September 9, 2025 • 39 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Apple Inc. introduced its iPhone 17 lineup, adding an all-new skinnier Air design and improving the devices’ durability and camera technology.
The company unveiled the new smartphones at an event with the tagline “awe dropping” from its headquarters in Cupertino, California. Apple also debuted new smartwatches and an updated version of its high-end AirPods.
The technology giant is looking to keep customers hooked on the smartphone — its biggest moneymaker — after signs of slowing demand in recent years. Apple has been contending with a saturated market for phones as well as fiercer competition in places like China.
“IPhone Air is a total game changer,” Chief Executive Officer Tim Cook said during the presentation.
Apple kept the starting price of its standard iPhone the same at $799. Though the Pro model will go up by $100, it also has twice as much storage. And the new Air version will cost $999, putting it in the middle of its price range. The skinnier model has ceramic shields on both sides of the phone, helping make the device more durable.
The model is 5.6 millimeters wide and “exceptionally light,” the company said. Though Apple rival Samsung Electronics Co. introduced its own skinny model earlier this year — the Galaxy S25 Edge — that device is 5.8 millimeters.
Today's show features:
- Dan Ives, Global Head of Technology Research at Wedbush Securities, on Apple’s newest iPhone launch and the tech sector broadly
- Jennifer Grancio, Global Head of ETFs at TCW on the market outlook and the demand for ETFs
- Douglas Boneparth, President of Bone Fide Wealth, and Heather Boneparth, Director of Business and Legal Affairs Bone Fide Wealth on personal financial management and investing
- Mark Gatto, Co-Founder, Co-President & Co-CEO of CION Investments, on the growing demand for private credit and alternative assets
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
Weekdaily reporting from the magazine that helps global leaders stay
ahead with insight on the people, companies, and trends shaping
today's complex economy. Plus global business finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:33):
We've been all in on Apple today.
Speaker 3 (00:34):
The company out with the biggest product launch of the year,
the iPhone seventeen, a skinnier air design.
Speaker 2 (00:41):
It improves durability and camera tech.
Speaker 3 (00:43):
As far as prices go, seven ninety nine is the
starting price of the standard phone. The new air versional
costs nine to ninety nine. The pro is going to
go up by one hundred dollars with twice as much storage.
Speaker 2 (00:53):
I want to bring in Dan Ives.
Speaker 3 (00:54):
He's Global head of Technology Research at Webush Securities. He's
also chairman of eight co holdings over three thousand percent.
After announcing a planned to buy the news just my
open eyes all. But that was yesterday, Dan's here on
site at future Proof in Huntington Beach. We're going to
talk about a co holdings in a minute. But first
I just want to get your reaction to Apple, because
you you actually I saw you you were on your
(01:15):
laptop and then I got your most recent Apple note.
Well while we were doing our interview with Barry, you
just you just you're maintaining your price target on Apple.
You and the team at web bush us to make
their three hundred and fifteen million folks out there who
are ready to upgrade their iPhones. Is the seventeen gonna
gun to upgrade?
Speaker 4 (01:33):
Look, I think it's gonna move the needle. I mean,
I think, especially in China, there's definitely what i'd pin
up demand. I think street numbers continue to be pretty
conservative to maybe low, and that's a great setup. Look,
the reality is that this is not going to be
a super cycle. There's nothing here that makes you think
that this is gonna be the game change that everyone's
(01:54):
been waiting for. But I do believe given the install base,
given some of the tweaks here, and ultimately on the
on sort of the second half of this upgrade cycle,
you will have an AI driven ecosystem.
Speaker 5 (02:07):
I believe it will be Google Gemini.
Speaker 4 (02:10):
This could be a sneaky upgrade cycle that I think
surprises investors on the upside. What do you mean because
right now, expectations New York City cab drivers bearish on Apple,
and I think that what I like about the setup
is it's all about it's kind of left behind.
Speaker 2 (02:25):
Now.
Speaker 4 (02:25):
A lot of that's been self inflicted, because every Apple
event feels like it's a I feel like Michael J.
Speaker 5 (02:31):
Fox and back to the future, you know.
Speaker 4 (02:33):
So they continue to be left behind AI, but now
with the Google DOJ issue in the rear view, they
will double down ultimate in that Gemini partnership. And when
you look at the install base, I think I think
Street is underestimating what numbers look like for iPhone when
you look out over the next six, nine, twelve months,
(02:55):
And I think in big tech, I view Apple from
a sentiment perspective relative to where I viewed Alphabet. Maybe
about six months ago.
Speaker 3 (03:03):
You in your note ahead of the launch called Apple's
AI strategy quote invisible. You said, the elephant in the room,
and is the black over the stock AI's invisible or
Apple's invisible AI strategy? Did you get any more information
today at the launch about its strategy?
Speaker 4 (03:22):
I mean, I think fundamentally it they're keeping it close
to the vest Right, you know, in the words, it
continues to be that black cloud.
Speaker 5 (03:32):
I think they're waiting.
Speaker 4 (03:34):
For ultimately what's going to be Gemini, because I think
they had a choice either go down the rout with
perplexity and ultimately look to acquire that, or if it
was a favorable ruling, then the candlelight dinner with Google
and sun Dar could ultimately start again and then you
could actually double down that partnership.
Speaker 5 (03:53):
And that is I believe the direction. But look, Tim
they got it.
Speaker 4 (03:58):
It was a black eye moment a year ago when
they laid out the AI strategy. Means it's ninety five
percent of that had a backtrack on it.
Speaker 3 (04:05):
Well now and now they've lost a lot of the
senior executives that we're working on that to matterply and.
Speaker 4 (04:09):
We've talked about there's a better chance to me playing
Ryder cup Bethpage than any internal AI strategy happening at Apple.
Speaker 6 (04:18):
But is that such a bad thing? And this is
one of the things that Dan we talk a lot
about that maybe Apple's just kind of watching. There's a
lot of money slashing around trying to figure out what
ultimately are the standards, the methods the companies that really
dominate right in terms of AI kind of protocols, and
maybe Apple's like I'll just watch and then we'll figure
it out.
Speaker 5 (04:37):
Are that bad? I think it's bad.
Speaker 4 (04:38):
I compare it to like Saturday night in New York
City there's a restaurant where there's one person in there
at eight thirty, like, oh, they must know something everyone
else does. I'd rather go to the place where people
are lining up outside when it comes to ultimately, AI,
time's not on their side. Loo quid open AI. Look
at Meta wartime CEO, look at Microsoft. Look what are
Google's done? That's why are you in an all time high?
(05:02):
So I do believe Cooks recognized it. But the problem
is is that now it's a go time moment when
it comes to AI. And now, look we've talked about
that's how you get through three twenty five three point
fifty four hundred dollars stock is AI?
Speaker 2 (05:17):
You know?
Speaker 4 (05:17):
Relative to right now Apple, they're kind of on the
outside looking in of that AI party where it's still
ten pm going to four am.
Speaker 3 (05:25):
Everyone wants to know about what the heck is going
on over at eight co Holdings, your chairman of this company. Now,
I think it took a lot of people by surprise.
It's a crypto treasury firm. And for those who aren't
familiar with the way this works, it's a Michael Sailor strategy,
but with a different cryptocurrency. This is world Coin backed
by Sam Altman eyeball scanning stuff.
Speaker 2 (05:46):
What is going on here?
Speaker 4 (05:48):
So I wouldn't have done this as chairman if it
was just a regular token back strategy. The reason I
did this it has to do with Sam. It has
to do with my view World is going to be
the acto standard for identification authentication in terms of human
proof in AI world. This is much more of a
tech infrastructure play than when I'd say the traditional crypto play.
(06:09):
So obviously the reason I'm so excited about it is
really this is going to become I think a huge
part of the story and the narrative. It's really an
intersection of AI and crypto. Explain that damn so So
what that means is, you know, as tempto, it's IRIS
scanning the orbs. Right going forward in the future, especially
(06:31):
in the robotic world bots everywhere, You're not going to
be able just identify through a boot check.
Speaker 5 (06:35):
It's really going to be iris scanning what they've done.
Speaker 4 (06:38):
Already fifteen million humans on the platform I believe going
about one hundred million over the next year. That's going
to be a form of identification. That's probably the most
privacy lock box out there, and it's secured by a token,
a World token. So my view and our view as
a team, this is early days in terms of where
this is all heading. And that's why we want to
(06:59):
do a strategy.
Speaker 6 (07:00):
Now, what's to prevent somebody else from doing the same
thing they are.
Speaker 4 (07:03):
They're playing a different game than they they're Vidian twenty
twenty two. And in other words, like relative to what
sam Alex and the team have built out, I mean
from an infrastructure and authentication perspective, they are I think
miles ahead. I don't see anyone that could capture them.
That's why we bet on World as part of the
acres strategy. And obviously having someone like Tom Lee and
(07:24):
bitminor Huge, you know, big Investor, that's another support that
we're so excited to have.
Speaker 3 (07:28):
You've also got an ETF the launched back in June.
It's the dan ives wedbush Ai Revolution ETF. It's up
sixteen percent since launch. It's outperforming the S and P
five hundred and the NASDAQ one hundred, Broadcom, Google and Video, TSMC, Apple.
Speaker 2 (07:45):
They're the top holdings.
Speaker 3 (07:47):
Somebody watching right now might be like, Okay, he's got
a clothing company, he's chairman of this crypto treasury company,
he has his.
Speaker 2 (07:54):
Day job at Wedbush.
Speaker 3 (07:56):
How am I sure that he's going to manage this
ETF and have the time and resources to manage the
CTF and my interest?
Speaker 4 (08:02):
And that's a great question. I'd say, when you think
about my chairman role, it's all related to to AI
and the infrastructure, and there was this is interrelated to
my view of where the AI revolution gets built out.
And the reality is that ninety five percent of my
time is spent you know, three and a half million
aire miles last twenty five years. I think what's what's
enabled to distinguish us is feet on the ground talking
(08:25):
whether it's private public partners and really, you know, I
think that's how investors have grown to.
Speaker 2 (08:30):
Do you add Do you add eight co holdings to
the i's ETF?
Speaker 4 (08:34):
No, No, that would be totally it's a total separate operation.
Speaker 6 (08:38):
I keep firewalls between it, though, Like there's going to
be people who are saying, yeah, of course Dan's going
to talk up that he loves Alphabet and that he
looks loves Nvidia. I mean he's got an ETF.
