February 15, 2025 • 45 mins
In this episode, host Allan Marks and Milbank partners Erwin Dweck, Apostolos Gkoutzinis, Fiona Schaeffer and John Williams forecast what’s in store for markets and policy in 2025 in the US, Europe and globally. They also share what they are reading now, recommending surprisingly diverse and wide-ranging books.
About the Speakers
Erwin Dweck is a partner in the New York office of Milbank LLP, the Practice Group Leader of the firm’s Real Estate Group and a member of the firm’s Global Executive Committee. Read More
Apostolos Gkoutzinis is a market-leading international corporate finance and securities lawyer and a partner in the firm’s European Leveraged Finance/Capital Markets group in London. Read More
Fiona Schaeffer is a member of the firm's Litigation & Arbitration Group and an international antitrust lawyer with over 25 years of experience practicing on both sides of the Atlantic. Read More
John Williams leads the Derivatives practice at Milbank globally and is a member of the firm’s Alternative Investment Practice. Read More
Allan Marks is one of the world's leading project finance lawyers. He has advised developers, investors, lenders, and underwriters in the development and financing of complex energy and infrastructure projects around the world, as well as acquisitions, restructurings and capital markets transactions. He is a Senior Fellow at Columbia University’s Center on Sustainable Investment and teaches law at both the University of California, Berkeley and UCLA. Read More
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Okay, we're recording .
I'm going to say to Fiona hangon a second, no problem, join us
at 3.15.
Okay, chrissy, I just toldFiona, 3.15 is fine, okay, okay.
(00:27):
So, irwin, this is stuff.
We'll go at the end, so I'll.
I'll ask you now and we'll talkabout the books and that kind
of stuff.
So, irwin, what books are onyour bookshelf for?
Speaker 2 (00:36):
a nightstand.
In the middle of reading twobooks right now, alan um
complete opposite ends of thespectrum.
One is John Meacham's book, theSoul of Our Nation, or the Soul
of the Nation, which is sort oftimely and interesting in light
of our current politicalenvironment, and the other one,
strangely, is this brand newtranslation of Maimonides' Guide
(00:59):
to the Perplexed.
Oh, who translated it this timeLen Goodman, and it's the first
translation from the Arabic tothe English and not indirectly
through the Hebrew.
Speaker 1 (01:10):
Oh good.
Which is which is an amazing,just an amazing way to really
access that I don't know ifyou're far enough into it to
know, but how different is itfrom the other?
You know other translationsthat people who speak English
might be more familiar with ifthey've read Maimonides.
Speaker 2 (01:29):
So there was an attempt here to translate it in
a way that was less technicalfrom the Arabic or through the
Hebrew, and so it's meant to bea bit more accessible.
I would say I haven't read alot of the older English
translations, but it seems likeit's a much easier read, it's a
(01:50):
much more accessible read, but Isuspect you're probably losing
a little bit of the nuance inthe way that it's delivered that
way, because Maimonidesintended this book to be read
and studied over and over again,and so there was a lot of
nuance, and in the introductionto the book he talks about its
accessibility and how it couldor would be accessible or made
(02:13):
accessible to its readers, and Isuspect in trying to make it
very accessible through theEnglish, you're probably losing
some of the nuance and some ofthe messaging that he was trying
to achieve through the originaltext.
Speaker 1 (02:27):
Yeah, and it's actually interesting.
He's so, on one, on one levelhe's he's complicated right,
because he's looking at reallydeep things, but on the other
hand, he's actually, compared toa lot of his contemporaries,
really clear and direct.
I mean, he was a physician, hewas, you know, he wasn't just
some abstract philosopher.
I mean, he really tried to tiethings down to well, how should
you do this and what ispractical.
(02:47):
In order to be less perplexedafter you've read it, one hopes
where you go and have childrendelivered.
Speaker 2 (02:52):
But when you think about, you know, a thousand
years ago this guy, who was arefugee, was a doctor, was a
philosopher, was familiar withnot just Greek or Aristotelian
(03:14):
philosophy but also the Islamicphilosophers of his day,
somebody who had written verylegal texts in Jewish law,
someone who was the head of acommunity, someone whose
full-time job was being a courtphysician.
And you think about writing atreatise like this just trying
(03:40):
to get his arms around or toteach other people how to get
your arms around, how youreconcile what was then
modernity, what is now modernity, with faith, with not just
faith, but just just how youkind of understand one's place
in the world, irrespective ofyour faith in a lot of ways.
And so I kind of look at, Ilook at him and, by the way, the
(04:04):
irony of it is, if you actuallylook at a lot of his
philosophical writing, some ofthem you would you would think
were even barbaric at the time.
Just you know, for instance,his treatment of women was
something that I don't thinkanybody today would kind of feel
comfortable getting around.
But he was a man who lived in avery particular time and a very
particular locale.
Right At the time he waswriting this, he was living in
(04:31):
Cairo.
Yeah, had he moved there fromwhat's now Spain, from Southern
Spain?
Yes, so just an incredible.
I mean I love it, it's just anincredible work I think
resonates a thousand years laterstill, and so that one's
definitely that one's not.
You know, that's not easyreading.
I think I try and look at thatfrom a from a studying
perspective.
They're thinking about Meacham'sbook on the soul of America.
(04:52):
You know, when he had writtenit he was coming off of Trump 45
.
And a lot of it.
It seems a lot more unclear tome where his views would land
today.
What is the better angels inour current political
environment?
Not to bring it back toMaimonides, but what is the
(05:13):
idolatry of our currentenvironment?
And a lot of those thingsaren't as clear to him, I think,
as they would have been two orthree years ago.
Clear to him, I think, as theywould have been two or three
years ago the place ofxenophobia, the place of
(05:34):
wokeness, the place of, you know, on one side the right, on one
side the left.
How does this compare toMcCarthy era?
How does this compare to theinterwar period and
reconstruction?
And when we talk about thepolitical challenges we have as
a divided country.
I I just think when he wrote itit it kind of has a different
feel to it than as I'm readingit today, a couple of years
(05:57):
later, which is, I think that'sprobably right.
Speaker 1 (05:59):
I mean people say, oh gee, we were so polarized, now
it's the worst it's ever been.
It is bad, but it is certainlydifferent than the 19th century.
We had a civil war and in facteven if you go back before that,
when the Constitution waswritten at the end of the 1700s,
we were also.
You can kind of see within itthe fissures, fossilized between
(06:21):
urban and rural and betweennative and immigrant and between
enslaved and exploiting, andyou know, whatever language one
wants to wrap around it, you cansee the gaps in society that
are kind of crystallized in thatConstitution and the fact that
we somehow have managed to usethat same document as the basis
for what is fundamentally a verydifferent sort of world.
(06:44):
Now, two centuries later, Ithink the jury's out on where
we're going next.
I'm interested in your take,but reading Beecham and others
like that again probably puts itin a different lens.
Speaker 2 (06:56):
Yeah, I don't know where we're going To tie it to
Maimonides, perhaps.
I like the idea of what I'llcall interfaith dialogue and the
search for common ground, andinterfaith in that setting
clearly doesn't mean religiousinterfaith, but it means
left-right political interfaithdialogue.
(07:18):
You know, I don't know.
I don't know that thispolitical environment is any
better or worse than it has been.
Certainly, things like socialmedia and Twitter and X and Elon
Musk can exacerbate oraccelerate some of these
processes.
You know, you read historicallyabout the amount of time it
(07:39):
took for information todisseminate.
Just a really, really differentthe role of media in
disseminating that information.
I think you start.
I think, when Meacham talksabout McCarthyism, he's talking
about the role that the mediaplays in disseminating
information.
At the time and people werestarting to think and starting
(08:00):
to see that actually the mediacan play a really important
positive or negative, dependingon your view role in how that
information gets disseminatedand how to couch that language
and how to couch thatinformation.
At some point you can unstripeverything through Twitter and
(08:20):
not have any ability to kind offocus the dialogue or even
fact-check the dialogue, or evenfact check the dialogue,
whatever fact check means in2024 or 2025.
Speaker 1 (08:30):
Well, there are still facts, there are.
We lose sight of that sometimes, but it's interesting because
if you look at like I want totie that together for a second,
because you have this medievalreference that you mentioned
with Maimonides and a fewcenturies, four centuries after
him, right, we get cheap paper,cheap printing and the print and
(08:50):
movable type for the printingpress and suddenly there's this
media explosion and how-to booksand religious books and
everything are just printed anddisseminated and we have other
media revolutions over time.
I mean it's just in the lastcentury we've had radio and
before that, telegraph and we'vehad television and the idea of
those later media sources isthat they were intermediated,
(09:13):
right, this whole thing.
Like you know, the medium isthe message We've got.
You know who is the editor, whois it that's doing it, and
relatively few options.
So it's mass media andeverybody's following it In some
ways, if you will.
The disintegration, the use ofsocial media platforms and other
ways of communicating to massaudiences that are then
(09:33):
fragmented and siloed and oftenin echo chambers, without that
intermedium editor, is much morelike that original explosion
that we had a thousand years ago.
It's kind of an interestingtake on it and I'm not saying
it's a good one, because I dothink there's real value to the
curated, edited, fact-checked.
It can have a position, it canhave a point of view, for sure,
(09:57):
but I do think there's a realrole for that.
Speaker 2 (10:01):
Yeah, I don't disagree.
I guess the challenge would beis how you bring that back into,
how you put guardrails or youbring that back into some
semblance of discernibility,just given the wide, the ability
that it has to kind of widelydistribute and then throw in
(10:23):
algorithms and all that sort ofthing where you can just
accelerate voices that shouldnot have otherwise be
accelerated.
Speaker 1 (10:29):
As you're thinking that you know, the voice that
should be accelerated is the onethat like fill in the blank, I
mean, obviously, if I have amedical problem, I might go to a
doctor.
If I have a problem with youknow, if I have a legal
transaction that I want to, youknow undertake and I need a
commercial real estate lawyer, Imight come to you.
Right, I might go to somebodywho actually knows their stuff.
(10:50):
I'm unlikely to want to just godown to the wrong person.
If I need a you know a carrepair, I go to the mechanic.
I don't go to, you know, thedoctor.
Speaker 2 (10:59):
You know, to stay with the law analogy, you know
sometimes we tell our clientsthat if they're going through a
workout it's much better to goto a different law firm that has
a different point of view,because there won't necessarily
be a defensiveness to thereaction and to the feedback
that you get and you're able toget a thoughtful and intelligent
(11:21):
view on your documents.
Now, that's not always the case.
It sometimes is the case.
There's sometimes a competitivelaw firm that may have an
incentive to make you look bad.
It may not, but what I wouldn'trecommend them doing is going
to a solo practitioner who doesresidential closings in the
(11:42):
suburbs of Boise, Idaho, and saycan you look at the commercial
real estate documents thatMilbank drafted up and give me a
critical eye?
But if we take this analogy ofTwitter and X to its logical
extreme, if that resi lawyer inBoise, Idaho is able to have the
(12:04):
most fanciful language and avery, very quick wit, it may be
that that voice gets, whateverthe right term is accelerated in
a way that is not helpful foranybody.
Amplified.
Speaker 3 (12:18):
Amplified.
Speaker 2 (12:18):
That's the word.
That's the word that you'regoing to use In a way that it
shouldn't be.
Now, if you went to any of ourcompetitive law firms, or even
law firms in the top 200 thatdeal in this commercial realm, I
think that's probably fair.
And so what you don't have isthe ability to really narrow the
focus of the criticism or theconstructive feedback or the
points of view to those againwithin the guardrails or within
(12:42):
the framework of what is sort ofuseful and helpful for the
particular issue or topic.
Right, Wonderful.
Speaker 1 (12:51):
All right, fiona, I see you've joined Fiona.
Fiona, if you can hear me,sorry, just coughing and getting
off mute.
Oh, that's okay.
That's okay.
So Erwin and I were justrecording the last bit of what
(13:12):
we'll cover, which is the bookrecommendations, and we got off
to a really interestingconversation, I think, on that.
Speaker 3 (13:21):
No, that reminds me I need to get my books in front
of me.
Thank you.
