YouSaid · the spoken record

Brian Higgins

lines on the record: 71
first: 2024-10-18
most recent: 2024-10-18
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Spill that they had a big liability from, or the governance was bad. That's why they were in distress because some guy was stealing money or what have you. So there's a number of things that we've been able to prove upon, bringing new management or cleaning up environmental issues that then the company valuation rebounded.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“All works out, but I think it's really the sophistication and innovative nature of, let's say, security design has been enabled to have the flexibility of capital that has been transformative, certainly for the U.S. cap markets and then finds its way into other markets. But it enables people, say, traffickers in tragedy. It's interesting. We had one of the investors going to allocate ESG and he said, well, distress, it's not ESG. Friendly. I said, well, we're 100% ESG. We're trying to have companies help companies survive. And they have bad ESG score. We're trying to transform them into productive companies that are doing better, think about environment. They might have had some.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I guess having the hindsight is 2020 perspective on markets in general. I think it's important pivoting globally also the, let's say, the broad product suite that we now have, I think, are super interesting and informative. I never would have thought that we would rebound so easily and quickly in so many different difficult times. And that kind of me speaks to the resiliency of markets and the commitment that the governments, et cetera, had to bail us out time and time again. And so now 35 plus trillion debt, we got a massive amount of debt to show for it since 2008. We'll see how it works.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's important again, as I said, to work in the credit business to understand those covenants, understand those companies to get a generalist type experience because one never knows is it the utility sector? Is it the energy sector? Is it the TMT sector that will have issues or asbestos or different issues? And then you're like, oh, I'm an expert in this. But at the end of the day, if you understand cash flow generation, you understand balance sheets, you understand legal framework, accounting, then you can kind of learn most valuations frameworks.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's the critical importance of analytical rigor. And so if you're a recent college grad, you can't necessarily go back and take the courses that would be helpful. And so if you see some of the, I believe kids, they don't have the accounting background, for example. I think critical thinking is important. I think having some understanding of the legal framework as that's become, has always become such a big deal. Get into, let's say, stress to stress out of favor. Look, there hasn't been as much interest, frankly, because the tech world's been such a robust world.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, Blinkist is the reader's digest version of books because most books, they have a concept, interesting concept, and they spend two, three hundred pages saying the same thing seven different ways, trying to convince you that versus Blink is like, all right, here's the concept. You're like, okay, makes sense. Interesting. And next.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say book wise, just let's say a genre in books because I listen to them. I'm not a big reader because I read so much in terms of research and consultants and sell side and our own internal research plus the papers, et cetera. And I try to Ingest a lot there and then content, deeper content on the weekends, and then just number of emails, et cetera you go through. So I'll listen to different, whether it's leadership or self-help type things, but it's more about, I think, the self-improvement and so how do you get the most out of life, if you will. I love hacks, if you will, in terms of health hacks or efficiency hacks. I think that's critically important technology to utilize to its followers. So that's sort of the focal point.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Vincent TC is on the number of boards to this day. He was banking commissioner stayed in New York. He was urban development chair. He had been tax lawyer. He was commodities trader. So he had this incredible varied career and life and quite successful entrepreneur. And so he was always a wealth information contact and always great, great advice and perspective. And Jimmy, of course, Ram Barrett Stearns, obviously unfortunate ending to a storied career, but he too was very helpful in giving great advice.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“You all can be leaders. You all can inspire. And when you're on the court, and Jay is 50, 100 feet away, who's going to inspire and lead each other? And you can't just rely on the coach. You got to look to each other for leadership and to sponsor. And that's when I talk to my team and how do we have the culture, how do we continually have that leadership if the partner's not in the room, who's going to take that mantle and who's going to push forward? And so on the things that I ingest, I got to have a lot of intake to have outtake, right? Because I got to do a lot of meetings. So I got to find that time to refill the tank with information. And so on stuff I'll watch, whether it's, if it's not sports, it will be some mindless spice things. I like to travel and see things around the world and different cultures and understand that and history. And so that usually wraps up and say.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It was interesting because Jay Wright had called me like four times in advance because it was so, but you go back to leadership and culture, it was so important with you want to make sure what message I was going to give. And I said to the team, I said, see,”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I said, yeah. And it was funny watching the faces of all the older upper class, and they were laughing because they knew I was just trying to see. And I said,”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“What do you say to me? And he had like deer in the headlights look. He was 18-year-old kid. He was sort of like this, you know, old guy with supposedly successful guy coming in begging me for advice. And he said, like quizly, like you can do it.