 Excellent. Thank you very much for coming this afternoon. So the panel today, we're going to talk about regulating non-bank financial institutions. Well, what are non-bank financial institutions? Surely one of the worst acronyms anybody could come up with, just designed to, like, put your relatives and friends to sleep. But in fact, you know, I'm going to explain their significance just with a couple of statistics. These are from Gary Gensler, who's the Chairman of the Security and Exchange Commission. He said, as of now, in the United States, private markets are now a $25 trillion asset class. That's more than U.S. commercial bank assets. In 2022, private markets raised $3.7 trillion compared to $1 trillion in public markets. Now, what do these private markets represent? The reason I bring up this statistic is that they, for the most part, represent the activity of what we call these non-bank financial institutions. Now, some of these have been around a long time. Bond markets are as old, you know, they're centuries old. We've had pension funds, mutual funds, life insurance companies, long time. But, you know, in the last few decades, they've been joined through financial innovation by things like exchange-traded funds, leveraged loans, syndicated loans, private equity, venture capital, and now, of course, perhaps the biggest and fastest growing private credit. And these represent tremendous opportunities and benefits, you know, through the force of financial innovation. But they also have risks. And you only have to go back 16 years ago when we had the global financial crisis, which was a crisis rooted in the excesses and the failures of what we, at the time, called shadow banks, which is really just a euphemism for non-bank financial institutions. So, essentially, what we want to do is talk about the two sides of that equation, an asset class which has a lot of benefit and potential but poses important risks at the macro and the macro level. And to talk about this question, we have a really amazing panel. On my left is His Excellency Muhammad Al-Jaddan, the Finance Minister of Saudi Arabia. And I think we were just discussing now the longest-serving Finance Minister of the G20. You know, take that out. Lucky you. And, while Chief Investment Officer and Managing Partner at Guggenheim Investments, Evan Siddal of the Albert Investment Management Company, fellow Canadian like me and, you know, knowing Canada, I guess we can call the Alberta Fund, basically Sovereign Wealth Fund, right, Evan? Yeah, that's right, actually. We do run Part of the Sovereign Wealth Fund. Yeah, that's right. And on the far left, Steve Tannenbaum, who's the founder of Golden Tree Asset Management, one of the biggest players in this space, so people are very well equipped to talk about this. Steve, I'm going to talk with you, and I'm going to, like, actually start with the premise that I put out there. 15 years ago, I was, like, as a reporter, writing about the collapse of non-bank financial institutions, and I'm going to talk about this story, never again, financial crisis. Here we are, 16 years later. By the broadest definition, these markets are even bigger. Should we be worried? So, looking, are we in better shape than 15 years ago? Absolutely. If you're looking at the leverage in the system 15 years ago, it was just a multiple, and you can measure it through, really, the leverage of banks, and you can see how the return on equity in the banks. So, elevate it because of the leverage. In terms of the environment or the market getting bigger, well, that's a function of the world growth of the economy. There's a demand for this credit. So, if the economy wasn't growing, actually, if it were the same size, that would be pretty scary, because the economy would suggest that the world economies are not growing. So, I feel like we're in much better shape. That's not to say you take something like the pandemic, and you see something like mortgage reads, which had margin leverage, which seemed like a smart idea at the time until it wasn't, and they basically all had margin calls. So, there was a run on that sector of finance during the pandemic, but broadly speaking, the system is much better. I think, and you continue as some of the episodes of last year with Silicon Valley being credit Swiss, there's certainly a refinement, but broadly speaking, much better. May I pick up on that? Because if you looked at the share of non-bank financial institutions, according to the FSB, in financial assets, it was 47% in 2007. Today, it's 47%. So, out of your comment, the world's just got bigger. Now, it's a big problem because it's a lot of numbers, but the world is safer in the sense because banks now hold more capital, so they have less leverage, they're more regulated from a liquidity point of view. The fact that we have, and by we, I include a pension fund as one of the shadow banks, have occupied some of that territory. We do not engage in maturity transformation. We do track our liquidity, and we have far less leverage than a bank, which would be 24 to 25 to 1. Inherently, the world is a safer place. That's an intended consequence, I think, of the capital regulations imposed on banks that that activity went into the so-called shadow banking sector. To just add to what Eric said, it's a broad topic, is probably in 2007, there was a heads-eye-win-and-tells-you-lose kind of setup. And I think that that's been largely more even-handed, even from what the banks can do and can't do from a compensation structure where you're not paid all at once. So, there's a lot of, I think, improvements to the system. Are the instruments fundamentally different today than they were 15 or 16 years ago? There's