Speaker 1 (13:26):
No problem, have them ready for the end, because what
we're going to do is we'llrecord the rest of the stuff now
, and then I'll let erwin go,and then you and I can do our
book thing at the end okay,right does that work?
yeah, good, um, before I forget,I want to record a concluding
bit where I'm going to thank youboth for taking the time to get
together and and so we have asign off, just in case I forget
(13:47):
to do that before we let you go,irwin.
So here we go with that part.
So, fiona and Irwin, thank youboth very much.
It's been a real pleasuretalking to you today.
Speaker 3 (13:59):
Likewise Alan Love doing this with you.
You're a consummate podcasthost.
Speaker 2 (14:04):
Thank you very much and Alan, I feel the same way.
It's been a fun ride since wefirst started this and it's been
great and interesting to listento you over these years.
Speaker 1 (14:16):
Thank you.
Well, 32,000 downloads and 62,64 episodes since.
Yeah, it's been quite a funfive years so far.
So thank you both.
Thank you, thanks, good.
Okay, so that'll be ourconclusion.
So let's go back to thebeginning and I'll ask you each
(14:38):
kind of what you're going to seefor this year.
I want to stress this is notgoing to be released until the
beginning of January, after Ihave sailed off into my
consulting partner gig, whateverthat will end up being here,
but I know it won't involve alot of day notes.
Speaker 3 (14:57):
Tell us about that.
Speaker 1 (14:58):
Yeah, so we'll talk more about that after.
But, um, I wanted to start out,uh, just uh, I'll jump real
kind of right into it and askyou what you guys each see in
your you know respective fieldsfor 2025, um, and then, if
there's I may or may not talkabout, you know what's what do
you?
What's the biggest surpriseyou've seen?
That's changed since werecorded first five years ago,
(15:22):
um, four and a half years agonow, but, uh, and kind of what
surprised you about that?
And then, and then, fiona, I'llask you about the book center
when you'll be free.
All right, okay, very good,fiona, is that?
Is that good?
Speaker 3 (15:34):
yes, I mean I was going to in in the response to
the first question.
Talk a little bit about when welast spoke yeah, we talked
about big tech in particularspoke.
Yeah, we talked about big techin particular, and antitrust.
Yeah, so I was just going togive a little summary of what I
thought the highlights of theBiden administration have been
just in a couple of sentencesand then lead into what to
(15:56):
expect now.
Speaker 1 (15:57):
Good.
I would encourage both of youby short sentences that I can
then interrupt with follow-onquestions.
Make it very conversational.
Okay, good, fiona.
Erwin, thank you very much forgetting together today.
(16:17):
Great to be here, alan,likewise.
So a lot has changed in the fourand a half or five years since
I recorded the initial episodesof the Law Policy and Markets
podcast with each of you.
At the time, you know, we werelooking at the beginning of a
pandemic, was not sure whatwould happen, erwin, with
commercial real estate.
Fiona, when you and I talked,there had been hearings on
(16:38):
Capitol Hill, in the House, inparticular, on big tech,
particular on big tech and thisis before the con period began
that the FTC and antitrust, ofcourse has really risen to the
forefront in the US and, ofcourse, competition policy in
Europe as well has really takena much sharper view of not just
big tech but a lot of economicconcentration on the one hand,
(17:01):
but in other ways, perhaps isacquiesced to some of the power
that some of those companieshave.
So I thought maybe, fiona, wecould start with you and looking
here now that we're in 2025, atwhat you think the next year,
next couple years, might bringwith respect to antitrust policy
with the new administration inWashington.
With you know politicaluncertainty in Europe.
(17:22):
Interested in your take newadministration in Washington.
With political uncertainty inEurope.
Speaker 3 (17:28):
Interested in your take.
Thanks, alan.
Well, we've just aboutconcluded the most aggressive
antitrust enforcement regimethat certainly I've experienced
in the US since I've beenpracticing as the Biden
administration wraps up, andwith that we've seen a number of
cases against all of the bigtech players Apple, google, etc.
Sorry, I'm going to.
(17:50):
Can we just do that bit again?
Ok, you'll edit that out.
Speaker 1 (17:56):
I'll edit all this.
Don't worry about it, just letit roll.
Speaker 3 (17:58):
OK, I think what we can expect in a Trump
administration.
There are, I think myimpression is a very large
number of deals that have beenwaiting in the wings for a
friendlier administration, so Ithink we're going to see a lot
of deal activity.
Of course, interest rates needto cooperate as well.
(18:19):
Antitrust is not the onlybarometer here, but I've
certainly seen from firsthandhow clients have been reluctant
to bring more challenging dealsout of the boardroom in what
they perceive to be a veryhostile administration towards
M&A activity.
I think the Trumpadministration will be viewed as
less hostile, more favorable tobusiness.
Speaker 1 (18:43):
And is that true across the board, or is it
viewed as more favorable tobusinesses than it views as
supportive of the administrationin some way?
Speaker 3 (18:51):
Well, it's helpful to remember that Trump won was not
exactly laissez-faire onantitrust.
So, for example, the concernabout antitrust implications of
non-competes and wage fixing inconnection with workers and
labor that was something thatcame out of the Trump
(19:12):
administration was certainlyamplified in the Biden
administration.
But the concern about labour, Ithink, will continue and that
may be evident in the review ofM&A deals, as it has been in the
Biden administration.
The Trump administration wasalso looking at vertical deals,
(19:33):
notably.
The Trump administration wasalso looking at vertical deals,
notably, and perhaps infamously,the Time Warner transaction
with AT&T that they challenged.
So the Trump administration, Ithink, will continue to be
aggressive.
Its targets may well bedifferent from what Biden was
looking at.
I think the focus on big techwill remain, and that's already
(19:55):
been clear.
I think there'll be lessemphasis on fossil fuel deals,
probably equal emphasis onhealthcare and pharma, because
that's an issue for everyAmerican.
And there may be some other youknow pet kind of focuses and
projects that Mr Trump andperhaps others around him are
(20:18):
very interested in that we don'tyet know about.
Expect a light ride onantitrust, that there is still,
I think, an aggressiveadministration in place ready to
challenge the mostantitrust-concerning deals Right
(20:40):
.
Speaker 1 (20:42):
I want to take a look then too, also at another area
of the economy which iscertainly top of mind for people
and very sensitive to interestrates and, fiona, you mentioned
interest rates being a factorkind of behind the scenes and
that's real estate, especiallycommercial real estate.
You know, Erwin, we've just seen, already in December, that the
(21:03):
Federal Reserve did two thingsit lowered interest rates, which
people expected in the Fedfunds rate coming down, which is
just short-term rates, and italso stated that the expectation
for rate cuts going forwardwould be fewer cuts, maybe
smaller cuts and certainly lessfrequent, which had the impact,
of course, of raising long-termrates when the markets reacted
(21:24):
to the expectations then thatperhaps US interest rates will
not in fact go down as low or asquickly as people had thought.
What's your snapshot view atthe beginning of 2025 of the
real estate market?
Speaker 2 (21:40):
So a lot's changed, obviously, since we last spoke,
but I think the enduringtakeaway from 2024 is that we've
finally found price discovery,which was really slowing up a
lot of the ability to resolveexisting debt problems over
(22:02):
levered situations, and themarket was not willing to really
allow things to resolve in apositive way or in any way,
frankly, until there was pricediscovery.
So with price discoveryhappening and by that I mean
we're actually seeing tradesthat people can point to,
workouts that people can pointto at valuations that investors
(22:24):
can be comfortable with- it'sgoing there for that.
Speaker 1 (22:28):
They can attract debt and finance.
Speaker 2 (22:30):
Exactly.
Speaker 1 (22:30):
Without that confidence in the value, there's
really a lot harder to attractthe debt capital that's needed
in order to lever these up andmake them you know pencil out.
Speaker 2 (22:40):
And it does two things.
One is it allows resolution ofexisting problems.
We're all hearing about thephrase the wall of maturities
and the wall of maturities, andwe can extend and we can pretend
and we can do all those rhymingwords that you hear the
investors use all the time, butyou'll have, on the one hand,
resolution of existing problemsRight, we're in the middle of
working on one of those rightnow that will resolve into 2025,
(23:03):
in the beginning of 2025.
Complicated capital stack, bigdevelopment project in Manhattan
, the west side of Manhattan but, by the same token, as you get,
price discovery and all youneed is a stabilization of rates
.
Right, you don't necessarilyneed low rates, but you need a
predictability and stabilizationof rates.
We're now seeing new money, newfinancings, new acquisitions
(23:26):
coming out, because people canprice debt.
They can price assets based onwhat their presumed or assumed
price of debt will be, sothere's plenty of new money
coming out.
Obviously, we can talk aboutthe details of where that money
is going.
Some of it's going to be asurprise and we wouldn't have
bet on that in 2020 when we lastspoke, for instance, retail.
(23:48):
Others of it we may have beenable to guess, like the data
center craze, but it stillstands to be geographically
specific, asset-specific,industry-specific.
Speaker 1 (24:01):
So you mentioned when we talked five years ago that
there are some things we couldhave predicted, like data center
and digital explosion, butmaybe not.
The course of others, likeretail, and obviously the
trajectory of the economy as awhole globally, not just in the
United States, reflects in largepart, I think, different
reactions to the pandemic fromgovernments and different
(24:24):
capacities to be resilient byeconomies around the world.
So some of that has led to, Ithink, greater concentration
perhaps of wealth and that's,you know, fiona, certainly an
antitrust issue.
So it has also just changed thepatterns of how we behave and
where we do it and, to theextent, locations have changed
for where activity occurs.
(24:45):
That's a real estate question,it's a land use question, it's a
transportation question, it'san energy question.
There's a lot of questions, butI think, erwin, it fundamentally
also comes down to, you know,are people going to go back to
downtowns and into officebuildings?
Are they going to want to livein, you know, suburbs?
We've seen the greatest growthin the United States in
residential investment hasactually been in suburban and
exurban areas, not in innercities, which are still being
(25:07):
built out, but maybe based ondeals that were approved a few
years ago that maybe are in amarket that was very different,
based on deals that wereapproved a few years ago that
maybe are in a market that wasvery different.
So for each of you, I'm kind ofcurious what do you think if
you look back five years and youlook at the responses to
resilience and also, still, Ithink, some of the kinks that
(25:27):
are in the system as we try towork through some of the
uncertainty that we've had, whatreally surprises you the most
about how we got from there tohere and that might influence
where we're going to be fiveyears from now.
Speaker 2 (25:42):
I'll take that one.
I'm certainly most surprised bythe resilience of retail In
2020,.
Everybody was talking about theretail apocalypse.
The retail apocalypse JCPenney,jcrew went through bankruptcy.
Is the mall, the modern mall,dead?
Can we convert big boxes andmalls to distribution centers?
(26:04):
And what does the future holdfor retail?
And you fast forward to todayretail again.
It's not necessarily the mallsas you knew them in 2020, but
retail as a sector is reallystrong.
Not quite as strong as it'sever been, but the foot traffic
going down Fifth Avenue is asmuch as it's ever been.
(26:25):
You have smaller footprints andthe stores are not as much
about selling as actual productas much as they are as
destinations.
You have grocery anchored,suburban exterior corridor malls
where people are.
The amount of foot trafficthere is just growing.
(26:45):
You have gyms and you know, Ithink my wife went to, to what
is it called Orange Theory,those sorts of experience-based
locational I'm making up words,you can cut this out and Cressy
will redo it butexperience-based locations and
(27:07):
people are actually utilizingthose retail spaces and they
tend to, in addition to beinglarge anchor grocery store,
anchor type of places, you'regetting the smaller mom and pop
coffee shops, not just theStarbucks, and so there's been a
renaissance there.
What's been really surprisingto me on the other end, is that
in 2020, everybody was thrilledabout building, you know, built
(27:30):
to suit distribution centers forAmazon.
You know, within the last year,18 months, we've seen Amazon
subletting those space,terminating a lot of those, and
it seems like there's been toomuch capacity for
logistics-based, industrial-typeproduct, mostly Amazon and
other large web-basedretailer-based and that's
(27:51):
already come and already shrunkin that four-year period, which
I would not have guessed.
So it's really hard, alan, toanswer your question, to really
guess the trends and see wherethey're going to go.
