• 1:06:09
  Speaker 1: that that personal connection and allowing for those newbies to
• 1:06:16
  Speaker 1: understand that that's the effect that you can have. UM
• 1:06:20
  Speaker 1: and alternatives, whether it's private equity, real estate, infrastructure, private credit,
• 1:06:26
  Speaker 1: hedge funds, all of these now with the scale at
• 1:06:30
  Speaker 1: which they're operating at, can allow for a great career.
• 1:06:34
  Speaker 1: But my advice to them is always don't forget your
• 1:06:36
  Speaker 1: career is supporting other people. And that comes directly through
• 1:06:41
  Speaker 1: how we intersect with the wealth channel. It comes indirectly
• 1:06:44
  Speaker 1: as as a result of the institution and and it's
• 1:06:48
  Speaker 1: such a privilege to do that. I didn't envision when
• 1:06:52
  Speaker 1: I grew up, as I mentioned my first year of
• 1:06:54
  Speaker 1: milking cows and back in a small town the middle
• 1:06:57
  Speaker 1: of Ireland, that I would be one day leading an
• 1:06:59
  Speaker 1: alternati those business within Black Rock. I see that as
• 1:07:03
  Speaker 1: a great privilege. So you know, for for those who
• 1:07:07
  Speaker 1: are joining a fresh hopefully try to remind them that
• 1:07:10
  Speaker 1: it is that for all of us and show up
• 1:07:12
  Speaker 1: with empathy, dignity, compassion, and you know, do the best
• 1:07:17
  Speaker 1: you can and hopefully these people we serve, we'll serve
• 1:07:20
  Speaker 1: them well. And our final question, what do you know
• 1:07:24
  Speaker 1: about the world of alternam investing today? You wish you
• 1:07:27
  Speaker 1: knew years or so ago when you were first getting started.
• 1:07:35
  Speaker 1: I think if we had invested much more heavily as
• 1:07:40
  Speaker 1: an industry in technology, we would not be in the
• 1:07:44
  Speaker 1: position we are today. Um and I say that very
• 1:07:48
  Speaker 1: from from a number of aspects. I mentioned that the
• 1:07:51
  Speaker 1: shortfall of information or clients are dealing with today. They're
• 1:07:56
  Speaker 1: making choices to do best from one asset class to
• 1:08:00
  Speaker 1: invest in another. To do that and do that effectively,
• 1:08:04
  Speaker 1: they need great transparency. They needed real time in many respects.
• 1:08:08
  Speaker 1: It can be just on a quarterly lacked basis. And
• 1:08:12
  Speaker 1: if we had been better prepared as an industry to
• 1:08:14
  Speaker 1: provide the technology and the data to help our clients
• 1:08:17
  Speaker 1: really appreciate what it is they own, how we're managing
• 1:08:21
  Speaker 1: the assets on their behalf, I think they would be
• 1:08:25
  Speaker 1: so much better served. I think We're very fortunate at
• 1:08:28
  Speaker 1: this firm to have built a business on the back
• 1:08:31
  Speaker 1: of technology for all the a thirty plus years and
• 1:08:34
  Speaker 1: we're investing over a billion dollars a year in technology
• 1:08:37
  Speaker 1: as as I'm sure you know, um. But we need
• 1:08:40
  Speaker 1: to see more of that in the industry. So the
• 1:08:43
  Speaker 1: client experience is so important. Stop let's demystify alternatives. It's
• 1:08:49
  Speaker 1: not that alternative. Let's provide education and data um. And
• 1:08:54
  Speaker 1: it's becomes so large relative to other asset classes. The
• 1:08:58
  Speaker 1: need to support, to educate and transmit information, uh not
• 1:09:03
  Speaker 1: data information so or clients can understand it is at
• 1:09:07
  Speaker 1: a paramount now and I think it's certainly is an
• 1:09:09
  Speaker 1: industry things have to change there. If I knew how
• 1:09:13
  Speaker 1: big the growth would have been and how prominent these
• 1:09:17
  Speaker 1: asset classes were becoming, I would have pushed so much
• 1:09:21
  Speaker 1: harder on that front thirty years ago. Thank you Edwin
• 1:09:23
  Speaker 1: for being so generous with your time. We've been speaking
• 1:09:26
  Speaker 1: with Edward Conway. He is the head of black Rock
• 1:09:30
  Speaker 1: Investor Alternatives Group. If you enjoy this conversation, please check
• 1:09:35
  Speaker 1: out all of our prior discussions. You can find those
• 1:09:39
  Speaker 1: at iTunes, Spotify, or wherever you get your podcasts at
• 1:09:44
  Speaker 1: We Love your comments, feedback and suggestions right to us
• 1:09:47
  Speaker 1: at m IB podcast at Bloomberg dot net. You can
• 1:09:51
  Speaker 1: sign up for my daily reads at Ridalts dot com.
• 1:09:55
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• 1:10:00
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• 1:10:03
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• 1:10:05
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• 1:10:10
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• 1:10:13
  Speaker 1: of research. Attiko Valbrann is our project manager. I'm Barry Rihalts.
• 1:10:19
  Speaker 1: You've been listening to Masters in Business on Bloomberg Radio