always evolving. So, the short answer is there are opportunistic ways that people want to have credit? Is there a more efficient way to get credit for more plain vanilla? Yes. So, there are improvements evolving, and credit's evolved. Would I say it's materially different in terms of what the purpose is, not really, but in terms of how it's executed absolutely? I would say I hope so. The short answer to your question is I really hope so. I mean, with the evolution of the fintech over the last 10, 15 years, I think we should be expecting significantly different products and different choices, different risk, different investors base and different powers base or beneficiaries base as a result of that. But obviously, it is all also about credit. I mean, at the end of the day, it's just being able to provide credit faster, cheaper and with more choices. If I could add on to the comments of His Excellency with regard to, there's a couple of other things too, and that is the synthetically created security, CDO squared and the like. They failed in the late 1990s, and there were short memories because then they became reinvigorated and became a big part of the leading edge of the problem when the financial crisis occurred. And if we're kind of thinking about the one word that is probably the most important for regulators and investors to be thinking about, and that is the extreme levels of leverage that can be created and extremely risky area would be synthetically. And so as long as we don't see that and the rise of that and I hope our memories aren't terribly short with regard to the impact of those types of transactions. Memories are very short. I mean, how long was it between the 1990s and the 2000s? That's right. That kind of has me worried a little bit. But in this way, 2008 is further from us now than the 1990s were from 2008. So just... But Ann, I actually want to stay with you for a second because His Excellency did mention that, you know, with fintech there's been a variety of growth of types of instruments. But the question I want to ask you, so Jamie Dimon unfortunately could not be here. So I'm going to pretend to be Jamie Dimon. And if I'm Jamie Dimon, I'm going to say the only reason this private market grows is because we as banks, we have capital requirements which are bigger than ever, more stricter than ever. We have liquidity requirements which are more onerous than ever. My risk controls are being checked all the time, you know. I am like held to disclosure requirements and so forth. And plus I get called before Congress every six months and get, you know, the stuffing beaten out of me. You're right. That's why your market is growing because it's an arbitrage play. You don't bear any of those costs. What's the answer to that? Well, with all due respect to Jamie Dimon, I think it's a little bit more fundamental than that. And that is the capital markets, particularly as I think about the U.S., have changed dramatically over the last number of years. We've gone from a world where there were many, many publicly listed companies in the U.S. We're down to about 3,600 listed stocks in the U.S. and contrast that with private equity-owned companies. That has exploded to about 5,500. Cross-over point was reached about seven, eight years ago now. And so as a result, private equity companies are not going to be coming to the public markets. And they're less so inclined to come to the syndicated, broadly syndicated loan market through banks as well. That leaves this opportunity set for private investors to become the lender of choice also to work closely with private equity sponsors in order to provide the necessary capital. So I think it's part of a larger narrative with regard to the development and evolution of the capital markets. Can I just comment on this? I think, first of all, there is a definition problem. We just need to make sure that we really understand exactly what you are talking about. When we talk about non-bank financial institutions, I mean, these are possibly investment banks who are actually heavily regulated. Benchin funds, which in a lot of jurisdictions are very heavily regulated. But it could be other credit providers who are lightly, in a lot of jurisdictions, lightly regulated. I think for me, what we are talking about is institutions that create credit and provide credit. So hopefully we agree on this if you disagree. So that's number one. Number two, there is fundamental difference in these institutions. Who takes depositors' money and who doesn't? And the difference here is not actually on the operational side. It is actually on stakeholders and the table of making decisions. So if you are a bank taking deposits, actually the owners of your bank are not on the table in the boardroom when you make decisions and take risks. They are the depositors who are not represented. And this is why central banks actually play that role. They play actually the role of the owner, the depositors, to protect the depositors. So that's why we get used over decades and possibly even hundreds of years of central banks focusing on deposit takers, regulating them heavily to make sure that the money of the depositors are not put in undue risk. That is, to me, is totally different from mature investors who choose to provide credit and assess their own risks and they are on the table or their representatives. They should be allowed to take that risk. So Evan, I know you want to come here, but actually my next question is going to go to you anyway, right? Okay, I'll double. But now I'm going to force you to answer the question I'm going to ask as to what you want to be asked, okay? And so I want to actually pick up on that point, your