David, welcome.
Just talk to me about some of the biggest investment trends
we're seeing in North America at the moment.
Of course. So we're focused on opportunistic credit, Special
Situations and private equity.
And first off, people are just sometimes surprised by the
amount of opportunity that we're seeing in North America right
now.
We like the complex stuff.
We invest in businesses and transformation companies going
through cycles, even buying businesses out of bankruptcy.
There's a lot more of that going on than people expect for a
world where USGDP growth is positive.
Equity markets are at all time highs. And what we're finding is
the economic cycle we have in the US, solidly in plus
territory,
It's been uneven.
The benefit across the economy hasn't been the same. Sectors
like real estate, construction, manufacturing.
It's almost 30% of the economy, and it's it's not doing as well
as you think from the headlines.
At the same time, in the credit world, we're finding 5% interest
rates.
Of course, for the first time in 15 years.
Companies, capital structures, they just weren't built for a 5%
world.
So more of them are defaulting, more of them are fixing their
debt outside of a court and that creates opportunities for a firm
like ours.
So we've bought 5 businesses in the last few years here in North
America, all in these kinds of different interesting Special
Situations. Good companies, market leaders who are growing,
but they're in some kind of a jam.
And we've been able to come into those situations and help those
companies out by making this kind of an opportunistic
investment.
At the same time, there have been a lot of loans.
There's been distressed debt buys too.
And it's all yielded an interesting cycle of opportunity
for us.
How do you adapt your investment strategy to changing market
conditions?
Yeah.
And so we do two things.
We go to where the opportunity is.
And for us, that's a broad geographic reach.
About half of our firm is based in Western Europe, about half
here in North America.
It's a broad strategy reach—everything from buying
into public credit to making private loans to buying
businesses and helping them through the turn around.
And we also go across asset classes, many investors in our
space, they're all corporates or they're all real estate.
We do a real mix of those, of corporate businesses and real
and hard asset classes and that lets us go to where the
opportunity is at different points in the cycle.
There's always a cycle going on somewhere, you know, if you know
how to find it and if you have some of the resources available
to actually go and take advantage of it.
Where do you see the key opportunities over the next few
years for the asset management industry?
Yeah, it's OK.
I think of it in terms of industries and I think of it in
terms of that credit cycle we were talking about.
And so, look, with that credit cycle, this 5% interest rate
world, it's something all of private equity has to adapt to.
It's something all of the credit world has to adapt to, and it
spins off all kinds of different interesting opportunities.
You know, private equity funds are under more pressure than
we've seen here in 10 years, right?
They're portfolio companies. Again, they just weren't made
for a 5% type world and they didn't all get the growth that
they had bargained for.
And so we see a lot of opportunity in buying businesses
from them that need a little bit of capital, need a little bit of
tender, loving, care.
And we see opportunities on the credit side to help out with
these different types of creative re-financings. Lending
into something with a complex structure, lending into a
business where that economic cycle hasn't been so easy on
them.
David, thank you so much.
Thank you.