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Hi, everyone, Welcome to the Bloomberg Business Wee Weekend podcast Top of Mine. This past week, we saw Nvidia at one point top Microsoft and Apple as the world's most valuable company, reaching a new record. It's since fallen back behind Microsoft and now along with Apple, the three are pretty much neck and neck. When it comes to market cap it's pretty close still and Vidia up around eight hundred percent since the beginning of twenty twenty three.
And speaking of records, the S and P five hundred and the NASDAC notching all time highs. This past week has more Wall Street firms piled on the bullish equity call, and as make of America's institutional clients piled into US equities for the second week in a row, were on the market An investing environment from two individuals whose firms oversee trillions of dollars in assets and client money.
Plus the alt MBA with the CEO of Ability and the CEO of ALT Finance on helping HBCU students explore a future in the world of private equity.
Also, he had a front row seat to the AIDS crisis and the pandemic. What the nation's top infectious disease doctor says about being on call and advising seven presidents through it all. We're talking about doctor Anthony Fauci, and we reflect on the complicated journey of acceptance for the LGBTQ community with the CEO of Glad.
All of that to come, we begin with the world of asset management. I was in Nashville earlier this month for bny Mel and Pershing Insight twenty twenty four. It's a gathering for the wealth management industry, and at it I moderated a keynote with two senior execs in the asset management business who see so much and who shared their outlook and views on everything from AI and ALTS to debt, deglobalization, demographic cinjia politics, and I'm going to say a lot more.
Han Caryl's panel, Jenny Johnson, President and CEO at Franklin Templeton and Hanika SMI's senior executive vice president and global head of Investment Management at bny Mellon. The conversation began with what is top of mind when it comes to the macro environment.
Everybody's talking about kind of the whether you have five or three or six d's, but I'll start with the d's. Look, demographics is going to be key, and it's going to be develop economies have aging demographics and or developed economies have aging demographics, and developing tend to have younger demographics except for China obviously, and it's going to have.
An impact on investing.
There's going to be opportunities, but it's also going to drag down economies as a younger smaller workforce has to support the folks that are older, and then those economies that are developing with it, like India. Fifty six percent of the population of India one point four trillion people is under the age of twenty five. So as long as they can educate them right, they can be participating in it. So demographics is important. Obviously, I'll call it disinflation,
so we can say r d's. Obviously, where the interest rate environment goes, you know, the supply chain. Sort of reorienting supply chains is going to be I think opportunity from an investment standpoint. It's also inflationary. There's a reason we were in China, the China plus one story. You
were in China because it was cheap. Right, So as soon as you start to decouple and you know, change your supply chain, you're going to end up adding some costs to that, not to mention tariffs and others from geopolitical decarbonization, right.
You know.
Unfortunately in the US it is a it's become this red and blue state conversation. You know, obviously, Honkey, you're based in London. You go to Europe, it is still a huge focus and the reality is over ninety percent of the world's you know, governments that could ninety percent of the world GDP have committed to net zero. Whether they get there or not as irrelevant, but they're focused on investing on that. And then finally, I'll call it
digitization is just this. We're living in a massive technological advanced age with AI things like blockchain and those are going to drive investment results.
And then I got to throw in US debt.
I don't think we're talking enough about the longer term impact of US debt.
I feel like it's safe to say that all of us have spent our careers a few years ago, a few decades ago, where it came up in every market conversation, then it went away.
It is back, and I feel like with a vengeance.
All right, Hanaga, let's go to you in terms of the global macro.
Yeah, so Jenny summed up, summed it up very well, and we're sort of seeing the same trends. I was actually quite interested to see that the audience here, so you know, you think about the trends actually feel optimistic about investing.
Are you surprised?
Well, yes and no. And I would say the ones that you know, we take a step back and think about these trends trans create uncertainty, but trends can Those trends and uncertainty can also create opportunities, right, because when there's more volatility in markets and in responses, people will
respond differently, have different needs, and that can create investment opportunities. Now, having said that, in this world of what appears to be this inflation, although there's some conflicting data sort of coming out where of course all keenly watching what the various central banks around the world are going to do. I think the ECB is coming out tomorrow, the FAT
next week. We have an expectation that generally we're still at rates higher for longer, but we are expecting, with the information that is starting to come out tighter sort of lower tighter employment, that we are expecting to see some cuts later in the year. But we're not going to go back as low as where we've come from. And I do think we're going to get back to an environment we're having higher interest rates is more to norm than the environment we've come out of.
One thing I want to ask you, and I think you know, we have the conversation that hey, folks, it was the low rate environment or zero rate environment that was the abnormality. Yes, right, that what we're doing right now is getting back to normal. Having said that, you have a generation of investors advisors who were used.
To this disinflationary environment.
How does that let me come back to you first, you know, how do we need to kind.
Of address that.
How do we have the smart conversation around that, you know, in terms of investing in what it needs.
So it's two ways, right, to sort of how we deal with it's in our own organizations. We do. I'm sure you have it as well, Jenny. In our own organizations, people who have only been investing trained investors this side of the GFC. I'm of the generation that was also investing. Well, good for all.
It's a lot of ideas.
And actually I call it these investor management is actually, thankfully an sector in which experience really matters, and you sort of do realize that they're is such a thing as cycles. But it does mean that we need to educate not only our own investors, but also our end clients in terms of what this type of environment seat of having positive interest rates, let's call it that means
for investors, and what it means for asset allocation. So we're spending a lot of time educating our end client, our advisors, but also our own our own workforce.
Jenny, your thoughts on that, well, I mean, the reality is, I think we're getting into what historically is a more normal interest rate environment, and if you look at it, you know the economy has actually been able to absorb or the rates increases pretty.
Well, uh, pretty agressive in the last year, right.
Yeah, very aggressive.
I mean I described to people as like, you know, of course you're going to see it slowing down data. They jammed on the brakes, right, you know exactly, it's whiplash.
But we're also in.
The camp and I caveat it with that Franklin Templeton. So we're one point six trillion, but we have we have five different UH CIOs who have slightly different views. I macro economic CIOs out of a slightly different views. So I'm gonna it's a little bit like debate there, Oh, huge debate that matter of fact, that is insisted that, especially the ones that are the furthest apart to make sure that at least having an internal debate on it. But you know I tend to and and it's obviously
converged over time, but you know, rates are higher for longer. Uh. The economy has definitely absorbed it pretty well.
Uh.
And you know, if we if I were to guess, I think it's maybe just one rate increase this year, and if I had to take a second gas, I'd say.
It could even be zero.
You know that it's more towards inflation being a little bit stickier and harder for the FED to truly get under control than probably, and I know there's some weaker data coming out, but.
It has some services today pretty strong.
Yeah, but I think you're right because they're also to your earlier point. There continues to be inflationary pressure from animating from the supply chain as well. Right, So you look at also the conflicts around the world, which is putting pressure. Certainly we've seen its being based in London on our doorstep. We've seen it an energy price, We've seen it in food prices. It's coming down a bit. We're seeing that the Middle East conflict at the moment
is also putting pressure on supply chain. You and I were talking earlier about aviation, Carol and flights. I mean, you can't just simply fly where. Airlines can't have to reroot where they go. My flight, you know, anytime I go to Japan from long and we're now the flight is taking an extra toon half hours because we're not going over Russia. So think about the costs of the time, the cost of fuel, and you know those costs will have to get passed on in the price of goods.
So it's it's that inflationary pressure I think is still there.
These big go ahead, I just go uf.
