Conference Presentation, Panel, Fireside Chat
The Asset Management Upheaval | Global Conference 2024
- Eldridge identifies the current interest rate environment, characterized by SOFR at 5.30% and credit spreads between 350 to 550 basis points, as providing the most significant opportunity for senior secured lending in career history, while anticipating dispersion in private credit returns to reach 10x greater levels if underwriting standards are maintained.
- TCW projects continued expansion of its alternative credit platform, noting a recent doubling in size, and expects the partnership between asset managers and banks in private credit to evolve alongside growing dispersion between top and bottom quartile managers beyond the previous 15 basis point range.
- Katie Koch anticipates that elevated interest rates will likely precipitate credit events and the first distress cycle in the private credit asset class even without a recession, creating opportunities for rescue investing and control positions, while demand for ESG integration is expected to focus on value creation and active governance voting.
- Kamal Behati forecasts a shift toward the "360 investor" model integrating public and private markets, predicts AI will generate more value in public markets than private markets in the near future, and expects a regulatory framework for ESG to eventually emerge and become disruptive.
- Kamal Behati and Jose Minaya identify the retirement crisis as a primary driver for industry change, expecting asset managers to increasingly incorporate insurance platforms to address liability management, with guaranteed income products projected to appear in nearly every US 401(k) plan within the next 24 months.
- Jose Minaya projects that legislation and business decisions regarding retirement will proceed regardless of the US election outcome due to bipartisan impact, while CalPERS plans to deploy $100 billion in climate solutions by 2030, having already invested $45 billion in adaptation and mitigation.
- CalPERS expects climate change, diversity, and governance to directly impact the sustainability of cash flows required to meet generational liabilities, while TCW and Tony Manila foresee significant industry consolidation with a widening performance gap between top performers and the bottom quartile.
- Tony Manila notes the industry trend of connecting insurance companies and liabilities with asset managers for permanent capital pools, and while acknowledging he does not predict market outcomes, he states the Texas Rangers will win the Stanley Cup.