Speaker 1 (28:03):
But I think that's actually part of it right,
because if trends are compressed, then the uncertainty about
what to predict long-term grows,that that can skew investment
decisions or chill them.
I'm not sure.
Um, and of course, fiona, fromthe from the uh, from your, from
your perspective, I'm sure thatthere's also been sort of this
careening back and forth in someways, legally or on the policy
(28:24):
side, that have a similar effectof making it harder to predict
where we'll be, not not one ortwo years from now, maybe that
that maybe you can can figureout, but you know five years
from now.
Maybe that that maybe you cancan figure out, but you know
five years from now.
Or more especially, given howthings are different in
different countries, not justhere.
Speaker 3 (28:38):
I think that's right.
Was that a question?
It's a question.
Yes, that's the question.
So is the question how willthings be in five years versus
two years?
Speaker 1 (28:48):
No, the question is let me rephrase it so for you,
fiona, if you look into thefuture, given the uncertainties,
what are you seeing and whatsurprises you the most in the
last five years that mightinfluence that prediction or
change it from what you mighthave expected.
Speaker 3 (29:08):
Great question, alan, the same.
And that is despite, I think,some pretty strong rhetoric from
the antitrust enforcement teamin the Biden administration.
When you look at the actualhard statistics on, for example,
number of deals that have beenchallenged, number of deals that
have been subject to a secondrequest, number of deals that
(29:29):
have been successfullychallenged and enjoined in court
, the record of the Bidenadministration is not challenged
and enjoined in court.
The record of the Bidenadministration is not very
different from prioradministrations In some areas,
in fact, some would arguethey've been less successful in
court.
And so that leads back to afundamental conclusion, I think,
which is antitrust enforcementis only as strong as the
(29:52):
agencies have resources to bringcases, and those resources are
limited.
We have seen a higher degree ofactivity by the states, and I
think that has been maybe one ofthe surprising elements that
that activity is now oftenindependent of what the federal
(30:12):
agencies are doing.
They are bringing their owncases, they are not just, you
know, me-tos to a federalcomplaint, and I think I expect
that trend to continue.
Once states understand thatthey can successfully bring
cases, or at least file casesand get settlement, that is a
powerful limb to their bow orstring to their bow.
Speaker 1 (30:35):
I should say Powerful arrow in their quiver.
Speaker 3 (30:40):
Yes, I mean.
What I will say on theinternational front is there's
certainly been in thisadministration a high degree of
coordination between, say, theFTC and the DOJ and the EC and
the UK, say the FTC and the DOJand the EC and the UK, and that
coordination has been usedstrategically in some cases to
(31:00):
enable the Europeans and I'llinclude within that the folks
from the CMA in the UK, theCompetition and Markets
Authority for them to really bethe front runners on the
investigation and challenge,because they have a superior
enforcement mechanism in thesense that they don't have to go
(31:20):
to court and block a deal.
They can be judged, jury andexecutioner and decide that the
deal should be prohibited.
That decision is subject toappeal, but they don't have to
run into a court and convince acourt in the first place, which
is what the folks over in the USneed to do.
Speaker 1 (31:39):
Right Interesting.
I want to look to a little bitat not just debt and finance and
regulatory regimes, but also atequity and, in particular,
private equity.
You know, erwin, in a lot ofsectors other than real estate,
where I've worked, it's adifficult time to be raising
(32:02):
capital, especially if you're anewer fund, and it's also a
difficult time to deploy it, fora lot of the reasons that you
know we sort of already talkedabout In the real estate field
in particular.
How do you expect that to shakeout in 2025, as far as both
raising and deploying capital?
And again, whether it's equityor debt, you can look at both if
(32:23):
you like, but I'm just kind ofcurious where you think we are
and if that'll loosen up a bit,given fiscal and monetary policy
.
Speaker 2 (32:32):
What's interesting to me is, over the last, however,
many years, most of our clientshave diversified the buckets of
capital that they have access todeploy.
So, as an example, when PIMCOstarted out their first
alternatives real estate fund,it was an opportunistic fund
looking at 14% to 16% returns.
Over time, they've brought in adebt platform.
(32:56):
They've brought in what theywould call core, a core platform
.
So looking for smaller or coreplus right, and those are
usually return-based vehiclesand it gives them the
opportunity to kind of look atthe entire real estate landscape
to invest in.
Again, debt, opportunisticequity and the like.
(33:19):
What we're seeing is theopportunistic equity platforms
that we do work for, whetherit's PIMCO or Prospect Ridge or
others, increasingly need tolook at what I would say
creative opportunities, right,so coming in to fix a broken
capital stack to get theirequity-like returns.
(33:42):
And so it forces a lot of theyounger analysts and asset
managers to really learn adifferent skill set.
They need to learn the debtskill set, because becoming
opportunistic in a debtinvestment to make it look like
an equity investment or a loanto own, or buying a loan with a
deed in lieu or an assignment inlieu in place, or renegotiating
(34:05):
a ground lease are all keyparts to how you can get to
opportunistic returns.
So I would say you know you canget to opportunistic returns.
So I would say you know, innormal good times you can be
competitive and look at amarketed deal and underwrite and
make your assumptions and beslightly better than the next
group.
But now you're really forced tobe more creative and you're
(34:27):
forced to look at more messy andwhat we call hairy
opportunities, which is where wedo well because that's more fun
.
And so I think the deploymentof even though there's different
buckets and people can look atboring CMBS or other things it
kind of forces our clients andus to be more creative in how we
think about and how westructure transactions to get to
(34:49):
the required returns.
Speaker 1 (34:51):
Yeah, Thank you All.
Right Now, completely shiftinggears for both of you.
I want to lift our heads for asecond out of our daily grind,
working on deals and matters andadvising clients and so forth
and ask you about what's sittingon your bookshelf or your
nightstand that you've eitherread recently or want to read
(35:13):
soon that you might recommend topeople.
Fiona, you want to kick us off.
What books should we look at?
Speaker 3 (35:21):
Well, alan, I am really excited to be heading to
a writer's retreat on January3rd.
Actually, this is going to berecorded thereafter, isn't it?
Can I just start that again?
Yes, you can.
Actually, this is going to berecorded thereafter, isn't it?
Can I start that again?
Yes, you can.
Well, alan, I am really excitedto be headed to a writer's
retreat in the next few weeksand I actually have some reading
(35:42):
that I need to do before thatretreat.
I actually have to read fivebooks, but I will just highlight
three of them.
One is by the person who'srunning the retreat and it's
called Detour, and it's abouther own journey through mental
illness.
(36:02):
She calls it her bipolar roadtrip and the and the.
The book is entitled Detour byLizzie Simon oh, fascinating.
And the next one is St Ivo bymy friend who's a wonderful
author, joanna Hirschhorn, and Ithink it's described as part
mystery, part delving intofamily trauma and midlife crisis
(36:29):
and how marriages and familiescan be torn apart by secrets and
lies.
Speaker 1 (36:38):
Wow Is that fiction or nonfiction, that one.
Speaker 3 (36:40):
It's fiction, but I'm I'm curious to discuss with her
whether there is any element ofof truth underlying it.
And the third is everything isunder control, a memoir with
recipes by Phyllis Grant, and Ithink that is again looking at
marriage, kids moving from NewYork City to California God
(37:02):
forbid and how food can sustainus through all of our journeys
in life.
Speaker 1 (37:09):
Yeah, I would say moving from New York to
California is not the end of theworld.
It might be the western edge ofthe North American continent,
but it's not.
If the world's round, we cankeep going Right.
Well, you've got some reallygood reading lists there.
That's terrific, erwin.
We'll turn to you next and wealready have, so we'll edit that
.
All right.
(37:29):
Good, I might re-record now ifyou both got like two more
minutes, just to kind of the end.
Speaker 3 (37:36):
Yeah, and.
I want to re-record one of myresponses also, if that's okay.
Speaker 1 (37:40):
Oh yeah, let's do that first.
Which one?
Speaker 3 (37:42):
Where does this go?
We probably don't need.
Speaker 1 (37:44):
Erwin, for that do we .
Speaker 3 (37:45):
No, we don't, that's fine I guess we'll do that after
Good.
Speaker 1 (37:51):
Well, I must say, as this looks pretty good.
So I must say it's really beena pleasure talking to both of
you, alan, it's.
Speaker 2 (38:04):
Sorry.
Speaker 3 (38:04):
Why don't you say it?
Also, is there anything elseyou want to add, anything else
you wish we?
Speaker 1 (38:08):
could cover, because I realize it's sort of an
awkward thing to tack on realestate and antitrust or anything
.
I can't own the same thing, butI'm glad we're doing it
together.
It's nice, but anything elseyou want to.
Speaker 3 (38:16):
Let's start again, and Erwin, you go first, I'll
follow Okay.
Speaker 1 (38:21):
Okay, well, thank you both.
Speaker 2 (38:31):
This has really been a longtime listener and admirer
of the podcast and I'm glad tohave been a part of it now two
times.
Speaker 1 (38:39):
You know it's funny, when we first recorded, you know
, back in 2020, you kind of tookme by surprise and I was not,
as I was not practiced in thisat all and I think he said oh
yeah, yeah, long-time listener,first-time caller, and I was
completely what.
Speaker 2 (38:59):
As a child who grew up listening to WFAN and Mike
and the Mad Dog here on the EastCoast, I felt compelled to
throw my two cents in.
It was wonderful.
Speaker 1 (39:08):
And Fiona, I remember when we started because the
first time we recorded it we hadto redo it because there was an
echo and things and I rememberasking if you could go into your
coat closet, turn out thelights, not read anything and
just have a nice naturalconversation and it ended up
being a really great firstepisode.
Speaker 3 (39:24):
Well, you were right that recording from a coat
closet was a lot better, eventhough I didn't find the keys to
Narnia.
It was a lot better, eventhough I didn't find the keys to
Narnia.
But you are, Alan, I thinkeveryone will agree with me the
podcast MC extraordinaire, andI've always said you've got a
great voice for radio, but thatdoes not mean you don't have a
great face for TV.
Speaker 1 (39:44):
Oh, thank you.
Actually, I've always thoughtI've been told once that I have
a good face for radio.
So there's that.
Speaker 3 (39:48):
I think you have it all combined and we've really
enjoyed these podcasts.
We've all learned a lot alongthe way and we would love to
continue the connection.
Speaker 1 (39:58):
Thank you.
That's very gracious of you.
I appreciate it and I lookforward to seeing both of you in
person very soon.
Absolutely, thanks, al.
Good, okay, thanks again.
So, erwin, thank you you you'refree to go thank you, you know,
we can re-record your other oneand you'll you'll be in the
breakers right now I will be atthe breakers, for sure.
Yes, I'll also be in the in thenew york office briefly um for
(40:19):
some project finance stuff we'redoing on january 15th, right
around there okay, all right.
Speaker 2 (40:23):
Well, I will probably .
I think I will be skiing then,but I will see you in the
breakers.
Speaker 1 (40:27):
I'm sure I will be skiing a lot more in the next
few weeks.
Take care.
Speaker 3 (40:31):
Hope you both have a lovely holiday.
Speaker 1 (40:32):
Thanks, erwin, okay so.
Fiona which part did you wantto rerecord?
Speaker 3 (40:36):
Well, I obviously like had that brain freeze on
the big tech thing.
Can I start that one again?
Speaker 1 (40:42):
Absolutely.
Do you want me to tee it upwith a particular question that
I can rephrase?
Speaker 3 (40:46):
Yes, and maybe you can splice some of the prior
answer together, because I thinksome of it was fine, sure, and
then I thought on my secondanswer I kind of meandered a bit
.
Speaker 1 (40:57):
I would like to have another.
You meandered way less thanmost people do.
I wouldn't worry about that.
Speaker 3 (41:00):
And again we the surprising part or the I guess
we were talking.
The thing I wasn't crazy aboutwas the cross-border
collaboration.
Answer.
Speaker 1 (41:12):
Maybe we could have a better go at it.
So we can do that.
So, fiona, if you could alsomaybe comment a bit on some of
the ways that no, I'm sorry, letme think of a better way to put
that.
So, fiona, one of the otherdifferences that strikes me
between a Biden administrationand the Trump administration is
the degree of internationalcollaboration, because we may be
(41:34):
pulling into a period wherethere's more of an isolationist
tendency.
