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All right, everybody check it out. Shares a Peloton Man investors peddling fast to snap them up. The stock soaring the most ever, although shares, I should point out, still down about thirty percent year to date. They're off about ninety seven percent from their all time high that was back in January of twenty twenty one. Let me just put it up on the Bloomberg because the stock is right now up thirty six percent. Let's get to it, though,
because there's stuff going on. Bloomberg News Chief Technology correspondent Mark German is with us in the La Bureau.
Mark.
We're usually talking Apple and we might get there. Peloton the latest results earnings beat. It seems significant. This is a company that has continued to struggle since the pandemic. What's your take on kind of what we got and does it mean that a corner has turned for Peloton.
Investors clearly are happy about the showcase of some better profitability, right, more free cash flow, more savings. But let's not forget last quarter their CEO resigned because clearly he didn't like the road he was seeing ahead of him. You had another fifteen percent of jobs cut. That followed three or four rounds of layoffs in the prior two years. They've completely destroyed this business, right, They've taken it from this hardware darling that made these popular bikes and treadmills and
have re architected it into an app business. I know investors are seeing the potential of profit here, and they saw that beat in this in this fourth quarter, But if you look ahead to the first quarter, you're going to see a dramatic revenue tanking on paid app subscriptions as well as their hardware purchases. So I'm not entirely sure why investors are so optimistic about this company. I personally think that a long term future for Peloton is
far fetched. I think that the best approach for them would be to try to sell themselves to a Netflix or an Amazon and convince Netflix or Amazon for a few billion dollars to buy their very strong arsenal of content right and their application in that brand and make that part of a Netflix subscription an Amazon Prime subscription to make that more valuable and get more people to sign up for their monthly services.
I mean, the whole company is worth less than what Apple paid for Beats headphones that you don't even see anymore because Apple decided they don't even care about the brand. It's got to be the smallest company that I've ever heard you, Mark German talk about. They only grew revenue one percent, and as you said, it's expected to fall. The only reason they're getting fatter margins is because they're
cutting costs at the same time. It kind of reminds me of Apple in the sense that the market is just saturated for these very expensive devices and they need to find other ways to get revenue. Do they have any other leads?
Yeah?
I wouldn't be surprised if Peloton, as one last ditch effort, winds down their Harbor business completely right, tries to take a loss on that on their balance sheet and completely gets rid of it. There's nothing proprietary about their hardware. If I'm being completely honest, right, this is something that any company in America or China or wherever can probably replicate really quickly. It burns a hole in their pockets and their margins. They've destroyed this business. Barry McCarthy drove
this business into the ground. He really had no choice after what John Foley did to it, thinking that this was going to become a trillion dollar company out of COVID and that people would never leave the house again. So I certainly think that the saving grace here is their content and their application, and I wouldn't be surprised in two to three years from now if Peloton hasn't sold itself that it's an app only business, and you
could have a nice business as an application. We've seen so many companies be app driven businesses.
You have Uber.
Netflix obviously is an app in many respects built around content. So the potential is there. But to your point, the only reason they're showing better profitability and cost savings is because they keep firing people and cutting costs. Now back to my harbor point for a second. When their chief product officer, this was one of their few co founders, left about a year and change ago, he was not
replaced by a hardware person. He was replaced someone with someone who's an expert in software and content and server infrastructure, And I think that gives you some sort of indicator where this company is going all in on that app. If they can turn that strong brand into a strong application, they have the future. But that's not a multi billion dollar public company mark.
Where did they go wrong? Where was the Because they came out of the gate a hardware company, right, and there was a lot of fanfare, there was a lot of ads. I know, we as a media organization did multiple stories and conversations. I know you you were covering them. Where did they go wrong? Is it that they just thought too big the spend? What was it?
Or was it just coming out of COVID. I mean, everybody was riding this bike in COVID.
But what I'm trying to understand is COVID did I've got one? I canceled my membership just recently because I'm just you know, it's a cote rack. But I had it exactly, but I had it before COVID. Having said that, though if COVID hadn't happened, would they have still had problems and issues?