Speaker 4 (08:48):
Like I just how do we sure on the ETF
and you for like and remember and part of how
investors know us the ETF is all based on our
ives AI thirty.
Speaker 5 (08:59):
It's all based or research.
Speaker 4 (09:01):
So the reality is I think part of how we've
gotten so you know, the the customer, I'd say from
an investor perspective, we've had massive you know, I think
reception for the ETF is because it's our thirty names
that altermately we've used the winners and we and we
change out every quarter. And that's I think you did
(09:21):
about ETF.
Speaker 5 (09:22):
What it's based on. It's all based on the research.
Speaker 4 (09:24):
And got everyone here that knows Dan ives they know
like feet on the street, not sitting there in some
Peter Malar fifteen to four of New York City office building.
And the only time we travel is two times in
San Francisco.
Speaker 2 (09:37):
Now, you just got back from Australia.
Speaker 5 (09:39):
Yeah, so I literally landed here from Australia.
Speaker 2 (09:41):
What were you doing there? Yeah?
Speaker 5 (09:42):
So part part work part pleasure.
Speaker 4 (09:45):
So it's fun because look, I mean we when we
talk at AI revolution like in Sydney, in Melbourne pack meetings,
because the reality is that this is not just us.
And that's why I spend so much my time traveling
around the globe what.
Speaker 6 (09:59):
Might be the national exuberance part of kind of the
trade today or the tech trade or the AI trade.
Speaker 7 (10:06):
And just got about thirty seconds. There's got to be
some fluff out.
Speaker 4 (10:09):
Just could you say AI forty times in a conference call?
Doesn't make yourself an AI need Look just because like
Tim he was wearing an AI shirt because he says
it fifteen times and says Tim on the back AI,
it doesn't. My view is you have to distinguish the
winners and the real ones from the fakes.
Speaker 5 (10:25):
And that's the reality. And then look, that's what we
spend all of our time doing.
Speaker 2 (10:29):
The one company you're most bullish on right now, public.
Speaker 4 (10:31):
Company SCFAI volunteer that's going to a trillion next two
to three years. And I always say the haters hate it,
hated fifteen, despise it, eighties, say it's super expensive one
point fifty.
Speaker 5 (10:40):
They'll be seeing the same thing at a trillion.
Speaker 6 (10:42):
Yeah, it's a company we've talked a lot about, I
would say, in the last year and then some dnives.
Speaker 5 (10:46):
Thank you so much.
Speaker 6 (10:47):
I always appreciate it. Globalhead of Technology Research at web
Bush Securities.
Speaker 2 (10:52):
Stay with us.
Speaker 3 (10:53):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (11:00):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to fiveys during this
listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (11:14):
Jennifer Grancia was back with US, globalhead of ETFs over
at TCW. They've got more than two hundred billion across
investment solutions as of the mid of this year midpoint.
ETF platforms have more than four billion a lot under management.
Speaker 2 (11:28):
They see a lot of flows.
Speaker 6 (11:29):
We want to remind everybody to Jennifer, the former CEO
of the Impact Investment from Engine Number one, which took
on Exon, You're going to be iconic forever. This is
going to go with you wherever you go because it
was really significant.
Speaker 3 (11:42):
I think also, I think also you joined us at
Milkin during that time. Yeah, you guys were in the
midst of that and that's where sort of like I
still know you from, but I think people still know
you from that, as Carol mentioned, Yeah.
Speaker 8 (11:54):
I mean Engine number one was a moment in time
where I think we had just started to think about
energy transition at a very big level. It's not just green,
it's brown. And then it's going to require so much
to move the world towards better sources of energy, electrification,
all the power we need for restoring in the US.
So yeah, that was it was a great moment in time,
(12:14):
and then we folded in a lot of the work
we had done there into TCW.
Speaker 6 (12:18):
We'll talk about what you are doing because energy is
a big theme in terms of investing here for you
guys for sure.
Speaker 8 (12:24):
So if you think about the world today as much
as it's volatile and we're never sure exactly what's going
to happen or how things are going to play out,
if you think about TCW, we started as an equity firm,
and then we've got a great public private credit business,
and so on the equity side, a lot of what
we do is fundamental concentrated portfolios that help you diversify
(12:44):
from the index fund and the direct indexing you have
at the core because the market is broadening and we
have a huge opportunity as investors to actually take advantage
of How do you profit from the fact that we're
seeing different sources of energy and we have a huge
demand for energy for AI and data centers, but also
for the restoring of manufacturing.
Speaker 3 (13:04):
How do you do that in an environment where the administration,
depending on who's in the White House, changes their view
on the future of energy, like does a one ad.
I mean you have the president wanting to actually doing it,
trying to cancel offshore wind projects and really anything that
isn't oil. It seems like he's not interested in safer nuclear.
But that's a bigger time arise in time.
Speaker 8 (13:25):
Yeah, but that's how we think about it. So from
a TCW perspective, we've been investing in the energy and
power transition. We do that through the ETF Powered pr PWRD.
Pardon me, but when we think about that, that's a
very long trend. So that's over decades and decades, and
so the way we think about it as we as
managers want to invest for you, so that we're paying
attention to one administration to the other and what happens
(13:48):
and there will be some changes, but if you think
about the changes in the traditional brown so that they
can electrify and be more productive in a market like
the Permian on oil, that's really important. Nuclear is incredibly important,
and then what Trump said on actually supporting more nuclear. Yeah,
it's a long run game, but that's great intermittent power.
So we like to think about it very broadly, and
(14:09):
it transcends administrations.
Speaker 3 (14:11):
What does it mean you ignore wind and solar That can.
Speaker 8 (14:13):
Be part of our portfolio as well. We're looking at
things that from a very long term perspective will make sense.
Speaker 3 (14:18):
And you think, even though wind is under so much
pressure right now, in a different administration, it could come back.
Speaker 8 (14:23):
It will be part of the solution. It's not the
lead place to make money in the next couple of years.
And we're active managers, so we can take that into
account in terms of the way we manage the portfolio.
Speaker 6 (14:33):
Where is money going across your platforms, where are the
flows going in, where are the flow's coming out?
Speaker 8 (14:38):
We would see if I answer it, maybe had an
industry question, and then I can talk about to PACW
We see active equity is tough, so in active equity
investments are very selective. So what we're doing in active
equity products like powered or AIFD for AI, if they're selective,
they're meant to be complementing to bake index holdings. And
(14:59):
on fixed income, like a lot of money continues to
come into fixed income and continues to come into active
fixed income or also big in private credit, not in
the ETF space and products that are appropriate there, but
both if fixed income and private credit are probably the
places we see the most money coming in.
Speaker 2 (15:15):
Really not surprising. It feels like everything is private credit.
Speaker 5 (15:20):
I mean, I don't like katty.
Speaker 2 (15:22):
Does it does.
Speaker 8 (15:23):
But on the other hand, it's early. So if you
think about if you think about the portfolio, and if
you think about the biggest institutions in the world, they're
invested in some kinds of private credit, but they're looking
to get into private ABF because it's diversifying. But in
wealth portfolios, if you think about the average investor or
registered investment advisors, they're looking at how to take advantage
(15:43):
of returns that can be like our core plus income
ETF flexer. You know that's returning almost seven percent with
over five percent annual yield. That's very attractive when you
move into safe control careful private credit. You're still picking
up multiple percentage points a year, so people should do
it carefully. But it's a big opportunity.
Speaker 3 (16:04):
Do you see that opportunity continue to grow in a
weakening environment?
Speaker 8 (16:08):
We do. It's if again, if you go out and
you survey. There's a McKinsey report that just came out
surveying institutions and wealth and private credit by far is
the place that people are most interested in most increasing allocations.
Speaker 6 (16:20):
In What confidence do you have that we have the
right regulatory oversight on this in a world where private
credit still there is a lack of transparency and people
don't maybe not all investors understand that it's not liquid
like a lot of other investments.
Speaker 8 (16:36):
It's the right question, which is from a responsibility perspective
as asset managers or for wealth managers, we should always
be in a dialogue with clients on do they understand
the liquids when you do a semi liquid product. For example,
for us, we have things that have many many your
five plus year draw downs, that's not a liquid product.
Speaker 7 (16:53):
We wouldn't tell.
Speaker 8 (16:54):
Clients if that's a liquid product. In the asset back
finance space, we have an interval fund, but the loans
there are getting kind of turning over within two to
four years, so there's a little bit more liquidity there.
So I think we'll watch the regulatory space, but investor
education and responsibility by the managers it's critical.
Speaker 6 (17:11):
So when it comes to private credit, you're looking for
things where it is two to four years that they're
turning over a little bit more liquid that that's a.
Speaker 8 (17:17):
Little bit more liquid. And so if you think about
private credit in the private securitized or asset back finance space,
the loans are self advertising in two to four years,
that's a space we think in interval fund makes sense
we manage an interval fund there. There are other places
where it's just not that liquid and that should be
a private market product.
Speaker 3 (17:34):
Still a lot of interest in AI and the fund
that tracks that a.
Speaker 8 (17:39):
Huge amount of interest in AI, and I think everybody's
interested in one what's happening with AI, who wins what happens,
but people are also looking at how to invest in it.
So at TCW, we manage an ETFAIFD which is investing
very broadly in AI, and that's an opportunity to take
advantage of. Yes, it Holds, Navidia, Broadcom and other companies
(18:01):
that are benefiting and early winners in the trade.
Speaker 6 (18:04):
When you come to an event like this, I mean,
is there a narrative you're picking up on that might
be surprising?
Speaker 5 (18:08):
I'm just curious.
Speaker 2 (18:09):
Just got about thirty seconds here, I.
Speaker 8 (18:11):
Think from this conference, which is full of wealth advisors,
they are trying to figure out how does artificial intelligence
affect their business, how do they get smarter about it,
and how can they adopt new outsourcing and new technology
so that they can spend more time actually serving their clients.
Speaker 2 (18:27):
Which is a great thing.
Speaker 8 (18:28):
Which is a great thing.
Speaker 6 (18:30):
More time with the investment advisors. Always good to get
more time with you. Thank you so much, an always
find it. Jennifer Grancio, She's Global ahead of ETFs over
at TCW, joining us on site at future Proof.