What's your take on that?
Speaker 3 (41:40):
That's a great observation, Alan.
I think that we should expectto see, from an antitrust
perspective, that there willstill be a high degree of
coordination between the USantitrust enforcers and their
counterparts overseas, and partof that is just for practical
reasons, which is there arebenefits to the US in being
tightly coordinated procedurallywith, say, Europe and the UK.
(42:06):
The CMA regime there and infact the EC and the CMA have
certain procedural advantagesthat can benefit a US
investigation.
They have the power to block adeal without having to go to
court.
So they are what we callcolloquially judge, jury and
(42:26):
executioner as administrativeagencies, whereas our agencies
they need to go to court toenjoin a deal, and so it may be
to the benefit of the US to havethe EC and or the UK do that
heavy lifting first while a UScase is pending.
Speaker 1 (42:45):
Interesting, very interesting.
Speaker 3 (42:47):
On the policy front, I think, when we think back to
Trump 1, albeit there may havebeen more of an isolationist
approach on trade the antitrustenforcers were very much in the
mix and in leadership positionsin organisations like the ICN,
(43:08):
which is the body that consistsof all of the international
antitrust enforcement regimesaround the world, and the US has
always been a strong influencerin that body, and that was
certainly true in the Trumpadministration.
Frankly, it's been less so inthe Biden administration.
(43:29):
I think the US agencies havebeen more internally focused and
concerned about internationalpolicy developments, and I hope
that the Trump administrationwill return to being a really
full part of the internationalpolicy developments, because
(43:50):
that's an arena where we'vetraditionally had strong
influence, and I'd want us tocontinue to do so.
I think it's in the interestsof the American business
community.
Speaker 1 (44:00):
And how do multinational corporations deal
with the risk that there couldbe inconsistent results, for
example, looking at a businesscombination or a merger between,
say, Europe and the UnitedStates.
Speaker 3 (44:11):
This is something we've been dealing with for a
very long time.
I mean I first came to theStates when the McDonnell
Douglas merger was being blockedin Europe and that was a huge
wake-up call, I think, for theUS antitrust community and
(44:31):
business community.
I don't think they'd ever seena divergent outcome.
In the end we avoided thatoutcome, but it took very high
level negotiations, includingPresident Clinton, to weigh in
on that.
So there's always been thatrisk.
As far as I've been practicing,I think the risk's actually
been reduced over the years aswe've come to more of a
(44:55):
harmonization on what we thinkthe antitrust theories of harm
are and we've had closercooperation between the major
agencies.
But I think one of the thingsthat has been harder in recent
deals to navigate is notnecessarily the big
jurisdictions taking a differentapproach, but some smaller
(45:16):
jurisdictions, and this is noteven necessarily on a merger
control antitrust review.
It could be on a foreign directinvestment review.
They are raising issues thataren't really antitrust related.
They could be more nationalsecurity related or could,
frankly, they could be purelypolitical and the impact in some
(45:38):
cases is to have a largemultinational cross-border deal
with many jurisdictions at playbeing held up by a very small
jurisdiction where there is verylittle commerce.
So these are the issues that wehave to worry about and make
sure that we have a good handleon up front, going into the
process, and so that we don'thave a small jurisdiction with a
(46:02):
political issue holding up ahuge deal.
I can't hear you.
Sorry, that's because I wasmuted.
Speaker 1 (46:21):
Sorry, so I was trying to thank you for that and
thank you, christy, for thetext.
So, yeah, so we'll take thatpart then that was nice and
clean and drop that in where itshould fit in the earlier
conversation.
I'd like to expand a little bitmore on the books, in
particular the first two,because the mental health tie-in
is really interesting, in partbecause Erwin also went on a
(46:44):
while about his books, which wasreally interesting to me, and I
want to make sure you haveequal time.
Well, I haven't read.
Speaker 3 (46:51):
I haven't read.
I've started to read the firstone, which is really interesting
, but I have not finished it yet.
Speaker 1 (47:00):
But you're going to a writer's workshop.
I mean that's pretty cool.
Speaker 3 (47:02):
Yeah Well, I'm trying to unblock my creative writing
from being depressed by, youknow, 30 years of legal writing.
Speaker 1 (47:13):
Yeah Well, so we aren't going to put that in the
podcast, but I know the feeling.
How's that?
Okay Well, this is wonderful.
This is really good, and I Ihope we can compare more notes
when I see you.
Speaker 3 (47:28):
And I'd be happy to talk about the detour.
Speaker 1 (47:33):
Well, let's talk a little more about detour for the
recording.
Can we do one more?
Yeah, can we do one more ondetour for the recording?
Sure Good, so tell me moreabout why you picked detour.
Speaker 3 (47:49):
So tell me more about why you picked Detour.
Well, I picked it because theauthor is convening a writer's
workshop or retreat that I'mattending, so obviously I'm
going to read one of the worksof the leader of our workshop.
Um, it's a really interestingautobiography, which is also
(48:14):
weaved in with family historyand the struggles of a person
with mental illness who is alsobrilliant.
She's intellectually brilliant,she's creatively brilliant, she
comes from a family ofbrilliant people stretching back
, you know, in history, but it'salso a family that has had its
(48:36):
share of mental illness.
And one of the things thatstruck me in reading the book
and I haven't finished it yet,but this is all of our stories
Lizzie is articulating how itlooks for her in particular, but
every family throughout historyhas had its share of mental
(48:57):
illness, and my family is noexception.
That is something that we'vedealt with in the generations,
including, you know, my owngeneration, and one of the
things I find wonderful aboutthis book is how it is allowing
those conversations to happen,you know, in broad daylight,
without shame and justrecognizing the prevalence of
(49:20):
mental illness in our society,and it's often associated with
high degree of creativity andbrilliance.
So this is not simply somethinglike a shameful, stigmatized
thing.
It's also mental illnessesamong us in our community.
It's with people we love, andthose people have enormous,
(49:40):
enormous gifts and talents tocontribute as well.
So it's a really wonderful,wonderful book from all those
perspectives.
Speaker 1 (49:48):
That's so important, absolutely.
I mean.
No family mine included, youknow is exempt.
I think this taking the shameor the social stigma out of
mental illness and having moreopen conversations where people
can share their experiences andtheir stories, to be seen as
they really are, where they needhelp to get that, but, more
(50:11):
importantly, to have empathy andunderstanding I just think
that's so critically important.
And this kind of you mentionedthings running in the family and
, of course, inherited traumacan sometimes run through as a
thread through a lot of this inways that are manifested just in
interpersonal relations,without putting a label on it.
Speaker 3 (50:29):
Absolutely Well.
The intergenerational trauma isactually something I'm working
on in my creative writing.
And again, I think all of ourhistories, we could look at all
of our family trees and see someintergenerational trauma there.
Again, these are conversationsthat I would love to encourage
(50:50):
to happen in you know, withoutshame, in broad daylight, and to
allow a greater degree ofunderstanding and empathy for,
you know, our friends, ourcolleagues, our family.
Speaker 1 (51:01):
Yeah, absolutely, amen.
Good, okay, so we'll put thatinto the book review part, right
.
Anything else that you want toredo or add.
Speaker 3 (51:13):
There was the big tech response.
If I could just redo part ofthat and hopefully Cressy, you
can be incredibly facile andsplice it in.
Speaker 1 (51:24):
Cressy is our producer and in charge, but
we'll have a guy named John whowill actually be doing the
cutting.
Okay, yes, so big tech.
Fiona, you mentioned the Googlecase, which I think was
actually in the United States,started under the Trump
administration as toward the endof his first term, and then, of
(51:47):
course, pursued and pursuedpretty aggressively in the Biden
administration.
And then, of course, pursuedand pursued pretty aggressively
in the Biden administration.
But stepping back from justthat one case and looking more
broadly at big tech andantitrust approaches to it,
what's happened and what's goingto happen?
Speaker 3 (52:06):
Well, great question, alan.
Well, since we last spoke, yes,you're right, the Google case
was filed under the Trumpadministration, as was the
Facebook case.
Since then we've also hadinteresting complaints filed
against Amazon and also Apple.
So the big four all have theirshare of monopolization and in
(52:27):
some cases, and in some cases,section 7 claims that they are
still currently fighting.
I expect we will continue tosee not only those cases proceed
the Google case, at least thesearch cases at the remedies
phase, and that is a reallyinteresting time for a change in
(52:49):
administration.
If we think back to theMicrosoft case and the IBM case,
who are the big Section 2 casesthat one puts in the same
category as the Google case,they suffered from a change of
administration in the sense thatin those cases the Republican
(53:10):
regime that came into powerreally stepped back from a very
dramatic remedy and allowedsomething or pushed something
that was much, much less onerous.
It'll be interesting to seewhat Trump does here, because
certainly the Bidenadministration is calling for
some pretty aggressive,draconian remedies in Google.
Speaker 1 (53:39):
I could ask you the question if you want.
So you know, I want to kind ofcompare the current cases
against.
You mentioned the big four andthe case against Microsoft
earlier, you know, many, manyyears ago, the case against the
(53:59):
broke-up AT&T.
How effective are these bigcases to break up what is
perceived to be a monopolisticactor that is also playing a
very large role in cutting-edgetechnology and communications in
society?
Speaker 3 (54:15):
It's a great question , alan.
I think many would say that theremedies in these cases, at
best the jury is out howeffective they've been.
I mean, in the case of AT&T, ofcourse it was broken up and
there was a long regulatoryregime that was in place that
(54:35):
was overseen by a judge.
I don't think anyone wouldreally advocate for that kind of
remedy today, certainly not along series of regulatory
oversight by a judge.
And of course the baby bellsprogressively were allowed to
combine and merge and become,you know, very powerful in their
own right.
Speaker 1 (54:57):
Well, I think one of the other issues there too is
you know, by the time you getthrough that process, you're
really looking at archaictechnology, right.
So, as the baby bellsreconsolidated, you know we were
moving also then from landlinesinto cellular telephony and
eventually into, you know,internet access, and it just you
know the technology was movingat a faster pace than I think
(55:18):
that regulatory regime couldhandle.
Speaker 3 (55:20):
I think that's absolutely right.
But one thing that I've seen inall three of these cases IBM,
microsoft and Google is that thecase itself, the litigation
itself, can be a big distraction.
And you know, that's where Ithink there is a risk that
innovation by the defendant gets, you know, left behind to some
(55:44):
degree because the focus is onwinning the litigation.
In the meantime, technology isprogressing and the kinds of
search technology, for example,at issue in Google really aren't
where the action is these days.
I think AI and the morecomplicated technology and
(56:07):
algorithms that are propellingthat technology or series of
technologies, are much more whatare going to shape tech 2.0.
And so, you know, whateverremedies there are in this
Google case may just besomething that's a product of
history but not particularlyimportant for competition going
(56:30):
forward.
We'll see.
The judge, interestingly, Ithink, has already indicated
that developments in AI willimpact his remedy.
So he's obviously thinkingalong the lines of you know how
does AI fit into the remedialapproach here, and perhaps even
(56:51):
you know the severity of theremedy.
Speaker 1 (56:55):
Yeah, and of course, as a user, one sometimes thinks
that some of the effects of thisconcentration actually improve
the experience.
So if you have AI, that's moreeffective because it's got a
larger language model that it'slearning off of, or you know
more sophisticated resources forthe algorithms that they're
designing and you have kind ofalmost like instant learning, if
(57:16):
you will, that it can give youmuch more targeted, accurate,
precise results that you'd liketo see you know.
From that standpoint, that'sactually a good thing.
Speaker 3 (57:26):
Absolutely Well.
Network effects provide thatbenefit and I don't know that
there's ever really been a bigset of complaints from consumers
about any of these techplatforms.
We've all benefited enormouslyfrom them.
I think the concerns have beenmore from the competitor front
than the consumer front, whichdoes say something about the
(57:46):
nature of these cases, and theconsumer front, which does say
something about the nature ofthese cases.
Speaker 1 (57:52):
Yeah, it does, it does Good, all right.
Well, that was fun, I think.
Speaker 3 (58:00):
That was a lot of fun .
I hope my answers were okay.
They certainly weren'trehearsed or even written down.