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“But anyway, so we went there, watched some of that. Also, I'm a Knicks fan went to Villanova and they call them the Nova Nicks. Funny story years ago, I was fortunate enough, Jay Wright, who's the coach of Villanova, invited me to speak to the team before the start of the season. They were in New York and talking to the team. And I said to them, guys, I'm really, really nervous here. 2018, they were reigning national champions. And if you guys don't win the championship, like they're going to look at me and blame me. And they were kind of looking at me quizly. And I picked one of the young players, young freshmen, and I sat down right across from him, right up in his face. And I said, you know, look, I'm really nervous. I got this big meeting and you got to help me. Can you?”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“October. Having grown up on Long Island. Yeah. Well, yeah, I mean, I grew up in New Jersey and my first Met game was 1969, which is when they won the World Series from a despicable, like, worst team ever. I think Chicago, White Sox have taken that over”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I was from, I grew up in New Jersey, in East Brunswick, so I don't know about the Hackensack one, but in the one, it was a discount store and went bankrupt in the 80s, which Fernado was part of the portfolio became then the funny history But my brother recently gave me a shirt, two guys capital, and we got on a website somewhere. Anyway, so I had a significance there. But no, so as I said earlier, having this team and this partners with us over 13 years on average and having MDs 38 plus MDs with us over 10 years on average, we've had a very deep, deep bench and fortunate to have incredible depth and breadth to the organization where we didn't miss a bead. And that's something I think testament to the culture that Fran and I built the first 25 years, which Continue for many, many years to come.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Two guys capital, right? Which is funny enough, my brother named that. We grew up in New Jersey and in East Brunswick, and it was two guys.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I believe the website's correct. He's still at Yale, I know. I've spoken to him recently, but I know he's got a lot of pursuits and quite busy with his family. And I think he's enjoying a well-deserved time. He and I had an incredible 25 years together. We call ourselves old married couple or brothers of King Street, whatever they call us in I.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That people had with their kids at home or trapped in different places and the sicknesses and loss of life. So those are obviously in any regular time important, but we believe corporate culture has to play its role and not to replace, but to be a part of it, to be supportive of people. But it's, and also think about we have offices, as you've indicated in the US and Europe and Asia, Middle East, how do we create that consistency? How do we create that fabric that runs throughout? And a lot of times we'll do similar furniture and the like, so they feel like, oh, this feels like a King Street office, things of that nature, similar events, and the swag, if you will. Binds”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, culture Becomes what it becomes. Everyone hopes that their culture is sustainable and constructive and not toxic. And so we strive to make sure there's that communication openness. We do a lot of surveys. We've always trying to better our scores at self-improvement. We focus on. If you go back to pandemic, it was hard, right? Because you're on Zoom. And so, you know, holiday party on Zoom or scavenger hunts on Zoom. It was how do we create these ties that bind us over what it was incredibly challenging personally and professionally for a lot of people. And frankly, the markets, as we all know back in the 2020, as I referenced earlier, were brutal and working incredible amount of hours, the family challenges.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That teamwork and collaboration. And I think it's important to celebrate events. We have outings. We have different groups celebrating our women, our diversity, our charitable pursuits, our holiday party. We saw the old school holiday party that we do every year. I think summer outings, et cetera, these are all, we believe, part of the building culture. Everyone, the month end, everyone's birthday gets celebrated with we had them happen every day. So we say, wait, we'll just do it once a month. All the February birthdays, you know, which, and then you get to vote on it. So little things that I think create the family. And you spend a lot of time with people. And if there's not that recognition of individuality and the effort put forth. Then it's a miss, we believe. It's, again, to celebrate together what we've achieved is critical.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it really, again, as I said at the outset, it's celebrating the people that comprise King Street. As I thought from the beginning and talked to other people in leadership, remember that your greatest asset goes down the elevator every day and you hope they come back up the next day. And so one has to, again, celebrate the teamwork and that's the approach that we have at King Street. I talked about the overlapping circles and the ability to work on different aspects of the business, but it's very much a team. And we look at the operation team, the investment team and the training team. There's a lot of collaboration that is constantly occurring and people get paid on the well-being of the overall firm. And so it forces”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So these are things in terms of proportionality and probability. And proportionality is, okay, you can create a scenario with any investment where you'd never make the investment. You could say, well, that could happen. And then you could say to someone, well, it's one in a million years and it's 2% of the business. Is that really going to cause you to pass on that investment? So that's the constant interplay that we feel is critical to arrive at the best decision you can make. And again, the best decision you make today, tomorrow, look at it again and say, oh, I screwed up.