Speaker 2 (18:41):
Stay with us.
Speaker 3 (18:42):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (18:50):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm e's during on Applecarplay
and Android Auto with the Bloomberg Business App. You can
also listen live on Amazon Alexa from our flagship New
York station. Just say Alexa Play Bloomberg eleven thirty.
Speaker 6 (19:09):
Carol Master, TIMSTEANOK live here at Futureproof in Huntington Beach, California.
Whill our next guests help others manage their money. They
are content creators at the same time. With us here
at future Proof is Doug and Heather Bonaparte of Bona
Fide Wealth. Doug is founder and president, Heather's director of
business and legal affairs. Doug is a wealth advisor. Heather
a former attorney corporate attorney, a big time in the
(19:29):
insurance industry, and the firm has about one hundred million
in assets under management. Nice to have you here.
Speaker 5 (19:34):
I know it's busy for you.
Speaker 6 (19:35):
You've got a lot going on your website notes a
wealth management firm built on unprecedented times. Walk us through
what that means.
Speaker 9 (19:42):
Doug, Yeah, absolutely, So you look to older millennials like ourselves,
the geriatric millennials.
Speaker 2 (19:48):
If you're will speaking my language, yeah, yeah.
Speaker 9 (19:51):
We start our adult lives in our careers in two
thousand and eight.
Speaker 7 (19:55):
I know, I literally moved to New York City on
top time.
Speaker 9 (19:57):
Yeah, October two thousand and eight to work and find it.
Speaker 2 (20:00):
It's in New York City.
Speaker 9 (20:00):
Great time to be you know, getting that started and
then we survive that. I get through that, only to
you know, start raising kids during a pandemic.
Speaker 5 (20:08):
Can we get a break here?
Speaker 9 (20:09):
So, you know, two major historical, once in a lifetime
events happening, and this is what we've had a navigate.
Doesn't make us any more special than other generations. It's
just very specific to how we manage our lives and
our financial lives during these times.
Speaker 3 (20:22):
And to what extent of your clientele actually represent that demographic.
Speaker 9 (20:26):
I would tell you eighty percent are between the ages
of twenty eight to fifty. So with that average being
right around forty forty two.
Speaker 3 (20:33):
I think people know you guys from social media, like
the jokes on Twitter.
Speaker 2 (20:38):
Sure how much of.
Speaker 3 (20:40):
Customer acquisition comes from social media.
Speaker 9 (20:43):
So I like to think of it as one piece
of the overall puzzle here. We're doing, you know, very
traditional mainstream financial media, and you pair that with social media.
Speaker 2 (20:50):
It's never one thing.
Speaker 6 (20:51):
Are you calling us traditional?
Speaker 2 (20:53):
No, I'm calling you awesome.
Speaker 5 (20:54):
Okay.
Speaker 9 (20:54):
Second, we need you and we need all of these
kitty I know, but we need all of these tools
to create, you know, a robust way to market in
the Internet era, right, and the intention of the attention
economy that we're in.
Speaker 6 (21:07):
Well, one of the things I was thinking and it
was funny people have come up to me about truth
in today's society and just with the political environment and
just there's so much content even when it comes to
business advice, and how do you make sure that what
you're putting out there, you're careful about it, there's transparency
because there's a lot of information that's out there that
is not good.
Speaker 9 (21:26):
Yeah, Heather can talk to that in terms of you know,
we talk about financial influencers all the time and those
who are licensed and those who are and you're getting
more information on the reddits and the tiktoks, and you
and I look at those videos and that content all
the time and we have opinions around that.
Speaker 10 (21:40):
I think it's very important that you don't end up
on the extreme ends of the scale. Right when we talk,
we try and tell people, Look, there isn't one right
way for everyone, So I think you have to be
cautious when you see, let's say, a f influencer online
who says everyone should always do this or you should
be extremes be in a position to do that, you
know that it's the.
Speaker 2 (22:00):
Only products for you.
Speaker 9 (22:01):
They're trying to sell you that product right here. And
I know a lot of clients with creators that are
so hard working it is it is tough to do
this and a lot of respect to them. But when
you get into those extremes, or you're pushing products, or
there are no guardrails whatsoever, it can get dangerous here
and there's just not enough.
Speaker 2 (22:17):
With a hybrid, you can be both. You can be
a professional and a content creator.
Speaker 9 (22:21):
You can do all of these things. But people tend
to just stick to their corners.
Speaker 2 (22:24):
I think.
Speaker 3 (22:24):
So if we think about your your clients, it's it's
different in the sense of, you know, we're oftentimes talking
to wealth managers. You have you know, five ten, one
hundred dollars in assets under management, I mean, much bigger
than where you guys are right now. So you're at
a different end of the spectrum, and your client tele
represent that.
Speaker 2 (22:42):
I think people might.
Speaker 3 (22:43):
Say, Okay, these are a lot of these folks are
Henry's right, high income, not yet rich, right, whatever the
acronym is, How do you keep them when they do
become rich?
Speaker 9 (22:51):
Yeah, I think we have less of that problem when
you're there with somebody in the days that they're grinding
it out and establishing themselves likely to have a stickier relationship,
a more loyal relationship. You meet someone after they've made
their money, I think you have a weaker relationship. You
were not there for the time. You're as good as
your last transaction. That's the worst place you want to
be as a wealth manager. As good as your last transaction,
(23:14):
as someone who's been at the core of their growth
and having that kind of relationship. So you know, by design,
investing in our clients at a time when we were
in our mid to late twenties, that's how we keep
them for you know generations.
Speaker 7 (23:30):
Their children are our clients.
Speaker 9 (23:32):
They are also nine years old. But there are clients
and they will be and that can then transcend down
and we don't have to worry about maybe some of
our colleagues that haven't been paying attention to the next generation.
Speaker 7 (23:42):
They have seventy eighty year old clients.
Speaker 9 (23:44):
They have issues with retaining the money because they didn't
even bring their partner to the table.
Speaker 7 (23:48):
Ye and like these gender chops.
Speaker 9 (23:50):
A lot of why we've written a book about Love
and Money is to solve that problem. Bring both partners
to the table, and that's very characteristic of the type
of clients that we serve.
Speaker 6 (23:58):
Do you have any book coming out to think October
money together? But I want to ask you about the
quarterly check ins. I do think this is such no
money dates. Yeah, tell us about these money dates in
terms of what you guys do in terms of your
own financial planning.
Speaker 10 (24:10):
Well, for us, we try and do something that we
could look forward to. So Doug and I know what
we like to do, right. We like to go for walks.
That's just maybe that's like a leftover thing from COVID.
From COVID and like fish strollers around the neighborhood.
Speaker 2 (24:21):
Drinks too.
Speaker 5 (24:22):
We like cocktails too, so.
Speaker 10 (24:24):
Like we'll go out for a nice cocktail, or we
will go for a walk, or we'll go play tennis
and be sure to leave twenty minutes on the back
end to have a good conversation after we've like sweated
out a little bit. I think the most important thing
with money dates is to do what you enjoy, so
this doesn't become something that is a chore, something that
you dread. You want to incorporate the money conversation into
your life.
Speaker 6 (24:43):
Does it always go well?
Speaker 9 (24:45):
No of course not, you're talking about actual decisions you
need to make that evolve risk and charting the course
of your life.
Speaker 2 (24:52):
Giving forty sometimes of course.
Speaker 9 (24:54):
How about this, to Heather's point, start the conversations with
the winds and what you did right, you're going to
have a better time getting into it, and then talk
about where room for improvement needs to be made. Then
be critical, give yourself a pat on the back and
the hard work you're doing before you get into that stuff,
so you reduce the probability that you're gonna get into
some kind of scuffle around something that you don't agree on.
(25:16):
And it's very normal to find stuff you don't agree on.
If you're green everything, I'd be a little more concerned
about that.
Speaker 10 (25:21):
Well, right, And our concept of a money date doesn't
just include looking at a networth table, looking at spending.
Speaker 2 (25:26):
Don't start there.
Speaker 10 (25:26):
Don't start there. You can talk about childcare, talk about
whether you both feel like you're bandwidth, like you have
any bandwidth or you don't, or whether you feel totally overwhelmed.
Speaker 7 (25:36):
You could talk about goals.
Speaker 10 (25:37):
You talk about how, like Doug said, the things you've
been doing right and the things you could stand to
improve upon.
Speaker 7 (25:42):
For the next quarter.
Speaker 9 (25:43):
We rather talk about how we're going to get on
that trip with the kids, you know during November when
the teachers do their convention thing in New Jersey, and
we rather, you know, we're going to rally around that
conversation because we want to go have that experience with them,
and that then dovetails into Okay, let's yeah, we can
afford to do that. What do we have to shift around?
All right, let's cancel this baby's let's not do that
date with our friends because we much rather, you know,
we can do that anytime. You can't create those memories,
(26:05):
you know, all the time with your little kids. So
those are great ways to engage something where most people
are like, here's what you did wrong this month, sweetie, Like,
what an awful.
Speaker 2 (26:13):
Awful way to start out.
Speaker 9 (26:14):
You're not gonna do it next quarter, and you need
four quarters in a year. You know, two years is
only eight cracks at it.
Speaker 6 (26:20):
It's not a lot, it's practical, but it makes an
awful lot of sense. We're gonna let you go because
you've got to run to your panel. Good luck with you,
You're not so lucky, good luck, good luck with the panel.
You go absolutely We do want to stay with you,
you know, Heather, because you do have this book coming
out in October, Money Together, How to find Fairness in
your relationship and become an unstoppable financial team. And I
(26:44):
just think it's kind of interesting because I do think
a lot of couples do have different priorities, right and
be sure to figure it out. They sure do tell
us about this book though, and what you guys wanted
to do with it.
Speaker 10 (26:54):
We want to help couples communicate about money better. Bottom line,
I think that it's one of the hardest things for
couples to talk about because money is not just money, right.
We tether our beliefs and our behaviors around money. They
they come along with them post of feelings about trust, freedom, power, independence,
you know, So when you're actually getting in a little spat,
(27:16):
you know, week to week on spending, that's not really
what you're talking about. There might be feelings beneath that.
There could be a spouse who doesn't feel like all
of their invisible work is being seen. So what we
really hope to do with this book is to have
the conversations that aren't being had. We want to really
uncover those, you know, deeper power dynamics over money in
your relationship and help couples find a way to talk
(27:37):
about it in hopes that we can level that playing
field and really bring more equity into relationships.