I was gonna say, one of the advantages that all you have is you're from all different places in the US, because you know, sometimes you get I always say my mother was a doctor, and she said one thing that always bothered her as about doctors is sometimes they didn't just look at what was in front of them. They always had to be proven through research. And sometimes it's obvious in front of you if you talk about the environment around you. I bought a truck for the farm
this weekend. And I used to finance. I ran a financing company of autos, and so whenever I bought a car, I go into the dealership and say, show me your invoice and we'll start there and work our way up. It was let's start at manufacturers suggested retail price, and we'll tell you what fees we added. And it took me three months of walking out. I finally asked, somebody in California, can you see what.
You can get there?
I was not going to buy a car for above MSRP. And you know what, in the end, I ended up doing that. Really, it has changed so much. And so you walk into a restaurant, are they still pretty full?
You guys.
You know, again, you only see where you're going. But as you ask each other around, it feels like it's still pretty robust out there.
It doesn't feel like I want to bring in a question. These are great questions, so thank you.
What concerns do you have regarding the rise of nationalism and populism pushing us away from globalization and its effect on those emerging markets like what you folks are talking about feels like not going away anytime.
Soon, agreed.
And that's inflationary and that's inflataty it is no.
I agree as well. I mean it's been a concern of mine and of ours for some time, this rise of nationalism, and also to benefit so our generation has already benefited from what I would call the piece and right following sort of the Second World's War, and it was all about globalization. We all read the book The World Is Flat that came out, didn't you, Jenny, Yes, I did. I read it some twenty years ago. But that is changing. We're all Jenny was talking about earlier,
we were all moving manufacturing to China. That is no longer happening in sort of reshoring, and that is adding to cost as well, so it's some mix of nationalism than a much more tense geopolitical environment as well. You throw that into the mix, and it is making for a much more combustible environment that I think will provide a challenge for corporates over the long term, notwithstanding what we're seeing today.
That was Hanikah Smit's and Jenny Johnson in conversation with Carol from their panel at BNY Mel and Pershing Insight earlier this month. That was in Nashville, Tennessee.
Coming up more from the conversation, including the dreaded D word debt, ballooning US federal debt, the impact and what to do.
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This past week, the non partisan Congressional Budget Office ramped up its estimate for this year's US budget deficit by twenty seven percent to almost two trillion dollars, sounding a fresh alarm about an unprecedented trajectory for federal borrowing. The CBO sees the deficit reaching one point nine two trillion dollars in twenty twenty four this year, up from one
point six y nine trillion in twenty twenty three. Longer term, US national debt set to top fifty six trillion dollars by twenty thirty four as rising spending and interest expenses outpaced tax revenues. A lot of numbers throwing in at everybody, The bottom line is US federal debt.
It's growing, yeah, and I think for many people they would argue that it's becoming a crisis. On that, we continue with Jenny Johnson, president and CEO at Franklin Templeton, and Hanikah Smith's senior executive VP and Global head of Investment Management at BNY Mellon, who sat down with Carol at the recent BNY melon Pershing Insight Conference in Nashville, Tennessee.
We are not at thread of not being the reserve currency. We're going to continue to be to reserve currency because there's nowhere else and anybody's going to go. The question is you still need buyers of debt and seventy percent of US debt is going to come in the next six years is going to turn over. Unfortunately, what we didn't do is lock in long term US treasuries when rates were really low, and right now that six that seventy percent, we're paid about two point four percent interest
on it. The US Budget Office predicts the next ten years in debt the cost of interest is three point five percent. Okay, that probably one percent difference crowds out so much spending. We're already this year will spend more on interest than we will on defense spending. So the question for all of you is to think about, well,
where does that money come from? And has to come from corporations, mutual funds, insurance companies, or it comes from the Fed right and the Fed quietly they were reducing their balance sheet ownership of treasuries ninety five billion a month.
They quietly moved that down.
To retiring sixty billion, and now they're down to twenty five billion rate. It's because they worry about the Treasury mark, and so it's it just becomes a crowding out of other investments. And so you have to ask yourself out, what price does somebody say I'm not going to invest here, I'm going to go buy treasures.
I love that you do it.
We had a story on Bloomberg recently and I talked about longevity and the need for government to issue more debt, will need to higher rates, the impact we'll have on investors seeking out more productive ways to fund their penton liabilities and so on. So basically, you know, fewer bonds, more stocks and commodities. Hanneka come on in on this issue of debt and how that impacts perhaps you know, investment portfolios, retail institutional over the longer term.
Well generally, helping clients understand how to manage for retirement is of course a very big topic. I'm sure it's a very big topic that is keeping everyone here in the coming days very very occupied. Right. The funding gap that exists both as an individual level and also at a state level that governments around the world can't really fund,
is well understood. It's then what we do about it, right, and how we as investment managers offer better solutions to the advisors to work with their clients so they can
actually have retire well with income. And with that, you have to have a portfolio that doesn't consist of securities but also provides income and has an opportunity for growth as well, which gets you into a combination of equity investing and possibly alternative investing, which is of course the strength that's been long underway and as a manage, but you need to have a more holistic view in terms of what you want to achieve as you move into
a retirement and how you're going to meet effectively your liabilities once you're in retirement.
Well, it makes me bring up kind of the debate over active versus passive. Right, It's been so easy, it feels like, for so long to just kind of buy the market by the index, right, But it does feel like with some of these big the de's that you laid out the big issues that you're going to have to be more selective in terms of reaching those retirement goals.
Is that fair well?
Active and passive is about costs and about outperformance. Right. So when you're in active, which we both are, but we also have be in my run, we also offer indexing products. So it's about how you both deliver outperformance and outperformance relative to market to clients, which is the active piece, but also how you combine it with passive so you can do it in a cost effective manner. So I think there's a room for both in client
portfolio and it's really important to have those. But once you look at active, we also see that not that the majority of active managers underperform, right, It's really important to focus on performance. We're pleased to say that on the whole, our equity focused managers and fixed income managers do outperform over the long term, and that's critical.
I mean, but I think what we.
Have a guest on and forgive me, but like I'll look at someone's performance, I'm like, why are we talking to this person? They've underperformed for the past five years.
Yes, all right, but all of you guys are responsible for risk adjusted returns because actually what happens the average investor is they love to be able to get the ride up. What kills them is the downside gas. And if you look at and this is where look, passive is inevitably going to outperform in lumpy markets like the Magnificent seven and momentum markets right where the more you put into the same stocks they go up.
It's going to tend to outperform.
Because a conscious risk adjusted manager is going to look at the magnificent seven in twenty twenty three and say, ooh, I think I should underweight these because I'm worried. And by the way, if you did, it ended up being a really good trade.
You were underperforming.
But now you're performing well because there.
Was a flip.
And if you look at the I think the market is healthier now than it was in twenty twenty three. It's broadening out. Their earnings are broadening out. You know, in twenty twenty three, it was rarely the Magnificent seven that was having earning growth and everything else was actually negative earnings. Now you've seen that come down dramatically, and it's the rest and you know, the rest of the four hundred and ninety three that have had positive earnings.
And then if you look at the Russell two thousand, that earnings projects is like up thirteen percent this year and in twenty twenty five it's projected to go up to thirty one percent. We had to check the data twice, right, that's on the Rustle two thousand companies.
I've heard more people talk about the Russell But because.
You've had this underperformance in small cap, because everybody's been so focused on the big, you know, and the video is probably the only one in that group that's actually predicting continued growth, big growth in earnings. The other one's expansion has mostly been by market cap. So you know, again the active passive your job is risk adjusted returns for the experience of the you know, the entire trip. And I always say it's a little bit akin to
if you were buying a car. I don't know why I've got two car analysis, but you know, if somebody said to you, drive down this road at the cheapest per mile, it's flat, it's straight, and it's well paved, you'd go with a car without any safety features. But if your journey of life takes you over the mountain in a snowstorm, you're gonna wish you had those safety features. And that's what looking at concentration risk, you know, sector versification,
public privates. You know, that's the lifetime experience of investing, and that's what the active advisor and the active manager has to bring you.