Speaker 1 (58:05):
No, I appreciate that .
That was wonderful.
We got out of the closet.
I'm going to figure out howwe're going to edit this
together.
There is a remote chance I willtry to untangle these and do it
as two separate episodes, ifthere's time to do that.
Speaker 3 (58:18):
But I don't know, We'll see.
Otherwise we'll keep ittogether.
Speaker 1 (58:22):
Sounds good.
Speaker 3 (58:23):
All right.
Speaker 1 (58:24):
Well, in the meantime , have a happy Christmas and New
Year's and I look forward toseeing you next month.
Speaker 3 (58:30):
And please do let me know when you're coming to New
York, because I know we wantedto.
Okay, we're recording .
I'm going to say to Fiona hangon a second, no problem, join us
at 3.15.
Okay, chrissy, I just toldFiona, 3.15 is fine, okay, okay.
(00:27):
So, irwin, this is stuff.
We'll go at the end, so I'll.
I'll ask you now and we'll talkabout the books and that kind
of stuff.
So, irwin, what books are onyour bookshelf for?
Speaker 2 (00:36):
a nightstand.
In the middle of reading twobooks right now, alan um
complete opposite ends of thespectrum.
One is John Meacham's book, theSoul of Our Nation, or the Soul
of the Nation, which is sort oftimely and interesting in light
of our current politicalenvironment, and the other one,
strangely, is this brand newtranslation of Maimonides' Guide
(00:59):
to the Perplexed.
Oh, who translated it this timeLen Goodman, and it's the first
translation from the Arabic tothe English and not indirectly
through the Hebrew.
Speaker 1 (01:10):
Oh good.
Which is which is an amazing,just an amazing way to really
access that I don't know ifyou're far enough into it to
know, but how different is itfrom the other?
You know other translationsthat people who speak English
might be more familiar with ifthey've read Maimonides.
Speaker 2 (01:29):
So there was an attempt here to translate it in
a way that was less technicalfrom the Arabic or through the
Hebrew, and so it's meant to bea bit more accessible.
I would say I haven't read alot of the older English
translations, but it seems likeit's a much easier read, it's a
(01:50):
much more accessible read, but Isuspect you're probably losing
a little bit of the nuance inthe way that it's delivered that
way, because Maimonidesintended this book to be read
and studied over and over again,and so there was a lot of
nuance, and in the introductionto the book he talks about its
accessibility and how it couldor would be accessible or made
(02:13):
accessible to its readers, and Isuspect in trying to make it
very accessible through theEnglish, you're probably losing
some of the nuance and some ofthe messaging that he was trying
to achieve through the originaltext.
Speaker 1 (02:27):
Yeah, and it's actually interesting.
He's so, on one, on one levelhe's he's complicated right,
because he's looking at reallydeep things, but on the other
hand, he's actually, compared toa lot of his contemporaries,
really clear and direct.
I mean, he was a physician, hewas, you know, he wasn't just
some abstract philosopher.
I mean, he really tried to tiethings down to well, how should
you do this and what ispractical.
(02:47):
In order to be less perplexedafter you've read it, one hopes
where you go and have childrendelivered.
Speaker 2 (02:52):
But when you think about, you know, a thousand
years ago this guy, who was arefugee, was a doctor, was a
philosopher, was familiar withnot just Greek or Aristotelian
(03:14):
philosophy but also the Islamicphilosophers of his day,
somebody who had written verylegal texts in Jewish law,
someone who was the head of acommunity, someone whose
full-time job was being a courtphysician.
And you think about writing atreatise like this just trying
(03:40):
to get his arms around or toteach other people how to get
your arms around, how youreconcile what was then
modernity, what is now modernity, with faith, with not just
faith, but just just how youkind of understand one's place
in the world, irrespective ofyour faith in a lot of ways.
And so I kind of look at, Ilook at him and, by the way, the
(04:04):
irony of it is, if you actuallylook at a lot of his
philosophical writing, some ofthem you would you would think
were even barbaric at the time.
Just you know, for instance,his treatment of women was
something that I don't thinkanybody today would kind of feel
comfortable getting around.
But he was a man who lived in avery particular time and a very
particular locale.
Right At the time he waswriting this, he was living in
(04:31):
Cairo.
Yeah, had he moved there fromwhat's now Spain, from Southern
Spain?
Yes, so just an incredible.
I mean I love it, it's just anincredible work I think
resonates a thousand years laterstill, and so that one's
definitely that one's not.
You know, that's not easyreading.
I think I try and look at thatfrom a from a studying
perspective.
They're thinking about Meacham'sbook on the soul of America.
(04:52):
You know, when he had writtenit he was coming off of Trump 45
.
And a lot of it.
It seems a lot more unclear tome where his views would land
today.
What is the better angels inour current political
environment?
Not to bring it back toMaimonides, but what is the
(05:13):
idolatry of our currentenvironment?
And a lot of those thingsaren't as clear to him, I think,
as they would have been two orthree years ago.
Clear to him, I think, as theywould have been two or three
years ago the place ofxenophobia, the place of
(05:34):
wokeness, the place of, you know, on one side the right, on one
side the left.
How does this compare toMcCarthy era?
How does this compare to theinterwar period and
reconstruction?
And when we talk about thepolitical challenges we have as
a divided country.
I I just think when he wrote itit it kind of has a different
feel to it than as I'm readingit today, a couple of years
(05:57):
later, which is, I think that'sprobably right.
Speaker 1 (05:59):
I mean people say, oh gee, we were so polarized, now
it's the worst it's ever been.
It is bad, but it is certainlydifferent than the 19th century.
We had a civil war and in facteven if you go back before that,
when the Constitution waswritten at the end of the 1700s,
we were also.
You can kind of see within itthe fissures, fossilized between
(06:21):
urban and rural and betweennative and immigrant and between
enslaved and exploiting, andyou know, whatever language one
wants to wrap around it, you cansee the gaps in society that
are kind of crystallized in thatConstitution and the fact that
we somehow have managed to usethat same document as the basis
for what is fundamentally a verydifferent sort of world.
(06:44):
Now, two centuries later, Ithink the jury's out on where
we're going next.
I'm interested in your take,but reading Beecham and others
like that again probably puts itin a different lens.
Speaker 2 (06:56):
Yeah, I don't know where we're going To tie it to
Maimonides, perhaps.
I like the idea of what I'llcall interfaith dialogue and the
search for common ground, andinterfaith in that setting
clearly doesn't mean religiousinterfaith, but it means
left-right political interfaithdialogue.
(07:18):
You know, I don't know.
I don't know that thispolitical environment is any
better or worse than it has been.
Certainly, things like socialmedia and Twitter and X and Elon
Musk can exacerbate oraccelerate some of these
processes.
You know, you read historicallyabout the amount of time it
(07:39):
took for information todisseminate.
Just a really, really differentthe role of media in
disseminating that information.
I think you start.
I think, when Meacham talksabout McCarthyism, he's talking
about the role that the mediaplays in disseminating
information.
At the time and people werestarting to think and starting
(08:00):
to see that actually the mediacan play a really important
positive or negative, dependingon your view role in how that
information gets disseminatedand how to couch that language
and how to couch thatinformation.
At some point you can unstripeverything through Twitter and
(08:20):
not have any ability to kind offocus the dialogue or even
fact-check the dialogue, or evenfact check the dialogue,
whatever fact check means in2024 or 2025.
Speaker 1 (08:30):
Well, there are still facts, there are.
We lose sight of that sometimes, but it's interesting because
if you look at like I want totie that together for a second,
because you have this medievalreference that you mentioned
with Maimonides and a fewcenturies, four centuries after
him, right, we get cheap paper,cheap printing and the print and
(08:50):
movable type for the printingpress and suddenly there's this
media explosion and how-to booksand religious books and
everything are just printed anddisseminated and we have other
media revolutions over time.
I mean it's just in the lastcentury we've had radio and
before that, telegraph and we'vehad television and the idea of
those later media sources isthat they were intermediated,
(09:13):
right, this whole thing.
Like you know, the medium isthe message We've got.
You know who is the editor, whois it that's doing it, and
relatively few options.
So it's mass media andeverybody's following it In some
ways, if you will.
The disintegration, the use ofsocial media platforms and other
ways of communicating to massaudiences that are then
(09:33):
fragmented and siloed and oftenin echo chambers, without that
intermedium editor, is much morelike that original explosion
that we had a thousand years ago.
It's kind of an interestingtake on it and I'm not saying
it's a good one, because I dothink there's real value to the
curated, edited, fact-checked.
It can have a position, it canhave a point of view, for sure,
(09:57):
but I do think there's a realrole for that.
Speaker 2 (10:01):
Yeah, I don't disagree.
I guess the challenge would beis how you bring that back into,
how you put guardrails or youbring that back into some
semblance of discernibility,just given the wide, the ability
that it has to kind of widelydistribute and then throw in
(10:23):
algorithms and all that sort ofthing where you can just
accelerate voices that shouldnot have otherwise be
accelerated.
Speaker 1 (10:29):
As you're thinking that you know, the voice that
should be accelerated is the onethat like fill in the blank, I
mean, obviously, if I have amedical problem, I might go to a
doctor.
If I have a problem with youknow, if I have a legal
transaction that I want to, youknow undertake and I need a
commercial real estate lawyer, Imight come to you.
Right, I might go to somebodywho actually knows their stuff.
(10:50):
I'm unlikely to want to just godown to the wrong person.
If I need a you know a carrepair, I go to the mechanic.
I don't go to, you know, thedoctor.
Speaker 2 (10:59):
You know, to stay with the law analogy, you know
sometimes we tell our clientsthat if they're going through a
workout it's much better to goto a different law firm that has
a different point of view,because there won't necessarily
be a defensiveness to thereaction and to the feedback
that you get and you're able toget a thoughtful and intelligent
(11:21):
view on your documents.
Now, that's not always the case.
It sometimes is the case.
There's sometimes a competitivelaw firm that may have an
incentive to make you look bad.
It may not, but what I wouldn'trecommend them doing is going
to a solo practitioner who doesresidential closings in the
(11:42):
suburbs of Boise, Idaho, and saycan you look at the commercial
real estate documents thatMilbank drafted up and give me a
critical eye?
But if we take this analogy ofTwitter and X to its logical
extreme, if that resi lawyer inBoise, Idaho is able to have the
(12:04):
most fanciful language and avery, very quick wit, it may be
that that voice gets, whateverthe right term is accelerated in
a way that is not helpful foranybody.
Amplified.
Speaker 3 (12:18):
Amplified.
Speaker 2 (12:18):
That's the word.
That's the word that you'regoing to use In a way that it
shouldn't be.
Now, if you went to any of ourcompetitive law firms, or even
law firms in the top 200 thatdeal in this commercial realm, I
think that's probably fair.
And so what you don't have isthe ability to really narrow the
focus of the criticism or theconstructive feedback or the
points of view to those againwithin the guardrails or within
(12:42):
the framework of what is sort ofuseful and helpful for the
particular issue or topic.
Right, Wonderful.
Speaker 1 (12:51):
All right, fiona, I see you've joined Fiona.
Fiona, if you can hear me,sorry, just coughing and getting
off mute.
Oh, that's okay.
That's okay.
So Erwin and I were justrecording the last bit of what
(13:12):
we'll cover, which is the bookrecommendations, and we got off
to a really interestingconversation, I think, on that.
Speaker 3 (13:21):
No, that reminds me I need to get my books in front
of me.
Thank you.
Speaker 1 (13:26):
No problem, have them ready for the end, because what
we're going to do is we'llrecord the rest of the stuff now
, and then I'll let erwin go,and then you and I can do our
book thing at the end okay,right does that work?
yeah, good, um, before I forget,I want to record a concluding
bit where I'm going to thank youboth for taking the time to get
together and and so we have asign off, just in case I forget
(13:47):
to do that before we let you go,irwin.
So here we go with that part.
So, fiona and Irwin, thank youboth very much.
It's been a real pleasuretalking to you today.
Speaker 3 (13:59):
Likewise Alan Love doing this with you.
You're a consummate podcasthost.
Speaker 2 (14:04):
Thank you very much and Alan, I feel the same way.
It's been a fun ride since wefirst started this and it's been
great and interesting to listento you over these years.