Speaker 3 (27:43):
Well, when the book comes out, you got to join
us in the studio back in New York. Heather Bonaparth,
director of business and legal Affairs for Bona Fide. Well,
she joins us on site here in Huntington Beach, California
for future Proof.
Speaker 2 (27:54):
Stay with us.
Speaker 3 (27:54):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (28:01):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five ees. During
this listen on Applecarplay and Android Otto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 6 (28:16):
All right, folks, we're going to talk a little bit
about the world of private credit. It has ballooned, by
the way to about one point seven trillion dollars in
the size in size and just a matter of years.
Speaker 7 (28:26):
There's a lot of issues.
Speaker 6 (28:27):
Going on in this environment. Most loans held in private
credit funds mature within five to seven years. It's a
timeframe for when investors should start seeing many more returns,
but many vehicles formed eight years ago still lagging on
a closely watched metric known as distribution to paid in capital,
which measures how much investors have received compared to what
they put in Originally. We're curious what our next guest
(28:48):
has to say. He is a player in the private
credit world. Marcato is a co founder, co president and
co CEO of sci On Investments, which specializes in alternative assets,
in particular private credit or private debt. Has about ten
billion in assets under management. Mark is also director, co
CEO and Investment Allocation Committee member of the Scion Areas
Diversified Credit Fund. So you know a little bit about credit.
(29:11):
How are you tell us a little bit about your
fund in the strategy right now?
Speaker 7 (29:14):
I'm doing well. Thank you for having me today.
Speaker 11 (29:17):
So our platform is really focused on providing alternative investment
solutions to private wealth investors, individual investors. So where a
lot of the private firms, private asset managers that deal
in private credit and other strategies focused on institutional clients,
our focus is on individuals and we distribute our products
through the wealth channel, the rias, the wirehouses independent broker dealers.
(29:44):
We currently have three products that we're very proud of.
One is our publicly list a BBC which is called
Scion Investment Corp. And that's a strategy where we focus
on the US middle market, providing direct lending private loans
to US middle market companies.
Speaker 7 (29:58):
We also have a diversified credit.
Speaker 11 (30:00):
Fund and that's a partnership that we have with Areas Management,
one of the world's largest global investors, top tier and credit,
and that fund is structured is an interval fund, and
we have close to eight billion dollars of AUM in
that product. That's the one, that's the big one, that's
the big one. And then we just recently launched it's
not private credit, but it's private assets, private markets. We
(30:22):
launched an interval fund that focus on infrastructure investing. So
we are all in on private markets, but we're also
very focused on the right structures for the individual investor.
Speaker 7 (30:33):
The stat that you mentioned.
Speaker 11 (30:34):
Earlier about capital effectively being locked up, right, that's not
what we do. We really focus on strategies that provide
appropriate liquidity, as I like to call it, appropriate liquidity
to individual investors. So the interval fund structure, the BDC structure.
What we do is we are giving dividends. We're giving
distributions on a regular basis, and that's something we pride
(30:55):
ourselves in, is consistent, stable dividends that are are are necessary.
Speaker 7 (31:02):
I think for the retail invest.
Speaker 6 (31:03):
You really got layout on your website.
Speaker 11 (31:05):
Yes, absolutely, So when you think about investing in one
of our products, you're going to see hopefully a high
single digit distribution yield every year. So you're getting your
capital back where traditional private credit was done in a
GP LP drawdown structure and your capital could be locked
up for a long time. And because of these structures,
(31:25):
we're seeing this strong demand by registered investment advisors other
financial advisors that deal with individuals, and that's what these
products really are doing. They're opening the gate right, They're
providing the access that individuals have never had.
Speaker 3 (31:41):
The growth of private credit over the last few years
has coincided with a pretty strong economy, and we're now
starting to see some cracks for them. We saw the
revisions downward with the labor numbers that we got today.
Jamie Diamond telling CNBC today that the economy is quote weakening.
He said, whether that is on the way to recession
or just weakening, I don't know what happens to private
(32:01):
credit in an environment that's weakening economy, that we.
Speaker 6 (32:05):
Can help your strategy specifically.
Speaker 11 (32:07):
So I think that obviously there will be some winners
and losers, but I don't think the market creators. So
it's really important to tie yourself to a good manager.
Someone that is very experienced in the industry, knows how
to underwrite, knows how to be selective, can generate opportunities
that makes sense for the investments.
Speaker 3 (32:27):
Well, because the concern is that the folks who have
been let money will not be able to pay that
money back.
Speaker 11 (32:34):
Yeah, and that's been a theme that's going on for
some time now, right, We've been having this conversation for
a long time, and people got really spooked when interest
rates spiked, and how are these companies going to afford
their debt payments?
Speaker 7 (32:46):
And the reality is that they have they have been
able to do it.
Speaker 11 (32:49):
And I think a lot of the US middle market
is very resilient. And when you think about the assets
that we focus on in our publicly traded BBC looking
at companies that are between twenty five and seventy five
million dollars of epatah, which we believe is the true
middle market. What's happening now is there's a real convergence
of the syndicated loan market where banks typically played right
(33:13):
and the upper upper middle market. So private investment managers,
private credit manager of doing those deals that banks used to.
And I think that's where you're going to see some
more issues.
Speaker 3 (33:23):
Why do the banks Why are the banks not doing
loans to those companies or conversely, why are those companies
not going to a traditional bank for that loan?
Speaker 11 (33:31):
Sure, so effectively banks have been regulated out of the business, right,
they're not focused on it. They abandoned the business after
the Great Financial Crisis. They let all of their deal
team go, you know, all of their portfolio managers go.
They were gobbled up or formed their own private asset
management firms. So you don't see private bank I see
(33:51):
the big banks doing these types of deals because they
just don't have the expertise anymore. What they do is
they get involved, I think, in the market more synthetically
by lending to firms like UH where they can be
on a more senior secured position. And what we're seeing
is these larger private institutional asset managers, they're getting so
big where they are now the bank. The difference is
(34:14):
is that the investment committee, that people making decisions there
are able to do it more efficiently, provide more certainty,
be more flexible than say a traditional money center bank.
Speaker 6 (34:25):
We're talking with Mark Gatto, he's co founder, co president
and co CEF signed on investments. Mark, what's the deal
you will do in the private credit space?
Speaker 5 (34:32):
What's the deal you will not do?
Speaker 6 (34:33):
Because I mean, and how much transparency are you feeling
like you're getting on these deals?
Speaker 11 (34:39):
So we feel like we get a lot of good information. Obviously,
we're very diligent about doing our underwriting and understanding what
we're getting ourselves into. I think every investment warrants merit
if it meets some of our baseline criteria. Right, So
we're we're again we're looking at companies that have earnings ye,
right first and foremost, So twenty five to seventy five
(35:02):
million dollars is our sweet spot. And then we want
to really focus on are they relevant in their industry?
Are they a leader in their industry? Do they have
a good management team? Is there a reason for them
to exist? So we're gonna focus on those things. Determined
whether or not we want to do the deal on
a high level, you know, we're not doing a lot
of stuff that's very cyclical in the BBC and even
(35:25):
in our integal Fund Diversity by Credit, we're not doing
cyclical industries. We're probably staying clear of retail in many instances.
Speaker 7 (35:34):
Not to say that we won't do.
Speaker 11 (35:35):
Either of those deals, right, it's just not going to
be a major portion of what we do.
Speaker 6 (35:38):
Give us an idea of a deal you recently did,
and I'm curious about, like the infrastructure play right now,
if that's a big part of it, or energy like
what you're seeing.
Speaker 11 (35:45):
Yes, so on the infrastructure side, which is a little
bit different because we're actually focused more on the equity
of these infrastructure deals, but they do have a lot
of characteristics that credit assets have. I think it kind
of falls in between pure credit and private equity, if
you will, right because when we're talking about infrastructure, we're
talking about stable, stable revenue that's being generated by these
(36:08):
assets as predictable, so it has that element, but there
is some sort of growth story to that. And if
you look at our infrastructure fund, we're doing deals like
the M twenty five in London, so roads, bridges, we
have terminals, at LaGuardia Terminals. At JFK, we're in AI
and data storage. So we really run a diversified strategy
(36:32):
and that is a theme throughout all of our products.
We want to be diversified, and we think that's probably
the most important thing for us as a manager, and
we think for investors is to be diversified.
Speaker 7 (36:42):
If you look at our BDC, we have.
Speaker 11 (36:44):
One hundred and sixty different names in there. If you
look at our Interval Fund, the sign Areas Diversible Credit Fund,
we have over seven hundred names in there. So you're
really getting granular, you're really getting diversified. So no one
deal is going to make a difference, and no group
of deals is going to make a difference. And we're
doing that same thing with infrastructure. We want to be
highly diversified.
Speaker 3 (37:03):
Is there political risk with the Infrastructure Fund in the
sense that you have an administration right now that wants
to punish different states and cities for not getting online.
Essentially we see that with the Trump administration and with
the MTA for example, and tolling congestion tolling?
Speaker 2 (37:19):
Is that a risk?
Speaker 11 (37:19):
So we don't view it as a risk because of
our diversification because we are investing in different.
Speaker 7 (37:25):
Areas of infrastructure.
Speaker 11 (37:27):
We're not a cleaning energy play, We're not a fossil
fossil fuel play. We don't believe that there's much political
risk in terms of our strategy. And then if you
look at the industry as a whole, the market as whole,
there's such a high demand for infrastructure assets. There's such
a need to spend capital to improve our infrastructure assets,
(37:49):
not only here in the United States, but globally. It's
a multi multi trillion dollar opportunity. We don't think that
political the current administration, our new administration is going to
sort of move the we move the needle one way.
Speaker 7 (38:01):
Or the other, especially if you're diversified.
Speaker 11 (38:04):
And again I go back to that theme, it's really
important at SIGN Investments.
Speaker 7 (38:07):
We preach it to our advisors and.
Speaker 11 (38:09):
Clients that that's where you need to be, not only
within alternatives, but across the entire spectrum.
Speaker 7 (38:14):
Just got thirty seconds.
Speaker 6 (38:15):
How would you describe the environment like in a word,
a couple of words.
Speaker 11 (38:19):
I think the word that describes the environment is uncertain.