The tab No, I agree with you, but I also it's not about just one thing, right, So it's to combinate how you bring those active and passive solutions together to both manage to cost as well as all the factors that you were just setting.
Out its goals, its costs, it's a lot of things.
Yeah, but it's also concentration and risk management because clients hate nothing more than actually losing money, and they rather forego some upsides than losing money.
Use that's something interesting to me in the back, and I was talking like knowing when to sell is also an important aspect a portfolio management.
Yes, and I know, like everybodys at market.
Time do it.
I get that, But there is a point where you say good gains, maybe.
I lock it in, yes, right, yes, And that's a part of it.
It's the heart. It's one of the harder things to do. And I think I mentioned to here there was an interesting artic and the economist I don't know if you saw, Jenny that came at this weekend, which was showing talking about some research how hard it is for active managers to sell. So as a sort of sector, we're very good in making the case to buy, we're not always as disciplined when it comes to making the case to sell.
And I think you should all our view is you should always look at a moment in time and determine where they're continuing to own a security will still generate upside from that moment in time, rather than look at the cumulative return or bank It comes perhaps a little bit from my own background in private markets, where you really tend to only have very rare opportunities to sell and generally the experience once you're better of selling early than holding on selling.
Late too late.
Question, have we hit a point of mania in the market, getting closing all the optimistic outlooks in the room?
You know, if you look at the ratio of the non mag seven, it's still higher than average, right, So that would indicate that the market's pretty fully priced, except that you have earnings revision. I mean, earnings projections have been pretty good, and earnings revisions up is actually higher than average.
You see things like productivity games.
All the time ties on the markets, chasing all tied ties with the well.
That's where again like i'd probably underweight that what has traditionally been the big winners And look at these other sectors and that's why you hear like small cap mid cap you know, kind of that technology that's not those big MAG seven type. So I think there's opportunities that.
Are still there.
And then I think when you go think about international, Uh, it's markets that are benefiting from this deglobalization of this, you know, decoupling the supply chain. So there's definitely it's it's about where you choose. And honestly, you know, like things like China.
I actually think you're starting to see some green shoots in China.
Finally, yeah, finally, and and you know they're pretty focused on when they want to do something, you know, to be able to do it, so you know there could there could even be opportunities open up there. And if you look at India which has had a huge run and what a surprise with the relection, So you know, again I think it's going.
To be chopping. It's about where you choose.
Market mania. What are you thinking?
I think Jenny just explained it. Well, it is always going to There is mania in certain sectors, but it's not everywhere. It's been very much underpinned by the Magnificent Seven that we're very well aware of, so we focus very much away from that. But it's been hard. We've seen it in our portfolio. Is because those seven, when you look at twenty three, have really driven the upside and that is what investors on the whole have been chasing. But I think I think I'm with Jenny. I think
it's going to turn to me. Some of it brought me back to the nineties. I used to come to New York and I always thought, you know, the symptom of mark and mania. I was sitting in those days, not in an uber Rickneyello and the cab driver asking me about Internet. So, oh, you're an investor, one about right and that stops right and you think online were We really are in a bubble. But we thought that for a long time, and I was part of an organization at the time which was focused on value. Is very,
very hard. It's not this similar when your clients are chasing growth, so you have to keep looking at underlying fundamentals.
That was Honikah Smith's and Jenny Johnson in conversation with Carol from their panel at bny Melon Pershing Insite conference in Nashville, Tennessee.
Still had more of the conversation as we tackle the future of asset management, everything from tokenization to artificial intelligence, and how investment advisors are adjusting to all of these disruptions.
More on Bloomberg Business Week.
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Goodbye sixty forty Portfolio, Hello, sneakers and rare cars. The new rich are trading long standing investing tactics for more crypto heavy portfolios and a passion for collectibles. Roughly ninety four percent of gen Z and millennial investors are interested in collecting items such as watches, rare cars, and sneakers. That's according to a new survey of wealthy Americans by Bank of America.
As we wrap Carol's conversation at the bny Mellon Pershing Insight Summit with Jenny Johnson, president and CEO at Franklin Templeton and Hanikah Smitt's, Senior Executive vice president and Global head of Investment Management at bny Mellan, we hear more on how things are changing and what investors are demanding.
Talk a little bit more about what investors are really interested in today. We talk about a portfolio has a lot of moving parts credit, growth, value, income, all the assets. Jenny, right, there's lots of pieces to this.
Well, when we talk about the maybe secular trends that I think are happening that are then informing sort of what your investments. I mean, in the ends, we as an industry talk about our benchmarks and this, and clients like do I have enough money to retire? Can I help my kids pay for their colleagues?
Right?
I mean that they have very specific goals, right, But you look at the big secular trends. One is private credit is here to stay. Banks are just because of the capital requirements that have been imposed on banks, they're not lending like they used to lend, and the private market has stepped in. And I don't have the same worry of this concept of shadow banking that you often hear about that because it's not like it's such a massive,
bigger number. It's just it's moved from banks balance sheets into really funds that are you know, the investor knows their ill liquid so you don't have to worry about a run on it.
So private credits here to stay.
Private equity, I mean the fact is companies are just not going public as quickly. If you can remain as a private company and monetize you know, holdings for your employees and things, which is what's been able to happen. You see it in the data there. Just there's half the number of public companies and six times the number.
Of about entrepreneurs.
They're like, why would I go public?
Why do I have to go do my earnings report every quarter when I need to invest in technology that may not pay off for three to five years. I'd rather be private to be able to do that. So I think those are the big trends, and now it's about managers figuring out how do they deliver that in a full portfolio, understanding the various characteristics of these kind of new segments and bring together a full portfolio too too.
Sorry if I had jump in here, because now you're really looking at the trade offs between risk on risk managements and liquidity. Right, that is the biggest I've been on both sides, public and private, and we oversee like Jenny does, but today's worlds as well, both public and
private investments. And by the way, it's not just that fewer companies are going public, there's also been the dlisting trends, so generally there's fewer public securities available today while the market caps are larger, so in a portfolio sense, you can still achieve your goals. The opportunities available to public investors are fewer, that's just the fact. So you have to increase your exposure to the to the real economy outside of public markets as well. It's really how you
do it. And this is where the liquidity or access to liquidity comes in.
It's a different liquidity, it's a very different you're a plane vanilla.
It's an organized market, it's not a it's obviously not a liquid market. So you can create liquidity, but that might not always be the right thing when there's a crisis, because you end up being a forced seller and you may not achieve the right results for your client. So for us, in our roles, it's all about making sure our end clients understand is that we work with the advisors and all of you and the audience here to educate you so you can optimally allocate to the underlying
asset classes. And the exciting part is they are available to the end clients, which wasn't really the case ten to fifteen years ago if we've been set here.
Just to add to what Hanka said, you know, I think that the next phase of this private markets right now you kind of get it delivered in model portfolios with allocations and sleeves.
There are vehicles.
You know.
The forty AC mutual fund, for example, allows up to fifteen percent illiquids because the sleeves still require somebody to be a qualified investor.
Our Franklin Growth equity.
Team has been investing in late stage venture in their mutual funds because they basically were running the numbers are like, we don't get the old IPO allocations that we used to get, and so they started to do because they're based in Silicon Valley, started to do these investments there. I think you're going to see more of that trend, and I think you're going to start to potentially see people use think what is it the thirty three Act
or something where it was commodities. It's what the original gray scale bitcoin was in, but you have more flexibil I think you're going to start to see those types of vehicles where you're going to see a combination. So it's a one ticket, but it has a combination of ill liquid and liquid.
Well, that's what I want to ask you the democratization of assets. Do you think in terms of private credit all assets, we need to increase the access for astor set.
