YouSaid · the spoken record

Mark Jenkins

lines on the record: 78
first: 2022-04-21
most recent: 2022-04-21
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

“Our platform approach is really informed by my time at CPPIB. And what I learned there where they were agnostic to product in silos, they were simply seeking out the best risk-adjusted returns. And if you looked at the old days of 08-09, things were very siloed. High yield, leverage loans, distress, maybe special sits, but they were very specialized. And what we learned, or I learned at least with my team at CPPIB, is by having a broad platform that could connect to the information flows coming in from the public market side, coming in from the private equity side, coming in from our infrastructure and real estate, helped inform opportunities and it allowed us to move three cycles to where those opportunities were. So for example, today at Carlisle, what we were able to do is as we were going into 2020, we were obviously working.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Our concern was they able to pass that on to the distributor, large distributors you could think of food in the United States? And the answer is they were. So that's a good thing. What we're trying to do is look at portfolios where that ability to pass on costs or absorb costs is greater than things that are more sensitive to it because we know that's going to hurt margins and EBITDA growth. And that's what we're focused on right now as we think about inflation, not so much how it affects interest rates.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is security selection and portfolio construction because the one thing I've learned in 31 years is the only thing that's protected us ever coming out of like a massive disruption in the marketplace is a high quality diversified portfolio. So that's how we're focused today. Inflation is not so much where we think rates go in terms of how I think about it. How does it impact the companies that we are lending to? So for instance, we have a company recently, they call it like a staple food provider, white label it. And the biggest cost to them is the inputs of the food, obviously. Gone up dramatically.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Very low still. So I think the early returns are really indicative of interest rate moves, which by the way, we should have expected. I don't know how long people thought the punch bowl was going to stay there, but we couldn't believe we're going to stay at that level forever. So none of this is unexpected. I think the shock of the moves is always, I find in the market unexpected by people, but it should have been expected. So as you think about investing, if you think about it from a return perspective, you've got that hedge, if you want to call it, against rising rates. What we're not seeing yet, but this is what we, I think we get paid for, is the credit impact of a slowing economy with rising rates and inflation. And that, you know, that's where I think we've moved from 2021, which was, I would say arguably a macro focused trade, if you want to call it that, even though we're long-term investors, to very much focusing on the micro, which”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, why is that? Because their floating rate, like 0.5 duration versus a longer duration fixed income bond. So right now, it's pretty clear that the move in interest rates is impacting valuations, right? It's not, there's not been a fundamental shift in credit yet, although default rates, you'd imply with spreads right now that default rates went from the end of year at 1.1 to maybe 1.25.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, the early returns are, if you look at high yield, it's down 4% year to date. That's relative to the S&P 500 down 8.5% year to date.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Premium you were paying for that was pretty substantial for liquidity. So, what we have today is a private credit market that's grown from $300 billion. It's over triple to $1.1 trillion today. Total alternative assets today as of the end of last year, 8.9 trillion, in a market where the combined fixed income and equity markets are $229 trillion. Alternatives as a whole are pretty small in somebody's portfolio. Private credit is a one to nine ratio in terms of total alternatives on a path where we've tripled in size, over tripled in size since 0809. And what we see, because of all those dynamics, the banks retrenching, the rotation into alternatives, is a 10 to 12% CAGR over the next five years. So we don't hear about it because it's relatively small, but it's a part of somebody's portfolio and it's becoming increasingly more important.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“I can pick up 500 extra basis points on average if I go into private equity plus or minus 100 here or there. I don't want to be exact on that, but just approximate. And they made that rotation. That happened coming out of 0809. And we've seen that progression. The next wave is people who are in fixed income who are picking up 2%, 3% in corporate bonds and rotating to the extent they can allow themselves to be more illiquid, picking up 100 to 150 basis points by going into privates. Now it's not obviously without risk because you want liquidity, but I think 0809 showed us that you may be overpaying for liquidity because I lived through that period of time and what you could sell was the best high quality liquid names and anything that wasn't high quality wasn't all that liquid. So the risk”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“In that void, if you will, you had a couple other things happening one, you've got a 30 year decline in absolute interest rates, which we've all observed. And you've seen a rotation as a result of that of these larger institutional funds that have to make returns that are in the high single digits rotate into illiquid assets. The first phase of that, that was in private equity. People looked and said,”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, a little bit of history, I guess, is probably worthwhile. If you went back to 0809, which I was fortunate enough to be in the credit markets then to work through that, which was very, very interesting. What you found is the banks had already started to retrench from the lending market. I mean, that, in fact, had started well before 0809 in the late 90s, more or less. In the institutional market specifically on the loan side, started to increase. If you went from 808-09 to call it 2020, if you saw the amount of credit inventory that banks were carrying to today, that's down 80%. I put it in simple terms is they're no longer hold inventory. They're shippers of risk, right?”