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Thank you both for sitting down with me, and first of all, congratulations. I know people will be viewing this after the race, but you've got to collectively a poll and a sprint win.
Oh it's amazing. It's very easy.
How is it to see the car yet again with the Carlisle name on it?
It's just every time it's exciting. It's like a kid opening a gift and there it is. There's your toy. Except this is an extraordinary toy that they spend years building and then they just keep winning and winning and winning.
It's a big toy and expensive toy, and I have to say it does have this element that it feels like a different Carlisle. Typically a Carlisle that operates behind the scenes working with institutional investors. But this is big, This is splashy, not to mention expensive. Why put yourself out there like this?
Well, if you think about the evolution of finance the last thirty years, you've seen a remarkable development of prime markets. Private markets are really the primary source of capital for many companies. As that capital continues to grow, the market has just evolved to a place where wealth retail. The breath of what we do globally is just evolved also, and this is just part of the natural evolution.
While it might feel.
Unique now, I think it's actually not revolutionary at all.
It's really just quite evolutionary.
And why move that way With bread bull specifically?
That was pretty easy. Everything about Oracle red bull Racing is about performance, execution, excellence, So that part was very easy to see and very easy.
To relate to as a firm.
The sport of one is also global and growing dramatically as we know, as are private markets, and so that all aligned. What made this really special was when Laurent and I spent time together, the teams spend time together, and it was almost like this sort of a very, i don't know, uniquely natural affinity where we all just became best friends really quickly, and and so hey, it's got to be fun too, But it is about performance excellence first and foremost.
I was going to say, Laurn, given what Harvey is saying that the finance world in general has been more interested in sport, more interested in f one, have you been fielding a lot of calls before this partnership from Harvey's peers who wanted to get in like he did.
You know, in reality, no, it felt it felt very natural straight away with Carlisle. With Harvey, you know, it's this moment where you realize that as a person you are talking with are the best at what they do in the world. And you know, we feel we are quite good at what we do, and what we see with our partners is that we go and try to partners with companies that are the best at what they do. And we had a lot more points of connections were
we had these performance obsessions. We have this data driven approach in our very different business, but together with that quest for perfections in everything we are doing, it felt like very very That's what collections, to.
Be fair, Harvey. There have been some outspoken critics about the move for private capital to do sponsorships to get invested in sports. Josh Easterly of Sixth Street said at a conference a couple of weeks ago it's representative to him that firms are more concentrated on fine tuning their brand than on the returns themselves. What do you say to that criticism.
Our business is exactly where they'ren't just described it. It's first and foremost always about performance. Performance drives everything. If you have performance, you have success. Again, you think about everything they do at Oracle Red Bull Racing, it's all oriented around success. When he references data, we think about data. It's different data. But these are organizations driven around performance excellence.
If you don't have performance, you don't have success. In terms of the partnership here, yeah, this is important to be able to reach a global audience. You know, you mentioned sport before. There's a real desire in the world for people to come together around sport and this is truly one of the fastest growing sports in the world, and so it's all very synergistic.
But you don't have success with that performance. You can't sacrifice it. It has to stay number one.
Well, the concentration of the sport, it's growing quickly. Apple now a US partnership with f one. But again, there is so much institutional money coming in, whether it be Carlisle sponsorship, whether it be other private capital firms taking investments in the team itself. What has that money done to change the sport?
Lare on You know, I think as a sport we have spent years and decades to try to have a more global reach. You know, we have been trying to reach out to our fans, We've been trying to reach out to the businesses, and finally it seems that we are now having that incredible growth. You after you reach, we reach more fans, more global audience. We have now forty percent of our global audience in Formula one is female,
forty percent that is under thirty five years old. And you know, we also had that common point of connections with Carolan. With Ave, they are trying to to get private markets to have that burder reach, and Phonua one is also trying to get set order reach towards a bigger fan base, and we are enjoying that. As a PRS, we worked a lot to be closer to our funds and you are right, there is so much more coming.
We feel we are only at the beginning, especially in the US, in terms of reaching out to the wider audience.
It's a fair point. This growth is happening to both of your industries at the same time, Harvey, that growth also coincides with you taking over the leadership of Carlisle in early twenty twenty three. It does feel like a different mindset coming from people institutions coming to buy funds versus you now having to sell them as well to.
A broader audience.
Is this a big cultural shift you think that you're leading at Carlisle? Is this a Carlisle two point out?
Well, I think again, if you think about it's an incredibly competitive world out there. All organizations have to go through constant processes of self analytics, really being humble, asking themselves, Hey, what can we do better tomorrow? What can we do better for any client we serve around the world, whether it's a wealthy individual outside of the United States or.