excellency, exactly that point. Because again, like the historical argument for there being a perimeter between the bank and the non-bank sector is exactly what you said. The banks, their liability holders are depositors who are insured by the federal government, right? You know, it's a different form of moral hazard, right? Different in people involved, you know? But all those arguments were true in 2008 and yet we had a crisis that required the intervention by the authorities, significant like backstopping by the sovereign in many countries of like many non-banks. And I talk about Lehman Brothers. I talk about AIG. I talk about Fannie and Freddie. I talk about like all the structured investment vehicles. Money market funds, okay? You know, reserve fund broke the buck, right? Required a complete federal backstop of the entire money market complex which was supposed to be not like any of these things. So the point I'm trying to make here is that I understand the point you're making, but where's the assurance that these things will not become systemic? And just to make my point a little bit better, we don't have a regulator on the panel so I'm kind of being the regulator here, right? So this is what the IMF wrote eight months ago. The combination of poor market liquidity, high leverage, high degree of interconnectedness between the non-banks and the banks is most dangerous to the financial system because it can amplify asset price changes and then spread stress. So that is my question to you, Evan, is that given that we have seen episodes where in spite of the perimeter that you've identified, non-bank stress has required the intervention of the authorities, what do we do? It's true and we've had that experience in Canada where the quesaday poll, one of the pension funds actually had some ABCP structures that collapsed that Bank of Canada had to jump in and support them. Secondly, another pension fund had significant liquidity squeeze as a result of derivatives and hedges. Bank of Canada had to support them. So what we've done as an industry is we're now self-regulating and this is not going to be an appealing answer to this crowd, but self-regulating our own liquidity. We do a stress liquidity coverage ratio, as banks do, because the end of liquidity for a pension fund is disastrous. We don't have a leverage problem, but we may indeed, so we don't have a solvency problem, we may indeed have a liquidity problem and we report to the Bank of Canada on a formal basis that way. That's just, but the problem with shadow banks is it's not a monolithic solution. As His Excellency said, there's a different social contract with banks, and you said this, Greg, different social contract with banks that have deposit insurance and access to the central bank than people like us who don't unless we're given it. And as a result, it's a little rich of Jamie, this is my point, to talk about regulatory arbitrage when that's exactly what he was engaging in. He was engaging in a too big to fail arbitrage that he'd get backstopped and the moral hazard supporting that is what we've tried to move out of the system. If market discipline is regulating the markets, that's a good place to start, not a bad place to start. I'd also add just with the INF, of course the banks are going to be working with whoever to facilitate transactions, so that's kind of an evergreen, or you're going to have many institutions, many financial players who are working to bring about the maximum price. And if they weren't able to work together, it would result in lower prices. So the fact that banks and private credit lenders are working together to me is pretty typical of the fact that they're trying to amplify their division of labor, labor makes a lot of sense. So the issue that I see is just more, is it responsible? And it's certainly further in growth. I think one of the issues is to balance, as you talked about on your first question to me, is it's natural for credit to be growing because it means the economy is growing. And so it's natural for banks to work with shadow banks or unregulated financial institutions. Okay. Well, the Securities and Exchange Commission, as you probably know, last year, looking at the private market question, decided that there was a lack of adequate regulation in this field. And so they put a proposal, a set of comments that would affect many of the individuals on this panel. They really want a lot of these private asset managers to basically pursue greater disclosure with respect to fees, with respect to performance, perhaps like assume greater liability in the field of negligence and so on. These have not been well received by the industry. Like Steve or Anne, do you want to like comment on whether the SEC has got it right or wrong? So I think the SEC has been able to touch the private credit market and industry through marketing and the usual rules on, as you mentioned, fees and disclosure of returns. Where the industry is concerned, and maybe this is not necessarily in support of the industry, is particularly in the case of valuation and pricing. And so there's not been a lot of volatility in the price of private credit in particular or private transactions, relatively speaking, because there's not the same level of price discovery as there is in public markets. And I think this is one angle that the SEC would like to spend a lot more time on. More broadly, away from the SEC, regulators are concerned, and including Federal Reserve officials, are concerned about the lack of transparency more broadly into the investment practices and lending practices of the private credit industry. And unless somehow an ETF or other mutual fund gets formed where these private