Speaker 1 (14:16):
Thank you.
Well, 32,000 downloads and 62,64 episodes since.
Yeah, it's been quite a funfive years so far.
So thank you both.
Thank you, thanks, good.
Okay, so that'll be ourconclusion.
So let's go back to thebeginning and I'll ask you each
(14:38):
kind of what you're going to seefor this year.
I want to stress this is notgoing to be released until the
beginning of January, after Ihave sailed off into my
consulting partner gig, whateverthat will end up being here,
but I know it won't involve alot of day notes.
Speaker 3 (14:57):
Tell us about that.
Speaker 1 (14:58):
Yeah, so we'll talk more about that after.
But, um, I wanted to start out,uh, just uh, I'll jump real
kind of right into it and askyou what you guys each see in
your you know respective fieldsfor 2025, um, and then, if
there's I may or may not talkabout, you know what's what do
you?
What's the biggest surpriseyou've seen?
That's changed since werecorded first five years ago,
(15:22):
um, four and a half years agonow, but, uh, and kind of what
surprised you about that?
And then, and then, fiona, I'llask you about the book center
when you'll be free.
All right, okay, very good,fiona, is that?
Is that good?
Speaker 3 (15:34):
yes, I mean I was going to in in the response to
the first question.
Talk a little bit about when welast spoke yeah, we talked
about big tech in particularspoke.
Yeah, we talked about big techin particular, and antitrust.
Yeah, so I was just going togive a little summary of what I
thought the highlights of theBiden administration have been
just in a couple of sentencesand then lead into what to
(15:56):
expect now.
Speaker 1 (15:57):
Good.
I would encourage both of youby short sentences that I can
then interrupt with follow-onquestions.
Make it very conversational.
Okay, good, fiona.
Erwin, thank you very much forgetting together today.
(16:17):
Great to be here, alan,likewise.
So a lot has changed in the fourand a half or five years since
I recorded the initial episodesof the Law Policy and Markets
podcast with each of you.
At the time, you know, we werelooking at the beginning of a
pandemic, was not sure whatwould happen, erwin, with
commercial real estate.
Fiona, when you and I talked,there had been hearings on
(16:38):
Capitol Hill, in the House, inparticular, on big tech,
particular on big tech and thisis before the con period began
that the FTC and antitrust, ofcourse has really risen to the
forefront in the US and, ofcourse, competition policy in
Europe as well has really takena much sharper view of not just
big tech but a lot of economicconcentration on the one hand,
(17:01):
but in other ways, perhaps isacquiesced to some of the power
that some of those companieshave.
So I thought maybe, fiona, wecould start with you and looking
here now that we're in 2025, atwhat you think the next year,
next couple years, might bringwith respect to antitrust policy
with the new administration inWashington.
With you know politicaluncertainty in Europe.
(17:22):
Interested in your take newadministration in Washington.
With political uncertainty inEurope.
Speaker 3 (17:28):
Interested in your take.
Thanks, alan.
Well, we've just aboutconcluded the most aggressive
antitrust enforcement regimethat certainly I've experienced
in the US since I've beenpracticing as the Biden
administration wraps up, andwith that we've seen a number of
cases against all of the bigtech players Apple, google, etc.
Sorry, I'm going to.
(17:50):
Can we just do that bit again?
Ok, you'll edit that out.
Speaker 1 (17:56):
I'll edit all this.
Don't worry about it, just letit roll.
Speaker 3 (17:58):
OK, I think what we can expect in a Trump
administration.
There are, I think myimpression is a very large
number of deals that have beenwaiting in the wings for a
friendlier administration, so Ithink we're going to see a lot
of deal activity.
Of course, interest rates needto cooperate as well.
(18:19):
Antitrust is not the onlybarometer here, but I've
certainly seen from firsthandhow clients have been reluctant
to bring more challenging dealsout of the boardroom in what
they perceive to be a veryhostile administration towards
M&A activity.
I think the Trumpadministration will be viewed as
less hostile, more favorable tobusiness.
Speaker 1 (18:43):
And is that true across the board, or is it
viewed as more favorable tobusinesses than it views as
supportive of the administrationin some way?
Speaker 3 (18:51):
Well, it's helpful to remember that Trump won was not
exactly laissez-faire onantitrust.
So, for example, the concernabout antitrust implications of
non-competes and wage fixing inconnection with workers and
labor that was something thatcame out of the Trump
(19:12):
administration was certainlyamplified in the Biden
administration.
But the concern about labour, Ithink, will continue and that
may be evident in the review ofM&A deals, as it has been in the
Biden administration.
The Trump administration wasalso looking at vertical deals,
(19:33):
notably.
The Trump administration wasalso looking at vertical deals,
notably, and perhaps infamously,the Time Warner transaction
with AT&T that they challenged.
So the Trump administration, Ithink, will continue to be
aggressive.
Its targets may well bedifferent from what Biden was
looking at.
I think the focus on big techwill remain, and that's already
(19:55):
been clear.
I think there'll be lessemphasis on fossil fuel deals,
probably equal emphasis onhealthcare and pharma, because
that's an issue for everyAmerican.
And there may be some other youknow pet kind of focuses and
projects that Mr Trump andperhaps others around him are
(20:18):
very interested in that we don'tyet know about.
Expect a light ride onantitrust, that there is still,
I think, an aggressiveadministration in place ready to
challenge the mostantitrust-concerning deals Right
(20:40):
.
Speaker 1 (20:42):
I want to take a look then too, also at another area
of the economy which iscertainly top of mind for people
and very sensitive to interestrates and, fiona, you mentioned
interest rates being a factorkind of behind the scenes and
that's real estate, especiallycommercial real estate.
You know, Erwin, we've just seen, already in December, that the
(21:03):
Federal Reserve did two thingsit lowered interest rates, which
people expected in the Fedfunds rate coming down, which is
just short-term rates, and italso stated that the expectation
for rate cuts going forwardwould be fewer cuts, maybe
smaller cuts and certainly lessfrequent, which had the impact,
of course, of raising long-termrates when the markets reacted
(21:24):
to the expectations then thatperhaps US interest rates will
not in fact go down as low or asquickly as people had thought.
What's your snapshot view atthe beginning of 2025 of the
real estate market?
Speaker 2 (21:40):
So a lot's changed, obviously, since we last spoke,
but I think the enduringtakeaway from 2024 is that we've
finally found price discovery,which was really slowing up a
lot of the ability to resolveexisting debt problems over
(22:02):
levered situations, and themarket was not willing to really
allow things to resolve in apositive way or in any way,
frankly, until there was pricediscovery.
So with price discoveryhappening and by that I mean
we're actually seeing tradesthat people can point to,
workouts that people can pointto at valuations that investors
(22:24):
can be comfortable with- it'sgoing there for that.
Speaker 1 (22:28):
They can attract debt and finance.
Speaker 2 (22:30):
Exactly.
Speaker 1 (22:30):
Without that confidence in the value, there's
really a lot harder to attractthe debt capital that's needed
in order to lever these up andmake them you know pencil out.
Speaker 2 (22:40):
And it does two things.
One is it allows resolution ofexisting problems.
We're all hearing about thephrase the wall of maturities
and the wall of maturities, andwe can extend and we can pretend
and we can do all those rhymingwords that you hear the
investors use all the time, butyou'll have, on the one hand,
resolution of existing problemsRight, we're in the middle of
working on one of those rightnow that will resolve into 2025,
(23:03):
in the beginning of 2025.
Complicated capital stack, bigdevelopment project in Manhattan
, the west side of Manhattan but, by the same token, as you get,
price discovery and all youneed is a stabilization of rates
.
Right, you don't necessarilyneed low rates, but you need a
predictability and stabilizationof rates.
We're now seeing new money, newfinancings, new acquisitions
(23:26):
coming out, because people canprice debt.
They can price assets based onwhat their presumed or assumed
price of debt will be, sothere's plenty of new money
coming out.
Obviously, we can talk aboutthe details of where that money
is going.
Some of it's going to be asurprise and we wouldn't have
bet on that in 2020 when we lastspoke, for instance, retail.
(23:48):
Others of it we may have beenable to guess, like the data
center craze, but it stillstands to be geographically
specific, asset-specific,industry-specific.
Speaker 1 (24:01):
So you mentioned when we talked five years ago that
there are some things we couldhave predicted, like data center
and digital explosion, butmaybe not.
The course of others, likeretail, and obviously the
trajectory of the economy as awhole globally, not just in the
United States, reflects in largepart, I think, different
reactions to the pandemic fromgovernments and different
(24:24):
capacities to be resilient byeconomies around the world.
So some of that has led to, Ithink, greater concentration
perhaps of wealth and that's,you know, fiona, certainly an
antitrust issue.
So it has also just changed thepatterns of how we behave and
where we do it and, to theextent, locations have changed
for where activity occurs.
(24:45):
That's a real estate question,it's a land use question, it's a
transportation question, it'san energy question.
There's a lot of questions, butI think, erwin, it fundamentally
also comes down to, you know,are people going to go back to
downtowns and into officebuildings?
Are they going to want to livein, you know, suburbs?
We've seen the greatest growthin the United States in
residential investment hasactually been in suburban and
exurban areas, not in innercities, which are still being
(25:07):
built out, but maybe based ondeals that were approved a few
years ago that maybe are in amarket that was very different,
based on deals that wereapproved a few years ago that
maybe are in a market that wasvery different.
So for each of you, I'm kind ofcurious what do you think if
you look back five years and youlook at the responses to
resilience and also, still, Ithink, some of the kinks that
(25:27):
are in the system as we try towork through some of the
uncertainty that we've had, whatreally surprises you the most
about how we got from there tohere and that might influence
where we're going to be fiveyears from now.
Speaker 2 (25:42):
I'll take that one.
I'm certainly most surprised bythe resilience of retail In
2020,.
Everybody was talking about theretail apocalypse.
The retail apocalypse JCPenney,jcrew went through bankruptcy.
Is the mall, the modern mall,dead?
Can we convert big boxes andmalls to distribution centers?
(26:04):
And what does the future holdfor retail?
And you fast forward to todayretail again.
It's not necessarily the mallsas you knew them in 2020, but
retail as a sector is reallystrong.
Not quite as strong as it'sever been, but the foot traffic
going down Fifth Avenue is asmuch as it's ever been.
(26:25):
You have smaller footprints andthe stores are not as much
about selling as actual productas much as they are as
destinations.
You have grocery anchored,suburban exterior corridor malls
where people are.
The amount of foot trafficthere is just growing.
(26:45):
You have gyms and you know, Ithink my wife went to, to what
is it called Orange Theory,those sorts of experience-based
locational I'm making up words,you can cut this out and Cressy
will redo it butexperience-based locations and
(27:07):
people are actually utilizingthose retail spaces and they
tend to, in addition to beinglarge anchor grocery store,
anchor type of places, you'regetting the smaller mom and pop
coffee shops, not just theStarbucks, and so there's been a
renaissance there.
What's been really surprisingto me on the other end, is that
in 2020, everybody was thrilledabout building, you know, built
(27:30):
to suit distribution centers forAmazon.
You know, within the last year,18 months, we've seen Amazon
subletting those space,terminating a lot of those, and
it seems like there's been toomuch capacity for
logistics-based, industrial-typeproduct, mostly Amazon and
other large web-basedretailer-based and that's
(27:51):
already come and already shrunkin that four-year period, which
I would not have guessed.
So it's really hard, alan, toanswer your question, to really
guess the trends and see wherethey're going to go.
Speaker 1 (28:03):
But I think that's actually part of it right,
because if trends are compressed, then the uncertainty about
what to predict long-term grows,that that can skew investment
decisions or chill them.
I'm not sure.
Um, and of course, fiona, fromthe from the uh, from your, from
your perspective, I'm sure thatthere's also been sort of this
careening back and forth in someways, legally or on the policy
(28:24):
side, that have a similar effectof making it harder to predict
where we'll be, not not one ortwo years from now, maybe that
that maybe you can can figureout, but you know five years
from now.
Maybe that that maybe you cancan figure out, but you know
five years from now.
Or more especially, given howthings are different in
different countries, not justhere.
Speaker 3 (28:38):
I think that's right.
Was that a question?