Potentially they were this nice high end brand, small company prior to COVID. COVID hit, they exploded. Everyone wanted one, right. They were growing so quickly. They continued to hire, they made major investments, they rolled out new products, they doubled down on their content. But the worst thing they did was try to open this facility in Ohio to manufacture their own equipment in the United States. And they spent
billions of dollars to do this. Right, they're only now writing that all down, and they really, you know, put themselves in a bad position. Fundamentally. They made a terrible bet that COVID would last for the foreseeable future, maybe forever. People, and I hate to be exaggerating here, but this is really what they thought. People weren't going to leave the house again. People weren't going to go to gym's again. They were going to only work out from home. And
they didn't double down. They quadrupled down on that idea, spent too much money, Jim started reopening. The world returned to some semblance of normalcy, and they were stuck with all this excess inventory that nobody was buying because people wouldn't need it. On top of that, they had crisis after crisis, including launching a treadmill that didn't have proper safety protections that ended up killing a baby, hurting pets,
and hurting people. And then they're bike had issues too where people were falling off of the bike, so their harbor wasn't safe and their harbor wasn't very good. So it was just this multitude of issue after issue after issue on top of really bad bets that drove this company to a place where a new CEO had to come in. Fire half the company wind down much of the harbor business, and now they're left with an application that then ran into marketing issues that then ran into
cost issues. So they're not really in a great place right now. Despite the new profitability they're showing.
Kind of sounds like next stop. You know, the CEO has to be an expert and how to sell a company.
Right, to be fair, Maybe at the time, many of us thought nobody would leave the home again, right, and a lot of workers are still working from home.
You didn't think you'd go back to work.
No, I'd never spent a day at home. Yeah, I was in the office every day. But there were people who thought, you know, this was a structural change, not that we wouldn't literally leave the home, but that we would work from home, we would exercise from home, we would only watch movies at home. And a lot of that has happened.
Yeah, there's a balance, yes, But Matt, and you've seen so many other companies face this, right, You've seen other companies like the tech giants over investing and having to pull back. But what Peloton should have done right with scale as needed? They refuse to scale as needed. They went from zero to one hundred to prepare for demand that they were anticipating that never came. The smarter thing would have been to follow the Dell and Apple model
of supply chain and build to a necessary degree. Now under this new leadership, they've done a lot of smart things to unwind the troubles of the prior management team. Okay, and they could have a pretty good app. But and one last thing I will say on this, because.
It's just quick.
Yeah, there's no stronger brand in fitness than Peloton. So there is something still interesting.
There, right, It's a value you say, Peloton people know, all right, interesting And we figure they'll at least be at least one more chapter to this and he'll be covering a Bloomberg News chief technology correspondent Marker out there on the West coast, you're.
Listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple car Play and then brought auto with a Bloomberg Business act or watch us live on YouTube.
I got some numbers for you. A Bloomberg News team put this out that wellness it's a big global business. It's about five point six trillion in rev revenue back in twenty twenty two. This is from the Global Wellness Institute. It's a big industry group, and they say research from the nonprofit organization says the industry has grown from three
point four trillion in twenty thirteen. I'm throwing a lot of numbers, and by twenty twenty seven it's expected to grow an additional fifty seven percent to eight point five trillion, about twice's largess Germany's gross domestic product.
Okay, there'll be a test.
Year's end of this.
Well do you know that seventy six point one percent of stats are made up?
Why do you say that?
I mean, how do you classify what people spend on wellness or not well by? By water is it wellness.
Every time you buy something, you know, there's data collection, like there's stuff. Anyway, let's get to somebody who's got their own report on wellness and health and what consumers are actually thinking about their own state of health. The Carney Institute Consumer Institute has done somewhere. Katie Thomas is with us. She's lead at the Carnee Consumer Institute with us from Pittsburgh, Pennsylvania. I don't know if you have some comments on data, but let's go to your research. How are you.
I'm doing well, Carol? How are you? Matt already scooped? You know, basically my whole brief by saying that is water wellness or not? Those are the exact kind of questions we were asking.
So I played pickle wall the last two nights and it was fifteen dollars a session. Was that thirty dollars spent on wellness this week?
Yes?
Right?
Well, yes, yes, I would say so. Yeah. So I think you're asking the exact right questions, which is, you know, our motivation going into this was to understand a little bit more how actual people talk about health and wellness as opposed to how we tend to bucket it when we talk about it from sort of a consumer trend or spend perspective. Well, when we talk to people about health, it's a lot more higher order than these like simple
decisions that we're talking about here. Whether it's pickleball or even GLP ones or the sober curious movement, people have much heavier ways of thinking about health. But they also feel like they know how to make healthy decisions. So that's an area where as we look at these health and wellness trends and we keep kind of hammering home the communication of this is how to be healthier. Most
people don't actually need that messaging. They either are defining it for themselves or they already know how to do it.