A future retirement.
An individual planning for retirement in the United States when no rules change. And so no, I don't know if you're ever through your two point zeros. I think as a leader of any organization, you constantly have to be working with your teams to say, hey, on any given day, what can we learn, what can.
We do better? And who can we serve better?
And so again, I don't view that any of that as revolutionary. I just think of that as evolutionary. Now, the firm, as you point out, has been on a strong growth trajectory since I've shown up.
The team's really rally They've gone an extraordinary job. I'm really quite proud of everything they've done.
Is it a cultural shift, though, to go from institutions to have to think about retail and wealth.
I wouldn't say it's a cultural shift because at the core of everything that is culturally relevant is performance. What I would say is understanding that end client. So you see a lot in the news today about retirement. It's not really even a sensible question to me whether retirees in the United States should have access to private markets. Firefighters millions of them, teachers millions of them have had
access to these solutions through their pension plans. What is relevant is how do you structure them, how do you work with regulators to get it correct. So the real issue about extending private markets more broadly around the world to different clients is just getting it right.
But it makes total sense.
You know, since two thousand, we've lost half the public companies in the world.
So private markets are the market that.
People want to allocate capital to, and they shouldn't They shouldn't be deny that opportunity. We just as an industry have to be really thoughtful about how we deliver it right.
Well, you coming in as leader, maybe there are some things that also mirror each other. Coming in when there's some tumult at the top, when there's maybe questions of leadership, Lauren, you've had to do that this year as well. Has Harvey given you any advice of what it's like to come in as a leader when there are questions surrounding past.
Leadership, of course, of course absolutely, And you know it even goes beyond. You know, when we say why do we why do we partner with Calai? We partners with companies so that we can have that challenge, We can have that exchange about leaderships, about.
What we have to know. What the advice was, We need to see behind the behind the scenes.
You know, the behind the scene advice is as simple as that. You know, it's all about performance, and performance only comes from people. So get your people in the right conditions to work. Get them in, give them the possibility to express their talents. Make sure they have the right working environment for them to operate at best. That's what they do, that's what we do. That was one of his first advice. All of that is happening in an incredibly technological environment and data reveal you.
Were also coming from racing balls where you were having a lot of success with the team, even our performing the team at certain points too. Was it a hard decision to make to come over to Red Bull or was it even a choice at all?
You know, I think it was an incredible owner. You know, to receive that call, the first the first feeling you get is it is Red Bull asking you to step up.
There there is a sense of loyalty towards the company, so of course it was it was you know, it was a big news and a big surprise, but it's also something that you know you have to jump into as part of the loyalty you have with the group, and you know it's an incredible owner and privileged to be part of a team that has been winning so much in such a competitive environment in the last two decades.
Spill mis leaders, we can we can all learn from each other. And what he just talked about was really about talent and talent drives everything.
We're in a people business.
No matter how much data we collect, no matter how much technology we implement, we're in a data business. He didn't want to get into much detail. He has called me about tire selection and I did call him for advice during the government shutdown, I said, hey, should we brainstorm about these issues?
But anyway, that's really just between him and me, his leaders.
So for the sprint, you were a hardsoft medium. You were there every call.
He doesn't call me live. We usually talk a couple of days before we've.
Got a race, and then you know, I'll talk to him like leading up to the government shutdown, But once it happens, I'm doing my thing.
He's doing well.
Maybe you're the right person for this, Harvey, because I was really struck by something you said last week at a conference. You called yourself as part of being the top of Carlisle also the chief worry officer. Sure, what is your chief worry right now? As the chief worry officer, the.
Important thing about being the chief warry officer is there's no list of things that one doesn't worry about. But I think that, you know, part of my role and primarily really what drives my role is exactly what Laurna said about enabling the team, motivating the team, bringing the team together, ensuring that the team, you know, feels good about success but not too good, always staying hungry but at the same time humble. They've had really remarkable success
since he stepped in. I mean, it is a extraordinary with this with this man leader and friend and the whole team and Max.
Have achieved like it's really needs to be underscored.
I think in terms of worries, the key things about worrying is anticipating things that may happen, but allowing your teams to really digest that information. So at this particular point in time, as we said here, you know, there's a lot of people talking about markets being priced for perfection, or geopolitics or basically the way governments are relating, and trends that have existed for thirty forty fifty years that are somewhat reversing. I would put all these things sort
of on my list of things I focus on. But there's nothing as I sit here this morning, that I'm worried about, you know, other than the that you know, we're going to win every race for the rest of the season, which also I will now say was part of our contractual agreement.
Yeah, oh wow, Okay, Well, if something goes wrong we don't win, we're going to check in on this. Not at all to that point, Max has been closing the gap. What needs to go right in order for that not only to be closed, but to be surpassed.