It's a question.
Yes, that's the question.
So is the question how willthings be in five years versus
two years?
Speaker 1 (28:48):
No, the question is let me rephrase it so for you,
fiona, if you look into thefuture, given the uncertainties,
what are you seeing and whatsurprises you the most in the
last five years that mightinfluence that prediction or
change it from what you mighthave expected.
Speaker 3 (29:08):
Great question, alan, the same.
And that is despite, I think,some pretty strong rhetoric from
the antitrust enforcement teamin the Biden administration.
When you look at the actualhard statistics on, for example,
number of deals that have beenchallenged, number of deals that
have been subject to a secondrequest, number of deals that
(29:29):
have been successfullychallenged and enjoined in court
, the record of the Bidenadministration is not challenged
and enjoined in court.
The record of the Bidenadministration is not very
different from prioradministrations In some areas,
in fact, some would arguethey've been less successful in
court.
And so that leads back to afundamental conclusion, I think,
which is antitrust enforcementis only as strong as the
(29:52):
agencies have resources to bringcases, and those resources are
limited.
We have seen a higher degree ofactivity by the states, and I
think that has been maybe one ofthe surprising elements that
that activity is now oftenindependent of what the federal
(30:12):
agencies are doing.
They are bringing their owncases, they are not just, you
know, me-tos to a federalcomplaint, and I think I expect
that trend to continue.
Once states understand thatthey can successfully bring
cases, or at least file casesand get settlement, that is a
powerful limb to their bow orstring to their bow.
Speaker 1 (30:35):
I should say Powerful arrow in their quiver.
Speaker 3 (30:40):
Yes, I mean.
What I will say on theinternational front is there's
certainly been in thisadministration a high degree of
coordination between, say, theFTC and the DOJ and the EC and
the UK, say the FTC and the DOJand the EC and the UK, and that
coordination has been usedstrategically in some cases to
(31:00):
enable the Europeans and I'llinclude within that the folks
from the CMA in the UK, theCompetition and Markets
Authority for them to really bethe front runners on the
investigation and challenge,because they have a superior
enforcement mechanism in thesense that they don't have to go
(31:20):
to court and block a deal.
They can be judged, jury andexecutioner and decide that the
deal should be prohibited.
That decision is subject toappeal, but they don't have to
run into a court and convince acourt in the first place, which
is what the folks over in the USneed to do.
Speaker 1 (31:39):
Right Interesting.
I want to look to a little bitat not just debt and finance and
regulatory regimes, but also atequity and, in particular,
private equity.
You know, erwin, in a lot ofsectors other than real estate,
where I've worked, it's adifficult time to be raising
(32:02):
capital, especially if you're anewer fund, and it's also a
difficult time to deploy it, fora lot of the reasons that you
know we sort of already talkedabout In the real estate field
in particular.
How do you expect that to shakeout in 2025, as far as both
raising and deploying capital?
And again, whether it's equityor debt, you can look at both if
(32:23):
you like, but I'm just kind ofcurious where you think we are
and if that'll loosen up a bit,given fiscal and monetary policy
.
Speaker 2 (32:32):
What's interesting to me is, over the last, however,
many years, most of our clientshave diversified the buckets of
capital that they have access todeploy.
So, as an example, when PIMCOstarted out their first
alternatives real estate fund,it was an opportunistic fund
looking at 14% to 16% returns.
Over time, they've brought in adebt platform.
(32:56):
They've brought in what theywould call core, a core platform
.
So looking for smaller or coreplus right, and those are
usually return-based vehiclesand it gives them the
opportunity to kind of look atthe entire real estate landscape
to invest in.
Again, debt, opportunisticequity and the like.
(33:19):
What we're seeing is theopportunistic equity platforms
that we do work for, whetherit's PIMCO or Prospect Ridge or
others, increasingly need tolook at what I would say
creative opportunities, right,so coming in to fix a broken
capital stack to get theirequity-like returns.
(33:42):
And so it forces a lot of theyounger analysts and asset
managers to really learn adifferent skill set.
They need to learn the debtskill set, because becoming
opportunistic in a debtinvestment to make it look like
an equity investment or a loanto own, or buying a loan with a
deed in lieu or an assignment inlieu in place, or renegotiating
(34:05):
a ground lease are all keyparts to how you can get to
opportunistic returns.
So I would say you know you canget to opportunistic returns.
So I would say you know, innormal good times you can be
competitive and look at amarketed deal and underwrite and
make your assumptions and beslightly better than the next
group.
But now you're really forced tobe more creative and you're
(34:27):
forced to look at more messy andwhat we call hairy
opportunities, which is where wedo well because that's more fun
.
And so I think the deploymentof even though there's different
buckets and people can look atboring CMBS or other things it
kind of forces our clients andus to be more creative in how we
think about and how westructure transactions to get to
(34:49):
the required returns.
Speaker 1 (34:51):
Yeah, Thank you All.
Right Now, completely shiftinggears for both of you.
I want to lift our heads for asecond out of our daily grind,
working on deals and matters andadvising clients and so forth
and ask you about what's sittingon your bookshelf or your
nightstand that you've eitherread recently or want to read
(35:13):
soon that you might recommend topeople.
Fiona, you want to kick us off.
What books should we look at?
Speaker 3 (35:21):
Well, alan, I am really excited to be heading to
a writer's retreat on January3rd.
Actually, this is going to berecorded thereafter, isn't it?
Can I just start that again?
Yes, you can.
Actually, this is going to berecorded thereafter, isn't it?
Can I start that again?
Yes, you can.
Well, alan, I am really excitedto be headed to a writer's
retreat in the next few weeksand I actually have some reading
(35:42):
that I need to do before thatretreat.
I actually have to read fivebooks, but I will just highlight
three of them.
One is by the person who'srunning the retreat and it's
called Detour, and it's abouther own journey through mental
illness.
(36:02):
She calls it her bipolar roadtrip and the and the.
The book is entitled Detour byLizzie Simon oh, fascinating.
And the next one is St Ivo bymy friend who's a wonderful
author, joanna Hirschhorn, and Ithink it's described as part
mystery, part delving intofamily trauma and midlife crisis
(36:29):
and how marriages and familiescan be torn apart by secrets and
lies.
Speaker 1 (36:38):
Wow Is that fiction or nonfiction, that one.
Speaker 3 (36:40):
It's fiction, but I'm I'm curious to discuss with her
whether there is any element ofof truth underlying it.
And the third is everything isunder control, a memoir with
recipes by Phyllis Grant, and Ithink that is again looking at
marriage, kids moving from NewYork City to California God
(37:02):
forbid and how food can sustainus through all of our journeys
in life.
Speaker 1 (37:09):
Yeah, I would say moving from New York to
California is not the end of theworld.
It might be the western edge ofthe North American continent,
but it's not.
If the world's round, we cankeep going Right.
Well, you've got some reallygood reading lists there.
That's terrific, erwin.
We'll turn to you next and wealready have, so we'll edit that
.
All right.
(37:29):
Good, I might re-record now ifyou both got like two more
minutes, just to kind of the end.
Speaker 3 (37:36):
Yeah, and.
I want to re-record one of myresponses also, if that's okay.
Speaker 1 (37:40):
Oh yeah, let's do that first.
Which one?
Speaker 3 (37:42):
Where does this go?
We probably don't need.
Speaker 1 (37:44):
Erwin, for that do we .
Speaker 3 (37:45):
No, we don't, that's fine I guess we'll do that after
Good.
Speaker 1 (37:51):
Well, I must say, as this looks pretty good.
So I must say it's really beena pleasure talking to both of
you, alan, it's.
Speaker 2 (38:04):
Sorry.
Speaker 3 (38:04):
Why don't you say it?
Also, is there anything elseyou want to add, anything else
you wish we?
Speaker 1 (38:08):
could cover, because I realize it's sort of an
awkward thing to tack on realestate and antitrust or anything
.
I can't own the same thing, butI'm glad we're doing it
together.
It's nice, but anything elseyou want to.
Speaker 3 (38:16):
Let's start again, and Erwin, you go first, I'll
follow Okay.
Speaker 1 (38:21):
Okay, well, thank you both.
Speaker 2 (38:31):
This has really been a longtime listener and admirer
of the podcast and I'm glad tohave been a part of it now two
times.
Speaker 1 (38:39):
You know it's funny, when we first recorded, you know
, back in 2020, you kind of tookme by surprise and I was not,
as I was not practiced in thisat all and I think he said oh
yeah, yeah, long-time listener,first-time caller, and I was
completely what.
Speaker 2 (38:59):
As a child who grew up listening to WFAN and Mike
and the Mad Dog here on the EastCoast, I felt compelled to
throw my two cents in.
It was wonderful.
Speaker 1 (39:08):
And Fiona, I remember when we started because the
first time we recorded it we hadto redo it because there was an
echo and things and I rememberasking if you could go into your
coat closet, turn out thelights, not read anything and
just have a nice naturalconversation and it ended up
being a really great firstepisode.
Speaker 3 (39:24):
Well, you were right that recording from a coat
closet was a lot better, eventhough I didn't find the keys to
Narnia.
It was a lot better, eventhough I didn't find the keys to
Narnia.
But you are, Alan, I thinkeveryone will agree with me the
podcast MC extraordinaire, andI've always said you've got a
great voice for radio, but thatdoes not mean you don't have a
great face for TV.
Speaker 1 (39:44):
Oh, thank you.
Actually, I've always thoughtI've been told once that I have
a good face for radio.
So there's that.
Speaker 3 (39:48):
I think you have it all combined and we've really
enjoyed these podcasts.
We've all learned a lot alongthe way and we would love to
continue the connection.
Speaker 1 (39:58):
Thank you.
That's very gracious of you.
I appreciate it and I lookforward to seeing both of you in
person very soon.
Absolutely, thanks, al.
Good, okay, thanks again.
So, erwin, thank you you you'refree to go thank you, you know,
we can re-record your other oneand you'll you'll be in the
breakers right now I will be atthe breakers, for sure.
Yes, I'll also be in the in thenew york office briefly um for
(40:19):
some project finance stuff we'redoing on january 15th, right
around there okay, all right.
Speaker 2 (40:23):
Well, I will probably .
I think I will be skiing then,but I will see you in the
breakers.
Speaker 1 (40:27):
I'm sure I will be skiing a lot more in the next
few weeks.
Take care.
Speaker 3 (40:31):
Hope you both have a lovely holiday.
Speaker 1 (40:32):
Thanks, erwin, okay so.
Fiona which part did you wantto rerecord?
Speaker 3 (40:36):
Well, I obviously like had that brain freeze on
the big tech thing.
Can I start that one again?
Speaker 1 (40:42):
Absolutely.
Do you want me to tee it upwith a particular question that
I can rephrase?
Speaker 3 (40:46):
Yes, and maybe you can splice some of the prior
answer together, because I thinksome of it was fine, sure, and
then I thought on my secondanswer I kind of meandered a bit
.
Speaker 1 (40:57):
I would like to have another.
You meandered way less thanmost people do.
I wouldn't worry about that.
Speaker 3 (41:00):
And again we the surprising part or the I guess
we were talking.
The thing I wasn't crazy aboutwas the cross-border
collaboration.
Answer.
Speaker 1 (41:12):
Maybe we could have a better go at it.
So we can do that.
So, fiona, if you could alsomaybe comment a bit on some of
the ways that no, I'm sorry, letme think of a better way to put
that.
So, fiona, one of the otherdifferences that strikes me
between a Biden administrationand the Trump administration is
the degree of internationalcollaboration, because we may be
(41:34):
pulling into a period wherethere's more of an isolationist
tendency.
What's your take on that?
Speaker 3 (41:40):
That's a great observation, Alan.
I think that we should expectto see, from an antitrust
perspective, that there willstill be a high degree of
coordination between the USantitrust enforcers and their
counterparts overseas, and partof that is just for practical
reasons, which is there arebenefits to the US in being
tightly coordinated procedurallywith, say, Europe and the UK.
(42:06):
The CMA regime there and infact the EC and the CMA have
certain procedural advantagesthat can benefit a US
investigation.
They have the power to block adeal without having to go to
court.