I actually think that you potentially. I know my teams internally probably don't love this, but I think potentially you're going to start to see fixed income teams the research for traditional fixed income and private credit to probably be combined.
I don't know that it's that different. Interesting at the research.
At and that's the same for equities too, right, Traditionally we're all students of companies ultimately, so you can you can own a company through a listed security and fixed or or the equity markets or through the private route.
But how do we deliver that to the clients is what Jenny is talking about is different, But I think what he really wanted to get to in terms of the democratization of assets, this is also a technology story because this is also about organization, right, which is going to be really helpful in delivering that.
So talk to us about in terms of changes to the asset management business and what you guys are doing to help advisors play with those two.
Yeah, so a big change that we started to talk about is general technology right and AI, and that's also been a trend that's been long on the way, but it has been I think turbocharged to some extent in the pandemic as well, because we all really had to think how we were engaging with clients and invest much more in technology and digital digital delivery, so how we deliver our advice is much more powered by technology. How the product wrappers have changed. I know was your grandfather
who was at the start of the mutual fund industry. Unfortunately, mutual funds are no longer and that's an industry trends.
Which which shocks me.
My first job in business news was a mutual fund show and teaching investors about mutual funds. I'm not that old, but I am amazed that the repetitive, the rapid.
Cycles that were.
But it's nowts cfs and SMAs and our mas and you know, our colleagues in Pershing are the are the second largest managed account provider and we're so One of the things we're doing and even was talking about is earlier and I think you might have heard Stephanie talk about it as well, is working with Purshing on what we call being more for our clients by bringing together the technology that exists on the both platforms, simplifying the
life of the advisors. It is technology enabled but also bringing in investment management capabilities and doing that in a very cost effective manner. And the more that all of you end up doing for your clients with us, actually the more cost efficient it is going to be to the order of sort of forty percent discount. And I think that's very very meaningful. But a lot of that is really powered by technology and it's simplifying the advisor's life.
And what it means is that the news advisors can actually spend more time with your end clients, which we know is really important.
Which begs the question that came up on the call with one of you guys, the next generation, next gen advisor, is it even human?
You know, money is emotional to people, and you probably have a lot of clients that are actually capable of managing their own money. But the more money you get, the more you realize it is it's not a part time job. Number one, and number two, the individual in the end wants assurances and there's an emotional component of it. So in nineteen ninety seven, the cover of Business Weeks said the Internet was going to be the death of the broker, and everybody's been calling the death of the.
Pipers boom our Business Week.
Anyway, I go ahead, you know, I just I don't see it. I don't think you know.
And I always say, quantum investing works until it doesn't. You know, historical data of the last ten years works until the FED changes their mind and does something different, and then it affects it, and so you need it's that hybrid. It becomes a tool, and in the end, I think the client wants to be serviced. What the advisor is doing today is a lot more than they had to do in the past. They used to be just investment advisors. Now you're all really life planners for people.
They probably have some clients that ask you to educate their next generation and engage with the next generation. You do a financial plan, so all those things still require that kind of human touch.
Is that the smart conversation around AI, I mean AI correct into every conversation, not new generative AI, LMS, machine learning. It does take things to a different level. I mean, what is the smart kind of thought that these folks.
Investments subject to us. It is about how you use it. It is very very smart where where we are using it and testing it and being my melon as well. I have my co pilot, but I also see with that that I need to train my co pilot for it to actually improve. It's still about pattern recognition.
You actually spend time with your head of AI right to really understand this.
Yeah, no, I was so.
I ran the technology group for a while, so I have a decent background in technology, so I wanted to learn more about AI. And after I'd spent about an hour every two weeks going through it, and I finally got to the point I was like, okay, I got the machine learning. It's kind of regression analysis. I can understand a little bit on large language models and how you group these words.
This and that.
And then we finally got into a certain level and I said, I have reached the maximum capacity of my brain. I think that I am not smart enough to go to the next level. But what I will say is, if you look in history on technological advances, the first thing that has done is that you optimize what you do today. That's the stage we're in. We're all figuring out, you know, this spot can do this. It's that next line.
And by the way, most of the investment returns in AI have been around the picks and shovels, the videos, the Microsoft c Amazon's those who are surrounding to be supportive of the tool. What's going to happen is the companies in various sectors who really figure out how to leverage AI as a competitive advantage in their business are going to be the winners, and others are going to
fall off because they're not going to keep up. But the problem is just we're like at that stage where you got your iPhone and you said, oh, it's pretty cool. I've got, you know, a flashlight and a phone and music and a camera. But what we didn't all appreciate is that Apple was unlocking the creativity of the people, right, but it took time for people to understand how to use it to You didn't even know all the apps that you needed that you need today, that you actually
needed when it first came out. That's where we are with AI. We don't yet know when you start to combine models, because a large language model takes a whole different programming team than an AI that's looking at images or an AI that's doing quantitative You know the chat GPT is great at language, it's terrible at maths. Right, That's tough technology problem to solve.
Our thanks to Jenny Johnson, president and CEO at Franklin Templeton and Anika Smith's Senior Executive VP and Global Head of Investment Management at bny Mellon. That from Carrol's panel at the bny Mellon Pershing Insight earlier this month in Nashville. Catch the full chat at bnymellon dot com.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm. Easter Listen on Applecardplay and then Broun Auto with a Bloomberg Business act or watch us live on YouTube.
Plenty. A head in our second hour of the weekend edition of Bloomberg Business Week, including acceptance of the LGBTQ plus community with the president and CEO of GLAD and how this year's Pride Month festivities come at a complicated time.
Plus the doctor who's been on call through some of the US's toughest health crises and on call for seven presidents, Doctor Anthony Fauci, will be with us.
First up this hour, we like to talk about alternatives here at Bloomberg and as Bloomberg BusinessWeek contributor Rob Mandelbaum recently wrote in a story for Bloomberg Business Week, the development of alternative and online MBA programs is in vogue today as traditional business schools simultaneously grow more expensive and less popular.
One company offering such a program is the corporate training firm Ability, which has a comprehensive business skills course that stylized as a twelve week MBA. The program is built around simulations of real life business and management decision making. For more on this alternative NBA, we're joined by Bloomberg New Senior editor Dimitro Cassanides and the CEO Ability Beyond, Bill Hart.
The truth is there in the US right now, one hundred and fifty thousand new MBAs every year and over a million new management positions. So close to ninety percent of new managers never set foot in a MBA in the Hollard Halls of Harvard or other NBA schools, and so there's this huge gap of people that have an undergraduate degree in history and biology but are moving into corporate jobs and need to understand what an statement, what
a balance she looks like. As they become a leader of people, they need to understand how to manage others. They need to understand how to collaborate in cross functional projects. And so there's this need where ninety percent of the people moving into these leadership roles don't have the time, don't have the energy to get it to be your heea perhaps or the money exactly, Demeter, I want.
To bring you into it when this came across your desk when you're talking to Rob, what is it that you wanted to know about in kind of what is going on? And what do you want to ask our guests?
Yeah, I mean the first question was what are you intending to do because you're calling it the twelve week MBA, But beyond that, it was really to get a better sense of what can you reasonably teach in that period of time and.
How can you do it?
They're doing it, you know, largely online. You know, what are we going to see in the way of these programs, because I think there is It's not just the number of positions that jorn mentions, there's the interest and the desire to move into those positions. Because of the potential
that they offer for earnings and more. And yet business schools are incredibly expect so you know, what can you actually train for in the way that you're training and is that really going to make a difference when they land in that job? Is it actually going to serve them?
Great question, And the truth is in twelve weeks, it's also not just twelve weeks. It's part it's part time, and it's virtual. So it is a very short certificate program. It's not a full MBA. Of course, it is not meant to be. The truth is though, that most people don't need all of the things that you learn in a two year program in business. This is not like law school or medical school, where you don't want a lawyer, you don't want a doctor operating on you without a
full degree. It is very clear that there are a lot of business leaders that are extremely successful without ever having had an MBA. So unlike those other professional certificates, there isn't necessarily the need to learn two years worth of study. And so for many people who don't have the luxury of going back to an MBA, there's an alternative.