Look, we take it raised by race as much as the world would like us to talk about the World Championships, because yes, mathematically it has been reopened thanks to the string of success we have been having. The true seas, we take it raised by race. We even take it day by day sessionization. That's how we keep the right focus, the right intensity in every decisions we make, and that's you know the rest will be the consequence of that level.
Only twenty six must be on your mind, and especially the second set I think is on a lot of people's mind. You take it day by day, but at what point do you think you'll have the information you need to make that decision for the second seat next year.
You know, we are in a very comfortable situation. We have the year contracts on our site for all of our drivers. They are great kids. We want to give them as much time as possible to show us what they want to show us. So of course we don't want to wait until the last race, because you know, if somebody loses seat, we need to be fair with this person. But we think a couple of prices would probably make a core and.
What are you focusing on the priorities for making that decision.
It's super simple, is the same then for every single business it's performance of performance only.
Performance only. Harvey, in thinking about where the world goes from here, I'd be remissified didn't bring up the chief worry of the moment, and that is concern about credit conditions. You've made it very clear that some of the issues, be it first brands, be it some of the regional banks more recently, if it is a cockroach, it's not termites that are destroying the foundation of the building. They
might be a one off. At what point do you start to get concerned that maybe it doesn't necessarily show that the whole thing's going to crumble, but it's a late cycle and there have been mistakes made that might pop up more frequently.
Well, I think a lot of the questions that are being asked make a lot of sense. You know, since the financial crisis, we've had generally speaking, very stimulative policy in all respects, quantitative easing, fiscal policy through the pandemic and beyond, and so it's unsurprising when you look back, of course, surprising when we came out of the financial crisis, but unsurprising when you look back the trajectory of markets
that we've experienced. Anytime you're very late cycle like this, any news item could be disruptive to a market on any given day. I think that we haven't had really a credit or session driven credit cycle in a very, very, very long time, and so people are right to be
concerned when they see credit under performance. Having said that, the bigger questions around systemic risk, or when you say will things crumble, Just because we haven't had a credit cycle in a long time doesn't mean if we go through a credit cycle, which inevitably we will, that's a certainty that things will crumble. I think the market structure
is such today that it's pretty resilient. And when we look at our data across our portfolio companies, as we've talked about any there are seven hundred thousand employees and our portfolio companies around the world, they're twenty four hundred at Carlisle driving all this activity. When we look at that data today, that data suggests that companies are growing. Employment is steady, inflation is a little sticky, but there's nothing in the immediate horizon that suggests that as you
would say things are crumbling. Having said that late cycle, it should be on a worry list.
It should Okay, makes sense as chief worry officer, what specifically is the worry Then if it's not system.
We should get to a point where markets are let's say, very stretched, credit spreads are very tight. It's about how you deploy marginal capital from our perspective, and so when we think about it again, we're not in the business of avoiding risk. That's not the business we're in. We're in the risk taking business. We have to be in the business of pricing it correctly. So anytime your late cycle you want to be very, very thoughtful about that
marginal risk deployment. Last year we deployed billions of capital, sometimes in Europe, sometimes in the US, sometimes in Asia. But you have to be looking around the world for the capital with the right risk return. And that's what we do on behalf of all of our clients.
Just to bring this back around, there have been some concerns that with the amount of money coming in from wealth that that gets harder to do just because there's that much more money that needs to be deployed, and maybe you go into things that you otherwise wouldn't have because that money needs to be put to work. Is that a fair concern?
Well, I think it's a it's a fair concern if you're not thoughtful about deployment. In the history of cycles, what you tend to see is you tend to see too much capital coming into a space, chasing chasing too little return. It's our responsibility to manage that capital thoughtfully, and so that's our obligation.
That's how we think it.
Is there a concern that others aren't doing that as this money's coming in.
I think any time you go through a long cycle, you're going to see marginal participants who may not make the best judgments. But again, your point is whether or not. Really what you're getting is whether or not it's systemic or not. I don't see that right now.
Well, just before we let both of you go the first big splashy sponsorship, more more to come between you two, between Carlisle and other sports.
Right now, we're pretty through with this partnership and we just continue to root for our friend here on the whole team in Max.
And so now we're quite satisfied.
And you know, on our side, we are very proud that Carlile is the first ever global investment firms to partners in Formula one, you know, is the first and also for the sport to be connected with as part of the business. And we are very poor that they chose or curricle racing.
Yeah, we're thrilled with it.
We're all excited to watch watch the race today with the Carlisles signed zipping by and good luck and congratulations already for this weekend.
Thank you both so much.
Thanks Danny