So they are what we callcolloquially judge, jury and
(42:26):
executioner as administrativeagencies, whereas our agencies
they need to go to court toenjoin a deal, and so it may be
to the benefit of the US to havethe EC and or the UK do that
heavy lifting first while a UScase is pending.
Speaker 1 (42:45):
Interesting, very interesting.
Speaker 3 (42:47):
On the policy front, I think, when we think back to
Trump 1, albeit there may havebeen more of an isolationist
approach on trade the antitrustenforcers were very much in the
mix and in leadership positionsin organisations like the ICN,
(43:08):
which is the body that consistsof all of the international
antitrust enforcement regimesaround the world, and the US has
always been a strong influencerin that body, and that was
certainly true in the Trumpadministration.
Frankly, it's been less so inthe Biden administration.
(43:29):
I think the US agencies havebeen more internally focused and
concerned about internationalpolicy developments, and I hope
that the Trump administrationwill return to being a really
full part of the internationalpolicy developments, because
(43:50):
that's an arena where we'vetraditionally had strong
influence, and I'd want us tocontinue to do so.
I think it's in the interestsof the American business
community.
Speaker 1 (44:00):
And how do multinational corporations deal
with the risk that there couldbe inconsistent results, for
example, looking at a businesscombination or a merger between,
say, Europe and the UnitedStates.
Speaker 3 (44:11):
This is something we've been dealing with for a
very long time.
I mean I first came to theStates when the McDonnell
Douglas merger was being blockedin Europe and that was a huge
wake-up call, I think, for theUS antitrust community and
(44:31):
business community.
I don't think they'd ever seena divergent outcome.
In the end we avoided thatoutcome, but it took very high
level negotiations, includingPresident Clinton, to weigh in
on that.
So there's always been thatrisk.
As far as I've been practicing,I think the risk's actually
been reduced over the years aswe've come to more of a
(44:55):
harmonization on what we thinkthe antitrust theories of harm
are and we've had closercooperation between the major
agencies.
But I think one of the thingsthat has been harder in recent
deals to navigate is notnecessarily the big
jurisdictions taking a differentapproach, but some smaller
(45:16):
jurisdictions, and this is noteven necessarily on a merger
control antitrust review.
It could be on a foreign directinvestment review.
They are raising issues thataren't really antitrust related.
They could be more nationalsecurity related or could,
frankly, they could be purelypolitical and the impact in some
(45:38):
cases is to have a largemultinational cross-border deal
with many jurisdictions at playbeing held up by a very small
jurisdiction where there is verylittle commerce.
So these are the issues that wehave to worry about and make
sure that we have a good handleon up front, going into the
process, and so that we don'thave a small jurisdiction with a
(46:02):
political issue holding up ahuge deal.
I can't hear you.
Sorry, that's because I wasmuted.
Speaker 1 (46:21):
Sorry, so I was trying to thank you for that and
thank you, christy, for thetext.
So, yeah, so we'll take thatpart then that was nice and
clean and drop that in where itshould fit in the earlier
conversation.
I'd like to expand a little bitmore on the books, in
particular the first two,because the mental health tie-in
is really interesting, in partbecause Erwin also went on a
(46:44):
while about his books, which wasreally interesting to me, and I
want to make sure you haveequal time.
Well, I haven't read.
Speaker 3 (46:51):
I haven't read.
I've started to read the firstone, which is really interesting
, but I have not finished it yet.
Speaker 1 (47:00):
But you're going to a writer's workshop.
I mean that's pretty cool.
Speaker 3 (47:02):
Yeah Well, I'm trying to unblock my creative writing
from being depressed by, youknow, 30 years of legal writing.
Speaker 1 (47:13):
Yeah Well, so we aren't going to put that in the
podcast, but I know the feeling.
How's that?
Okay Well, this is wonderful.
This is really good, and I Ihope we can compare more notes
when I see you.
Speaker 3 (47:28):
And I'd be happy to talk about the detour.
Speaker 1 (47:33):
Well, let's talk a little more about detour for the
recording.
Can we do one more?
Yeah, can we do one more ondetour for the recording?
Sure Good, so tell me moreabout why you picked detour.
Speaker 3 (47:49):
So tell me more about why you picked Detour.
Well, I picked it because theauthor is convening a writer's
workshop or retreat that I'mattending, so obviously I'm
going to read one of the worksof the leader of our workshop.
Um, it's a really interestingautobiography, which is also
(48:14):
weaved in with family historyand the struggles of a person
with mental illness who is alsobrilliant.
She's intellectually brilliant,she's creatively brilliant, she
comes from a family ofbrilliant people stretching back
, you know, in history, but it'salso a family that has had its
(48:36):
share of mental illness.
And one of the things thatstruck me in reading the book
and I haven't finished it yet,but this is all of our stories
Lizzie is articulating how itlooks for her in particular, but
every family throughout historyhas had its share of mental
(48:57):
illness, and my family is noexception.
That is something that we'vedealt with in the generations,
including, you know, my owngeneration, and one of the
things I find wonderful aboutthis book is how it is allowing
those conversations to happen,you know, in broad daylight,
without shame and justrecognizing the prevalence of
(49:20):
mental illness in our society,and it's often associated with
high degree of creativity andbrilliance.
So this is not simply somethinglike a shameful, stigmatized
thing.
It's also mental illnessesamong us in our community.
It's with people we love, andthose people have enormous,
(49:40):
enormous gifts and talents tocontribute as well.
So it's a really wonderful,wonderful book from all those
perspectives.
Speaker 1 (49:48):
That's so important, absolutely.
I mean.
No family mine included, youknow is exempt.
I think this taking the shameor the social stigma out of
mental illness and having moreopen conversations where people
can share their experiences andtheir stories, to be seen as
they really are, where they needhelp to get that, but, more
(50:11):
importantly, to have empathy andunderstanding I just think
that's so critically important.
And this kind of you mentionedthings running in the family and
, of course, inherited traumacan sometimes run through as a
thread through a lot of this inways that are manifested just in
interpersonal relations,without putting a label on it.
Speaker 3 (50:29):
Absolutely Well.
The intergenerational trauma isactually something I'm working
on in my creative writing.
And again, I think all of ourhistories, we could look at all
of our family trees and see someintergenerational trauma there.
Again, these are conversationsthat I would love to encourage
(50:50):
to happen in you know, withoutshame, in broad daylight, and to
allow a greater degree ofunderstanding and empathy for,
you know, our friends, ourcolleagues, our family.
Speaker 1 (51:01):
Yeah, absolutely, amen.
Good, okay, so we'll put thatinto the book review part, right
.
Anything else that you want toredo or add.
Speaker 3 (51:13):
There was the big tech response.
If I could just redo part ofthat and hopefully Cressy, you
can be incredibly facile andsplice it in.
Speaker 1 (51:24):
Cressy is our producer and in charge, but
we'll have a guy named John whowill actually be doing the
cutting.
Okay, yes, so big tech.
Fiona, you mentioned the Googlecase, which I think was
actually in the United States,started under the Trump
administration as toward the endof his first term, and then, of
(51:47):
course, pursued and pursuedpretty aggressively in the Biden
administration.
And then, of course, pursuedand pursued pretty aggressively
in the Biden administration.
But stepping back from justthat one case and looking more
broadly at big tech andantitrust approaches to it,
what's happened and what's goingto happen?
Speaker 3 (52:06):
Well, great question, alan.
Well, since we last spoke, yes,you're right, the Google case
was filed under the Trumpadministration, as was the
Facebook case.
Since then we've also hadinteresting complaints filed
against Amazon and also Apple.
So the big four all have theirshare of monopolization and in
(52:27):
some cases, and in some cases,section 7 claims that they are
still currently fighting.
I expect we will continue tosee not only those cases proceed
the Google case, at least thesearch cases at the remedies
phase, and that is a reallyinteresting time for a change in
(52:49):
administration.
If we think back to theMicrosoft case and the IBM case,
who are the big Section 2 casesthat one puts in the same
category as the Google case,they suffered from a change of
administration in the sense thatin those cases the Republican
(53:10):
regime that came into powerreally stepped back from a very
dramatic remedy and allowedsomething or pushed something
that was much, much less onerous.
It'll be interesting to seewhat Trump does here, because
certainly the Bidenadministration is calling for
some pretty aggressive,draconian remedies in Google.
Speaker 1 (53:39):
I could ask you the question if you want.
So you know, I want to kind ofcompare the current cases
against.
You mentioned the big four andthe case against Microsoft
earlier, you know, many, manyyears ago, the case against the
(53:59):
broke-up AT&T.
How effective are these bigcases to break up what is
perceived to be a monopolisticactor that is also playing a
very large role in cutting-edgetechnology and communications in
society?
Speaker 3 (54:15):
It's a great question , alan.
I think many would say that theremedies in these cases, at
best the jury is out howeffective they've been.
I mean, in the case of AT&T, ofcourse it was broken up and
there was a long regulatoryregime that was in place that
(54:35):
was overseen by a judge.
I don't think anyone wouldreally advocate for that kind of
remedy today, certainly not along series of regulatory
oversight by a judge.
And of course the baby bellsprogressively were allowed to
combine and merge and become,you know, very powerful in their
own right.
Speaker 1 (54:57):
Well, I think one of the other issues there too is
you know, by the time you getthrough that process, you're
really looking at archaictechnology, right.
So, as the baby bellsreconsolidated, you know we were
moving also then from landlinesinto cellular telephony and
eventually into, you know,internet access, and it just you
know the technology was movingat a faster pace than I think
(55:18):
that regulatory regime couldhandle.
Speaker 3 (55:20):
I think that's absolutely right.
But one thing that I've seen inall three of these cases IBM,
microsoft and Google is that thecase itself, the litigation
itself, can be a big distraction.
And you know, that's where Ithink there is a risk that
innovation by the defendant gets, you know, left behind to some
(55:44):
degree because the focus is onwinning the litigation.
In the meantime, technology isprogressing and the kinds of
search technology, for example,at issue in Google really aren't
where the action is these days.
I think AI and the morecomplicated technology and
(56:07):
algorithms that are propellingthat technology or series of
technologies, are much more whatare going to shape tech 2.0.
And so, you know, whateverremedies there are in this
Google case may just besomething that's a product of
history but not particularlyimportant for competition going
(56:30):
forward.
We'll see.
The judge, interestingly, Ithink, has already indicated
that developments in AI willimpact his remedy.
So he's obviously thinkingalong the lines of you know how
does AI fit into the remedialapproach here, and perhaps even
(56:51):
you know the severity of theremedy.
Speaker 1 (56:55):
Yeah, and of course, as a user, one sometimes thinks
that some of the effects of thisconcentration actually improve
the experience.
So if you have AI, that's moreeffective because it's got a
larger language model that it'slearning off of, or you know
more sophisticated resources forthe algorithms that they're
designing and you have kind ofalmost like instant learning, if
(57:16):
you will, that it can give youmuch more targeted, accurate,
precise results that you'd liketo see you know.
From that standpoint, that'sactually a good thing.
Speaker 3 (57:26):
Absolutely Well.
Network effects provide thatbenefit and I don't know that
there's ever really been a bigset of complaints from consumers
about any of these techplatforms.
We've all benefited enormouslyfrom them.
I think the concerns have beenmore from the competitor front
than the consumer front, whichdoes say something about the
(57:46):
nature of these cases, and theconsumer front, which does say
something about the nature ofthese cases.
Speaker 1 (57:52):
Yeah, it does, it does Good, all right.
Well, that was fun, I think.
Speaker 3 (58:00):
That was a lot of fun .
I hope my answers were okay.
They certainly weren'trehearsed or even written down.
Speaker 1 (58:05):
No, I appreciate that .
That was wonderful.
We got out of the closet.
I'm going to figure out howwe're going to edit this
together.
There is a remote chance I willtry to untangle these and do it
as two separate episodes, ifthere's time to do that.
Speaker 3 (58:18):
But I don't know, We'll see.
Otherwise we'll keep ittogether.
Speaker 1 (58:22):
Sounds good.
Speaker 3 (58:23):
All right.
Speaker 1 (58:24):
Well, in the meantime , have a happy Christmas and New
Year's and I look forward toseeing you next month.
Speaker 3 (58:30):
And please do let me know when you're coming to New
York, because I know we wantedto.
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