credit transactions are offered to the retail investor, I think there will continue to be a separation between the regulators and private credit. We've seen in bank loan space where the syndicated loan market has entered into the retail product space with these offerings, and they have a number of issues. One, you can't transfer, in the case of an ETF, you can't transfer a bank loan into an individual's portfolio. So if for some reason there was something to ever happen to that particular transaction or that structure, the outcome would be probably pretty troubled. We haven't been tested in that situation. And so private credit, as long as it doesn't end up somehow trying to attract the individual investor as a participant, I think can continue to argue that they do not need to be regulated in the same way. So I'm going to share another statistic with you. In 1983, 2% of households fit the definition of a credited investor, you know, wealthy enough that they didn't have to be treated like a retail investor. That figure today is 18.5%, because the threshold has never been adjusted for inflation or income growth. So we have a large segment of the U.S. population, I can't speak for Canada or other countries, which could potentially be attracted to this asset class right now. So I think that raises the question, is the SEC directionally right, Steve? Should there be more, at least to protect that growing segment of the population that could be involved? So a couple of things. First is just to get back to regulation, I'm marking third-party marks and a common established pricing methodology is really important, you know, for our confidence. And also, as economic environments change and industry prospects change, I think it's important to have confidence that there was a consistent methodology. So I think that's something that should continue to be developed, and I think it also makes results much more uniform and comparable. In terms of, it'll be interesting what the alpha that's added with some of the alternative programs on retail. So just having a name brand without the alpha I think has a lot more issues than whether they should be able to buy it or not. You know, so I think that's another issue. And from a financial advisor just saying that you can get X, Y, and Z, a piece of X, Y, and Z without looking at what the value that's added with all the extra fees or what's been added given the size of these institutions I've grown to. So I think that's going to be, you know, whether they're good investments to be. That's how I start thinking about it. And at least it seems like many of them haven't been. Greg, I'd say part of our job is pension fund managers because we wouldn't be included in your stat on accredited investors, but we basically are an aggregation of non-accredited investors that through us become accredited and participate in those markets. And that's an adjustment that works, right? And that purchasing power comes together in a way that can't participate in a market in an informed way. But also there's another added element to that and that is in the case of a retail product, the regulator has certain disclosure requirements because the retail investor can't themselves do the level of due diligence that you can. And in today's market, the aggregator, if you want to refer to yourself as that, then is performing the due diligence. And I can tell you, sitting on the asset manager side, the due diligence is... You don't go light. You don't go light, that's right. And so in fact, I would say it's more rigorous even than what the SEC might actually have mandated in terms of disclosure. So you take the place of that regulator in that way. And as long as that continues to function strongly, then again I think that can give some comfort to investors. Did you use a regulator? No, I said no. You use a place up. You wear one as a regulator. Can I just make a comment? I think there are multiple points that you mentioned and the colleagues that really weren't just reflection. Number one, I think when you talked about government intervention and the fact that they jumped into other institutions to save them, I think governments does not take light on failing out institutions. So they know this is taxpayers' money, public money, and they need to assess really what is the public good that is behind it. They bailed out car manufacturers, you know, as before. They have nothing to do with the financial system for some good cause, strategic cause. But in this context, I think a lot of it actually, the reason is you will find that the box stops at a bank that has not been regulated properly enough and they do want that bank to be exposed to these institutions. Failures. So they need to save these institutions to save the banks. The second point is I think there is a big difference between regulating and awareness. And the government has a role to play in raising the awareness of investors, particularly retail investors or investors who are considered sophisticated but they are not sophisticated enough because a lot of times if you don't raise that awareness even if they are technically qualified as qualified investors, they can be manipulated. Obviously, you know, the players or the ecosystem is smart enough to put that small print that will just satisfy the right regulations but you need investors who are savvy, you need to raise awareness and you need even to encourage them to use sophisticated asset managers who are able to do that due diligence on their behalf. The last point I want to say is we need to be very careful not to apply regulatory framework that relies to banks to non-bank financial institutions. Very careful because that could potentially