YouSaid · the spoken record

Taimur Hyat

lines on the record: 76
first: 2020-07-20
most recent: 2020-07-20
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

“Absolutely that cut the bait sooner than I used to. I valued optionality too highly. I wanted options. I sometimes overinvested in things where I should have seen the signals that this isn't going to work and cut that particular investment, that particular idea sooner. And I think it's not about being ruthless. It's about being disciplined, trying lots of things, but also cutting loose quickly when you need to is something I do much more now. And I think it's a good thing. I wish I'd done it a decade or two ago.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think what I value most is that they didn't try to make me images of themselves or better versions of themselves to fulfill goals in their lives that they didn't achieve, but they're let me be myself, they let me indulge, often adding some guardrails and discipline around it, but they let me indulge in my discipline and trusted me. And I think I learnt from that that even in teams, let people be passionate and do what they want most, and that's what's most successful. There shouldn't be versions of timer, but versions of themselves and bringing those together in a team, that diversity of thinking is what's most powerful. And I think I learned that from my parents.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“My biggest investment bet is probably an over reliance on trading algorithms and baptists that lack a foundation in underlying theory. Probably comes back to my academic roots. But while I believe big data is absolutely part of the answer and there's a lot of data analytics to do, I think you always want to be able to tell your clients when your particular source of alpha will work and when it won't work. And you can only do it if you truly understand the underlying mechanism rather than find spurious temporary correlations. Unfortunately, there's a lot of that going on.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“My biggest pet bee is probably sloppy grammar, and extra apostrophes where they don't belong capitalization in the middle of sentences. I already mentioned that prefer Garimund to non Garamond, but things like that that lead to sloppy writing really irritate me.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“We probably all developed a fucher on our vices, but in the same spirit I would say one has been a slight obsession, which sadly is not unique when I look at people's Instagram feeds of baking banana bread and experimenting with different versions pretty much every second or third day. So I made one with hazelnuts instead of walnuts. I've add rum-infused raisins. I've crushed the walnuts to create a walnut flour instead of normal flour for a gluten-free version. So I think it's getting a little dangerous as a habit. And then a little bit of binge watching of television on weekends, particularly when it was a little cloudier and rainier in March. And my latest one is a book that I could never read called My Brilliant Friend, but that's been turned into an excellent HPO series.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's a new one. What new habits have you developed during the pandemic? And we can go good and bad. And when we get to bad, just to be open about it, I have developed a daily habit of eating fruit loops, which is my corona vice, if you will.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it wouldn't be typography because I think I only have one font in me. It would be to set up a restaurant. I'm a big cook. And I think while I realize the financial risks of a restaurant, given that your question says money is no object, I would take one of the upstate New York highways, the Taconic Parkway, find an old diner that might be in bankruptcy, one of those beautiful buildings with red roofs next to a gas station, and converted into a sixteen seat restaurant that serves absolutely still serves, you know, cheese sandwiches and burgers during the day, but becomes a small amakasi restaurant with a tasting menu with local ingredients in the evening.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I am quite obsessed with fonts and I decided that I wasn't quite in love with the italics version of Garamond, which otherwise is my favorite font as all my teams and colleagues and friends know. And I try to just change the talicization of Garamond and discover that that's like adding a moustache to the Mona Lisa. Typographers frown on that. And so I had to turn to the drawing board and start a multi-year labor of love of beginning my own font using a range of incredible new digital tools that exist to do that, but also sketching out these letters.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“So one of the little projects I'm doing is typography. I'm designing my own font. And living in New York City, one of the great benefits is there's a whole host of typographers. I didn't even know there existed communities that meet to critique fonts over beers in Brooklyn bars and can help you learn it. Typography is brilliant because it's all digital these days. But what really distinguishes a font is the ability to bring that human frailty into that digital font, which means it should have the same strokes as the initial original calligraphic instrument that created it, a broad nibbed pen or a chalk or an etching device, and it must have imperfections to not look super perfect and therefore capture the human eye. And what really matters is not the black of the letter, but the counters, the spaces between the letters. So I find great aesthetic beauty, digital perfection, the shape of the”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“during the crisis but have really intense rich debates and come to the best answer because they've known each other and they've worked through different cycles and market environments so the pattern recognition is much longer and third i would say it's the long termism so even in our public businesses or the private businesses the long-termism of our perspective allows us to be more disciplined in our risk management and to see through shorter term movements that might phase others”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think several factors. First, we have a model that treats asset management and investment management like a craft rather than a machine. We have businesses which have a group of senior leaders focus just on that single asset class, allowed to follow their own investment process with their own investment discipline. And without some of the confusion and noise that comes from broader integration trying to do too many things. So I'd say the discipline and focus of our model is a key driver and the belief that it's a craft rather than a scaled technology company that we are trying to build. I think it's the long tenure of our teams. People come to the PGM to build a career. It's not a stopping point on the way somewhere. Our average tenure is sixteen and a half years for our portfolio managers. That allows them to work well not just remotely.