Wait, so why did you do this?
What?
Like, how do you guys take this and then I either help your clients or find productive material and you know, help to make productive decisions out of it.
Yeah, So what we really do is, honestly, it's in response to the fact that everyone feels like they have to kind of jump at every little blip you see on the radar. So whether it's electrolyte powders or you know, gut health or like, oh I've got to move and make these small shifts to all these little tiki taki health and wellness trends. And what we found is if you have a better understanding of a consumer's overall lifestyle,
that will be a lot more impactful. So I think a great recent example of this is McDonald's actually taking salads off the menu right because they realize that when people go there, they're probably not looking for a salad, and there may just be other ways they define health from McDonald So it's not going all the way to a salad. Maybe it's grilled chicken tenders things like that.
So it's really starting to kind of translate some of the overall lifestyle considerations and where people make trade offs and kind of couch things as health, like we said, as opposed to feeling like you have to overcorrect just because some small health and wellness, you know, little trend is bubbling up.
I've been buying asa e bowls lately, Aggie loves My daughter loves assabols.
Although they're packed with sugar.
So I'm not sure that it's much different than I I've.
Known you for such a long time when you weren't an asaya ball kind of guy.
Yes, well, I mean, look, I'm leaning more into it because I'm getting older.
Is that why you've done it out of it?
I mean, yeah, of course I want to live longer, you know, I don't want to die of a heart attack and get diabetes. And but you know what, I'm in a very large cohort, right, I mean we're seeing I was talking to Alan Patrick Hov today, famous VC.
Investor invests in longevity.
In longevity his new company, Prime Time invest In trying to make life better for people who are older. And there are more people over sixty than there are under eighteen, So we're definitely directionally that's where we're headed, right, Katie.
Yeah, absolutely, And that's part of what we're seeing here is just like a preference for preventative health as opposed to some of the other, again smaller things we've seen as a response to health lately. And then also of course factoring in mental health, and that's where some of
this really starts to blur. And sometimes there's this inherent conflict with health of what's traditionally physically healthy as it relates to perhaps diet and exercise, and then what's sort of that self care bucket, right, Like, oh, I you know, having ice cream once a week or a glass of wine is sort of taking care of myself. It's good
for my mental health. And so it's really that's part of the journey is figuring out for consumers and each brand's individual consumers, what are those trade offs people are making, how are they defining health, What is what matters most to them, like where they're gonna kind of make a sacrifice, Like a lot of people still don't eat healthy things
because simply they don't taste good. And then there's a lot of products like some of those electrolyte powders that that's exactly why they're doing well is because people don't like plain water. So it's really just like trying to bring all those things together and strike the right balance to figure out what health really means to consumer.
I mean, I spend six dollars, at least six dollars a week on a twelve pack of flavored Seltzer water, Like the flavored seltz water section that my grocery is now an entire aisle.
I know, I know, it's like kind of crazy. I am just kind of blown away. I mean, and I feel like all we should do is be drinking water.
To be quite honest, I actually quit drinking Katie too years ago. I've been California sober for two years. What do you think about weed?
I mean, I think that's that's a great example of one way a consumer. Some consumers would claim that's not healthy, and some would say it is healthy. I think sort of in a similar vein Matt, we asked in our study what people think about GOP one's versus like having more of a body positivity self acceptance message. Ninety percent of people said self acceptance was actually healthier body positivity messages as compared to GLP one. So I mean, I
think you see all these trade offs. Same goes with weed. Some people would say, hey, sober sober, not California sober. Others would say, do what you got to do that works for your lifestyle. All right.
So we're in an economy that some would say that there are a lot of I think it's not even some. I think it's safe to say that there are a lot of Americans out there that are just struggling to kind of get by month to month. So having said that, you know, I don't know if something came up in your survey about you know, when the economies toky, it's harder to make those smarter, healthier decisions.
Yeah, absolutely so some of what we saw about one in three consumers said that finances are one of the things that stand in the way of them being healthier, and then one and four said access, so maybe not being able to you know, get to the right foods or get to a gym or what have you. So
there certainly are trade offs that happen there. But part of the other challenge that we're calling out with this brief is the issue with health washing, which is sort of similar to greenwashing, where everyone's throwing every claim on pack that they can it's just ultimately confusing consumers when really we should be looking at you know, public health and public policy for more consistent messages on like you know, fresh fruits and vegetables and all of that, and just
like being thoughtful about what the whole lifestyle looks like and where consumers can kind of make those trade offs.