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, at a macro level, absolutely. I think that's true. I think the other thing I would layer into that is there has been a shift in terms of the older aircraft that have been retired. So the actual inventory has shrunk and the actual OEMs, Airbus and Boeing have actually shrunk the number of planes they're producing. So there's another technical factor going that you're having old aircraft retired because they're not economical to fly. And you have the OEM slowing down. So it actually makes our midlife aircraft much more valuable if you're trying to have a very economical asset in the sky to fly from. Makes sense.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, the actual aircraft. I mean, the actual metal in the sky only has value to the extent you have a contract to lease it out. So it's not just enough. Countries around the world. So we have that diversity and maintaining that long term contract. So through this period of time, which a lot of people would say, geez, it must have been a really tough time in global aircraft, which it has been. You know, we've been able to take advantage of restructuring and terming out our long-term leases, which is good, gives us lots of optionality, but also take in more aircraft. So we've now actually risen from being, I think it's the 15th largest lessor in the world to the sixth largest lessor in the world as long as we close on Manchester, which was announced just before Christmas. So we really leaned into something where the metal in the sky is relevant.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Perspective allows you to Together a portfolio that is diverse away from just single name credit. And I think that's what people like on the institutional side, I know that from experience, that's what we look to do in my portfolio, my former life, and that what people are doing today. So that was point one. We wanted to be relevant to our customer, if you want to calm that, the investor. Number two, we got to be relevant to the user capital, right? Like by having a platform approach, which really kind of covers that span, that broad span, we can be relevant to almost any borrower in the world for whatever they want to do, right? So they may have some real estate. They may have ongoing cash flow loans, but you can put them together and you can deliver an opportunity. Why is that important? Because it allows us to have the widest funnel from an origination standpoint that we can and leverage that Carlisle network where we're operating on a global basis. So that's really.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what we wanted to do, and from my experience on the other side, an experience that these other organizations was explaining credit, which isn't really a monolithic asset class. Like it has a range of exposures and a range of expected outcomes through time that we really wanted to be able to deliver to investors that range of risk return outcomes, right? And so if you think about non-investment grade credit, you go from leveraged liquid loans, CLOs, which is the liquid credit side of things, to direct lending to opportunistic credit, to distress, which is really private or e-liquid credit because it doesn't trade. And then there's real asset credit, which involves assets like real estate, infrastructure, in our case, aircraft, aviation, where the underlying security and cash flows are determined on hard assets. And all of those from our investors'”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And I think for anybody who manages a portfolio and getting back to that managing large portfolios at a place like CPPIB is you recognize we're just like one exposure in somebody's broad portfolio. So you got to think about what you're meant to deliver into that portfolio. And that is a very stable, persistent return three cycles. And that's to what credit encapsulates from an investor standpoint.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“We're in a good position and we're minimizing our credit risks. I think the other thing that Goldman really taught me was how to mitigate risk and downside and really focus on the downside in a lot of situations. And so coming at investing from that perspective naturally led me to a better credit hat than it ever did equity. And in fact, I did run equity private equity at CPPIB. I think I was okay at it, but I definitely majored in credit. So that's the path I pursued. And it's been fruitful. And I really find it fascinating. I know I'm a credit geek, if you will.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, Barry. You know, when I think about just being incredit generally, people ask me all the time, and I look back in my not illustrious sporting career, which was soccer, hockey. And I always played defense. So I never really played on the offense. I was always trying to keep the puck or the ball out of the net and helping people do that. And I think when you think about credit, what you're looking to do is there's a contract between me and you, and I give you some money. And at the end of that term of the contract, you give me the money back. That's defense. I'm not looking for, we're not looking for massive upside that you shoot the lights out on the equity side. And so it always seemed to be a very much a comfort zone for me that I could operate in an area where I could understand what was going to allow me to get my money back at the end of the day. And all that training at Goldman had taught me as a credit analyst, that's what I was always thinking about is how will this obligor give us the money back at the end of the day so that”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Peterborough contributing to CPP for a year. So that really puts things in perspective. And I've taken that with me now because now I work on behalf of many beneficiaries and fiduciaries across the globe. And I still think it's a sacred trust and it's a privilege to manage money.