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I want to circle back to PGIM, and in particular, just ask the question You're working at a investment manager with over a trillion in assets that somehow, as you said, maybe is the best kept secret of the largest asset managers, what's been the key driver of the success of the asset growth and the products over the years?”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“That this recession has driven. So we are still quite optimistic that this could be a good time over the now and the next six to nine months for investors to return to markets at a pretty attractive new pricing point.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I do think it's really about being an active investment manager. And while benchmarks and indices may be certainly, in the case of equities, assuming a very sharp V-shaped recovery and therefore quite buoyantly priced, finding select pockets, whether it's technology or other sectors in emerging markets where you are seeing companies with opportunities is important. I do think it's also the power of being in multiple asset classes the way we are. So we are thinking about opportunities now in direct lending and mezzanine, where you may find some very attractive pricing entering into the recessionary environment that we are now in. We are thinking about distressed opportunities. And in real estate, it is so localized in terms of the pricing trends. We fortunately have a portfolio that's quite resilient to sectors like hospitality and retail that suffered quite a lot in the crisis, but there will be new opportunities that come out of the repricing.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now we started this whole conversation about what happens after the Great Lockdown with the notion that costs will go up. And maybe aside from these sort of really technology driven weightless firms, it feels like we might have hit peak profitability in markets if that's the case. And I'm just curious with markets having bounced back from lows the future of these businesses in thinking through where you find great investment opportunities.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Versus your portfolio of infrastructure and real estate investments. Those are some of the obvious ones. There are many more that work in a nuanced manner. And I think increasingly the ESG effort is really focusing in asset managers to really think very thoughtfully about each of those and how it moves value.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mentioned board seats as one, but an interesting anecdote is their QMAR quant business did some great analysis on what is considered a linear relationship where, you know, very mature boards are considered to be less dynamic than new boards. And in reality, when you explore the valuation relationship between board length and tenure and valuation, it's a curve relationship where very new boards might reflect a lot of flux and change and indeed very long tenured boards may affect a lack of ability to move. And there's an optimal sweet spot. So these relationships are of a nonlinear governance, I think, is a good example. I think the longer your horizon, so private equity, infrastructure, real estate, these things become much more obvious. There are many things like safety standards in our buildings, the kinds of tenants you have, how much energy efficiency have you created through being more aware of climate change, how are you thinking about flood risk?”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Be part of your core process regardless of whether you're a DPSG believer or not. So that's kind of how we bifurcated. And then finally asset managers themselves can greenwash and as an end investor you need to see in addition to kind of the walkers versus the talkers versus the material factors versus the factors that socially matter but are not material for valuation whether the company has integrated it how much is the company greenwashing their results versus truly has an ESG process that's integrated into the core of how they make investment decisions. For those who walk through all those four hoops successfully we do think particularly for long-term investors there's real value in some of the factors that underpin ESG which is a broad that includes things that move the needle and things that don't.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Impact on their investment return, does it affect valuations? There might be very good social things a company is doing that the market is not yet rewarding or that improve the social well-being of a company but may not improve its valuation outcomes. And then if you're an ESG investor, those are great things to invest in because you've made sure they're tangible and real and you care about them intrinsically. But you might also want to separate things that are material movers of valuation, things like board governance, for example, that has lots of empirically proven ability to change things, things like climate responsibility that might create litigation risk and therefore affect long-term value. And you might want to separate out those material factors. And then for those material factors, you wouldn't want a separate ESG process sitting off on the side. You want to integrate it deeply into your investment process because it affects value and its material to value it must”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I heard the series on ESG and I encourage everyone interested in ESG investing who integrate ESG into the investment process to listen to it. It was fascinating. So I think it's extremely complicated is the first thing to bear in mind because there are multiple layers of obfuscation that happened. First, we talked about the company itself, the end company you might be investing in. Many of them will talk the talk but not walk the walk. It's a marketing and media exercise in some cases rather than a real exercise. And you've got to find metrics that actually tell you which companies are actually taking real actions that are going to have tangible impacts on ESG rather than merely making it part of a marketing machine. And there are things like how many pollution incidents you've had, actual stats on diversity and so on that can give you a sense of that. The second layer then is even if a company is actually doing something, does it have a material”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“The pandemic driven crisis that you've seen corporate leaders come out publicly and voice their support on these issues. It is something that many of them personally believe passionately about, but it's also that moment in the zeitgeist when increasingly corporations are being looked at not just to maximize shareholder value, but to represent the coalition of stakeholders that their companies work with and partner with. And I think you're seeing it, and I think it's a good thing.