00:27:18 · Ron Biscardi
[00:27:18] S0: Totally overblown, and and I kind of said it as it was happening. There there... So what I like about private credit is that there's not a tremendous amount of leverage in the private credit funds. You know, they may have two or three to one leverage. But where you see real, like, systemic level blowups is when an asset class starts levering 30 to one, 40 to one, 50 to one. Right? Like in the in the financial crisis in o eight, you had... A lot of these banks were levered at those kind of numbers. That's when you can take down the system. Private credit funds are making loans to operating businesses. They're filling in a void that exists where where banks are not servicing various segments of the of the middle market in particular very effectively. And private credit has stepped in to fill in that void and they've done a great job of it. As investments, I think they're pretty great. You know, you put money into these funds, they make loans to operating businesses, and those operating businesses make payments on those loans which result in cash flow back to you as an investor in the fund. There were a few funds who probably got a little bit too aggressive in their lending practices and they had too many failures in the portfolio and that started to impact their ability to hit the investment returns that that were targeted. I... Most of the stories that I've heard is that a lot of those funds were able to sell their portfolios ranging from 60¢ on the dollar to 90¢ on the dollar. You know, that is far from a major crash. And it wasn't even really industry wide. It was it was a handful of the biggest players who experienced it, but I can tell you that my institutional investors are still completely focused on the asset class. Like, the whole blue owl thing was playing out in q one of this year. At my event in Miami in late February, private credit funds had 3,000 meetings. Out of a total, we ran about 20,000 meetings in the event this year. So for one asset class to have 3,000 meetings, I'm... I mean, I think it was the... It was in the top three, I would say, asset classes in terms of meeting performance at the event. So I haven't seen any real slowdown. I think it has become a huge part of investor portfolios. It became a huge part, by the way, because, your traditional bond portfolio couldn't generate the returns that it used to.
00:30:06 · Ron Biscardi, Anthony Pompliano
And that also made private credit a really interesting alternative to a bond portfolio when, you know, when we were still in a ZERP world. And I think investors got used to the returns. They got comfortable with the fund managers. They got comfortable with the strategy. So we still see a ton of interest in private credit. Our big event in Miami this upcoming February, [00:30:33] S1: you know, [00:30:33] S0: we probably have 700 funds signed up for that. And the... You know, we we have the same percentage of private credit funds signed up for that event this year as we did last year. So I haven't seen any... I I will say this. It was definitely getting maybe a little bit overheated. Right? There were a lot of new funds coming out. Some of that has slowed, but it it is still a completely viable asset class with a a ton of interest.
00:31:04 · Anthony Pompliano
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00:32:51 · Ron Biscardi
[00:32:51] S0: Yep. Yeah. A 100%. Yeah. You know, these are these are organizations that have... You know, like for you and I as individuals, we're thinking in terms of maybe decades. Right? Like, I know I'm gonna be in an earning period in my life, you know, from my early twenties to, I don't know, God willing, maybe my late seventies. But somewhere in there, I need to start shifting my investment strategy to be more risk averse, to be focused more on providing cash flow in my retirement years. These big organizations have a time horizon of infinity. If you're an endowment or a foundation or sovereign wealth fund, you're really thinking in terms of I need to provide a certain amount of cash flow and as long as I can build my fixed income side of my book to provide that cash flow, All the other stuff I'm looking at, I can take a very, very long term view. And I think that leads you to be... You you just don't experience the same volatility in your decision making. You know? When when you have a long term view, you can ride out bad markets. You know? You can hang on to things a lot longer and wait till they come back if you believe the core investment thesis hasn't changed and we're just in a moment of market panic for whatever reason. So for sure, they're much more slow moving than family offices and than individual investors for sure. You know, individual investors are the ones who probably are the worst at panicking and, you know, they buy at the top and they sell at the bottom. You know, they're they're definitely much more subject to, like, the emotional swings of the business.
00:34:46 · Anthony Pompliano
[00:34:46] S1: But they have more fun, Ron. They have more fun. Speaking of individual investors, you've got this conference going on in Austin, Texas called TomorrowX. And, when I first saw you guys, talking about this, I was like, ah, it's a idea. I looked at the lineup. This thing is a plus plus. I mean, you guys crushed it in terms of who is speaking. Just give us an overview who the speakers are, why are you doing it, you and for the individuals who who wanna manage their own money and go learn from some of these folks why they should go.
00:35:15 · Ron Biscardi
[00:35:15] S0: Yeah. So I I have to say, you are right. The lineup is incredibly good. I think it is literally the best AI conference in the country as it lineup as stands right now. And I have to give my partners Gavin Baker and Antonio Gracias all the credit. These are two of the best tech investors in the world, and they have built incredible networks and an incredible amount of goodwill. They are just great humans that lots of people have done business with. It was really fascinating to be on the email chains as they're inviting people to the event. Basically, everyone loves these guys and everyone said yes. The the hit rate was, you know, was like 90% on this one. We have just an epic lineup of speakers, Jensen Huang, David Solomon, Jon Gray, Marc Rowan. I mean, the... We actually have had to shrink a lot of the sessions down to twenty minute time frames just to give more of these amazing CEOs a chance to come and speak. But yeah, if you go to tomorrowxsummit.com, you can check out the speaker lineup. It's November seventeenth and eighteenth in Austin at the Moody Center. We'll probably have somewhere between five and six thousand people by the time it's done. But it is an incredible lineup. And I'll also say the thing that I love about this event and the reason we actually put it in an arena like the size of the Moody Center was we wanted to democratize access to these banking conferences that are incredibly valuable if you're an investor but are largely unavailable to retail investors. Right? If you're... Even if you're like a small fund, a retail investor, you're... Generally speaking, you're not gonna get invited to a JPMorgan, Goldman Sachs, Morgan Stanley banking conference. You know, those those spots are reserved for, generally speaking, the biggest funds in the space. Well, we thought, you know, x has been an incredible platform for smaller investors to do their analysis and express their opinion and engage in dialogue about whatever whatever stock it is they're focused on. And it's incredibly useful. Right? It's like that that kind of... That access wasn't available before the dawn of platforms like x and Substack. Well, now what we're seeing is analysts who post primarily to platforms like this are getting just as much attention from public company CEOs as the bank analysts have gotten historically, and and in some cases, maybe even more so.