Haresh Patel (00:00):

Good morning, everybody. Good morning. Welcome to the private debt webinar, hosted by Mercatus. Really excited to have everybody join us. You know, this is a very fast growing segment. And so I think there’s a lot of growth brings opportunities and challenges, and I’m really excited to have our panelists join us and share how that’s affecting their business, and how they see the crystal ball with so many moving pieces. Quick housekeeping, we would love to make this as conversational as possible. So if you could type in your question in the Q and A, and we’ll try to get to them and do it real time as you have questions for panelists. Let’s start real quickly by just letting each of the panelists introduce themselves and talk about their business. And Jeremiah, I’m going to start with you, and then Tim, and then Nicholas, in that order. If you could just give us a brief overview of yourself, if there’s a fun fact we need to know about you that the audience might appreciate. And just a little bit about your business and your investment thesis.

Jeremiah Loeffler (01:03):

Okay. Thank you. Good morning, everyone. Good afternoon for others. My name is Jeremiah Loeffler, and I work with Crestline Investors. Put me on the spot for a fun fact there, Haresh. I’m going to go with, even though I’ve been in Texas for a long time, I’m originally from Minnesota. So I’m not a native Texan, which means you have to fight to try and assimilate. So I enjoy being in Texas, though. But thank you for having me on, I look forward to it.

Crestline was founded over 20 years ago. We have 15 billion in assets under management. As I mentioned, we’re headquartered in Fort Worth, Texas, but we do have offices in New York and London, Toronto and Tokyo. We focus primarily in credit on three strategies. We have an opportunistic credit platform that provides capital solutions to underserved middle market businesses, especially finance pools, those sorts of credits. We also have a direct lending business, where we provide senior secured first lien lending to middle market companies, mostly in North America. And then finally, our third credit strategy is fund liquidity solutions, where we’re providing bespoke financing solutions to mature private equity funds. So commonly referred to as NAV lending, but Crestline also is able to offer preferred equity and other solutions there.

You asked about growth and Crestline’s success, and I would really focus on the one team platform, the approach that allows us to look across credit strategies, provide flexibility where we can, also flexibility in being able to look at multiple things and really capitalize on the credit market inefficiencies across all market cycles.

Haresh Patel (02:54):

Thanks. Tim?

Timothy Lower (02:57):

Good morning, Haresh, and thank you for inviting me to today’s panel. I’m Tim Lower, CEO of Willow Tree. Willow Tree is an asset management firm, primarily focused on providing senior secure floating rate debt to companies. We provide capital to middle market borrowers with EBITDAs ranging from five to 75 million, occasionally we will invest in a larger business. While our primary product is senior debt, we do occasionally provide bespoke junior capital solutions. We have scaled our business nicely, I think we like our other panelists are seeing a lot of growth in the private credit markets, the direct lending markets, and do believe that our business is positioned alongside others to continue to grow in providing solutions to borrowers that are not available in the syndicated markets, and providing income to investors in an asset class that’s proven to be increasingly durable across cycles with a real lack of volatility and performance for investors.

Nicholas Bamber (04:11):

[crosstalk 00:04:11] I’m Nicholas Bamber. I run the private credit business at Legal & General Investment Management, primarily in London, but also we have operations in Chicago as well. I’m at the other end of the scale from my panelists. So we are primarily an investment grade lender. So we are participating in private illiquid lending opportunities that are broadly investment grade across four asset sectors. So real estate debt, corporate debt, infrastructure debt, and alternative debt, which is a mix of a variety of different things.

            We’re primarily a UK lender, so Sterling is our biggest source of capital, but we are also active in dollars, in Euros and Canadian, and other currencies. And we are very much looking to lend outside of the bond markets, but we are quite… We’re much closer to the bond markets than I think my colleagues are, as to provide that diversity for mainly pension scheme money, which is what’s the underlying ethos of our firm. And being able to do it in a way which is not just for financial returns, but definitely looking at that social capitalism, inclusive capitalism mindset that is the hallmark of what we’re about.

Haresh Patel (05:35):

Well, great. Thanks for the introductions of your firms and yourself. I’m going to touch on, I would say, pressures coming from different sides. You’ve got investors, you’ve got our market’s getting big enough where regulators love to sink their teeth into what we’re doing. And then you have ESG, which is another pressure. And we’ll touch out on each one.

I want to focus, start on just the growth and the amount of money coming in from the interest from investors, but with that interest comes a lot of questions and a lot of inquiries. Talk to me a little bit about how you see that scaling as investor demands go up in terms of, I need this information yesterday. It’d be good to just get your view on if you see that, but that’s what I hear talking to some of the CEOs of our clients, including some of you. But just if you could give us a little bit of context around just investor demand increasing, and how that’s impacting your business in terms of deal making. Now, this one I’m going to do a quick round robin, so maybe Nicholas, if you want to start first, then Tim, and then we’ll do Jeremy.

Nicholas Bamber (06:45):

Sure. I think we have a slightly different client base. So our client base is very much open ended, generally large SEG mandates relationships. So the communication flow is a daily one, honestly. Definitely weekly or multiple times a week where that interaction is happening. So I wouldn’t say that we are seeing that increasing, because I think it’s the nature of our business that we would expect to communicate on underlying assets in a real time basis. Clearly in our pool funds, it’s a little bit slower than, or it’s a lot slower than that, but the vast majority of our business is SEG business. And therefore, I don’t think that’s particularly changing, but it is reasonably high intensity anyway. But I think Jeremiah and Tim will be closer to the nuance that you were talking about.

Haresh Patel (07:40):

Tim?

Timothy Lower (07:42):

Sure. We are seeing more questions coming from consultants, investors, as the asset class is distributed more broadly there’s new participants that may or may not be as familiar with private debt, with direct lending. One of the things that we offer as a firm is more transparency than many of our peers, just given that investors can email or call me, and I will within a reasonable timeframe get on the phone and talk about our business. Now, our assets don’t trade. In general we are holding private loans to maturity. We’re making long only investments. So it’s more of a conversation around what’s driving the private markets, what’s driving labor and input inflation, where are we seeing pressure in the supply chain? And we enjoy that, and we share perspectives with our investors and I think everyone benefits from that dialogue. So while it is burdensome at times to respond to investor inquiries, the due diligence process, I think is beneficial to everyone involved.

Haresh Patel (08:55):

Jeremiah?

Jeremiah Loeffler (08:57):

Sure. I would agree with my panelist’s comments there. I think we continue to see unprecedented demand in this space. And again, I mentioned being able to play across a couple different strategies in credit is helpful, similar to the things Tim describing, having experience in past cycles informs and continues to inform your approach in how we invest. We, again, also focus on the recurring revenues, the multi-site businesses in hopes of mitigating some of these risks. So having discussions with investors about approach continues, as Tim said, it’s important for the investors to understand how your approach is changing, and I wouldn’t say that ours has.

You’re looking and working with highly structured investments, focusing on maintenance covenants, negative controls, the conservative attachment points. So again, just being able to be transparent about those things with investors, and tying into later discussion, being able to have the data to support those discussions with investors is helpful.

One thing I will mention, of late we continue to see, I will say, an increased demand for building custom vehicles. Like the large institutional investors would, would like to see the corporate credits here and the fund lending business, and put all these pieces together in a custom vehicle. And again, I think that has been relatively increased. It’s a bit unique of late, and I think it’s just a sign that they’re looking for managers to give them exposure and unique ways, right? And so each of the panelists here have something unique to provide to investors, and I think that continues to be part of the discussions.

I did see one question there, so I’ll just comment about investment grade or non-investment grade. For Crestline, I can speak to, we definitely look outside of investment grade. So when we’re doing direct lending, and especially the opportunistic credit, these companies usually have unique stories and would be considered outside of investment grade.

Haresh Patel (11:19):

Thanks. Yeah, well, maybe while you answered that question, I think the question that came in was basically, is Willow Tree and Crestline non-investment grade or investment grade? And I think the part two of that question was in the loan format, is it maintenance covenants or bond format in current? So that just quick question for those two companies

Timothy Lower (11:43):

Sure. Willow Tree doesn’t provide investment grade solutions. We are financing businesses that couldn’t access an investment grade market. So primarily we’re investing in senior debt that’s private, and we do care about maintenance covenants and incurrence covenants. People are very focused on a company’s ability to perform under maintenance covenants. But I would say a senior debt document is very long. The negative covenant section can be 50, 60 pages, and it’s not always a maintenance covenant, which allows you to have a dialogue with a borrower. There’s investment limitations, restricted payment tests, all things that we generally as partners with middle market borrowers and sponsors work to provide solutions, but it does allow us to monitor a business very closely and predict value, which is important to our investors.

Haresh Patel (12:45):

Thanks. I’m going to switch subjects here. Several of you have mentioned volatility, and we’ve been in a volatile phase over the last two, three years than I’ve ever seen. And JP Morgan’s CEO letter just came out, and I think he did a great job summarizing because we were dealing with three confluences at the same time, and they’re conflicting, right? You’ve got COVID in the rearview mirror. I would’ve never predicted a V-shape recovery like we did, but we that’s what we’ve had. And hopefully that’s in the rearview mirror, but we now have boomflation, right? We have the booming US economy, a labor shortage, and at the same time, you’ve got very high inflation now. And then you’ve got the third dynamics of the Ukraine/Soviet Union crisis, or the Russian crisis. And I say Soviet Union because it feels like we’re back to the Cold War. And I think we’re as closest to the Cuban Missile Crisis we’ve ever been.

And so you’ve got all these forces going on that drive commodity prices and occupancy and all the things that you provide debt to, it has an impact on them as much as we think it doesn’t. So I’m curious as you think about all these, are these 4:00 AMs for you? Do you guys really worry about it, and how much do your investors worry about this, and is that driving some of the questions? So I just want to understand the dynamics, and is it changing your thesis? And so maybe, Tim, I’d like to start with you and get your thoughts on, as you see all these headlines spinning every morning, how does that affect your sleep?

Timothy Lower (14:21):

Sure. So again, we don’t invest in assets that trade. So I don’t wake up looking at a market opening, worrying about whether our NAV is falling that morning. We do worry, we’re investors in credit, we’re paid to worry. All of our investors want to get our view on what is today a very interesting macro. We’ve been through many cycles, I’ve been investing in this asset class really since it was defined as private debt as an asset class. So in the last six months we have been monitoring inflation, probably more than that, both labor and input. So far, we haven’t seen input inflation, not being picked up by the end market, the consumer, the customer. Labor inflation and variants we also have seen masked by growth and price increase.

Now, cost variances don’t impair value in senior debt. I’ve never had a scenario where if it’s just a one time, 12 to 18 month period where margins fall, I haven’t seen a lot of loss hit a senior debt lender in that and scenario. Borrowers are taking our debt through three or four or five turns of leverage, and we have maintenance covenants to the extent earnings fall to demand repayment, to demand a repricing of that loan. And when we worry, it’s where you can’t staff a business because of labor markets aren’t cooperating. And does that impact revenue, and do you lose customers as a result of this macro? That’s where I think you can get impaired in senior debt.

But I think as we look at investing, the asset class has proven to be very durable, very resilient. In my career I’ve never seen businesses across sector as good as zero revenue. And that’s what happened in COVID, and certain folks that were exposed to more consumer facing businesses, restaurants, retail, were damaged more than others. We don’t invest in retail in general in our business. We’re looking for recurring revenue businesses, insurance services, FIG, healthcare, things that can withstand a recession. And so what we’re looking at now, in addition to inflation of both inputs and labor, is demand. Are we seeing demand destruction as a result of worries about increased tightening, interest rates rising, obviously the global crisis that we’re all in?

But I have not in my career really been damaged by a macro environment. Certainly the loan markets have traded to 80 several times, but when we’ve lost money in our careers, it’s really something particular to an individual borrower. And that may be the result of a macro that’s impacting its industry, but more often than not, it’s something that a management team fails to do and respond as a result of a number of risk factors.

And so when we underwrite, we look for a set of risk factors that are very low probability. If one of them should arrive during our underwrite, we need to have a plan for how we will work out that loan. I don’t think anything changes in terms of our approach today. I think generally volatility is very good. That’s why direct lending has grown. When markets are volatile, banks close their doors. If you stay open, you can certainly generate better terms and generate some risk premium relative to markets that are functioning and healthy. So it is a very interesting macro, there is a lot to unpack, but we’re still open for business and excited about the prospects of our asset class within what continues to be a growing US economy.

Haresh Patel (18:16):

[inaudible 00:18:16] Nicholas, your thoughts on this?

Nicholas Bamber (18:20):

Yeah, I’d share the comment that I don’t wake up at 4:00 with it, because I don’t have to deal with that sort of instant feedback. It is clearly a really complex macro environment at the moment. And we had come out of the COVID scenario, and there were sectors which were traditionally seen as very stable that went really ugly. Transport, we have quite a big exposure to transport across our infrastructure space. And those were previously stable sectors that suddenly became lumped in with some cyclical ones. So that, there was definitely we had some interesting dynamics.

I do think the other question that we are wrestling with at the moment is having V-shaped out of COVID, we all were hoping to breeze through. Clearly the… I think [inaudible 00:19:14] has called it that probably interest rates will rise faster than everyone expected. So we will see a sharp increase in those levels and deals coming through. And then the question is, will we get a recession in ’23? So I think that’s a question which we’re definitely debating in the European context. And clearly there are many there who are questioning will that come through in the US as well.

So I think the confidence of the macro factors at the moment are not really playing through in the micro yet, because it’s to come. But I think there’s definitely a lot of question of about, are we really now at the late cycle? Do we think spreads are going to move a whole load more this year? Maybe not, but do we think there’s a real scenario of recession next year, and therefore spreads move, and then how do you play it headed into that?

So there’s a lot of scenario assessing, and consideration of how the economy will actually move is driving our thinking. Clearly we are… I’m not really anticipating loss in some of the positions I’m in, given the nature of the credits that I’m doing, but clearly rating transition is something we are very focused on, and we’re looking for assets that are stable through those cycles and can deal with the question of a recession being caused by the supply constraints, rising costs, and the central bankers finally putting the slammers on the thing, rather than the decades of easy money.

Haresh Patel (20:57):

Yeah. Tim, back to you on this one. I pick up on this point here, in terms of just the whole tightening of the monetary policy, and possibly much faster rising rates of interest to borrow money, impacted your business and how you do things. And just both either in terms of investors raising more capital to lend, or even on your returns, how do you see this playing out?

Timothy Lower (21:23):

So we invest in floating rate debt. So rising rates will increase absolute returns when we’re in a levered fund, we’re borrowing and floating rate assets. So we’re naturally hedged, versus the bond market as it relates to interest rate risk. Now, fundamentals, as a result of tightening is a question that I think we had constantly asked ourselves, and what happens in the US economy if it’s harder to borrow money? Does the housing market back up? Are businesses less prone to invest in growth, and how does that trickle through the middle market? And I think that’s something that we constantly, as we look at a new business, have a recession case for what that might look like, to the extent a demand is destroyed or revenues fall.

            So tightening in and of itself doesn’t impact our performance as it relates to the value of our assets. We are excited about rates moving. We’ve been waiting for that for decades in our industry. And I think it certainly makes the asset class more popular. We’ll see if the Fed tolerates tightening, if we get back to a three or 4% interest rate level, again, I’ve been waiting to see that for decades. And that does for me, make things a little bit more exciting. But TBD, for example, for the most part.

Haresh Patel (22:49):

Okay. I’m going to shift gears a little bit in terms of just as we talked about scaling the business growth brings new complexity to the business, and we all talked about increase in investor demand for real time information. And so there’s been this whole investment phase that I think that private markets have been in in terms of technology, gathering your data so that you can be more nimble, you can scale the business, you can provide more information. So Jeremiah, as you begin to think about scaling your business and the digital transformation journey, how do you see this as part of your either differentiator? Is it a differentiator? Is it a must have, is it a defensive move, or is it just like, I wish it would go away? Just talk to me a little bit about how you view the data and that as part of the strategy of your funds.

Jeremiah Loeffler (23:41):

Sure. Yeah, Haresh, I would say I’m going to go with must have to answer your question directly. It may have in the past been a differentiator to have different or maybe exceptional data, but I think it’s become a requirement, really. The environment today, as we talked about investor questions, they continue to get more complex and more detailed. And so for us, that transformation has really been a couple of years in the making, is trying to centralize data, be able to standardize it, clean it up in a way that you can use it across strategies. I mentioned a couple of different strategies we have. And so for Crestline, the challenges there are standardizing data sets across different strategies, where different data points mean different things, or maybe aren’t as relevant. And so there’s a lot of work there in the minutia of the data and standardization, and I think it’s definitely a journey. We continue to find what is to centralize it.

            And then I think the other part that’s really important is, once you have a central data set that you’re comfortable with, finding ways to utilize it efficiently. And so finding a place that can visualize that data and get to the reporting you want quickly, it’s an overused term, but I’ll use it again, democratizing data, putting it in the hands of your portfolio managers and your investors is very significant. It can be transformational. And that’s really been our goal on this journey, is trying to get to a point where all the data has some level of standardization that’s useful. And then we can put that in the hands of the people that need it directly, rather than having to spend as much time massaging data and creating things, for example, in Excel.

That being said, I think the other challenge that we can all admit is, you can’t anticipate everything. And so there are questions that no matter how good your data set is, you have to decide, do we want to answer this one? Do we want to get into this? Do we want to be in the business of these types of responses? Each one we’re finding adds a new layer of complexity or manual work, and in the world of trying to be scalable and efficient, those are significant decisions.

So for example, real time example, when the conflict started, there were a lot of questions about Ukraine exposure. And even though we have, again, hundreds of data points across our transactions, and I would’ve told you we’re in a really good position to answer a lot of questions, that’s a new one, right? And so then you get to decide how do you analyze that? And do you want to go back through and comb for a certain data point, or do you want to talk generally to whether it’s relevant? So just an example of no matter how good you may be, there are still challenges with new questions.

Haresh Patel (26:48):

Surprise question.

Jeremiah Loeffler (26:49):

That’s right. That’s right.

Haresh Patel (26:50):

And Nicholas, your quick thoughts on this subject.

Nicholas Bamber (26:53):

I think Jeremiah summed really well. I think the Ukraine thing was not on my radar. I hadn’t quite spotted it. And inevitably that does involve some manual workaround to get that answer out. And look, people want to know, people have very high expectations, and it’s important to deliver. And it is important to be able to provide that in data format, and I have to say orally. I think we’ve all said it in different ways, that oral interaction as to, it is not just about providing that specific information, it’s about understanding the underlying companies or the people to whom we’re lending to, what is really going on and what are going to be the implications. And people are quite capable of jumping to some extreme answers quickly if you can’t speak to them and talk them through actually what the dynamic is. And I think that’s been the other thing we’ve learned in the last [inaudible 00:27:57].

Haresh Patel (27:58):

Okay. I’m going to watch the time clock here. So I’d love to encourage the audience to continue to ask their questions. I’ve got a lot to continue with, but I want to make sure that the audience gets their curiosity satisfied to these great panelists. So, please, as you think of them, enter them into the chat box and we’d love to answer them.

I want to shift gears again. And part of data, one of the biggest data sets that I think seems to generate the most amount of interest as we talked to clients is ESG. It’s being driven by investors, and they’re no longer happy with the glossy brochure. They want to double click, and they want to double click and just make sure that the there’s integrity in that reporting. And so as you think about ESG as a factor in your business, how are you seeing that demand for information? How are you seeing that, impact how you invest? So again, maybe Nicholas and Jeremiah, I know we’ve talked in the past about this, but love to get you guys into a conversation around this topic. So Nicholas, maybe you want to start here first.

Nicholas Bamber (29:01):

Fine. You’re absolutely right, everyone’s talking about it, and it is happening. It’s moved from a interesting thing on the side to many investors are genuinely seeing it as utterly integral to what they’re about. And they’re not satisfied with a, you don’t lend to coal, a couple of exclusions over in the corner. It’s very specific, it’s where do you stand relative to article eight or nine? Where do you stand with sustainable development goals? Where do you stand on these particular issues? Am I a full blown green end, or am I in a sort of [inaudible 00:29:43] type position? So there are different gradations as you go. I think we genuinely, COP26, Legal & General, it’s a really strong part of what we’re about. And the lobbying and the stewardship and the work we do actually across the public and private side. So this is not something that is exclusive to the private side by any means, that we are very public in what we mean about ESG, and how we can bring about change.

And that does mean that we will make some choices that people won’t necessarily like. So I think it’s moved from being something that is off the edge, but financial returns are the only thing that matters. It’s definitely more than that now. So I think that’s interesting. I think we had a chat earlier, and I think it is an interesting question as to how much can debt actually drive impact. And I think that is an interesting question, which is worthy of quite a lot of debates, because the truth is equity can really drive change. Debt can hold managements and equity to account against certain ratios and against certain performance statistics.

And that balance between debt and equity, I think is an interesting one. So actually how much impact you have on the debt side, I think is something to be debated. And what none of us liked doing, but sometimes the data driven answers do, does get into a tick box exercise, and that’s not healthy. Nobody likes it. Everyone’s uncomfortable with it, but sometimes that data driven approach does take you down that lens, because it’s easy to be able to tick a box than it is to be able to deal with complex nuances. And I think that is an interesting question, which we wrestle with daily, if I’m really honest.

Haresh Patel (31:29):

Yeah. Jeremiah, on that point, what I’ve seen is the problem is the only three acronyms, right? E, S, and G. But the interpretation of what it really means, every investor has their own format again. And what they want that you talked about, the standard template, and this seems to break all the rules. Like every investor said, I need this part of, I need more of E than I need S. So just curious again, what you see as you’re getting investor demands for the data around ESG.

Jeremiah Loeffler (31:55):

Sure, sure. Well, I would completely echo what Nick said there. Completely agree, challenging to say the least. So we get a certain amount of standard questionnaires, which I’m sure we all here are dealing with, and trying to be able to respond to those in a way that’s meaningful is I think the toughest part of this. As Nick said, how much influence can you actually have? So how relevant are some of the responses we have as lenders? That being said, push that aside and assume that there is some level of it that we need to do. For us it’s finding ways to, again, standardize data, put it into a system that’s useful, and then figuring out how to show it to the investors.

We do a couple things, and this is probably not, I’m going to answer for others, it’s not dissimilar probably from any of us here. You’re really spending time pulling out an activity or action that you did, you’ve always done, right? So as part of your underwriting process, there’s work that we probably have all stayed away from certain things or certain transactions, for these ESG type considerations. And so now it’s just a matter of how do you get that information out, and put it in a place that you can use it for reporting? So it means sometimes going back to the underwriting memos, but also having a place to put that information. And so we’ve been building that you again, a centralized data place.

And then the other part I think is, you got to build a process around the standardized questionnaire side of it. For example, we have some investors that would like to know the makeup of the board and the makeup of the executive committee, maybe by gender, by race, those sorts of considerations. And so again, that’s just a whole new set of data that you have to find a place for, and then figure out how to report back to investors with it, and then add the color, the qualitative components that Nick was mentioning here to really talk about, although we can give you this information, we do feel it’s somewhat, checkbox at times, and we can’t always have the impact you may be looking for, so.

Haresh Patel (34:10):

Right, thanks. Tim. You know, again, growth is bringing all kinds of interesting challenges. And the one that we all see lurking is regulation, right? And the regulators want to get their hands around our business, make sure there’s that transparency. I think we use that word transparency. And so just as you think about, let’s say the SEC proposing potentially new rules, again, how are you anticipating this? When do you see it fruitioning into something that’s substantial? I’ve typically seen it after a big mistake happens or something bad happens. So far I think we’ve been a really good industry and we’ve had a lot of good, honest folks making some good money for our investors, but it is lurking out there, and I’m just curious how you view that, and how you’re preparing for it.

Timothy Lower (34:54):

Sure. So I think the changes being proposed are still off in the distance in terms of becoming a reality. And I think there will be a very active debate as to what ends up adding to the job of compliance and reporting for managers, versus not. Again, it’s our job as asset managers to comply with regulations. It’s very important. I think you can impact what’s otherwise a very good and solidly performing company if you don’t. So we take it very seriously. We have regulatory council, we’ve reviewed the proposed changes, we’ve talked about what impact that might have on our reporting. We are an investor in the private markets, our investors, if they want a real dialogue as to what’s impacting our borrowers, we’re happy to do that. And we don’t see what’s being proposed is potentially offering more print transparency that we already do for our investors.

So we’re monitoring the situation. If there are changes that need to be made, as it relates to how we report, how we monitor things, we certainly can comply with those regulations. But I think it is potentially burdensome for a lot of asset managers to add more reporting than what’s already asked of us and our firm and our compliance departments.

Haresh Patel (36:22):

Thanks, Tim. I have one question that I want to help you guys weigh in on. I have two adult children, third almost coming along, and they’re all into crypto and tokenization and NFTs, and they keep teasing me, dad, you got to do more on your platform, and it’s going to be very, very disruptive. And I’m going to keep the words kind here on what they mean by disruptive. But I would say that the polite way I could say it is that those couple of technologies, including blockchain, are going to do what Uber did to the taxi industry. And so I just love to get you go your view again. Do you see this as an opportunity, do you see it as a threat in terms of what I call the democratization of money, and that’s the end impact, and how do you guys view that? And what do you foresee the future of that kind of new currency technology? I’m opening it up to one of you three to jump in and give your views of what I should tell my dinner table.

Jeremiah Loeffler (37:27):

I don’t have any good input. It’s a tough one. It’s a tough one. It’s, yeah. We’re seeing it gets talked about a lot, right? And it gets talked about a lot about where it’s going to be disruptive. I would say we have not found a lot of places it’s so far disrupted, the businesses we’ve been lending to is probably the best answer I’ve got.

Haresh Patel (37:55):

I’ve stayed quiet by the way, at my dinner table. I just let them talk. It’s interesting to listen to that generation of how they view it, right?

Jeremiah Loeffler (38:01):

Right, right.

Nicholas Bamber (38:02):

And they view change, and they see everything as being… It can all be radical, and then maybe we’re just Luddites. But it’s not impacting the businesses that we’re a part of. It’s not yet really impacting the financial markets, other than in its own space, if I can put it… I mean, it’s obviously having a huge impact in its own space, but I don’t think it’s really flowing back yet. So I’m going to play the let’s wait and see card, I think, for the way I’ll put it.

Haresh Patel (38:35):

All right. Sounds good.

Timothy Lower (38:36):

I will [crosstalk 00:38:37] there’s many business lines that we would add that are a little bit more adjacent than crypto. In general our investors are looking for a real lack of volatility and steady dividend income performance. So I think it’s an interesting market. I think it’s certainly grown beyond my expectations, but don’t have a real view as to how it may or may impact the asset management industry, the borrowers that we’re invested in, we haven’t seen a lot of impact to date. But it certainly will be an interesting market to continue to follow. And I do expect it to continue to grow.

Haresh Patel (39:17):

Yeah. I think we’ll probably plan a future webinar around that topic. Mercatus got acquired by State Street, and they’re doing quite a bit in each of those areas. And so I think this would be a good topic to say, how does this affect the private markets and how maybe their fund fundraising happens, and/or how can we used to aid our business? So we’ll probably do that as a future topic, because the question does come up more and more as I visit clients.

Well, listen, I want to thank three of you for joining us today, providing your insights into your business, appreciate the audience joining us, investing the time either this morning here in the US or in the afternoon if you’re in the UK or in Europe. And again, if you have follow on questions, send it over to us and we’re certainly happy to connect you with one of the panelists to make sure we satisfy your curiosity into this area. But again, thank you very much for participating, and have a good rest of the day.

Nicholas Bamber (40:11):

Thanks very much. Appreciate it. [crosstalk 00:40:13]