You got your undergrad and ann arbor, right, you got your MBA in Chicago, You're in Pittsburgh right now, You're like a solidly Midwest That's right.
Is it easier?
Is it easier there because you're closer to the farms and natural food, or do you think on the coasts, I mean, is there a difference between like flyover Country and New York and LA.
You know, just to clarify, those of us from Pittsburgh don't actually consider ourselves midwestern. So I never grew up being Midwestern. But no, just you know, just a nitpick, but no, but I am, well, let's be honest, No, I think you know, you do get a little bit of both. So it depends on what you're looking access to. The nice thing about you know, middle of the countries there it does tend to be a little bit more affordable, but it really just kind of depends on Again, it
goes back to what people define as healthy. So is healthy local versus organic? And there are arguments to be made in either way. If you're getting meat that's organic versus something that's maybe not organic, But like hasn't you know, the supply chain is a lot shorter, so I think once again you get into those same sort of base. And that's the whole challenge with health and wellness is you can kind of call anything health and wellness.
All right, Well, this was fun California's sober.
I liked it.
I know people are.
I'm a Midwestern boy as well. I will point out go buck Eyes. I thought you were good.
Oh no, I was gonna say go Blue. I haven't Jim Horba bobble Head behind me. Sorry, disagree the bane.
Of my existence.
They're good lately, you know I love it.
Katie Thomas, thanks so much.
Be well.
Let She's a lead at the Carney Consumer Institute, joining us there in Pittsburgh. Organic natural, what do you buy?
You know what? I will be honest.
I was all about organic uh for years until I moved here and had kids and like money got tight. I used to have so much disposable income as a single guy. And now that I'm married and diffay Westchester taxes and I'm paying like you know, college administration prices for preschool. I just buy whatever's cheapest.
I know it changes, right when you have everything's expensive.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car 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.
All right, so from the Magic Kingdom to the platform formerly known as Twitter, ya hear thisss leader, there's a few things.
Well, and Silicon Valley at large, right, I mean, there's so much going on out there, especially with Elon Musk's companies, not just Tesla and Twitter, but also Neurlink. Max Chafkin covers a lot of this stuff for us. And but before we get to all of that, I want to throw them a curveball.
What I'm ready.
I just ordered The Contrarian, so I think you'll see a bump in your in your revenue there. Max wrote The Contrarian, which is a story about Peter Tile and Silicon Valley. Right, No, and it's because he was on the Joe Rogan Experience. Did you listen to Peter Teal on the Rogan Experience?
You know it's it's three hour it's three hours long. I actually have not a confession, have not made it through the whole thing. And it's been you're sort of hinting at this, but the but the appearance has been memed. There's a lot of stumbling, a lot of sort of amusing back and forth between Rogan floating various i'd say rogan interests and Teal attempting kind of graciously to sidestep those.
It was amazing. First of all, you get a real read on how deep Rogan is into any right wing conspiracy theory. I mean, he's all in on all of them, and then Peter Teal seems to kind of debunk them one by one. On the other hand, Rogan asks Peter Teal like a couple in three hours, two tough questions, and both times Teal is just absolutely frozen. He says, how come climate science isn't real science? And Teal's like, uh, well uh and doesn't have a great answer for it.
He also asks, you know why these left wing philanthropy businesses are suspicious? And Teal also freezes there. So I just thought it was just such a fascinating waste of three hours. I feel like I need.
To know more, all right, Well, I want to know more from Max because there is a story on the Bloomberg about those that are financing Twitter or formerly known as Twitter, now known as x So there is that story Dana Hall and Rachel Met's putting it out. What do we need to know about that? And what's interesting for you.
Peter til is not an investor in X.
Not no, no, Peter Teal. Although plenty of friends of Elon Musk, Peter tele and Musk have a sort of fraught relationship, they're more like frenemies. This list, though, a lot of these names are going to be known to people who have who have followed either X or the whole saga. It's it's a lot of people who have
close ties to Musk. So Larry Ellison, uh, the you know, software billionaire, Bill Ackman of Pershing Square Capital, a Saudi prince and recent Horowitz Sequoia venture capital firms, both both of whom have sort of are tied closely with stuff that Musk is doing. Now. The biggest surprise is that Sean Combs Diddy was an investor in the in the buyout.
So it's interesting to me that. First of all, I love to say Prince Al Walid bin Tlal's name, so I wanted to do that one time.