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“So a spot of the future means business our megatrends are talked about kind of big ways, corporate archetypes are changing. One of our trends was the purposeful firm. And we argued that Milton Friedman Orthodoxy, that shareholder value maximization is the only thing a company should care about. Whether you agree with that view or not, companies can no longer afford to be perceived to be following that philosophy. And some of them are walking the walk, but all of them are talking the talk. But they all recognize that there's a much broader alliance of stakeholders, their own employees, their customers, regulators, the communities in which they operate in, and they need to be seen as considering the views, the rights and the responsibilities to that broader community. And I think that is one of the reasons that you've seen with some of the current unrest around racial injustice, around some of the inequalities laid bare by”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you think that the management of companies will consider going forward this, let's call it inequality that has exacerbated over time? And now moving forward, you mentioned earlier ESG as a potential paper, just sort of thoughts on that whole movement.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I certainly think more broadly that the COVID-19 crisis has led to an exacerbation of both people understanding and the perception of inequalities between those who had the resources to weather the storm and perhaps leave dense urban centers to safer places and those whether there were central workers or lower income workers who had no choice but to survive the storm at its center. So concepts of inequality and injustice I think will be a key part of the geopolitical conversation and the political conversation as you know is increasingly part of what moves markets. So it is something every investor needs to think about. I found at least among my teams that the experience of working under the lockdown has been very varied and I would say that's across all levels.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you look at companies in this notion that there'll be more remote work, I'm curious about how that plays its way through almost in the hierarchy of a business, because it feels at least for now like the senior people that have more control over their own times and schedules are the ones that are coning towards some remote working. And I'm curious if you found that to be the case both conceptually within PGM and then also broadly.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Safe and protects people and that requires less shared amenities, more spaces that are yours, and maybe longer term investments in all the things that you require, whether it's the ventilation systems or flexible panels between cubicles, that means that you may want to make longer-term investments in spaces you earn rather than having super flexible and shared co-working spaces. So I think it's a headwind.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, we were always skeptical about the ability of some of the co working models because of their unique personal balance sheet situations to weather a downturn. And there's a rich history of co-working and flexible space providers weathering downturns badly. But nevertheless, we believed there were some virtues in what the co-working model did, let alone specific companies like WeWork that had some additional issues. And that include shortening commercial lease lengths and increasing the attractiveness of amenities for particularly millennial workers at these places who kind of valued a different kind of vibe. We do think that trend is going to be curtailed by the coronavirus situation as employees and their companies from both the liability and risk perspective and because they care about their employee safety will want to have their own standards of what is sanitary and”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the trends that has been quite a buzz in the commercial space has been this sort of co-working. And we work with Bell Weather for lots of things, not the least of which maybe the peak unicorn trying to go public. And this was a megatrend that seemingly COVID has meaningfully shifted from something that looked like it would accelerate to something that is hard to see how it will be the same. What's your perspective on that particular issue of co-working spaces?”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Space, you've got your movie theater, you've got your indoor saltwater pool. And we think we might go back a little more to construction where you have more internal community spaces that are gardens, but also people will want slightly bigger footprints again within cities when they recognize that they might need to spend months there. And certainly there is a group of baby boomers who might rethink their move from the suburbs back to dense urban centers, and millennials who may be at that transition point anywhere to moving to suburbs who might accelerate that decision. So cities will thrive. Cities are where we innovate. Cities are where new ideas emerge. Cities are where people connect. But we do think suburban properties will become more relatively attractive as people look for safe personal spaces.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this is one where you have had a positive trend for the last five, ten years for people to kind of try and embody this live, work, play lifestyle where you can walk to your restaurant, walk to your job, walk to the theater. And that's created hubs in places like Atlanta and Nashville and Austin. And of course, made big cities like New York and London and San Francisco even more attractive, not just for millennials, but also for baby boomers who become empty nesters and return there. So this one that had a very rich range of views within PGM as we talked to folks because it is a bit of a reversal. But we do have a sense that certainly the desire for safety and security and personal space will grow. It has a couple of micro feature trends. So micro apartments in New York City where I live have become really popular where you have a really tiny footprint smaller than a studio but lots of internal shared communities.