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Because if you say, well, this hurricane is going to happen, the tragic hurricanes that we've had currently and just recently, okay, if you had said, never going to happen, we haven't had for a while. And if it happens, it doesn't create much damage. Well, what's the probability that that good outcome? Now, if you look at geological faults and you're buying a piece of property and you're building a data center, for example, and you say, well, one imp 1.6 million or billion years that, you know. I feel good about that, right? But if you're down in Florida and you're saying, I'm not going to buy flood insurance, now question, can you get it these days? For it, right? But like think about the people”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Change. So, if you think about the number of variables, one would be kidding oneself to think that they can rest in their laurels, if you will. The work just begins when that investment is made. And so in the paranoia and insecurity, only paranoids survive, as they say. And so we have to say, did I do enough work? Was there something I missed? Keeping one up at night that constantly looking at it. I think if you look at any piece of work, an artist or whomever it is, they put some work, they do some work, they put it down, they come back, they look at it from another light. And there's, oh, I missed that. Let me continue to refine it. And so investments in our mind, our bodies of work that need to be continually refined because the elements, if you will, continue to challenge it. And then you look at probability and proportionality. One has to be careful on that, right?”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know, look, paranoid insecurity, I try to be humorous and colorful because investors come in to drone on that it doesn't always keep their attention. I think it's important to look at we also talk about probability and proportionality. And so if you take those four things, right? So the paranoia insecurity is like, okay, did I do enough work? Does someone else know what can happen that I'm not seeing? It keeps that drive to continue to ask those questions. As we said, knowledge reduces risk because these are moving picture. This is not a still life photograph. And so there's many different variables that happen through a business, through a cycle, through lifetime of owning investment and markets.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's from our perspective fairly simple as investors that focus on out of favor, distress, bankruptcy, we see failure every day. And we would be incredibly delusional to think that without, and sometimes it's no fault of the companies, right? It's some unforeseen act. It's some fraud was perpetrated on it, you know. But it's incumbent upon us to be tireless in our effort as there's multitude of competitors out there globally that we go up against every day. And if we're not grinding it out, then there's going to be a shortfall and we don't plan on having that.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Because if you're not out there with your LinkedIn presence, or I think it's just a sign, look, we're not on Instagram. No tickets.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Evolution is so important self improvement evolution. I think markets change and I think it's important to adapt, to survive, as Troit saying might say. We look at the opportunities that we're facing, the business that we're building and have built, and are quite excited about, and I think it's important to communicate for our investors, for prospective partners and people to attract the best and make sure we have the best partners to make sure our story's out there. It's gotten incredibly noisy, if you will, and everyone's out there. So, to do nothing, I think, would be a disservice to the people in the business and our partners, really, as the opportunities come to, as they say, squeaky will get to Greece. And so one has to, you know, relationships are great. However, at times people would say, oh, King Street, they still own business.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Know 5, 10, 20 is these traditional data centers air cooled. And so as Wayne Gretzky used to say, I skate where the puck is going to be. And the chips are all about we need liquid cooling. Also, as we look to satisfy the future, which will be inference versus the LLM, the big training models. There will be a need for the data center. So we're having a number of conversations across many different verticals. Our real estate group is executing, plus the team. It's super exciting. And it's, again, it's something that evolved out of our overlapping circles with the financing. There's always a method to it that we evolve into.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So just think about just the construct, right? So, you have the whole data center, you have three foot race floors, you have an intake, outtake of water that's ambient water temperature flows around and goes to the rack. Many will do liquid cooling to the rack, but separately, and that's very expensive because in effect you're retrofitting 95 plus percent of the data centers are air cooled. As we know, air water is 3,000 times more effective cooling than air. And so the PUE, which is the efficiency rating that they utilize, we're like 1.3 and many are 1.5, 6, et cetera. So it's very efficient. You can have a denser facility and it can handle the AI The kilowatts per cabinet. And so we can host up to 250 kilowatts per cabinet”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“However, we then said, wow, this data center business is going to have legs for quite some time. We looked at the hyperscale business, insanely competitive and said, okay, can't make a mark or find an edge there. And that's when we came up with Colivore, which was selling itself. They have been doing liquid cooling for 13 years. They started a company 13 years, the company 10 years ago operational in a co-location business in Santa Clara, California in the heart of all these tech behemoths. And they've been DGX certified by Namibia for over five years. Liquid cooling, the way we do it, is it's full, true liquid cooling.