It's super fun.
And uh, Bill Ackman is an investor as well, and he has been so heavy, such a heavy, super user on Twitter. He even thought he could, I guess, raise and market a closed end fund with all of his followers, but that was not so successful. Do you get any interesting insight from this list other than kind of the gossipy side of it.
I mean, I think, like, like I said, we knew a lot of these names because because of other last suits and so on had shown. Some of these people came up in Elon Musk's text messages, you know, back in twenty twenty two, and when he was discussing the buyout, I'd say this the acquisition of X and Elon Musk's you know, running it has always been a bit of
a head scratcher. It's never totally made sense. Like as a business he overpaid for the company, which is part of the reason he tried to get out of it, and for the investors has always been a head scratcher. I think really like a lot of these guys who are in this company are just like the banks that loaned him the money to do the buyout, are hoping for further connections to Elon Musk, you know, to be involved in whatever the next deal is.
Well, maybe they should get a chip put into their brain. No easy segue only got about forty five seconds. I'm sorry, Max, because the little Rogan thing ate up some time. What do we need to know though about this second implantation?
So yeah, Neuralink, that's Elon Mus's brain implant company, announced they put a chip in a second patient. Now I should say this. The chip essentially allows the patients who are paralyzed, you know, unable to move a mouse, a cursor mouser type. Before this, they're able to basically use a computer. It's exciting, but very very very early days. I mean, this is like the earliest kind of clinical trial. It's not even a clinical trial, it's like a preliminary investigation.
So it's gonna be many years before we see any of this commercially, at least for Elon Musk, although certainly good news for Musk and for his company, Neuralink.
Always pretty cool stuff. Listen, Max, thank you so much, and thanks for putting up with Matt Miller.
I think you know what.
I'm so excited to read this book because you're going to learn more. You need to learn more about somebody who essentially is trying to buy himself into the.
White We actually had Max on to talk about the book a lot.
I missed that episode.
You're listening to the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Easter on Apple car 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 playing Bloomberg eleven thirty.
M Broommack.
Journal, Now about you? Let me drive?
No, no, no, no, alright please, I'll do gravels.
Let's wait.
I want to drive.
It's a question time.
This is the drive to the clothes do for me? Well, yelling on Bloomberg Radio.
All right, he's definitely dancing a little bit. We're getting closer to the closing eighteen minutes away. Here, got stocks pretty much near their lows of the session. Charlie, of course, just breaking down the numbers. I do feel like Matt, we're kind of all waiting for.
At one point, we were just half a percent away from another record high, right, we're looking for fifty six sixty seven. We got closer and closer that on the S and P five hundred, and then we just fell away.
Yeah, I think we're kind of running out of steam, but maybe just waiting for Jay Powell tomorrow. Let's see what our to the closed guest has to say about it all. Hamilton Lane is co CEO. He is, actually, I should say Hamilton Lane co CEO. Eric Hirsh and he joins us from Pennsylvania. Good to have you here with us. Eric, How are you? And just let's start big and broad. When you look at the market environment, what are the kind of things that you are focusing on?
Is it Jay Powell tomorrow? Is it something else?
So it's not Powell tomorrow. And again, happy to be here. So I think we know what we're going to hear tomorrow. I think we're going to clearly start to see rates coming down. But I think sort of from our perspective sort of the concerns of recession or hard landing are sort of just.
Grossly overstated right now.
We're just not seeing the consumer spending in the areas that really matter and drive the economy.
We're not seeing those let up.
I mean, all of the sort of standout consumer issues and earnings reports have been down arrow stories right like they're not booking enough at trip Advisor or at Airbnb. We're not saying growth to Disney's parks. Even you know, people at Walmart if they're buying more stuff, but it's actually sort of people, wealthy people coming down from you know, higher end stories.
I've done that. I'd like I've traded down on brands, like for things like, you know, plastic bags or something. I'm like, a, you know, I'm.
Okay, buy plastic bags. I know you're an evil person.
Care right, so you can't be buying plastic bags. Yeah, seriously.
Now, on the other hand, if you look at the retail sales numbers, they're good.
You know.
If you look at GDP numbers, they're good.
So, uh, you know the.