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“And so my mother, my brothers are about 18 years older than me, so they take the Canadian pension plan right now as well and my sister. So they're all beneficiaries of that. And on top of that, my brother and my other brother, they're both were, one was a teacher, one was a policeman. So they also benefit from the Ontario Municipal Employee Retirement Plan and Ontario Teachers Pension Plan. So they're all beneficiaries of these large pension plans in Canada. And I think what it really did is made it real. made it real for me in terms of the money that I was investing, the sacred trust where literally 19 million people are giving you money to invest on their behalf is a sacred trust. And so I used to say to the team at CPPIB that that's a special place to be and that has a higher duty of care in my mind. Because think about if you lose $20 million, that's like the entire city of”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Things like that Sure, for sure. I think that the greatest takeaway from me, and I take that to my job today, is like know who you work for. And for me, I have a 91-year-old mother and she would say to me every week when I talk to her, how are we doing? It's her money, right?”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“But that's effectively what you're doing. You're managing those excess contributions to the Canada pension plan. And for me, it gave me the ability to take all the knowledge I learned on the credit side, the business building opportunities, and transform that into a private credit direct private credit investment platform for CPPIB. And later, you know, as I progressed there or stayed there, I guess I ended up running private investments, which included private equity, infrastructure credit, energy credit, and some other assets. But generally, I'm a practitioner in the credit side.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, very different, but similar in that my former boss used to joke when he hired me that basically I was joining a $100 billion startup. Because the Canada Pension Plan Investment Board, in fact, manages what you would think of in the US terms excess.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'd spent over 11 years at Goldman. I learned a tremendous amount of that organization as it transferred from basically being a partnership into a corporate and all the changes that go with it. But it was an extraordinarily... Fertile time for me in terms of growth and development, in terms of just being very entrepreneurial and commercial. And I love that aspect of it. But Barclays, a couple of my friends had left Goldman to start up the leverage finance business there. And really for me, it was an opportunity to learn how to build a business. I was, you know, spent all my years doing very highly structured transactions on the credit side, being a credit analyst, et cetera. But really what I hadn't learned is the business side of it. And that was a great formative time for me, which kind of led me into my next move, which Canadian”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sure. Well, I realized that the accounting profession probably long term wasn't going to be for me. And most people would move on to something different. I had some friends who worked over Golden Sachs, which frankly I didn't know a lot about at the time. I walked across the street in Toronto, ended up working there initially in controllers, but eventually worked my way into being a credit analyst there. And very shortly thereafter, I moved down to New York and spent actually most of my career in New York working for Goldman and always on the credit side.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Cross collateralization that was kept from all the banks, of course, which was part of what we discovered. And I think my formative year was started with a lot of skepticism, which probably led me into credit as a result.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's certainly taught me how to understand how you're going to get your capital back, if you will. I think that my early formative years in terms of business was one of skepticism because 89.90 was, at least in Canada, was going through large recession, predominantly in real estate. ONY had overextended itself, building out in Canary Wharf at the time.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, actually, I took a bit of a short stop first. So back in the day when I was sort of again trying to explore how to get into business, I noticed a lot of chief financial officers in Canada had a CPA or back then a CA. And so I actually spent two years at Cooper's and Librand working on my CA in Canada. You have to intern at an accounting firm. So I worked there in corporate audit and business investigations, which basically back in 1989-90 did a lot of the bankruptcies in real estate. So in fact, one of my early experiences was working on the Olympia and York bankruptcy with the Reichmann brothers.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sure. I think, you know, when I grew up, I grew up in a town called Oshawa, just outside of Toronto. And, you know, growing up, I didn't really have any influences that were in the business side. And so as I was kind of progressing through my childhood and through high school, I sort of was very interested in commerce and how that works. So, you know, my first job really was working at a corner store where I used to stack what we would affectionately call in Canada pop bottles, but you'd call soda bottles. I did that. If you're in Minnesota, you might call them pop bottles as well. And I used to sweep out the parking lot as well. That was sort of my first job at 13. And I was very interested in how that gentleman ran that store. And my brother-in-law actually ran a small lumber yard in town that I worked at as well. And so I was very, very interested in how businesses worked, you know, how that operationally worked, not just the actual element of working at them. And so I kind of looked at people who had progressed into.”
2022-04-21 · Masters in Business · Mark Jenkins on Leveraged Finance and Pension Plans · IDENTIFIED FROM THE TRANSCRIPT · source