It's been still, it's been it's been that way for
a while. It's going to be that way for a
long time. Information moves too quickly, where the global kinds
are too interconnected. There's always a news story that's going
to give you some sort of angst, that's going to
make you think things are uncertain. So that's why we again,
we fall back to diversification and we like alternatives for
(38:43):
our clients, our advisors because we think we stabilize some
of that uncertainty and volatility in the market place.
Speaker 6 (38:48):
We know you're based on the West Coast, but we
hope we can attract you back to our New York studio.
Speaker 11 (38:51):
We're headquartered in New York, so anytime there often, anytime
you would like to have me on as a guest,
I would be my pleasure.
Speaker 5 (38:57):
We would love it.
Speaker 6 (38:58):
Marcatto. He's co founder, co resident and Cofcion Investment.
Speaker 1 (39:01):
This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,
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You can also watch us live every weekday on YouTube
(39:22):
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Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
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(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:33):
We've been all in on Apple today.
Speaker 3 (00:34):
The company out with the biggest product launch of the year,
the iPhone seventeen, a skinnier air design.
Speaker 2 (00:41):
It improves durability and camera tech.
Speaker 3 (00:43):
As far as prices go, seven ninety nine is the
starting price of the standard phone. The new air versional
costs nine to ninety nine. The pro is going to
go up by one hundred dollars with twice as much storage.
Speaker 2 (00:53):
I want to bring in Dan Ives.
Speaker 3 (00:54):
He's Global head of Technology Research at Webush Securities. He's
also chairman of eight co holdings over three thousand percent.
After announcing a planned to buy the news just my
open eyes all. But that was yesterday, Dan's here on
site at future Proof in Huntington Beach. We're going to
talk about a co holdings in a minute. But first
I just want to get your reaction to Apple, because
you you actually I saw you you were on your
(01:15):
laptop and then I got your most recent Apple note.
Well while we were doing our interview with Barry, you
just you just you're maintaining your price target on Apple.
You and the team at web bush us to make
their three hundred and fifteen million folks out there who
are ready to upgrade their iPhones. Is the seventeen gonna
gun to upgrade?
Speaker 4 (01:33):
Look, I think it's gonna move the needle. I mean,
I think, especially in China, there's definitely what i'd pin
up demand. I think street numbers continue to be pretty
conservative to maybe low, and that's a great setup. Look,
the reality is that this is not going to be
a super cycle. There's nothing here that makes you think
that this is gonna be the game change that everyone's
(01:54):
been waiting for. But I do believe given the install base,
given some of the tweaks here, and ultimately on the
on sort of the second half of this upgrade cycle,
you will have an AI driven ecosystem.
Speaker 5 (02:07):
I believe it will be Google Gemini.
Speaker 4 (02:10):
This could be a sneaky upgrade cycle that I think
surprises investors on the upside. What do you mean because
right now, expectations New York City cab drivers bearish on Apple,
and I think that what I like about the setup
is it's all about it's kind of left behind.
Speaker 2 (02:25):
Now.
Speaker 4 (02:25):
A lot of that's been self inflicted, because every Apple
event feels like it's a I feel like Michael J.
Speaker 5 (02:31):
Fox and back to the future, you know.
Speaker 4 (02:33):
So they continue to be left behind AI, but now
with the Google DOJ issue in the rear view, they
will double down ultimate in that Gemini partnership. And when
you look at the install base, I think I think
Street is underestimating what numbers look like for iPhone when
you look out over the next six, nine, twelve months,
(02:55):
And I think in big tech, I view Apple from
a sentiment perspective relative to where I viewed Alphabet. Maybe
about six months ago.
Speaker 3 (03:03):
You in your note ahead of the launch called Apple's
AI strategy quote invisible. You said, the elephant in the room,
and is the black over the stock AI's invisible or
Apple's invisible AI strategy? Did you get any more information
today at the launch about its strategy?
Speaker 4 (03:22):
I mean, I think fundamentally it they're keeping it close
to the vest Right, you know, in the words, it
continues to be that black cloud.
Speaker 5 (03:32):
I think they're waiting.
Speaker 4 (03:34):
For ultimately what's going to be Gemini, because I think
they had a choice either go down the rout with
perplexity and ultimately look to acquire that, or if it
was a favorable ruling, then the candlelight dinner with Google
and sun Dar could ultimately start again and then you
could actually double down that partnership.
Speaker 5 (03:53):
And that is I believe the direction. But look, Tim
they got it.
Speaker 4 (03:58):
It was a black eye moment a year ago when
they laid out the AI strategy. Means it's ninety five
percent of that had a backtrack on it.
Speaker 3 (04:05):
Well now and now they've lost a lot of the
senior executives that we're working on that to matterply and.
Speaker 4 (04:09):
We've talked about there's a better chance to me playing
Ryder cup Bethpage than any internal AI strategy happening at Apple.
Speaker 6 (04:18):
But is that such a bad thing? And this is
one of the things that Dan we talk a lot
about that maybe Apple's just kind of watching. There's a
lot of money slashing around trying to figure out what
ultimately are the standards, the methods the companies that really
dominate right in terms of AI kind of protocols, and
maybe Apple's like I'll just watch and then we'll figure
it out.
Speaker 5 (04:37):
Are that bad? I think it's bad.
Speaker 4 (04:38):
I compare it to like Saturday night in New York
City there's a restaurant where there's one person in there
at eight thirty, like, oh, they must know something everyone
else does. I'd rather go to the place where people
are lining up outside when it comes to ultimately, AI,
time's not on their side. Loo quid open AI. Look
at Meta wartime CEO, look at Microsoft. Look what are
Google's done? That's why are you in an all time high?
(05:02):
So I do believe Cooks recognized it. But the problem
is is that now it's a go time moment when
it comes to AI. And now, look we've talked about
that's how you get through three twenty five three point
fifty four hundred dollars stock is AI?
Speaker 2 (05:17):
You know?
Speaker 4 (05:17):
Relative to right now Apple, they're kind of on the
outside looking in of that AI party where it's still
ten pm going to four am.
Speaker 3 (05:25):
Everyone wants to know about what the heck is going
on over at eight co Holdings, your chairman of this company. Now,
I think it took a lot of people by surprise.
It's a crypto treasury firm. And for those who aren't
familiar with the way this works, it's a Michael Sailor strategy,
but with a different cryptocurrency. This is world Coin backed
by Sam Altman eyeball scanning stuff.
Speaker 2 (05:46):
What is going on here?
Speaker 4 (05:48):
So I wouldn't have done this as chairman if it
was just a regular token back strategy. The reason I
did this it has to do with Sam. It has
to do with my view World is going to be
the acto standard for identification authentication in terms of human
proof in AI world. This is much more of a
tech infrastructure play than when I'd say the traditional crypto play.
(06:09):
So obviously the reason I'm so excited about it is
really this is going to become I think a huge
part of the story and the narrative. It's really an
intersection of AI and crypto. Explain that damn so So
what that means is, you know, as tempto, it's IRIS
scanning the orbs. Right going forward in the future, especially
(06:31):
in the robotic world bots everywhere, You're not going to
be able just identify through a boot check.
Speaker 5 (06:35):
It's really going to be iris scanning what they've done.
Speaker 4 (06:38):
Already fifteen million humans on the platform I believe going
about one hundred million over the next year. That's going
to be a form of identification. That's probably the most
privacy lock box out there, and it's secured by a token,
a World token. So my view and our view as
a team, this is early days in terms of where
this is all heading. And that's why we want to
(06:59):
do a strategy.
Speaker 6 (07:00):
Now, what's to prevent somebody else from doing the same
thing they are.
Speaker 4 (07:03):
They're playing a different game than they they're Vidian twenty
twenty two. And in other words, like relative to what
sam Alex and the team have built out, I mean
from an infrastructure and authentication perspective, they are I think
miles ahead. I don't see anyone that could capture them.
That's why we bet on World as part of the
acres strategy. And obviously having someone like Tom Lee and
(07:24):
bitminor Huge, you know, big Investor, that's another support that
we're so excited to have.
Speaker 3 (07:28):
You've also got an ETF the launched back in June.
It's the dan ives wedbush Ai Revolution ETF. It's up
sixteen percent since launch. It's outperforming the S and P
five hundred and the NASDAQ one hundred, Broadcom, Google and Video, TSMC, Apple.
Speaker 2 (07:45):
They're the top holdings.
Speaker 3 (07:47):
Somebody watching right now might be like, Okay, he's got
a clothing company, he's chairman of this crypto treasury company,
he has his.
Speaker 2 (07:54):
Day job at Wedbush.
Speaker 3 (07:56):
How am I sure that he's going to manage this
ETF and have the time and resources to manage the
CTF and my interest?
Speaker 4 (08:02):
And that's a great question. I'd say, when you think
about my chairman role, it's all related to to AI
and the infrastructure, and there was this is interrelated to
my view of where the AI revolution gets built out.
And the reality is that ninety five percent of my
time is spent you know, three and a half million
aire miles last twenty five years. I think what's what's
enabled to distinguish us is feet on the ground talking
(08:25):
whether it's private public partners and really, you know, I
think that's how investors have grown to.
Speaker 2 (08:30):
Do you add Do you add eight co holdings to
the i's ETF?
Speaker 4 (08:34):
No, No, that would be totally it's a total separate operation.
Speaker 6 (08:38):
I keep firewalls between it, though, Like there's going to
be people who are saying, yeah, of course Dan's going
to talk up that he loves Alphabet and that he
looks loves Nvidia. I mean he's got an ETF.
Speaker 4 (08:48):
Like I just how do we sure on the ETF
and you for like and remember and part of how
investors know us the ETF is all based on our
ives AI thirty.
Speaker 5 (08:59):
It's all based or research.
Speaker 4 (09:01):
So the reality is I think part of how we've
gotten so you know, the the customer, I'd say from
an investor perspective, we've had massive you know, I think
reception for the ETF is because it's our thirty names
that altermately we've used the winners and we and we
change out every quarter. And that's I think you did
(09:21):
about ETF.
Speaker 5 (09:22):
What it's based on. It's all based on the research.
Speaker 4 (09:24):
And got everyone here that knows Dan ives they know
like feet on the street, not sitting there in some
Peter Malar fifteen to four of New York City office building.