Issue, Matt, I think I think we got to be careful to not sort of conflate pieces here. Just because Disney's theme parks aren't growing is very different than saying Disney's theme parks aren't still pretty full. And so to me, when we talk about recession hard landing, we need to see Disney theme parks coming way down. We need to see airline travel coming way down. We need to see restaurants empty, we need to see restaurant pricing way down, and that we're just not seeing. I think what we
have is a real bifurcation in the consumer. There is no question that the bottom end of the consumer is getting hit hard. There is some social issues around that, there are some tragic issues around that, but they are truly struggling. The middle class and the upper class, however, are continuing to crank away and again for a lot of them, higher rates have actually been a real benefit to cash in the pocket.
So you guys have what about nine hundred and forty billion dollars in assets under management and supervision. So I'm just curious. I know you focus a lot on the private markets. You know, what are you doing with your client money? And by the way, I do buy a few ziplocks, but I use a lot of I've all usable bags. I don't use plastic bags in the supermarket or anything anymore. Before I get a lot of mail,
although I might get some hate mail for ziplocks. So, having said that, what do you do with client money?
So we've been active, We are deploying.
We have a lot lot of capital, Our clients have a lot of capital, and we are deploying a lot of capital. The private markets, I think, very different than kind of the public market dynamic are continuing to expand. There are just more and more private companies getting created.
And whether it's here in the US or outside the US, whereas on the public market side, the number of publicly traded companies around the globe that is not a big growing group of companies, and so that is generally shrinking in most markets. As being public is challenging, it's expensive, it's time consuming. We know we are public, and so I think for a lot of investors, they want to get access to the sort of the broader, growing part
of the economy, and that tends to be the private side. Specifically, There's been a couple of areas that I think are attracting a lot of the capital in a good way. One private credit, So regional banks really kind of hamstrung in this environment out of the lending business. Private credit
has sort of stepped in and filled that gap. Infrastructure, whether it's here in the US or in Europe, there is real need for major infrastructure spending, and so private infrastructure really is going to be the gap filler relative to what the governments are doing. So those are two interesting areas with interesting returning characteristics.
I wonder what you think about the aging population and healthcare, because we've had investor after investor on my show Bloomberg Open interest mornings from nine to eleven on Bloomberg Television. Who are saying, you know what, the demographics are so compelling, and you know, pricing power is definitely there when it comes to saving your life. I mean, look, how many people are willing to pay one thousand dollars a month for GLP ones? Is that trade still not too crowded?
Well, we know, Matt, that osa E balls are not going to be the only solution for healthcare, so right to more than just that, and I think that is an interesting trade. So healthcare, whether it's in the pharma space, whether it's in the service provider space. So again, aging population of boomers with a lot of capital, I don't expect that we're going to see all of them heading into kind of group run facilities. There's going to be an awful lot of care at home and that is
going to create an incredible growth in private nursing. That's been a big area for the private markets. Private healthcare providers and sort of general home help. Those are other big areas for good capital absorption.
Hey, one thing I want to ask you though about private credit specifically, And listen, the last few years at Milkin and I've been there. It's like that's all anybody ever talks about. It's not the public markets, it's private credit. Having said that, you have increasingly more and more big firms that have gotten involved in private credit. You've got new market entrants, and so that extra competition has definitely
pushed down some of those returns. What are you seeing on your private credit return investments?
So I would say a couple of things can be true. We can see more capital coming in.
We are. We can see more entrants coming in. We are.
We can see the big getting big. They are that gap and that void that the banks have left very large, and the amount of dry capital that's sort of sitting there in the private markets that needs to be deployed. And oh, by the way, leverage buyouts they're going to largely get financed by private credit. They're not going to
go into the bond market to do that. That game is largely moved away again from not only the regional banks, but sort of the big bracket banks are not the big providers anymore of kind of the the the lending capital inside of a leverage buyout. And so we're still seeing the returns being very resilient. You got to be careful again not to say that every private credit manager is fantastic and no one's going to have any issues. That's not true. But again this is kind of picking
and choosing. But if I'm painting with the broadbrush, I ud say, returns there look very good, very good as what sixteen Yeah, I would say again we're talking about credit, yeah, you know, with credit protection. So I think what you're talking about is kind of a nine to thirteen percent
rate to return. And again on a relative basis to what you're sort of seeing in the public markets for credit risk with very low leverage ratios, I think a lot of investors are really happy to go take home a ten percent rate to return.
All right.
Going to leave it on that note, Hey, Eric, thank you so much. Appreciate it.
Eric Hirsch.
He's the co chief executive officer at Hamilton Lane. Joining us there from Pennsylvania.
This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you hit your podcast. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminalone