Looks Like a Bull Market, Feels Like a Crash

31:07You might turn a bit in your precious metals. You might have seen that in silver and gold lately. But it doesn't necessarily get to wheat. And it's not in emerging market currencies where you're looking at different, you know, peso-dollar pairs, for example. So it's a different thing, but it changes the way that equities, in particular the S &P, has operated. And that is a different thing from the trend traditionally that you would be hearing in that space. I think trend following is intuitive for investors, right? Like an object in motion, station motion. But one of my favorite, and rising prices attract buyers and falling prices attract sales.

31:47We know how it works, right? You're more likely to buy something after it's gone up because, oh, it's going to continue to go up. And that does drive prices up. One of my favorite investment quotes is from Mail Abroad who said, the trend has vanished, killed by its discovery. And not just particular to what retail is doing, but the rise of CTAs. I mean, the rise happened a long time ago, but there's a lot more competition. So even if retail investors aren't trading currencies and commodities to the degree that you are, that actually might make it harder for you because now you're not competing against the Patsy's, no offense.

32:20You're competing against other professional investors with a lot of resources and a lot of the same data and signals and information. And that's it. And therein lies the nub of it, right? Is when you say it's the same, the thing for any organization, listen, I said we're 240 years old. If we hadn't changed, I'd still be making barrels on the side of the River Thames and supplying rum to the Royal Navy on the daily ration. And I'm not joking, that was the monopoly, right? The thing that changes through the lives of organizations like ours is the need to stay relevant and stay right at the bleeding edge, the cutting edge of alpha signals and capabilities.

33:02The one thing I can for sure assure you is that alpha becomes commoditized quicker. And more data doesn't mean that more people are more skilled at it. also. So the product we had 30 years ago in a momentum trend product, which had, you know, 30 markets and had a fee structure that would make me very happy today, would trade for nothing today. It would be replicable. You and I could sit on our computers right now and replicate that strategy across those eight markets and get the execution benefit. When you're at 800 markets and when execution becomes part of the alpha and when portfolio construction is part of it again and when risk management is part of it again and risk scaling and vol scaling is part of it, it's a much harder thing to replicate.

33:54And that's where you have to continue to look is the capability to find more signals that are alpha signals that you can trade at scale, that you can optimize, that you can put in a portfolio that provides outperformance, that you can execute, and that you can deliver the risk and the value back to clients. That's what you do. And that's what you have to be able to do. Again, running something at$100 million and running something at$10 billion, they're a whole different kettle of fish. And so we run, man, incredibly hard to be at that bleeding and cutting edge. And it takes an army of, this is a shocker to people perhaps, But people, like real people, who are really smart, really capable, but use every part of the advances in tech and in research to make sure that we can deliver value back to clients.

34:51Good answer. Okay. There was a Bank of America does a global fund manager survey. And they always ask, what do you think the biggest tail risk is? and they were, so they showed November, chart 4C, please, Daniel. November, December, January, February. And you can predict what happened. AI bubble was number one in November and then people got a little bit less worried in December, a little bit less worried in January and a little bit less worried in February as the air came out of the bubble that never really blew up in the first place. If there was to be a public proxy, I think, for OpenAI, which of course is not publicly traded, I think it would look something like this.

35:31Next chart, please. Daniel. So we're looking at Microsoft divided by the S &P 500 since the launch of ChatGPT. And yeah, people got really excited as well they should have. And now no more excitement. So Microsoft has underperformed the S &P 500 since November 2022. That's not how a bubble is supposed to work. So I don't think this is a traditional bubble. I think a lot of this has to do with, again, the rate of change and how quickly things are moving. I mean, what we've seen over the last few weeks, and really it started a few months ago, was the investing world's version of a murder mystery.

36:13We know who the murderer is, but we don't know who was murdered or who will be murdered. And so there has been this incredible sell-off, some of it quite irrational. And so So many, I think when we look back on this chapter, we'll point out a lot of investing irrationalities that occurred. And I would argue that Microsoft could very well be one of them. We don't know today exactly how this shakes out. I think this is very, very similar to what we saw in the late 90s and early 2000s with telecoms and the money they spent to build out fiber optic networks. and there was a huge race and there was an enormous amount of excitement.

36:59And ultimately, that excitement was correct because that really laid the groundwork for a far more modernized economy and the internet. But there were some victims. And so I think it's right to worry about who the victims are. But certainly what we've seen in terms of these sell-offs, there's been a lot of irrationality. I love the murder mystery analogy is a good one. And you're right. I think there is a lot of irrationality. Of course, none of us know which players are acting irrational. I'll let you know in a year or two. But I shared a chart last week that went viral because it's so unusual.

37:33So Daniel, chart 10, please. We've seen a surge in blowups while the stock market is near an all-time high. So last week, we saw 115 stocks that fell 7 % or more in a single session. Meanwhile, the S &P 500 was 1.5 % away from an all-time high. The last time that happened, not to make comparisons, I, for the record, do not think that this is going to happen. I don't think that, like, passes prologue in this case. Maybe it isn't. I'm an idiot and this ages poorly. But the last time this did happen was in the late 90s. Now, differences galore. We don't need to necessarily get into that. But the market is trying to figure out who's going to be the loser and who's going to be a bigger loser.

38:16Yeah. Yeah. Yeah, and this is the point, isn't it? It's the, we can't, we've got a lot of data that goes backwards. No front tests. No front tests. And so this is, I mean, I like Christina's analogy was the one that made me smile as well, as the kind of, yep, murder mystery, get it. We're playing it in reverse. We know what's going, we know the outcome. Now we've got to work out who. I'm sure there's a movie that does that somewhere. But it's the, it's a set, I'm sure. It's like Knives Out for AI. Yeah, Knives Out. That's it, right. Right. And so there is a bit of that. I think the other piece is the players that we don't, who aren't even on the chart yet.

38:53You know, there's a bit of this, which is, as we've talked about, this isn't the first time. It wasn't just.com. It wasn't just fiber optics. We can see through time that the people who go out and spend loads and loads of money on this don't tend to be the people who end up with, or the institutions that end up with the net benefits here. But also they have public financials back in the day. These are open AIs at the epicent. that's the hub. Yeah. And we don't know what they're up to. I mean, you know, we hear drips and drabs, but we mentioned this earlier. In September of 2025, when they made the announcement with Oracle, everybody was like, oh my God, look at how much they're spending.

39:26And every stock got bid up, NVIDIA and all the chips. And now it's like, holy shit, look at how much they're spending. So Michael Mobison wrote a piece last week showing that OpenAI, their sales forecast, so$3.7 billion in 2024, they're projected at$145 billion in 2029 because they owe Oracle$60 billion a year for the next five years. And he said, hey, wait a minute. Let's take a look at how many companies in the history since 1950 to 2024. Now, these are, it's apples to oranges because no, you know, companies weren't this big, but whatever. Two to$5 billion in sales. How many of them, I don't know if he adjusts for inflation.

40:03Let's assume that he does. How many of them were able to grow? So let me just quote him. Michael said, and his colleague, Dan, The data revealed that no public company has grown this fast for five years in the last three quarters of a century. The results include all industries. The average compound annual growth rate is 7%, and the standard deviation is 10.6%. This forecast implies a roughly 9.5 standard deviation outcome for open AI, which is extraordinarily unlikely, obviously. So how are you all thinking about the relationship between the hyperscalers, the gigantic startups, and the market's reaction to this?

40:42Like, are we not going to use Salesforce? Or is, I mean, Intuit, maybe it's a different story, but how in trouble are these SaaS companies, particularly the horizontal ones that serve everybody and then I guess maybe nobody? I think one of the interesting things. So I'm going to try and answer that question really badly, though. We're all guessing, it's okay. So there's a huge caveat in here. Christine, just stop. Maybe somebody needs to press that button in a minute to make a funny sound. But I think, thank you very much. Thank you. You're welcome. So there are a few things that is a dynamic.

41:15One, we have this rather weird cycle where all of the hyperscalers and the software companies and the tech companies are all cross-investing in one another. So you've got this kind of AI financing cycle, which in and of itself is producing some slightly weird outcomes. When it comes to will we be using SAS or will this, is this really under, is it really going after these guys? Well, the answer I think is kind of yeah, right? It is. How quickly though? And how big, let me do a different analogy. When we talked about things like the way that you may or may not want to think about using hydrogen as fuel at some point in shipping, right?

42:02The problem is you've got a bunch of ships that are not built and their entire fuel system is not going to be built for hydro anytime soon, right? So there is a delay in the ability to act, even if you wanted to, put this kind of cleaner, smarter, cheaper potentially technology into some of these literal ships. Same thing goes with the way that producing manufacturers had. manufacturers had great big basements full of machinery with cogs and wheels and belts and stuff. And the reason there was a delay, perhaps, in the way that there was benefit in manufacturing, kind of took 40 years or so to get the benefits of electrification and all of those things in manufacturing, was because you had to decommission some of this other stuff and put the new stuff in.

42:49Make no mistake, it is really hard in these very big companies to unpick the legacy systems. And as Christina put her kind of finger on, people have to help. I mean, this is one of those interesting things. In order for there to be mass adoption, and for people to be able to really take the benefits of AI and this capability, they are part of teaching AI. They're part of replacing and understanding the pipework in organizations. I sit in an organization where, You know, about a third of the organization are much cleverer than I by far. You know, they're quants, they're developers, they're engineers, they're technicians.

43:32We have tech as part of the DNA of the organization. I have a lot of people very excited about the capability that this puts in their hands. They're the same people, though, who also understand its limitations. I have an organization where we have a single version of the truth. I have that capability because this is the way we've built man. 35 years of quant heritage helps you do stuff better driving systems scalable systems but very large organizations out there have a ton of legacy systems and unpicking that ain't straightforward and requires real people to help them do that so when you talk about delays and you talk about ludditism which sort of is a word that you know there is a bunch of things that are going to prevent, delay, naturally slow down adoption.

44:23But are they going after it? Sure. That's such a great example. Go ahead. Well, I was just going to add, so for investors wondering where to go, what to do in this kind of environment, I would say the key is diversification. Because if you look at the US landscape, there will be winners and losers. If we go back to the dot-com phase, Corning was very much an old school company, and it morphed. So there is the very real potential that some companies that we think might go obsolete actually morph and become critically important. Also, I think it's important to diversify outside the US. China has had a very different approach to AI CapEx.

45:09It's been more methodical. It's been slower. And of course, just given that it's more of a command economy, it has been targeted at helping older school industries like manufacturing. And so I think that in a world where we don't know who the winners and losers will be, diversification is very important. Robin, I loved your answer. Christina, yours was good too. It's okay. We're a team. It's fine. Let me make sure I've got the good one. Come on. There we go. But spoken like somebody who runs a company, who works with human beings, who is not a techno weirdo, you can't just rip these things out.

45:53And investors are acting as if, and they're probably right, that the terminal value of these businesses has changed. It has, even if we haven't seen it yet. Like it just, there's no doubt about it. To the extent of which these new companies are going to just, we don't know. But my friend Warren Pies has this incredible data point. He said there has never been, until just now, there has never been an S &P 500 industry that accounted for more than 8 % of total market cap, declined by 25%, and have the index remain within 3 % of an all-time high. And it's completely indiscriminate selling. So Rob Anderson from NetDevice Research, Daniel, chart 13, says no software stock has escaped the sell-off unscathed.

46:41100 % of industry stocks were in drawdowns of at least 20 % from their 52-week highs. And almost 80 % of them saw a drawdown greater than 30%, obviously the highest reading outside of any bear market. It's just unbelievable how quickly investors are pricing this in, and maybe more. Yes, I think that's right. And it's back to Christine's point. Let's zoom out, people. You know, this is the zoom out moment. if you want to not be glued to X and looking at charts like this if you want to have a little bit more of a wider perspective there's options here that help you and it's not a bad thing because this is a global economy this isn't just a phenomenon that is being experienced in the US it's a phenomenon that's being experienced just about everywhere it isn't just the purview you don't have a monopoly on this one This is one where actually being part of how this impacts societies and impacts industries everywhere, it's real.

47:43I think the other overlay here is this is different in a social impact perspective, politically and otherwise. This is going to be for people to wrangle with everywhere in the world. How are societies going to deal with this? What is the role of protectionism or allowing or retraining or reskilling people in our societies? There's no doubt that this is great stuff, but we've talked about it. This is nerve wracking. Yeah. And daunting. And you can't have excitement without a bit of that, right? I mean, part of why this is exciting is because we don't know the outcome, apart from the Miss Marple analogy.

48:24You know, you don't know the outcome of where this lands. What are we going to look like five years from now or 10 years from now? I don't know. I do know that there are some things that we all want, though, and that's financial security. And we want some stability and we want to be able to feel like we have some control over that. And I think, therefore, it's incumbent upon people and organizations like ours, like, man, to try and be part of a solution for financial security and stability. We don't do that by just looking at one index. We don't do that by just looking at one sector. that we do that by giving access to the largest institutions in the world as they're thinking about their portfolios and how they really need to rethink the allocations that they've had historically.

49:10You know, it's if you want to be dynamic, you care about liquidity all of a sudden. If you want to be active, you need some alts in your space that are liquid. If you don't want to just be the vagaries of an index, you need to be active in that space, not passive. And so all of a sudden, you've got the largest institutions in the world, rethinking portfolio construction. My question is, why, why aren't we doing more to help real people in the world at the wealth and the retail space to help think through that same piece of logic? Oh, we'll get there in a second. We'll get there in a second. Last thing on this topic before we get there.

49:52Christina, you mentioned diversification as being a sensible solution, and I would agree. Dana, chart 11, please. So in 2024, it really was the MAG7 versus everything else. So the chart that we're looking at is the S &P 500 market cap divided by the equal weight. And it was up and to the right for the most part. It was seven versus everything else. And we're seeing the exact opposite year-to-date, which is lovely. I love it. I think it's phenomenal. It's fantastic. How much of this do you think is people rejecting the hyperscaler spending? This is not sustainable. I don't want to be a part of this.

50:27Versus, no, actually, thank you for your spending because the 493 are going to be transformed. They're going to see margin expansion after a long time of oppressive interest rates. And it's going to be great for many industries. I think it's both. I mean, if we were to go back to that telecom example, there certainly was a rejection of it. but also excitement about all the companies that benefited from it. And I think that's very much the case with the hyperscalers today. And who knows? They could very well have second and third acts. But for right now, I think there is a very good reason to be cautious and careful with them.

51:06Also, the other thing that we were talking about earlier on hyperscalers was they're not just doing one thing. It's slightly different as well. So they've got broader business models. that it's not just the only thing that they're throwing into the mix is that I'm putting all of my eggs in one basket. Yeah, they're throwing a ton of money and capex at it, but actually they've got whole areas of other business models, in Amazon, for example, who are doing a lot of other stuff that might be extraordinarily benefited by this type of capability. Okay, let's talk lending. So there's been a lot of loud, Loud, vocal skeptics of private credit.

51:51Yep. I don't think I've been one of them. I understand the skepticism. I think the way that the financial markets have been structured with the legal stuff and the banks to the Blackstones of the world, I think makes sense. I think it's okay. So when Jamie Dimon said there's never one cockroach, I said, listen, this was, I think, fraud. And so fraud happens in public markets. And sometimes loans go bad. That happens. It's not like unique to private markets. Okay, but... Let's guess where you're going. But where I'm going and where I have legitimate concern is the software. B-Cred just put out a piece.

52:31They've got 26 % exposure in that portfolio to software. And a lot of the alternative asset managers, the charts look really bad. Like really bad. I don't look today. It looks really bad. Your guys looks great, by the way. You look nothing like the companies I'm talking about. Credit to you. So, are we going to see the line of, in 2021, a lot of the real estate, and you're ready to go, Rob, but I'm almost done. A lot of the private real estate managers say, no, we're not in office. Is that going to be private credit? Oh, no, we're not in software. I think, so I'll hand over to Christina in a sec.

53:07Let me do the intro because I think it is creditors for me. As I said earlier, I'm old and I grew up on the investment banking side on credit floors apart from anything. And credit was always about risk management, actually. It was all about understanding the credits that you were lending to. You know, it sort of sounds a bit straightforward, a bit dull, doesn't it? What a concept. I mean, ain't it? if you look at the rate of lending the speed of deployment i think you scratch your head a bit don't you don't don't don't you yes and this that sounds like a song i found i thought i was going to burst into something but don't just you kind of stop and hang and say hang on if this is about risk management is this about and this is about understanding fundamentally the risk you are taking the terms of lending that you're providing, then that takes discipline and it takes diversification and it takes you pricing things right.

54:09And if somebody or certain larger organizations in certain spaces are just writing checks, A billion a week. A billion a week. At some point, you got to go, this is kind of hard. And the hardest thing in credit is to stop, be patient, be thoughtful, deploy with integrity into those spaces, with intellectual integrity. But when you have inflows, relentless inflows, how do you do that? You be careful about the inflows you've got and you're honest about the deployment rate that makes sense. And this is one of those interesting conundrums. You know, there's a reason why we think about our private credit space in a very sort of disciplined way.

54:48We sat on dry powder last year. And by doing that, by the way, it means I don't count it as AUM and I don't take fees on it. And I'm comfortable with that because we need to keep disciplined on deployment. If you don't do that, then you're investing, crossing your fingers. And that's not what people pay us to do. So just with that as the intro, I think you are going to see some interesting outcomes here. I'm not surprised you're seeing some of the red on the screen today. I'm also in that point where, you know, I remember gating post-GFC.

55:31That's a big thing. How has to come back from that? You've pressed a big red button when you've done it. We know it. We learned it. And so when you do that, you are definitely signaling something that's painful. I mean, Krista, your two cents. No. Can I read something, Christina, before you jump in? And you don't have to comment on this particular, but I can. This is from the FT. Private credit group Blue Owl will permanently restrict investors from withdrawing their cash from its inaugural private retail debt fund, backtracking from an earlier plan to reopen to redemptions this quarter. The New York Investment Group on Wednesday said investors in Blue Owl Capital Corp 2 would no longer be able to redeem their investments in quarterly intervals, but that the company would instead return investors capital in episodic payments as it sells on assets in coming quarters and years.

56:19So they made a couple of mega sales and 99.7 % of the, see, we're all good. It's all. And the publicly traded BDC opened up 3%. And the last time I checked, it was down a lot more than that. The market is not buying what they're selling. And they had the opportunity several times to maybe be a little bit more forthcoming with what was happening. They did not do that. I listened to the earnings call last month and the CEO, Mr. Lipschultz, was saying, we don't have red flags. We have green lights. I mean, it was just like a lot of, and then boom. And he might not speak for the space, but it doesn't matter because investors are now understandably and rightfully scared.

57:07Yes, they are. And you're seeing it today. I think this will be a point where perhaps diligence dull though it might sound becomes you know but you know we're going to see clients we should be seeing clients doing really deeper dives on diligence I think it's going to be very interesting to see whether there's a regulatory response to this you know one of those interesting points about mark to markets remember I'm a public salts house very dull means I am I I am subject to marking the vast majority of my book to market. I care about liquidity matching. I care about the version of whether a mark goes up and I have value or the mark goes down and I don't.

57:53You don't have that transparency in private credit. You can't see it. And it's going to be quite interesting to see where the valuations are. And that is nerve wracking for people. I understand it. And if the lenders can't have the visibility or the total visibility, as an allocator, how are you supposed to get comfortable? Because really, the only way to be confident is the relationship. Hey, I think they're smart. I think they're disciplined. I'm not reading the sub docs. How would I even know what's in there? You have to rely on the experts. And this is why credit, I go right back to risk. It's a risk mechanism, risk investing.

58:36It's understanding everything about that underlying, and you have to deal with people who really care about that and deploy capital carefully. And listen, not every loan portfolio works 100%. There are risks of default, and there are levers of default, and you can understand that sometimes things don't work. Not every investment goes up, I wish. So fundamentally, portfolio construction is important, risk management is performing, understanding the underlying is important, and thinking about whether you're in a space where you want exposure to lending to certain sectors. There will be entire parts of the lending books which have no technology exposure at all because they choose to be.

59:16We run in one part of our business and a recession, less sensitive recession strategy effectively. And I said, what does that mean? What does that look like, for example? and somebody gave me a great example. And I don't know, it feels like I'm obsessed by elevators today. And I don't mean to be, it just turns out that's what happens. Elevators, they're a thing. People who service elevators, they tend to be reasonably recession-proof because you and I still need to go up and down in buildings. It was really useful for me to understand that. These are the types of thoughtfulness. When you are talking and thinking about the people that you are putting money with, do you understand how they go about putting that money to work for you under what circumstances how why um and i'm a little like the indiscriminate in indiscriminate out there's a little bit of i worry and i care about making sure there's transparency about what people are expecting and liquidity mismatches i've been there before so it's difficult for advisors to really understand what's under the hood.

1:00:25If you were to ask an advisor who's looked at Blackstone, Blue Owl, cake, whoever, and you said, okay, well, what's the difference between this, this, BlackRock's version? Come on, right? Like, what can they really tell you? And then you think about the transition and the cynical take on the transition from Ivy Leaguers, the Ivy Leagues, institutions, endowments, pension funds. They're already invested. They're 40%. Distributions haven't been great. They're full. They're not allocating more. Returns haven't been great. Okay, well, there's a whole new channel. It's the$40 trillion wealth channel, whatever it is, 401k market,$11 trillion, the advisor market.

1:01:07I think that there's some things that are reasonable, but the cynical take, you don't have to really stretch to connect the dots, that no more money here, let's get money there. So how are you all thinking about the, I hate this phrase, but the democratization of alternatives. I mean, you're a very serious asset manager. Yep. And I'll start and then Krista pile in. One democratization of into liquid alts is exactly that. It's not just into private credit, by the way, just to make that clear. So there are many, many liquid alternative products. So I think the democratization into liquid alternatives is something that is sensible in a portfolio.

1:01:56I think it's out there to find at the right price point. There are many, many different styles of alternative liquid products that are beyond passive investing and aren't throwing your money to private equity. So number one, we need to demystify that hedge funds all look the same and all do the same stuff. They don't. And you can be there via systematic. You can be there with discretionary managers. You can be there at emerging markets. You could be there in European equities. You could do a bunch of different things. But do you want retail money in your hedge funds? I want retail. I want wealth to have an opportunity to benefit via the right wrappers and the right products from the returns that you can get in alternatives.

1:02:41And that will diversify their portfolios. And I think that's right i think it's the right thing that that straight so let's do it a different way around i work with the institutional the institutional environment that i work with are people who run your pensions are people who are responsible for 401ks are responsible for the the protection of teachers and firemen all over the world metal workers in holland whatever it may be ambulance drivers in Japan. We work with those people all day long to put your hard earned and saved money to work so that you have financial security. They do it in a way that is across diversified portfolios and they ask us to help them do that.

1:03:24If there's also something as a pool of money that you would like to have access to that same type of exposure, there are mechanisms which you can do that. And you can see that with active ETFs or you can see that with interval funds, you can see that through any number of different wrappers and processes which are designed for retail and wealth consumption. I think that is very, very important that it's that mechanism. You're going to come bowling in and just write checks where we have minimums to get into some of the, you know, the systematic CTA type space. You can't do that directly, But there are mechanisms by way you can absolutely benefit from the credit capabilities that we have.

1:04:08You can absolutely, in the public space, you can absolutely benefit from an emerging market space. You can absolutely get access. But in wrappers that are going to give you liquidity and are going to give you mark to market. I mean, I think the key is liquidity. I think what so many university endowments, especially the Ivies, learned during the global financial crisis, is the importance of liquidity. It may have been lost just given allocations today, but I think this is true for institutional investors. It's true for wealth investors. It's all about ensuring that there is adequate liquidity in portfolios.

1:04:50Look at the kinds of pressures. It's been sort of an anus horribilis for universities, and they've had to draw a lot more from their endowments on average. There are years when there are many individual investors that also face those kinds of difficult headwinds. So liquidity should be at a premium for all of them. I was at an institutional investor conference in the fall, and I was on a panel with an institutional consultant who said, I've gotten more interest in hedge funds in the last five months than I've gotten in the last five years. And I think that really speaks to the uncertain environment we're in.

1:05:27But my qualifier was, but there should be just as much interest in liquidity as there should be in alternatives. And that's right. And by the way, you know, we're focusing on some of the retail and wealth space, but let's be super clear. Some of the biggest organizations, the biggest allocators in the world, trillions of dollars, are finding themselves in a heavily and denominated outcome of being illiquid. And that's so as they required liquidity, and they haven't had equitization, larger proportion of their portfolio is sitting in illiquid in illiquid assets. Now that's going to take that takes time to rebalance, it just does.

1:06:12So that liquidity premium, I think is hugely valuable to be able to take advantage of dynamics, but also the vast majority of our conversation, excellent conversation, has been about what we can't predict the future to be. Who doesn't want to have the capability of being dynamic, of having the opportunity to participate in new alpha sources, in new spaces, in diversifying capabilities, in new countries, asset classes, in new technologies, even, right? And so to find yourself hamstrung is frustrating. What we're talking about is, I mean, I'm going back maybe 15 years, but that capability of choice, of freedom, to be able to be dynamic, but liquidity, liquidity is back.

1:07:05The story about how pension funds think about liquidity and long-term management and working for the firefighter, all checks. Alpha is finite, right? These alpha sources will turn into beta very quickly as they're democratized. And there is just a fundamental difference between how these longstanding pensions with investment teams and, you know, forget about all the biases that go on there, but at least there are systems and processes in place and they understand deeply the pros and cons of each strategy and where they fit into a portfolio. the reality is individual investors just do not behave that way they line item everything and if something isn't working for three years they get rid of it we know this it's been this way and it will always be this way so i think a maybe sensible place to start and i even like hesitate shuttered to say this because there's so much people throwing tomatoes at this idea is the 401k.

1:08:14Because at least that is long-duration capital. You look at it less, you're less likely to panic. So maybe in a target date fund where it's professionally managed. But this idea that people are going to have access to these alternative premiums in their brokerage account and it's going to go well, I just don't think so. Well, we may want to bet on that. And we'll see where it goes. There will be a prediction market for that, I'm sure. Absolutely. So maybe next time you guys come back, I'm going to talk prediction markets. All right, this was really excellent. Thank you so much. Thank you. Thank you.

1:08:43All right. For people that want to learn more about Man Group, the 240-year-old rum trading... Not rum. Not rum. No, but... Well, we made that no barrels. We sold rum. We sold rum to the Royal Navy. We're rum runners. We were... Yeah, something like that. There's probably a sound to that. Look us up. We're on our website. Okay, Man Group? Yeah. All right, thank you so much. Thank you. Thank you.

1:09:11That was great.