And the only time we travel is two times in
San Francisco.
Speaker 2 (09:37):
Now, you just got back from Australia.
Speaker 5 (09:39):
Yeah, so I literally landed here from Australia.
Speaker 2 (09:41):
What were you doing there? Yeah?
Speaker 5 (09:42):
So part part work part pleasure.
Speaker 4 (09:45):
So it's fun because look, I mean we when we
talk at AI revolution like in Sydney, in Melbourne pack meetings,
because the reality is that this is not just us.
And that's why I spend so much my time traveling
around the globe what.
Speaker 6 (09:59):
Might be the national exuberance part of kind of the
trade today or the tech trade or the AI trade.
Speaker 7 (10:06):
And just got about thirty seconds. There's got to be
some fluff out.
Speaker 4 (10:09):
Just could you say AI forty times in a conference call?
Doesn't make yourself an AI need Look just because like
Tim he was wearing an AI shirt because he says
it fifteen times and says Tim on the back AI,
it doesn't. My view is you have to distinguish the
winners and the real ones from the fakes.
Speaker 5 (10:25):
And that's the reality. And then look, that's what we
spend all of our time doing.
Speaker 2 (10:29):
The one company you're most bullish on right now, public.
Speaker 4 (10:31):
Company SCFAI volunteer that's going to a trillion next two
to three years. And I always say the haters hate it,
hated fifteen, despise it, eighties, say it's super expensive one
point fifty.
Speaker 5 (10:40):
They'll be seeing the same thing at a trillion.
Speaker 6 (10:42):
Yeah, it's a company we've talked a lot about, I
would say, in the last year and then some dnives.
Speaker 5 (10:46):
Thank you so much.
Speaker 6 (10:47):
I always appreciate it. Globalhead of Technology Research at web
Bush Securities.
Speaker 2 (10:52):
Stay with us.
Speaker 3 (10:53):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (11:00):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to fiveys during this
listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (11:14):
Jennifer Grancia was back with US, globalhead of ETFs over
at TCW. They've got more than two hundred billion across
investment solutions as of the mid of this year midpoint.
ETF platforms have more than four billion a lot under management.
Speaker 2 (11:28):
They see a lot of flows.
Speaker 6 (11:29):
We want to remind everybody to Jennifer, the former CEO
of the Impact Investment from Engine Number one, which took
on Exon, You're going to be iconic forever. This is
going to go with you wherever you go because it
was really significant.
Speaker 3 (11:42):
I think also, I think also you joined us at
Milkin during that time. Yeah, you guys were in the
midst of that and that's where sort of like I
still know you from, but I think people still know
you from that, as Carol mentioned, Yeah.
Speaker 8 (11:54):
I mean Engine number one was a moment in time
where I think we had just started to think about
energy transition at a very big level. It's not just green,
it's brown. And then it's going to require so much
to move the world towards better sources of energy, electrification,
all the power we need for restoring in the US.
So yeah, that was it was a great moment in time,
(12:14):
and then we folded in a lot of the work
we had done there into TCW.
Speaker 6 (12:18):
We'll talk about what you are doing because energy is
a big theme in terms of investing here for you
guys for sure.
Speaker 8 (12:24):
So if you think about the world today as much
as it's volatile and we're never sure exactly what's going
to happen or how things are going to play out,
if you think about TCW, we started as an equity firm,
and then we've got a great public private credit business,
and so on the equity side, a lot of what
we do is fundamental concentrated portfolios that help you diversify
(12:44):
from the index fund and the direct indexing you have
at the core because the market is broadening and we
have a huge opportunity as investors to actually take advantage
of How do you profit from the fact that we're
seeing different sources of energy and we have a huge
demand for energy for AI and data centers, but also
for the restoring of manufacturing.
Speaker 3 (13:04):
How do you do that in an environment where the administration,
depending on who's in the White House, changes their view
on the future of energy, like does a one ad.
I mean you have the president wanting to actually doing it,
trying to cancel offshore wind projects and really anything that
isn't oil. It seems like he's not interested in safer nuclear.
But that's a bigger time arise in time.
Speaker 8 (13:25):
Yeah, but that's how we think about it. So from
a TCW perspective, we've been investing in the energy and
power transition. We do that through the ETF Powered pr PWRD.
Pardon me, but when we think about that, that's a
very long trend. So that's over decades and decades, and
so the way we think about it as we as
managers want to invest for you, so that we're paying
attention to one administration to the other and what happens
(13:48):
and there will be some changes, but if you think
about the changes in the traditional brown so that they
can electrify and be more productive in a market like
the Permian on oil, that's really important. Nuclear is incredibly important,
and then what Trump said on actually supporting more nuclear. Yeah,
it's a long run game, but that's great intermittent power.
So we like to think about it very broadly, and
(14:09):
it transcends administrations.
Speaker 3 (14:11):
What does it mean you ignore wind and solar That can.
Speaker 8 (14:13):
Be part of our portfolio as well. We're looking at
things that from a very long term perspective will make sense.
Speaker 3 (14:18):
And you think, even though wind is under so much
pressure right now, in a different administration, it could come back.
Speaker 8 (14:23):
It will be part of the solution. It's not the
lead place to make money in the next couple of years.
And we're active managers, so we can take that into
account in terms of the way we manage the portfolio.
Speaker 6 (14:33):
Where is money going across your platforms, where are the
flows going in, where are the flow's coming out?
Speaker 8 (14:38):
We would see if I answer it, maybe had an
industry question, and then I can talk about to PACW
We see active equity is tough, so in active equity
investments are very selective. So what we're doing in active
equity products like powered or AIFD for AI, if they're selective,
they're meant to be complementing to bake index holdings. And
(14:59):
on fixed income, like a lot of money continues to
come into fixed income and continues to come into active
fixed income or also big in private credit, not in
the ETF space and products that are appropriate there, but
both if fixed income and private credit are probably the
places we see the most money coming in.
Speaker 2 (15:15):
Really not surprising. It feels like everything is private credit.
Speaker 5 (15:20):
I mean, I don't like katty.
Speaker 2 (15:22):
Does it does.
Speaker 8 (15:23):
But on the other hand, it's early. So if you
think about if you think about the portfolio, and if
you think about the biggest institutions in the world, they're
invested in some kinds of private credit, but they're looking
to get into private ABF because it's diversifying. But in
wealth portfolios, if you think about the average investor or
registered investment advisors, they're looking at how to take advantage
(15:43):
of returns that can be like our core plus income
ETF flexer. You know that's returning almost seven percent with
over five percent annual yield. That's very attractive when you
move into safe control careful private credit. You're still picking
up multiple percentage points a year, so people should do
it carefully. But it's a big opportunity.
Speaker 3 (16:04):
Do you see that opportunity continue to grow in a
weakening environment?
Speaker 8 (16:08):
We do. It's if again, if you go out and
you survey. There's a McKinsey report that just came out
surveying institutions and wealth and private credit by far is
the place that people are most interested in most increasing allocations.
Speaker 6 (16:20):
In What confidence do you have that we have the
right regulatory oversight on this in a world where private
credit still there is a lack of transparency and people
don't maybe not all investors understand that it's not liquid
like a lot of other investments.
Speaker 8 (16:36):
It's the right question, which is from a responsibility perspective
as asset managers or for wealth managers, we should always
be in a dialogue with clients on do they understand
the liquids when you do a semi liquid product. For example,
for us, we have things that have many many your
five plus year draw downs, that's not a liquid product.
Speaker 7 (16:53):
We wouldn't tell.
Speaker 8 (16:54):
Clients if that's a liquid product. In the asset back
finance space, we have an interval fund, but the loans
there are getting kind of turning over within two to
four years, so there's a little bit more liquidity there.
So I think we'll watch the regulatory space, but investor
education and responsibility by the managers it's critical.
Speaker 6 (17:11):
So when it comes to private credit, you're looking for
things where it is two to four years that they're
turning over a little bit more liquid that that's a.
Speaker 8 (17:17):
Little bit more liquid. And so if you think about
private credit in the private securitized or asset back finance space,
the loans are self advertising in two to four years,
that's a space we think in interval fund makes sense
we manage an interval fund there. There are other places
where it's just not that liquid and that should be
a private market product.
Speaker 3 (17:34):
Still a lot of interest in AI and the fund
that tracks that a.
Speaker 8 (17:39):
Huge amount of interest in AI, and I think everybody's
interested in one what's happening with AI, who wins what happens,
but people are also looking at how to invest in it.
So at TCW, we manage an ETFAIFD which is investing
very broadly in AI, and that's an opportunity to take
advantage of. Yes, it Holds, Navidia, Broadcom and other companies
(18:01):
that are benefiting and early winners in the trade.
Speaker 6 (18:04):
When you come to an event like this, I mean,
is there a narrative you're picking up on that might
be surprising?
Speaker 5 (18:08):
I'm just curious.
Speaker 2 (18:09):
Just got about thirty seconds here, I.
Speaker 8 (18:11):
Think from this conference, which is full of wealth advisors,
they are trying to figure out how does artificial intelligence
affect their business, how do they get smarter about it,
and how can they adopt new outsourcing and new technology
so that they can spend more time actually serving their clients.
Speaker 2 (18:27):
Which is a great thing.
Speaker 8 (18:28):
Which is a great thing.
Speaker 6 (18:30):
More time with the investment advisors. Always good to get
more time with you. Thank you so much, an always
find it. Jennifer Grancio, She's Global ahead of ETFs over
at TCW, joining us on site at future Proof.
Speaker 2 (18:41):
Stay with us.
Speaker 3 (18:42):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (18:50):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm e's during on Applecarplay
and Android Auto with the Bloomberg Business App. You can
also listen live on Amazon Alexa from our flagship New
York station. Just say Alexa Play Bloomberg eleven thirty.
Speaker 6 (19:09):
Carol Master, TIMSTEANOK live here at Futureproof in Huntington Beach, California.
Whill our next guests help others manage their money. They
are content creators at the same time. With us here
at future Proof is Doug and Heather Bonaparte of Bona
Fide Wealth. Doug is founder and president, Heather's director of
business and legal affairs. Doug is a wealth advisor. Heather
a former attorney corporate attorney, a big time in the
(19:29):
insurance industry, and the firm has about one hundred million
in assets under management. Nice to have you here.
Speaker 5 (19:34):
I know it's busy for you.