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Nvidia chip, that's what they produce. And so we looked at some financings there. Couldn't get quite comfortable the depreciation curve because NVIDIA comes out every other day with a new chip. And so we said, why lend your money if every two years you're going to have a new chip and so worry about the value eroding on that chip? And so even though we overearning in terms of financing, now there will be situations and opportunities that will make sense to lend in that sector.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Sort of give you the history. So years ago we started focusing on growth lending, growth financing. You know, it's funny VC distress, there's a lot of similarities between the two. You don't know What's going to happen with the company? Is it going to make it not make it? So, for example, Airbnb and DoorDash. In 2020, we let them money prior to their IPOs. Now, the V on the LTV, loan to value, the value oftentimes is disparity because when you ask a tech person what's this company worth, generally it's very, very high numbers, which we don't always support from our valuation. But if the loan percentage is quite small, 5-10%, then there's a margin of safety and we have a lot of covenants to protect ourselves. Neil say we did some of that. We looked at GPU financing, which GPU is the”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've been doing real estate as we mentioned first real estate finance and then real estate buying the equity or buying actual properties for quite some time. A number of years ago, again, as I mentioned earlier, the demise, if you will, the stop doing side pockets and you set up separate real estate funds. And so we've set up a number of funds. We've also invested in some specialties such as student housing in Europe. We've done last mile logistics. We've done movie studios. We've also done a number of financing as the banks have pulled back, has created great opportunities in that. And then more recently, we bought a data center business that specializes in AI and high-performance compute, which is quite an exciting business.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“We will have different fund strategies, and there might be a bond or a loan situation that we might see in different funds if they meet the investment criteria, liquidity, duration that we are looking for in that particular strategy. And so there is real synergistic effects and ability to analyze these situations quite rigorously.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've been investing in CLOs, mezzanine, and opportunistically for a number of years, equity and et cetera. We've always had this credit expertise and we felt that as a complement for our investors and to benefit our longshore credit business to have the CLO strategy was, we think, a distinct advantage. And so we've had a terrific growth and successful business launch and continue to grow from strength to strength there in both the US and Europe issuance. During 2020, there was a number of opportunities that came out to rescue finance. A number of the companies we had relationships with. And so it has proven very complementary to our business. We describe our business in terms of overlapping circles. And that is...”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“We did wrong, and we correct those hopefully then the going gets better going forward. Trading in 22, as I said, I wouldn't say it's too differentiated, but again, in absence of a true distress cycle, I think that it loses sort of meaning. But if you look at in 2020, there was a number of things that is really for me a more signature important time.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say it set the table going back to, say, 2020. If you look in the pandemic when world's going to end and then a lot of liquidity injected and then we had the vaccine news came out, everything rallied. But there was so much stimulus being put. And I think just let's say I don't like losing money ever. And as my co-founder used to say, relative performance, but you can't eat your relatives. So it's just important to, from our perspective, contextualize that. And so we are very disciplined. I think one of the things that we look to was like, hey, let's go up in quality, up in liquidity. And that was a concern. I think one of the things took us by surprise was, okay, how much inflation really rooted and how quickly and how high it went. So I would say, you know, that was something we missed. Again, we always try to focus on.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So it really having a bit of perspective is important. And then you can then time it appropriately. Now, we're not market timers, but it does give us, I think, a relative value perspective. So coupling the trading and understanding, okay, a lot of sellers are coming out. There's more coming out, having that supply demand question answered is important as well.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. At the end of Right. And so initially, there's always the, and we could sit there a bit of time and it gets expensive carrying shorts, so you have to be mindful of that. It can take some time. However, it does enable us to have done a fair amount of work in advance. And so let's say something breaks. Hopefully we've been shorted and we have a fair amount of institutional knowledge about that situation. And then we can cover it or wait it's going to get worse because oftentimes management comes out and they say, okay, they find some guy, they shoot him and say that was the bad guy. And now we're back. And you're like, wait a minute, that guy was the janitor. What do you mean? Or we're going to execute on this or that. And you say they've tried to execute for the last three years to do it.