kill innovation. That could potentially actually deprive investments, deprive private sectors and others from credit that can be provided by institutions that are willing to take higher risk than banks would have taken. Have you actually seen that tension in the Saudi context? Absolutely. In Saudi, I can't give an example now it is done and behind us, these capital market authority started allowing one fund to basically lend to small and medium enterprises and the central bank was not comfortable with that and they wanted actually to apply the regulatory framework that applies to financing companies that are supervised by the central bank and there was a tension. Ultimately the two regulators had to sit down together and say what is it that we are worried about? Why are you not allowing funds to actually lend investors money who are willing when they subscribed in the units of this fund to lend? Is it systemic risk? We can understand and just restrict their ability to access banks' money to certain limits so that there is no exposure but for you then to just say because they may cause systemic risk we need to be harsh on their regulatory framework so that they will not pose any risk I think you are potentially depriving your economy from growth significantly. And are there instances where what is purportedly concerned about systemic risk or prudential risk actually just rent seeking? It's in some sense the banks and their representatives trying to protect their status? Absolutely. I think competition plays but there are other reasons than industry players. We stepped into the regional banking space in the U.S. in a significant way in the last year and so we are taking up the demand that or supply I guess that the date... To clarify you are buying regional banks or you are competing for credit? No we are competing for credit so engaging in what private debt either through funds or directly through on our own we estimate that a trillion dollars of M&A activity happened because people like us stepped into the market when regional banks went away so that's kept the economy going in a way that's a good outcome. Historically if you look at the 90s where the regional banks would do LBO lending it was a tough space for them and it was a space where there were a lot of charge-offs usually during recessions which didn't justify the lending during the good times and what we saw was they felt very confident at charging six or seven hundred basis points over LIBOR now SOFR but we're not so confident with a thousand so pricing was also tough historically I found for regional banks particularly at the wider level for us a basic thesis would be what's the risk-adjusted spread so basically what's your gross yield minus expected default accounting for the volatility of outcome and that's not necessarily what it seemed like they were broadly speaking at companies in early 2000s how they operated and as a result people who are more confident taking that approach took a lot of market share you're saying that basically for their own institutional reasons there were certain credits that they simply would not lend to because their default probabilities were too high even in a scenario where the risk-adjusted return was appropriate actually I would just add something to that and they weren't terribly confident about which ones those work and that's what that created the opportunity so you're saying basically the private credit market fills a gap that literally would not exist at least in the US context absolutely and I think to add on to that especially in the periods of time that you're speaking of as well those are periods of time when capital gets rationed and banks are more likely to ration capital relatively speaking because they have little of it to allocate and they are very much prosyclical in terms of their risk management and so as a result private credit does step in in those particular situations we're certainly seeing it today and I think that's the point you're making Evan about the last year where you stepped into a space in the context where these mid-sized regionals were pulling back but just to go back to the regulatory question for a moment okay so you're excellent so you talked about the importance of information right so can I get the panel to at least agree perhaps that notwithstanding where you want to go with regulation there's something to be said for having more information out there so I think at least as a journalist and having talked to a lot of regulators one of the things that bothers them is just so much that they don't know I mean we know a lot about banks right we collect information on a quarterly basis we literally don't know the size or nature of a lot of these markets what do the panels feel about at least a reporting regimen so that we actually have a sense of the size and nature of this market so one of the benefits of private credit is actually being discreet so that's it's not the main benefit so in other words not disclosing who's taking money if they're trying to build up you know they don't want to be public with their information so you certainly want to make sure it's marked correctly and that's fairly valued but a lot of the lenders don't want the information they're doing if they're taking loans who they're buying and they're private that's the point so I think one of the issues of more transparency is not always right because a lot of the borrowers deliberately for good business reasons don't want to disclose what their borrowing is on a per transaction basis but I'll tell you from our point of view we do disclose the aggregate level of our investments we do not and it's not by agreement we don't disclose discreet investments