Speaker 6 (19:35):
You've got a lot going on your website notes a
wealth management firm built on unprecedented times. Walk us through
what that means.
Speaker 9 (19:42):
Doug, Yeah, absolutely, So you look to older millennials like ourselves,
the geriatric millennials.
Speaker 2 (19:48):
If you're will speaking my language, yeah, yeah.
Speaker 9 (19:51):
We start our adult lives in our careers in two
thousand and eight.
Speaker 7 (19:55):
I know, I literally moved to New York City on
top time.
Speaker 9 (19:57):
Yeah, October two thousand and eight to work and find it.
Speaker 2 (20:00):
It's in New York City.
Speaker 9 (20:00):
Great time to be you know, getting that started and
then we survive that. I get through that, only to
you know, start raising kids during a pandemic.
Speaker 5 (20:08):
Can we get a break here?
Speaker 9 (20:09):
So, you know, two major historical, once in a lifetime
events happening, and this is what we've had a navigate.
Doesn't make us any more special than other generations. It's
just very specific to how we manage our lives and
our financial lives during these times.
Speaker 3 (20:22):
And to what extent of your clientele actually represent that demographic.
Speaker 9 (20:26):
I would tell you eighty percent are between the ages
of twenty eight to fifty. So with that average being
right around forty forty two.
Speaker 3 (20:33):
I think people know you guys from social media, like
the jokes on Twitter.
Speaker 2 (20:38):
Sure how much of.
Speaker 3 (20:40):
Customer acquisition comes from social media.
Speaker 9 (20:43):
So I like to think of it as one piece
of the overall puzzle here. We're doing, you know, very
traditional mainstream financial media, and you pair that with social media.
Speaker 2 (20:50):
It's never one thing.
Speaker 6 (20:51):
Are you calling us traditional?
Speaker 2 (20:53):
No, I'm calling you awesome.
Speaker 5 (20:54):
Okay.
Speaker 9 (20:54):
Second, we need you and we need all of these
kitty I know, but we need all of these tools
to create, you know, a robust way to market in
the Internet era, right, and the intention of the attention
economy that we're in.
Speaker 6 (21:07):
Well, one of the things I was thinking and it
was funny people have come up to me about truth
in today's society and just with the political environment and
just there's so much content even when it comes to
business advice, and how do you make sure that what
you're putting out there, you're careful about it, there's transparency
because there's a lot of information that's out there that
is not good.
Speaker 9 (21:26):
Yeah, Heather can talk to that in terms of you know,
we talk about financial influencers all the time and those
who are licensed and those who are and you're getting
more information on the reddits and the tiktoks, and you
and I look at those videos and that content all
the time and we have opinions around that.
Speaker 10 (21:40):
I think it's very important that you don't end up
on the extreme ends of the scale. Right when we talk,
we try and tell people, Look, there isn't one right
way for everyone, So I think you have to be
cautious when you see, let's say, a f influencer online
who says everyone should always do this or you should
be extremes be in a position to do that, you
know that it's the.
Speaker 2 (22:00):
Only products for you.
Speaker 9 (22:01):
They're trying to sell you that product right here. And
I know a lot of clients with creators that are
so hard working it is it is tough to do
this and a lot of respect to them. But when
you get into those extremes, or you're pushing products, or
there are no guardrails whatsoever, it can get dangerous here
and there's just not enough.
Speaker 2 (22:17):
With a hybrid, you can be both. You can be
a professional and a content creator.
Speaker 9 (22:21):
You can do all of these things. But people tend
to just stick to their corners.
Speaker 2 (22:24):
I think.
Speaker 3 (22:24):
So if we think about your your clients, it's it's
different in the sense of, you know, we're oftentimes talking
to wealth managers. You have you know, five ten, one
hundred dollars in assets under management, I mean, much bigger
than where you guys are right now. So you're at
a different end of the spectrum, and your client tele
represent that.
Speaker 2 (22:42):
I think people might.
Speaker 3 (22:43):
Say, Okay, these are a lot of these folks are
Henry's right, high income, not yet rich, right, whatever the
acronym is, How do you keep them when they do
become rich?
Speaker 9 (22:51):
Yeah, I think we have less of that problem when
you're there with somebody in the days that they're grinding
it out and establishing themselves likely to have a stickier relationship,
a more loyal relationship. You meet someone after they've made
their money, I think you have a weaker relationship. You
were not there for the time. You're as good as
your last transaction. That's the worst place you want to
be as a wealth manager. As good as your last transaction,
(23:14):
as someone who's been at the core of their growth
and having that kind of relationship. So you know, by design,
investing in our clients at a time when we were
in our mid to late twenties, that's how we keep
them for you know generations.
Speaker 7 (23:30):
Their children are our clients.
Speaker 9 (23:32):
They are also nine years old. But there are clients
and they will be and that can then transcend down
and we don't have to worry about maybe some of
our colleagues that haven't been paying attention to the next generation.
Speaker 7 (23:42):
They have seventy eighty year old clients.
Speaker 9 (23:44):
They have issues with retaining the money because they didn't
even bring their partner to the table.
Speaker 7 (23:48):
Ye and like these gender chops.
Speaker 9 (23:50):
A lot of why we've written a book about Love
and Money is to solve that problem. Bring both partners
to the table, and that's very characteristic of the type
of clients that we serve.
Speaker 6 (23:58):
Do you have any book coming out to think October
money together? But I want to ask you about the
quarterly check ins. I do think this is such no
money dates. Yeah, tell us about these money dates in
terms of what you guys do in terms of your
own financial planning.
Speaker 10 (24:10):
Well, for us, we try and do something that we
could look forward to. So Doug and I know what
we like to do, right. We like to go for walks.
That's just maybe that's like a leftover thing from COVID.
From COVID and like fish strollers around the neighborhood.
Speaker 2 (24:21):
Drinks too.
Speaker 5 (24:22):
We like cocktails too, so.
Speaker 10 (24:24):
Like we'll go out for a nice cocktail, or we
will go for a walk, or we'll go play tennis
and be sure to leave twenty minutes on the back
end to have a good conversation after we've like sweated
out a little bit. I think the most important thing
with money dates is to do what you enjoy, so
this doesn't become something that is a chore, something that
you dread. You want to incorporate the money conversation into
your life.
Speaker 6 (24:43):
Does it always go well?
Speaker 9 (24:45):
No of course not, you're talking about actual decisions you
need to make that evolve risk and charting the course
of your life.
Speaker 2 (24:52):
Giving forty sometimes of course.
Speaker 9 (24:54):
How about this, to Heather's point, start the conversations with
the winds and what you did right, you're going to
have a better time getting into it, and then talk
about where room for improvement needs to be made. Then
be critical, give yourself a pat on the back and
the hard work you're doing before you get into that stuff,
so you reduce the probability that you're gonna get into
some kind of scuffle around something that you don't agree on.
(25:16):
And it's very normal to find stuff you don't agree on.
If you're green everything, I'd be a little more concerned
about that.
Speaker 10 (25:21):
Well, right, And our concept of a money date doesn't
just include looking at a networth table, looking at spending.
Speaker 2 (25:26):
Don't start there.
Speaker 10 (25:26):
Don't start there. You can talk about childcare, talk about
whether you both feel like you're bandwidth, like you have
any bandwidth or you don't, or whether you feel totally overwhelmed.
Speaker 7 (25:36):
You could talk about goals.
Speaker 10 (25:37):
You talk about how, like Doug said, the things you've
been doing right and the things you could stand to
improve upon.
Speaker 7 (25:42):
For the next quarter.
Speaker 9 (25:43):
We rather talk about how we're going to get on
that trip with the kids, you know during November when
the teachers do their convention thing in New Jersey, and
we rather, you know, we're going to rally around that
conversation because we want to go have that experience with them,
and that then dovetails into Okay, let's yeah, we can
afford to do that. What do we have to shift around?
All right, let's cancel this baby's let's not do that
date with our friends because we much rather, you know,
we can do that anytime. You can't create those memories,
(26:05):
you know, all the time with your little kids. So
those are great ways to engage something where most people
are like, here's what you did wrong this month, sweetie, Like,
what an awful.
Speaker 2 (26:13):
Awful way to start out.
Speaker 9 (26:14):
You're not gonna do it next quarter, and you need
four quarters in a year. You know, two years is
only eight cracks at it.
Speaker 6 (26:20):
It's not a lot, it's practical, but it makes an
awful lot of sense. We're gonna let you go because
you've got to run to your panel. Good luck with you,
You're not so lucky, good luck, good luck with the panel.
You go absolutely We do want to stay with you,
you know, Heather, because you do have this book coming
out in October, Money Together, How to find Fairness in
your relationship and become an unstoppable financial team. And I
(26:44):
just think it's kind of interesting because I do think
a lot of couples do have different priorities, right and
be sure to figure it out. They sure do tell
us about this book though, and what you guys wanted
to do with it.
Speaker 10 (26:54):
We want to help couples communicate about money better. Bottom line,
I think that it's one of the hardest things for
couples to talk about because money is not just money, right.
We tether our beliefs and our behaviors around money. They
they come along with them post of feelings about trust, freedom, power, independence,
you know, So when you're actually getting in a little spat,
(27:16):
you know, week to week on spending, that's not really
what you're talking about. There might be feelings beneath that.
There could be a spouse who doesn't feel like all
of their invisible work is being seen. So what we
really hope to do with this book is to have
the conversations that aren't being had. We want to really
uncover those, you know, deeper power dynamics over money in
your relationship and help couples find a way to talk
(27:37):
about it in hopes that we can level that playing
field and really bring more equity into relationships.
Speaker 3 (27:43):
Well, when the book comes out, you got to join
us in the studio back in New York. Heather Bonaparth,
director of business and legal Affairs for Bona Fide. Well,
she joins us on site here in Huntington Beach, California
for future Proof.
Speaker 2 (27:54):
Stay with us.
Speaker 3 (27:54):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (28:01):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five ees. During
this listen on Applecarplay and Android Otto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 6 (28:16):
All right, folks, we're going to talk a little bit
about the world of private credit. It has ballooned, by
the way to about one point seven trillion dollars in
the size in size and just a matter of years.
Speaker 7 (28:26):
There's a lot of issues.