To build a one to meet you said that These are people that aren't going to be CEO, but are going to be other type of managers. Like, who is this for?
It's for anyone that is moving into leadership roles in companies, always planning to move into leadership roles over the next five ten years.
Or is it like an executive you know program?
It's like that, but it's not for executives, right, So the executive MBAs are very expensive. They're twenty thousand and thirty thousand dollars. Sometimes this program is two thousand dollars, so it's a it's the price of a conference that
someone can go to. So it's meant for people that are not at the executive's level level, at the executive level yet, but that are thinking about maybe becoming a team manager or are starting to manage others, starting to get into leadership roles where understanding and income statement balance sheet is becoming more important.
Right.
I do want to know about the content of the courses, because one thing that I found so interesting about Rob's piece, Bjorn is the gamification here and the idea that you're sort of competing with other folks and AI is kind of the backdrop here. Explain what the course work is because it's it's not necessarily what you'd find in a quote unquote traditional business school.
Yeah, and I think that's the other disruption that I think is happening now. So the in the twelve week NBA, there are no lectures, there are no power points, there is no e learning. In those twelve weeks, you're actually in a simulated environment where you become CEO of a company.
You have to compete with others and virtual teams, and it's super fun, super engaging and allows you to see business from different vantage points vantage point CEO, vantage point of VP of sales operations and learn by doing, learn by making mistakes and then having a facilitator who comes in and points out what mistakes were made as the teams competed with each other.
Facilitator being another person or is this like another part of AI.
No, there's actually real These are not AI facilitators. It's actually real facilities. We actually have a lot of business school professors as well as retired executives that teach in the curricular.
But everything is all entirely online and remote. I mean, are they missing something by not having that sort of in person human element. I mean even schools today that have had very successful online programs, they're trying to find a way to incorporate something where the people are coming together.
You know, it's a fantastic question. And we actually started the twelve week MBA as an in person program and then when the pandemic hit, we didn't have a choice of moving online, but was really interesting and fascinating. This fall, we're actually moving part of it back into the classroom, so we're going to have a capstone experience that people
can fly into based in Austin, Texas. So it's going to be an Austin at least the first one, but we're going to actually slightly modify the curriculum from an all online curriculum to have at least one weekend where people get together and have that in person experience.
And that was based on was it feedback, I mean again, a feeling that there's something that they're missing out on when they're not in person, and there's an aspect of this education that really does need to you need to connect with people.
Yeah, I think so much of education is social. It's a difference between knowledge transfer and education is actually that social environment. And there's some of it that you can recreate online, and I think we've done a pretty good job creating some of these virtual simulations and competitions, but there's something that is so important about this human element when you're in person, when you're at the bar after the competition, and you can debrief with your peer, and so we want to bring that.
Back our Thanks to beor Bill Hart, CEO of Ability, and Dimitro Cassinid's Bloomberg News Senior editor.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern Dot applecar Play and Android Auto with the Bloomberg Business ad. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play Bloomberg eleven thirty from.
An alternative NBA program to All Finance, the nonprofit which is also helping to train the next generation of professional financial investors by working with students at historically black colorges in universities, also known as HBCUs.
Marcus Shaw's president and CEO at All Finance, which has a ten year, ninety million dollar commitment to reduce the underrepresentation of people of color in the world of private equity.
So All Finance is a nonprofit that was seeded by areas oak Tree and Apollo really to address what we believe are unfortunate underrepresentation in the alternative investment industry. That's private equity, private credit, real estate, infrastructure, all of your
non traditional investment asset classes. And so those three companies decided that in the wake of George Floyd and a lot of the racial conversations that were happening back in twenty twenty one, that they wanted to actually commit to solving the problem by developing a broader pool of talent from historically black colleges and universities.
So I'm so glad you brought up the history here because we spent a lot of time on our program and here at Bloomberg News as well, going through the promises that companies made in the wake of the twenty twenty protests after the murder of George Floyd, and also the pushback, especially in recent months to these DEI efforts as well, which have been well documented according to changes
in company filings as well. I'm wondering if you're still seeing the same support from these companies that you were seeing four years ago.
So absolutely. We're continuing to see that support, not only in terms of dollars, but in support in terms of commitment from the professionals that work there. And from my perspective, this is really about talent. No matter what business you're in, whether you're in the news business, you're in tennis, you're an athlete, no matter what you are, what you want to see is the best talent. And so if we can do that in sports, which is the ultimate meritocracy, why shouldn't we do it in other arenas?
And do they stay in the industry?
Do you have like you know some can you share with us, like how their careers progress, and like you know what's like the uh I guess attrition so speak?
Yeah, so you know, we have early signals. We graduated our first class last year. We had fourteen seniors graduated. All of those seniors are still working in and around the industry. They're finding early success to their firms. I think one thing that we all know is the first year of being an analyst in financial services is very, very tough, right, you know, I think it's equivalent to being a resident in medical school, or maybe you know, your first week at boot camp in the armed forces.
It's it's tough whether no matter what your background is. So I think what we're seeing is success because students feel more comfortable, They've built relationships, they have understanding of what the workplace looks like, and so we've been able to galvanize some of the risk that students normally would experience by building this incredible network around them.
Okay, speaking of backgrounds, a little more about you. You spent twenty years in nonprofit. In finance, you were at Height Analytics, Piedmont Investor Advisors, Bank of America's Securities. I want to know why alternatives of all parts of the finance ecosystem, all parts of Wall Street, why is private equity and alternative investments place you wanted to focus on for all finances.
It's a great question, and I think, as with other things, the evolution of an industry breeds interests and breeds innovation. When I came out of business school, sales and trading cash sales and trading inequities was incredibly important. I mean, you saw people coming out of business school that wanted to be a trader on a cash equities desk. You saw people that were traditional fixed income roles. You fast forward twenty or twenty five years to where we are now.
The most interesting, the most erudite people on Earth are working in alternatives. They're working in private equity, they're working in private credit. Private credit is an industry, a subsector of alternatives that we've seen incredible growth in just three years from the beginning of this organization to where we are now. We have students that are going into private equity direct and landing private market deals in the credit space that didn't know about it when they started college.
You know, talk about as well, how much this even just affects you know more like not in the alternative space, but just you know, right Wall Street banks, and like what if anything, if you have a relationship with increasing diversity at mainstream, more mainstream financial.
Firms, It's all part of the ecosystem. And traditionally, in alternatives, folks would go through analyst programs at a traditional bulgracket bank, they go through associate recruiting, and they would then find their way into a private equity firm or a private creaditut real estate or infrastructure. What we're seeing now, and some of this is just a supply and demand dynamic.
Some of this is the growth of the industry that many alternative investment firms are starting their own analysts programs because they need talent earlier. Or Again, this is not strictly about diversity. This is about talent. It's you know, I use the analogy of sports a lot, because they're wins and losses. In sports, it's ones and zero. It's
fairly binary. If we look at success in the business world the same way, we'll recognize that bring talent from all corners of the earth, from all experiences will increase our outcomes. And so for banks, I think I think they started to see this early on, but as their clients right, some of these alternative investment shops are doubling down on that. I think banks are encouraged to do the same.
Marcus, I want to talk about your background and then how it plays into what you're doing at ALT Finance. You have a dual degree from Georgia Tech, but also an HBCU Morehouse, Yes, in electrical engineering and mathematics mathematics, and then you went off and got an MBA over at Duke. Talk a little bit about HBCUs and why you're focused on HBCUs as the pipeline for all finance.
So HBCUs are an important part of the fabric of this country. They have produced leaders in this country for the past one hundred and fifty years. And I mean the and when you're talking about diversity and bringing talent, about defining a strategy specifically around HBCUs, this critical pool to success. In fact, HBCUs it's a federal designation under the Civil Act, right, So this is about identifying students at schools that have historically produced leaders and bringing them
into the economy. One of the things that I experienced in Morehouse and you know, my time there was something that I look upon as the finest years of my life, is that really you go to that school to be bred as a leader. That's the focus. If you want to be a great warfighter, you go to the Service Academy. You want to be a great physician, you go to John Hopkins. You want to be a great tech leader, you go to Stanford or you know wherever. But if you really want to learn how to lead, Morehouse was
a great school for me. And so I look at that school and my time there as really development in leadership and not just leadership of people that look like me. The leadership of all people because it creates an opportunity for you.
Did you feel like when you were getting your MBA and you were around a bunch of people who were basically in school to become leaders, you were a step ahead of them.
Yeah. I mean I think for me it was because of the experiences, the lived experiences that I had morehouse with part of that, but the human element, right, My background traditionally was engineering as an engineer, and went to business school and fell into finance and financial assets. For what we covered for a long time, it's what you guys talk about in earnings. But the more complicated and honestly the more important asset is humans. Why do humans
do what they do? How do they make decisions? How do they think about risk? And ultimately everything else is a derivative of that. Being able to bring that experience to Duke to the future school of business, having some of that developed at Morehouse, having some of that developed my parents. My father was a military officer, my mother was a school teacher. It's basically eighteen years of a lesson in how to deal with people. I went to
a Quaker school how to deal with people peacefully? Right, It really creates a pathway for you to think about how to solve big problems like what we're doing at all Finance.
So tell us then, if you're right now a student at an HBCU, how do you get involved with All Finance, Like where is the connection?
You know?
At what level of your studies and is this going to help you also get.
An internship for a job? Like how does the process work?
Yeah, so All Finance Number one, I would point everybody to our website allfinance dot com. That's l FI n A n CE dot com. There you can learn more about our program. So we have two programs that we run and really put our focus on today. One is our Fellowship, which is a multi year program focused on students at eight of our partner HBCUs, Clark Atlanta University, Morehouse College, Spelman College, Howard University, North Carolina, and t FAMU, Hampton University, and Morgan State.
So that was eight accounted eight got it?
Got them?
Yeah, got them. So we have eight schools that we work with directly. Our program has quickly become one of the standout co curricular programs at those schools and so students apply to that. We just went for our fourth round or our fourth cohort, and we have fifty seven incredible students from all eight of those schools that are joining our platform. But if you're at one of the other one hundred or ninety four, HBC use that exists, or they're one hundred and foards of ninety six, I'm sorry,
HBC use that exists. We have a platform called the All Finance Institute, which we partnered with the Warden School of Business at the University of Pennsylvania to develop a co curricular digital platform that gives students access to both non academic and academic content supporting their development in finance, investments and alternative investments.
Are you getting gender diversity because there's a challenge on Wall Street, Yes, when it comes to the balance of men and women, And I'm wondering if you see that in private equity as well outside of your program.
So that does exist outside of our program. They're fantastic organizations like Girls who Invest incredible shout outs to the work that they're doing. We actually have a few Girls who Invest fellows also in our program. So doesn't need to be competition amongst groups that are trying to increase the talent pool right.
Instern sectionality, as we say.
The intersectionality Molly, great word, thank you. Intersectionality is really where the recipe for success can be multiplied, right in terms of what All Finance is doing, and this is a byproduct of working with HBCUs where there is an over representation of women and on HBCU campuses. Black women are one of the highest and fastest educated group of people in the United States, and so the fact that they show up on HBCU campuses is really a win win.
Forty five percent of the women in our program or forty five percent of the fellows in our program are women, which I would put that number up against any financial services firm.
I wouldn't think it's anywhere near fifty to fifty.
Right, And so by working with an organization like All Finance, not only are you getting incredible diverse talent, but you're also making sure that you're getting well trained women.
Totally.
Yeah, I mean what are I mean, what do you hear specifically from the women? Then as far as their feedback and coming into some of these workplace settings.
It's a challenge, right. I think that you know, number one, being a minority, but also being a gender minority or being a woman not a gender minority in the grand scheme, because I think there's there is are challenges, and a lot of those challenges are culture driven, right, and the firms aren't a monolith. Some firms have really really strong
inclusive cultures. I like to think that our partners areas Oaksture and Apollo have incredibly inclusive cultures and have done very very well and continue to do well in welcoming women into the workplace. But the industry in and of itself has had challenges.
Why do you think that you've been so successful when it comes to the gender balance with the with the fellows compared to the recruiting at some of these firms.
We're very intentional about it. I mean, if something, if there is a pool and I see that we don't have what I believe is a representative number of women in the pool, we put more effort into recruiting really great women into our program. Right. Then once you're in the program, we put a lot of effort into making sure that everybody has the shared time to grow and develop. Right,
that we don't let time. We try not to let people dominate time, right, We try not to let the natural inertia of a male dominated industry filter its way into our program.
Right.
We believe that our program is a position of growth for men and for women, for sophomores, for juniors and seniors, and that in order for us to maximize the total output of what we're trying to do, we have to make sure that we allow maximum opportunity for everybody that's involved.
Last thirty here for you, Marcus. So this marks year four of the initial ten year commitment by those three founding firms. What do we look at for the next ten years they sign up for more.
Look, I think they appreciate what we're doing, but the reality is the burden of what we're doing should not follow on three firms. There are thousands of firms that are doing this across the globe. We'd love to have global reach, but they're firms right here in New York City, right around this office that would benefit from a partnership with all Finance.
And you'd accept that partnership right away. Very are you getting incoming?
We are getting incoming. The proof is in the putting, as one of our HBCU presidents said, and I thought I might get that tattooed on me. But he said, you've proven the concept, right. We've proven the thesis. We get a significant amount of inbound calls with people interested about how to work with our fellows. But I think the reality is the returnal investment is happening for the
firms that made the commitment. You cannot do this for free, and so we want other firms to make a commitment as well.
And I imagine next time you're with us, we might have some more firms who have signed on. Marcus Shaw, President and CEO over at Halt Finance.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple, card Play and The brout Otto with a Bloomberg Business act or warned us live on YouTube.
Doctor Anthony Fauci became a household name during the COVID pandemic. However, his journey to becoming at the top infectious disease doctor in the United States started decades before, and really to his childhood back in Brooklyn, New York and living with his family above his dad's pharmacy, the Fauci Pharmacy.
He was a basketball player in high school, went on to become a doctor and then spent fifty four years at the National Institutes of Health, thirty eight of them as the Director of the National Institutes of Allergy and Infectious Diseases. During that time, he advised seven presidents on various diseases, including AIDS, Ebola, SARS, COVID nineteen and more. Doctor Fauci writes about it all in his new memoir On Call, a Doctor's Journey in Public Service.
You kept a lot of notes, and I'm curious, we are curious what it was like going through that those notes, putting this book together, going back to your notes of the AIDS crisis, or STARS or COVID for that matter, anything anytime in particular that made you stop, that really took you back in a big way.
When you remember things in your mind forty years down the pike and you go back over some of the notes that you made back in very stressful times, like those terrible early years of HIV, when I was spending most of my time taking care of desperately ill, mostly young, otherwise previously healthy gay men who were suffering terribly and then almost inevitably dying. It really brings back. What I've described, and I mean that honestly is almost a post traumatic
stress feeling of my goodness. I went through that, and I had to suppress all of those feelings. And then when you start to write your memoir, in order to write it properly, you have to go back and re examine those experiences and re examine those feelings. So we you know, what I went through was a journey, but writing the memoir was itself a journey for me.
You know.
I want to stay on this topic here because I think it's fair to say there's a generation out there that really has no idea about the AIDS health crisis, and we should remind people there have been more than eighty six million HIV infections throughout the world forty million deaths. There's a part in your book where you write about a visit to the White House in nineteen ninety six, nearly thirty years ago, when then President Clinton asked you
why there was no HIV vaccine. Why is an HIV vaccine still so elusive.
Well, it's a very unusual virus in which the body, for reasons we still don't completely understand, does not make an adequate immune response to protect from or even clear the virus from the body. Most every other pathogen that we get infected with mankind civilization, even things that have a fair degree of more teen like smallpox and measles
and the crippling effect of polio. At the end of the day, most people clear those viruses from the body, and the body's immune response serves as a model for how you should make a vaccine to protect a person who's uninfected from getting infected. But we don't have that kind of a situation with HIV because once a person's infected, there are virtually no instances that are documented of someone
who's actually spontaneously cleared the virus. There's a very small percentage of elite controllers who can control the virus, but there's no real evidence of anyone actually on their own, through their own immune system, clearing the virus. That's a very high bar for a vaccine to be able to do, because you want to do better than what even natural infection does. And that's the reason why, among all the
difficult diseases, we just don't yet. I think we may get it because science will figure out a way to do it, but it's been very difficult because of the unique nature of HIV.
I'm always amazed at doctors who are in very difficult situations and then but stay very level headed and stay cool, and you have to, I would assume, But I do think about your time with HIV and AIDS victims ultimately, you know, because you write your book, you think of the years from eighty two into the late nineteen eighties as the dark years of your medical career. I mean, you got to know a lot of these patients. How I just can't even imagine how difficult it was.
Well, it was terribly difficult, I mean, and it was even made more difficult by the contrast with what I had been doing in the prior nine years before we started seeing individuals with HIV, before it was even known to be HIV in nineteen eighty one. My career had been quite successful, you know, parenthetically in developing therapies for inflammatory diseases and order immune diseases, and we developed some protocols that had diseases that were formally fatal have ninety
ninety three ninety five percent remission rates. So we were on a real high, as it were, for accomplishments, and then all of a sudden you devote the rest of your medical career of taking individuals taking care of individuals to a disease. For the first several years, essentially all of our patients died with very very few exceptions. And you're right, you do get to know them, you develop a really good patient physician relationship, and you really care
about them. I mean, you know, part of the art of the art and science of medicine is to care for your patients, not only care for their medical issues, but to care about them. And that was very tough, and it was several years because remember we started I did started taking care of persons with HIV in the fall of nineteen eighty one, very soon after the first cases were recognized, and then we did not get truly
addic with therapy until nineteen ninety six. We got the beginnings of some therapy which kind of slowed the disease down starting in nineteen eighty seven with AZT, but it wasn't until the triple combination cocktail that showed that you could durably suppress virus to below detective level, but that wasn't until nineteen ninety six, so those were really difficult times.
We're speaking with doctor Anthony Fauci, who's now a distinguished University professor at Georgetown. His new book out now. It's called On Call, A Doctor's Journey in Public Service.
Doctor Fauci. In the book, you write about how former President Donald Trump way ask maybe after a tense moment or maybe an argument, are we okay?
You know, and would mess it.
You know, messaging would come back from his team or even Vice President Mike Pensis team too, that they love you, you know again, after maybe some tense moments. You've served seven presidents during your tenure, starting with Ronald Reagans all the way to President Biden. Are all presidential relationships complicated or was just that one in particular?
No? No, this was a very and as I mentioned explicitly in the memoir, this was a complicated relationship, very unique relationship when you compare it with the relationship with other presidents, because we did in the beginning. I mean, even though right now the people who are in the Trump camp, you know, are very hostile to me, I had a very good relationship with President Trump, and we related well to each other. I describe it in the memoir.
I don't know whether it was the rapport that two people, you know, who grew up in New York City to me in Brooklyn, and him and Queens had that kind of New York swagger relationship with each other, and it really was fine until I had to because of the fact that he was starting to say things that were just not correct from a public health and a scientific
and medical standpoint. And I was put in a very difficult position, which I did not like, but I had to do it to preserve my own integrity as well as fulfill my responsibilities to the general public. To have to contradict him in a public way when I was asked publicly, is it going to go away like magic? And does hydroxychlorican work? Which it doesn't and it can actually harm you. That's when the relationship started to fray.
And even when it did start to fray, I don't think that he wanted to have conflict with me, nor did I want to have conflict within.
Well of conflict for better or for worse. You've become certainly a lightning rod in the dialogue about public health and in the dialogue about COVID, and I'm wondering if you have any regrets about your time at the as the nation's top doctor in recommendations, in recommending school closures, anything like that in hindsight, given what we know.
Now well, first thing, that we were dealing with a historic catastrophic pandemic that ultimately killed one point two million Americans and more than seven million and probably closer to twenty million worldwide at the time, that we had to
have that physical distancing and that's slowing down it. We used to call it flattened the curve when the recommendations, and you know, most people, because I was the communicator of that, because I had been communicating with the public for four decades about outbreaks that I was communicating with the public, there was the misinterpretation, understandably that I was making all the policy about doing things like shutting down
and having physical distancing. I think at the time, when you make those decisions, you do it because you want to save lives. What the perfect decisions? No, would you like to have done a better job. Of course none of us did it perfectly, But the idea about at least slowing down and closing things for a while was the right decision. With masks, with shutting down with schools, the issue that we need to re examine importantly is
how long you did that? And I think that's what we need to re examine because if you look back, I was the one that said we should open the schools as quickly and safely as we possibly could, because there is collateral damage when you keep schools closed for a long period of time.
I am curious what you think the next big health crime this will be the US Surgeon General is warning about, you know, or what's put a warning on social media? For example, you know we're talking about flesh eating bacteria in Japan. What do you think is the next big health crisis and are we prepared for it?
Well, you know, there are health crisises that are infectious diseases, which is my lane. I still think that we have to be very careful to be prepared better and prepared to respond to the inevitability of another pandemic of an infectious diseases because history has taught us that we've had pandemics since before recorded history, and we've had it in our own lifetime with COVID and one hundred years ago we had it with the nineteen eighteen pandemic of influenzas.
So my feeling is that the thing that would be most abrupt and surprising would be another pandemic. But you can't predict that because pandemics are not predictable. But there are a lot of other health crises, some of which you mentioned yourself. I mean, I think the epidemic of OBCD in this country. I think the mental health crises, the issue with fentenol and other narcotics that are killing so many people. Yeah, those are the things that we need to address.
Well, doctor Fauci, I appreciate getting some time with you. Thank you so much, Doctor Anthony Fauci. His new memoir on call, A Doctor's Journey in Public Service. Not new, it's his memoir.
It is just out.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern ont applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty tim.
As you know, June is Pride month, and all across the world, millions are dotting their rainbow flag to celebrate the culture of the LGBTQ plus community.
And though in the US there's been plenty of progress in the pursuit of equality, justice, and inclusion, it's also been complicated time for LGBTQ Americans as companies continue to walk a tightrope with Pride out of fear of conservative backlash.
Politically, there where five hundred anti LGBTQ bills introduced this year, with restrictions on gender affirming care for transgender youth being the most common. For her take on Pride's progress and setbacks is Sarah Kate ellis President and CEO of the Gay and Lesbian Alliance Against Defamation, commonly known as GLAD.