which I think is what you're talking about Banks don't disclose Banks don't disclose I'm not thinking about name by name disclosure but like anonymized information that can be aggregated up so that at least on a system-wide basis we have a sense of the nature of this market and its size I think if I may regulating this industry smartly is necessary to avoid systemic risks and to maintain financial stability but that is the limit I think beyond that and they are required to comply with the US GAAB or IFRS accounting principles and if they are public companies they will need to publish if they are not public they will need to send reports to their investors but I think we need just to make sure that we smartly regulate them but we don't go beyond that to intrude into their business because that could potentially jeopardize productivity, renovation and potentially deprived credit going to industries and individuals and businesses that they cannot get it from banks so even if we don't believe that there's a radically new regulatory regime that's necessary do we think that there might still be nonetheless risks out there in the market right now you observe this market on a daily, weekly basis what do you think? what are the hazards that might be out there with respect to pricing, with respect to leverage with respect to quality and so on are there going to be sort of blow-ups somewhere down the line that we need to watch for? who's going to say no to that the problems in the system are largely interconnectedness to institutions that are subject to runs banks, some other non-bank financial institutions are subject to runs open-ended funds for example without gates broker dealers can be too if they're financing the repo market because the repo market is a runnable market attending to the level of interconnectedness of my activity for example and the banking system is an important thing for regulators to pay attention to because there are we've got to remember 20th century financial was the trigger of the U.S. financial crisis not a big institution a quite small institution and then there were series of what's the term, infection contagion that's the word I was looking for thank you Greg you're the journalist contagion the system that resulted from that and made it much larger than it otherwise needed to be yeah but right now we've come off a period of tremendous growth in private credit right and credit it's a very large there and like I've been in this business for longer than I care to admit in front of a public audience and has that kind of feel like it's kind of like when you've had so much growth and people have made so much money for so long there's something you know something's going to blow up you know the old saying like when the tide goes out you see who's swimming naked right so we've just been through a period of very high interest rates they're going to be with us for a while aren't there things out there that worry you so a few things first the returns the idea that triple C to single B credit will have risk adjusted returns of three to four hundred basis points going forward like they've had going backwards is a tough bet and so the returns are going to shrink in terms of it's really been a substitute for what the banks used to distribute so there was an innovation where there was to pay a dividend or do an acquisition quickly so to the extent that banks or other providers can come in quicker or cheaper it'll probably come in so I feel the returns are probably not going to be as excessive as they've been looking backwards so that would be the one issue in terms of how the asset class behaves I do feel as if the idea of that if private equity is the primary issuer of private credit the most sophisticated issuers are going to provide creditors with excess returns doesn't really seem like a great business model to bet on in the future so I don't expect that to continue I think there is one risk that in addition to what was already been said and that is I look at the market in two different ways there's credit now and in the last 12 months and then there's legacy credit in the private space that was made and issued against triple C rated borrowers in 2021 when there was a great deal of refinancing that occurred at lower rates than today and at some point those particular companies may in fact prove even at their lower borrowing rate especially if they borrowed on a floating rate that's no longer a lower rate that they may they may be feeling stress if we are to see the slow down in the economy that certainly our firm predicts and that could be an area of risk I think that would result in if there's a series of defaults of size and magnitude that will cause regulators to wonder if in fact the underwriting standards are as strong as the private credit industry seems to claim and whether or not that will be a way for them to work their way into some sort of regulatory oversight so I do have a concern about the legacy holdings one thing I'd add just in private credit I've seen the most innovation in credit in the last called decade in private credit so in the 90s there might have been structure products here so I don't want to there's been a lot of interesting and innovative positive aspects of private credit so I don't want to leave out in terms of why it's been a good on neighborhood debate okay I think we have some time for questions does anybody have any questions yes can I get the microphone here too sir you state your name and affiliation if you could thank you my name is very good to see some of previous friends and colleagues I am in the context of regulation that is being discussed I was hoping actually I was surprised that I didn't