Speaker 6 (28:27):
Going on in this environment. Most loans held in private
credit funds mature within five to seven years. It's a
timeframe for when investors should start seeing many more returns,
but many vehicles formed eight years ago still lagging on
a closely watched metric known as distribution to paid in capital,
which measures how much investors have received compared to what
they put in Originally. We're curious what our next guest
(28:48):
has to say. He is a player in the private
credit world. Marcato is a co founder, co president and
co CEO of sci On Investments, which specializes in alternative assets,
in particular private credit or private debt. Has about ten
billion in assets under management. Mark is also director, co
CEO and Investment Allocation Committee member of the Scion Areas
Diversified Credit Fund. So you know a little bit about credit.
(29:11):
How are you tell us a little bit about your
fund in the strategy right now?
Speaker 7 (29:14):
I'm doing well. Thank you for having me today.
Speaker 11 (29:17):
So our platform is really focused on providing alternative investment
solutions to private wealth investors, individual investors. So where a
lot of the private firms, private asset managers that deal
in private credit and other strategies focused on institutional clients,
our focus is on individuals and we distribute our products
through the wealth channel, the rias, the wirehouses independent broker dealers.
(29:44):
We currently have three products that we're very proud of.
One is our publicly list a BBC which is called
Scion Investment Corp. And that's a strategy where we focus
on the US middle market, providing direct lending private loans
to US middle market companies.
Speaker 7 (29:58):
We also have a diversified credit.
Speaker 11 (30:00):
Fund and that's a partnership that we have with Areas Management,
one of the world's largest global investors, top tier and credit,
and that fund is structured is an interval fund, and
we have close to eight billion dollars of AUM in
that product. That's the one, that's the big one, that's
the big one. And then we just recently launched it's
not private credit, but it's private assets, private markets. We
(30:22):
launched an interval fund that focus on infrastructure investing. So
we are all in on private markets, but we're also
very focused on the right structures for the individual investor.
Speaker 7 (30:33):
The stat that you mentioned.
Speaker 11 (30:34):
Earlier about capital effectively being locked up, right, that's not
what we do. We really focus on strategies that provide
appropriate liquidity, as I like to call it, appropriate liquidity
to individual investors. So the interval fund structure, the BDC structure.
What we do is we are giving dividends. We're giving
distributions on a regular basis, and that's something we pride
(30:55):
ourselves in, is consistent, stable dividends that are are are necessary.
Speaker 7 (31:02):
I think for the retail invest.
Speaker 6 (31:03):
You really got layout on your website.
Speaker 11 (31:05):
Yes, absolutely, So when you think about investing in one
of our products, you're going to see hopefully a high
single digit distribution yield every year. So you're getting your
capital back where traditional private credit was done in a
GP LP drawdown structure and your capital could be locked
up for a long time. And because of these structures,
(31:25):
we're seeing this strong demand by registered investment advisors other
financial advisors that deal with individuals, and that's what these
products really are doing. They're opening the gate right, They're
providing the access that individuals have never had.
Speaker 3 (31:41):
The growth of private credit over the last few years
has coincided with a pretty strong economy, and we're now
starting to see some cracks for them. We saw the
revisions downward with the labor numbers that we got today.
Jamie Diamond telling CNBC today that the economy is quote weakening.
He said, whether that is on the way to recession
or just weakening, I don't know what happens to private
(32:01):
credit in an environment that's weakening economy, that we.
Speaker 6 (32:05):
Can help your strategy specifically.
Speaker 11 (32:07):
So I think that obviously there will be some winners
and losers, but I don't think the market creators. So
it's really important to tie yourself to a good manager.
Someone that is very experienced in the industry, knows how
to underwrite, knows how to be selective, can generate opportunities
that makes sense for the investments.
Speaker 3 (32:27):
Well, because the concern is that the folks who have
been let money will not be able to pay that
money back.
Speaker 11 (32:34):
Yeah, and that's been a theme that's going on for
some time now, right, We've been having this conversation for
a long time, and people got really spooked when interest
rates spiked, and how are these companies going to afford
their debt payments?
Speaker 7 (32:46):
And the reality is that they have they have been
able to do it.
Speaker 11 (32:49):
And I think a lot of the US middle market
is very resilient. And when you think about the assets
that we focus on in our publicly traded BBC looking
at companies that are between twenty five and seventy five
million dollars of epatah, which we believe is the true
middle market. What's happening now is there's a real convergence
of the syndicated loan market where banks typically played right
(33:13):
and the upper upper middle market. So private investment managers,
private credit manager of doing those deals that banks used to.
And I think that's where you're going to see some
more issues.
Speaker 3 (33:23):
Why do the banks Why are the banks not doing
loans to those companies or conversely, why are those companies
not going to a traditional bank for that loan?
Speaker 11 (33:31):
Sure, so effectively banks have been regulated out of the business, right,
they're not focused on it. They abandoned the business after
the Great Financial Crisis. They let all of their deal
team go, you know, all of their portfolio managers go.
They were gobbled up or formed their own private asset
management firms. So you don't see private bank I see
(33:51):
the big banks doing these types of deals because they
just don't have the expertise anymore. What they do is
they get involved, I think, in the market more synthetically
by lending to firms like UH where they can be
on a more senior secured position. And what we're seeing
is these larger private institutional asset managers, they're getting so
big where they are now the bank. The difference is
(34:14):
is that the investment committee, that people making decisions there
are able to do it more efficiently, provide more certainty,
be more flexible than say a traditional money center bank.
Speaker 6 (34:25):
We're talking with Mark Gatto, he's co founder, co president
and co CEF signed on investments. Mark, what's the deal
you will do in the private credit space?
Speaker 5 (34:32):
What's the deal you will not do?
Speaker 6 (34:33):
Because I mean, and how much transparency are you feeling
like you're getting on these deals?
Speaker 11 (34:39):
So we feel like we get a lot of good information. Obviously,
we're very diligent about doing our underwriting and understanding what
we're getting ourselves into. I think every investment warrants merit
if it meets some of our baseline criteria. Right, So
we're we're again we're looking at companies that have earnings ye,
right first and foremost, So twenty five to seventy five
(35:02):
million dollars is our sweet spot. And then we want
to really focus on are they relevant in their industry?
Are they a leader in their industry? Do they have
a good management team? Is there a reason for them
to exist? So we're gonna focus on those things. Determined
whether or not we want to do the deal on
a high level, you know, we're not doing a lot
of stuff that's very cyclical in the BBC and even
(35:25):
in our integal Fund Diversity by Credit, we're not doing
cyclical industries. We're probably staying clear of retail in many instances.
Speaker 7 (35:34):
Not to say that we won't do.
Speaker 11 (35:35):
Either of those deals, right, it's just not going to
be a major portion of what we do.
Speaker 6 (35:38):
Give us an idea of a deal you recently did,
and I'm curious about, like the infrastructure play right now,
if that's a big part of it, or energy like
what you're seeing.
Speaker 11 (35:45):
Yes, so on the infrastructure side, which is a little
bit different because we're actually focused more on the equity
of these infrastructure deals, but they do have a lot
of characteristics that credit assets have. I think it kind
of falls in between pure credit and private equity, if
you will, right because when we're talking about infrastructure, we're
talking about stable, stable revenue that's being generated by these
(36:08):
assets as predictable, so it has that element, but there
is some sort of growth story to that. And if
you look at our infrastructure fund, we're doing deals like
the M twenty five in London, so roads, bridges, we
have terminals, at LaGuardia Terminals. At JFK, we're in AI
and data storage. So we really run a diversified strategy
(36:32):
and that is a theme throughout all of our products.
We want to be diversified, and we think that's probably
the most important thing for us as a manager, and
we think for investors is to be diversified.
Speaker 7 (36:42):
If you look at our BDC, we have.
Speaker 11 (36:44):
One hundred and sixty different names in there. If you
look at our Interval Fund, the sign Areas Diversible Credit Fund,
we have over seven hundred names in there. So you're
really getting granular, you're really getting diversified. So no one
deal is going to make a difference, and no group
of deals is going to make a difference. And we're
doing that same thing with infrastructure. We want to be
highly diversified.
Speaker 3 (37:03):
Is there political risk with the Infrastructure Fund in the
sense that you have an administration right now that wants
to punish different states and cities for not getting online.
Essentially we see that with the Trump administration and with
the MTA for example, and tolling congestion tolling?
Speaker 2 (37:19):
Is that a risk?
Speaker 11 (37:19):
So we don't view it as a risk because of
our diversification because we are investing in different.
Speaker 7 (37:25):
Areas of infrastructure.
Speaker 11 (37:27):
We're not a cleaning energy play, We're not a fossil
fossil fuel play. We don't believe that there's much political
risk in terms of our strategy. And then if you
look at the industry as a whole, the market as whole,
there's such a high demand for infrastructure assets. There's such
a need to spend capital to improve our infrastructure assets,
(37:49):
not only here in the United States, but globally. It's
a multi multi trillion dollar opportunity. We don't think that
political the current administration, our new administration is going to
sort of move the we move the needle one way.
Speaker 7 (38:01):
Or the other, especially if you're diversified.
Speaker 11 (38:04):
And again I go back to that theme, it's really
important at SIGN Investments.
Speaker 7 (38:07):
We preach it to our advisors and.
Speaker 11 (38:09):
Clients that that's where you need to be, not only
within alternatives, but across the entire spectrum.
Speaker 7 (38:14):
Just got thirty seconds.
Speaker 6 (38:15):
How would you describe the environment like in a word,
a couple of words.
Speaker 11 (38:19):
I think the word that describes the environment is uncertain.
It's been still, it's been it's been that way for
a while. It's going to be that way for a
long time. Information moves too quickly, where the global kinds
are too interconnected. There's always a news story that's going
to give you some sort of angst, that's going to
make you think things are uncertain. So that's why we again,
we fall back to diversification and we like alternatives for
(38:43):
our clients, our advisors because we think we stabilize some
of that uncertainty and volatility in the market place.
Speaker 6 (38:48):
We know you're based on the West Coast, but we
hope we can attract you back to our New York studio.
Speaker 11 (38:51):
We're headquartered in New York, so anytime there often, anytime
you would like to have me on as a guest,
I would be my pleasure.
Speaker 5 (38:57):
We would love it.
Speaker 6 (38:58):
Marcatto. He's co founder, co resident and Cofcion Investment.
Speaker 1 (39:01):
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(39:22):
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