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think going back to history, which is 1989, well, so you can go back to 87 with the crash, saying the importance of tactical trading, go back to A9, the formation of the distress, the prop group, the distressed securities group on the trading desk, but being part of that when you had very wide bid-ass spreads. And you could see that execution and entering and exiting a position, there was a massive amount of differentiation and performance that could be created if one were to be able to trade it tactically. So, for example, if things go quite wide and spreads where they can trade 10 bomb points wide. Being able to buy on the bid side versus the ass side if it's 5060 market, for example, that's 20% differential. So, just your entry point is massive. And also, we call ourselves short-long investors. And people say, as opposed”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. And a lot of times they do it with you have Japan Post, you have Italian Post, you have Deutsche Post, you have, you know, the regulatory environment for asset management in Europe is quite onerous and is difficult to passport. I mean, they have that these days, but there's still the reality is there's still a lot of inflexibility within the regulatory framework that, and look, I've spent a fair amount of time with regulators and central bankers and participated in a number of forums and meetings on the topic. It does get complicated because Europe is Europe, but it's still a number of different countries within that. The US having this large, deep market does help. And look, I think we do have the innovation sophistication. And I think the beneficiary of the world being able to buy.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“In terms of the market construct comparing US versus the rest of the world, I think there's a lot of credit due to the innovation, open regulation, but also evolving regulation. And also it helps having these large banks if you look at there hasn't been the Big Bang in Europe, as they said it was going to be, right? You look at the wrestling going on between Uticredo and Commerce Bank. And you look at the German banks and some of the issues, the stagnant aspect of that economy, if you look at savings products over there, there's not the full depth and breadth of products that we have.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Argue that the markets have been more rational in terms of their approach to leverage than ever before. At least, you know, almost 40 years doing this.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“More susceptible to boom and bust because there's that lack of cushion and the more systemic in terms of their issues when the economy turns. But if you go back to the question on high yield and how it's differentiated, there was just a lot more leverage back then. I remember doing the Allied federated deal. Now, granted, the risk-free rate was higher, but you had 16% loans, 70% loans. You had eight times, ten times leverage, right? So you have less leverage. You have lower spread going in. As I said, a higher quality. And the greater leverage is being found at times in some of the private credit or other loans. But I think this extreme leverage is not as prevalent as it once was. And so I would.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I wouldn't say it's the Fed. I think the markets have evolved dramatically. And if you look at markets around the world, the US capital markets are the envy of the world because the banks have had less and less responsibility, if you will, meaning they're 25% banking, traditional banks and 75% capital markets, which should be all sorts of bonds private and public. You go to Europe, it's 75% banks. You go to developing markets, it's 9,500% banks.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think that's fair. I mean, again, I'm sure some would have their own classification system, as it were. I would just liken it into distressed is real operational issues or financial issues that, as I say, inevitably preponderance of outcomes to a restructuring or a bankruptcy out-of-quarter others. And so versus a stress, which is not always heading that way.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Had the Fed come in and push a lot of the banks and say, hey, you can't have a ton of leverage on the high yield issuance. And so they kind of help create the private credit market, if you will. Or went into loans. And so lack of covenant protection. But the quality of the hyo market is dramatically different than one say I came up.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And that could be stressed. Now you would say, well, that's in high yield, that's nothing. We can see 20, 50, 100, 200 spread widening or tightening in high yield. Now, that is, I'm giving a historical perspective. It seems like the last couple years, this is not your father's high yield market when they, you know, high yield meant junk bonds. And these days, high yield is trying to be an investment grade market given. The security”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it is kind of nuanced in a way. I think distressed assets, you're on their way to default most times or restructuring. Stress assets can be out of favor assets. I think you're splitting hairs. Some would say, oh, CCCC bucket, that's all distressed. And if you look in single B, double B, oh, that's stressed. It also depends on where we are in the cycle. What can be stress to stress? And also, if you look at a stress infrastructure situation that might not be that wide in terms of total spread, so let's say you have 1,000 basis points over the treasury is, say, a distressed situation. And then if you look at something that normally trades, say, 100 over, but it's trading at 100 over.”
2024-10-18 · Masters in Business · King Street's Brian Higgins On Navigating Distressed Markets · IDENTIFIED FROM THE TRANSCRIPT · source