hear any reference to the roles of custodians and trustees some of them are in Guernsey, Jersey, Cayman Islands maybe London or Frankfurt or New York and their role in ensuring that the IPS the investment policy statement of pension plans of endowments some of these pension plans are managed by firms presented here in New York and Wellington so what is the role of these two important players trustees and custodian who report on the investments to the trustees to ensure that the IPS is complied with thank you very much very good question does anybody want to tackle that one so I think the reason that we're sort of sitting here stumped a little bit is because they don't play much of a role now no and it's really quite administrative should they if assets are held in trust absolutely then they do read the investment policy statement and then they do actively engage to ensure adherence but they don't perform any additional underwriting responsibilities it is administrative in my experience so I'm not sure that I see much role for them changing and in fact I think they want less responsibility rather than more any other questions so we've spent a lot of time talking about the regulation and risk of these things I want to spend the last few minutes talking about the potential in the future and so on so this NASA class has grown and evolved and like morphed what do you see in the next few years what new sort of markets might this market address and in particular I'd like the panel's thoughts on the way private credit and related private markets can assist in the needs of emerging markets and enormous capital requirements in the next few years things for poverty reduction things for infrastructure things for green transition anybody want to tackle that one we're engaged through an organization we at AIMCO are engaged in an organization called the investor leadership network in mobilizing private capital particularly for transition finance opportunities so we have a transition finance pool it's just slightly over a billion dollars our fund's about 120 so it's not that large so our Canadian government about effectively war bonds governments can put their own security and credit behind a risk that we wouldn't otherwise want to take, de-risk it and then we will commit to that in a significant way because it sounds like Brady Bonds it would be rather like Brady Bonds basically providing the first last portion as a word I'm sorry blended finance through them or through multilateral development banks would be very attractive and our models are looking at I just in terms of first from a liability management so liability management is you have a too much debt that private credit can come in and be a solution provider whether it's through offering a tender through a subsidiary so that's one way as it applies to emerging markets can help be a provider in situations where you've gone according to plan and it's really innovative lending in which takes the form being called private credit but it's really innovative lending where you can protect yourself from the downside and participate in some of the upside but I view it as more innovative in terms of terms that provide a good protection structure products haven't really been that evident or practiced that much in countries like Brazil but there's no good reason why so I could see private credit solutions helping innovate in countries such as that which have pretty good scale and there's no reason why and pretty good consumer behavior for why that wouldn't be the case I'll go back to his excellency's definition of private investment more broadly and say there's a lot of opportunity private credit we've been mostly I think referencing corporate credit here but the truth is it's a very wide category and to Steve's term innovation it's very innovative these days it includes novel ways to access real estate investments infrastructure investments which is particularly important of course to emerging markets new ways to do asset lending and in this way again private credit is moving way borrowers from traditional bank institutions and banking institutions these thoughtful ways to deploy credit technology if you want to call it that can be utilized much more globally and give investors investment protection in places where they otherwise might not have been feeling so secure to lend to and so I think these are actually helping to broaden out the scope and geography of private investment can I cover just one very quickly I think possibly just outside the norm here is the challenge that low-income country face in terms of their debt sustainability and if you take actually quite large number of these countries they would be countries who actually have endowments and assets that they just need support to be able to monetize these assets over time and helping them restructure that debt and under the common framework obviously we need to work with the private side creditors to restructure but then they also need the help of institutions like our friends here to provide them with the support in conjunction with multilateral development institutions to actually be able to weather the three or five or six years period that they need to develop their own endowments, industries and whatever I think there is a lot of room a lot of opportunities that we can utilize private credit with multilateral institutions to help even in a more innovative way but it will take a lot of engagement and mutual engagement between the private sector and the multilateral sector absolutely great conversation thank you everybody thanks for your thoughts really enjoyed it and thank you to the audience for listening hope that you found it helpful thank you