It has been a roller coaster ride for the past ten years. Before I started, we were headed into and really did have the winds that are back at that point on marriage equality, and then we saw a real sharp backlash to that. What we do at GLAD is we do an annual KPI or measurement tool that we have called Accelerating Acceptance, and it's a piece of research that measures culture and society to understand how accepting or
not accepting it is for LGBTQ people in America. Once we have marriage equality, we really saw a jump in acceptance in America. But then once we saw the twenty sixteen election, we saw it dip down acceptance for LGBTQ Americans, and ever since we've seen it continually dip down as opposed to increase. However, what we haven't seen change and has stayed the same, and it's incredibly powerful for the past ten years, is that over ninety percent of Americans
believe in equality and acceptance for the LGBTQ community. So we haven't seen that ever flow, but we have seen culture ebb and flow over the past ten years.
Sarah Kate, are you surprised that it hasn't been more linear?
You know, honestly, after marriage equality, we really felt like, Wow, we're making so much progress. The wind is at our backs, like I said, so it was shocking, honestly, But when you look at change in in the trajectory and over long periods of time, it does ebb and flow. So
I shouldn't have been surprised. But I really got caught up, honestly, in the power of progress that was happening at that time, and it was palpable in the culture acceptance for the LGBTQ community, and my wife and I were able to get married. Our kids were at our wedding, you know, so it was like it was really it felt so good, like felt as though we were finally making headway. And we have made tremendous headway. But we have seen a backlash.
All right, So we have made headway. As you said, ninety percent of Americans acceptance of the LGBTQ community. Why are then we seeing five hundred anti LGBTQ bills introduced in twenty twenty four If there's such a high acceptance level, I mean, I think about all the political polling, there's nothing it feels like that's ninety percent, and yet there's all this anti LGBTQ bills being introduced.
Why is that?
Well, you know, I think it's the continued disconnect between a handful of politicians and the American will and want Right, a lot of politicians today don't actually stand up for the majority of Americans and where they see America going. So this is a handful of politicians who are vehemently
anti LGBTQ, and these bills have been sweeping across America. Now, the great news is that I think out of the five hundred, thirty seven have passed, which is not a lot unless you live in that state and then it's
you know, it's life changing for you. But the damage is done when they're proposed, and that's why we're seeing the backslide in acceptance because these bills are defining who we are as an LGBTQ community because they're being talked about in the news media by anti lgbt TQ politicians and they're especially targeting the transgender and gender non conforming communities, and that's super dangerous because it's a small community within
our community. They don't have a big voice, and that's why so many of us in the community are using whenever we get a chance to talk about are talking about the trans and gender non conforming community because they've been politically used by anti LGBTQ political activists.
Sir Kay.
One thing that's been really surprising to me, and we're bloomberg so we go, you know, companies is the economics and businesses the lens that we look through so frequently is what's happened with companies that they had fully accepted the idea of selling pride merchandise. I'm talking about Target for examples. It's now walking this tightrope because of fear they could face backlash like they did last year.
So there, you know, thank you for bringing this up, because I think there's a lot of false narratives around this. I want to say that that a couple of things. One is that what I've seen out of last year, Yes, bud Light and Target were targeted by a handful of anti LGBTQ activists that did an outsize social media campaign
and it did cause some issues in the marketplace. And if you look at the latest Gravity research, the majority of corporate executives and Fortune five hundred leaders are not backing down from Pride, from their pride strategy or what they are doing. And this is something that we've always asked for and Target is doing. This is actually making it Pride three hundred and sixty five and not putting all their eggs in one pride basket, so to speak.
Brands are really stepping up, they're not stepping down. And I'll tell you why. The reason is is because CEOs and boards know that thirty percent of gen g are LGBTQ and eighty percent our allies. And they're not just allies for the sake of allies. They are very active allies. And so the future generation of employees and of consumers are highly attuned to the LGBTQ community, and in order to appeal to them, you have to stand up for
the community. So we work with over two hundred brands at GLAD and none of them have been backing down. So I think that there was a lot of headlines at that moment in time, but nobody really dug into the story. And when you look at the story, we haven't seen a movement from forty to five hundred companies.
You have certainly played a role in media in terms of for the LGBTQ community and being aware of it. And I am curious how media has either helped or hurt in terms of acceptance and understanding by the broader public.
We now refer to ourselves as a culture change because media is everywhere right and people have platforms that have never had platforms before. It's both a curse and a blessing. We've seen media really accelerate acceptance for the LGBTQ community. You know, President Biden once said that Will and Grace did more for marriage equality than anything else, And I
think do you agree with that? Oh? Yeah, I mean I think in terms of when you're thinking about folks who don't know LGBTQ people and opening hearts and minds coming into your personal living At that time, it was like on TVs you didn't have phones coming into your personal living room or your personal space and laughing with you and crying with you. There's nothing that replaces that
to move hearts and minds and to humanize people. And it's quite frankly, you know, we're running three ad campaigns right now, and because we understand that only thirty percent of Americans know someone who's trans, so the rest of the seventy percent of people in America are learning about
transgender people through media. We have this Here we Are Now campaign, we have Protect this Kid campaign, we have all these media campaigns that we're running to introduce people in America to trans folks and humanize them.
Yeah, and I do wonder how that impacts, certainly the world more broadly, that if you have that experience, you're more accepting versus maybe if you don't.
I don't know, well, Sarah, Sarah Kate. That actually brings up a good point, and it's the idea that this is we're not talking about a monolith here and I'm wondering if what we're seeing right now in terms of what we were describing earlier, with the path to progress not being linear, are we seeing more resistance to the trans part of LGBTQ right now than the lesbian and gay part of it.
I would say categorically yes, and that because ninety percent of Americans say they know someone who's lesbian or gay, and only thirty percent. As I said, more Americans report seeing a ghost than knowing a trans person. So I do think that because people don't know trans people that they are being targeted, and they're definitely being targeted by politicians. Most of those five hundred anti LGBTQ bills that you spoke of earlier are targeting the trans community, and for
no good reason. Trans people have always been here. They have gained more visibility than ever before the trans community, and with that visibility comes fear because people don't know who they are. They're trying to understand. But once you know someone, it's really once you know someone's story, once you meet somebody, it's really hard to hate them.
How do you think about the investment universe, our world that we talk about so much money. Money can bring attention to something can move the needles on things. The investing world can too, So I just I'm curious how you think about that, if there's something to connect there or not.
Well, you know, I think about our disposable income right as a community is I think one point one trillion, And I think about companies understand you know a lot of times it used to be called the pink dollar. I think companies understand that there is a lot of opportunity with the LGBTQ community on every level in investment,
in consumer goods, in all of it. And so I think that helps our community along the way because from early on it's been our community has been positioned mainly because the people at the forefront of our community that had their platforms were gay, white men, and they could oftentimes hide who they were in the workplace rise into great positions that enabled them to have quite a bit of income. And that has been very helpful for our community in building our economic power and political power.
What's the conversation you and I are having with Carol five years from now.
I think we're going to see great acceptance. We're going to see seventy percent of Americans know someone who's trans versus thirty percent, and we're going to have a more accepting, kinder society. I know we have to get there, and I know that we're in a little bit of a culture war now, but I think on the other side of it, we're all about moving forward, building, dreaming, and that is about tomorrow.
You know, it's funny that I didn't hear people introduce themselves with pronouns until I went to my little brother's college graduation to show and you know, I'm forty. Yeah, wasn't done when we were in when I was in college, Like, things have changed quickly.
Yeah, there's been a lot that has actually happened. I feel like in the last couple of years you left us with some hope heading you to the weekend. And I really really appreciate that. I think our audience does too. Sarah Kate, thank you so much. Really appreciate it. Sara Kate Ellis, she's Brosident and chief executive officer of GLAD joining us here in New York City. Yeah, I love that. Right, change do us happen? Right, And if you think about it,
right the pronouns was a great example of right. We weren't talking about.
It wasn't even on my It wasn't even on my radar.
I should say, all right, everybody.
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