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Reinforce that through complete remote working. So we do think offices will exist, but there need to be reimagined and they need to be much more flexible. Senior housing at the low end has seen a lot of really sad and tragic stories come out of that. We do think it'll lead to a reform of what that looks like, but nevertheless, the aging wave, something we've written about in another megatrend, is true. It's not just true in the US, it's true in China, in Italy, and the UK. And we do think ultimately safe senior housing will continue to grow. And then the final question is residential TED, which is very interesting. What happens to big cities?”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“A place where people convene, where companies, cultures and visions and missions are reinforced, particularly for new employees as these companies grow and change, will remain more important than those who say everybody will move to remote working. But undoubtedly you will have about, let's call it 15, 25% of employees, anybody's guess who might be able to work more remotely on more days. And we think it'll lead to a rise in hot desking and more efficient use of office real estate space. At the same time, probably the size of cubicles and spaces will grow. There's only so much you can do with plexiglass. And that lacked as a bit of a counterbalance. But we do think humans ultimately treat offices as part of their social network. And we are social creatures. And companies ultimately are a combination of the cultural features that make one company in a sector different from another. And you can't”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. So maybe let's do a quick asset class tour within commercial real estate. I think in terms of accelerating trends, the trends to logistics and distribution facilities, particularly those supporting the last mile delivery of goods and products to consumers around the world will grow. This is not just about the big US and European companies. There's a whole range of local oligopolists and monopolists in different emerging markets that control those markets. So it's actually quite a broad set of companies that fulfill that function. Mercado Libre in Latin America, for example, is one. Second, cold storage facilities as groceries go online as well. Nobody wants to touch that cold tomato or squeeze that line before they buy it, but are willing to buy it online. We do think the demise of the office”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things people are talking a lot about through this pandemic is what the future looks like of real estate, particularly, say, commercial real estate, but also residential. And I know that's one of the after effects of the Great Lockdown you talked about.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think 5G more generally will do well as wireless speeds become more important. And in real estate, certainly the data centers and cell phone towers that bar this technology-centered world will become more important. I think more broadly technology is the new infrastructure of the US and global economy and firms that participate in that will do well.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Saw 21% increase in online sales in Asia on the luxury end of the spectrum even as their store sales went down. So luxury brands are even building direct consumer connections rather than working through wholesalers and department stores. So I think those wholesaling intermediaries, retail-driven department stores, those models will be much more challenged than ones that rely on technology. And that includes companies that are part of the cloud computing infrastructure, not just the big AWS, but also people who provide cloud security, cloud transmission, services around the cloud. I think it will be good for companies that support remote working video conferencing, video apps, including the one we're using right now. It'll be good for streaming media. I think apart from big sporting events, the time when people are willing to sit through a bunch of ads as they're watching their favorite TV programs may well be over. So streaming apps will do well.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think the easiest megatrends to predict or the easiest trends impacted by COVID-19 and the resulting humanitarian and economic crisis are ones that are accelerations of things already underway. And we can talk later about things that we think might be a little bit of a reversal, but those are always harder to predict and sometimes don't always come true. But I do think the rise of the weightless firm has accelerated and will lead to even greater success of companies that are revolutionizing their business models through the use of technology and technology platforms. An obvious example of a winner and loser is I think this accelerates the demise of the department store anchored retail store and the retail companies that operate in that environment and increase online delivery mechanisms including retail and including really quite fascinatingly luxury goods. So Gucci actually”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Whenever we come out of this, there is always this notion that you go through a crisis and certain firms come out stronger, and others in this case, there's a lot of potential bankruptcy risk. You've talked some about these superstar firms, these technology winners. Are the implications of that on portfolios going forward?”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think given some of the high valuations pre-coronavirus, particularly private real estate debt and private debt rather than necessarily private equity, where there was perhaps more of a sense of a bit of a bubble, but absolutely a perceptible shift, it's the first question that clients ask me when we have conversations with them, is how should we be thinking about privates? What is the right balance between the liquidity we might need to meet our participant needs or for a cash requirement at some point and how much we can invest in private asset classes?”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's interesting on the less listed public companies. Again, it is a US and perhaps European phenomenon. You are still seeing lots of IPOs and new companies accessing public markets in China and emerging markets. And we think that's good. It's good for the democratization of equity markets and capital and part of the answer to some of the inequalities in wealth that we are seeing grow. We are seeing a bigger driver of asset allocation being the search for yield. And that search for yield is driving people to higher risk products within public markets. So do you think more about emerging market debt rather than investment grade debt as an example? Folks looking more at say global equities rather than just large gap domestic equities and certainly looking for kind of the higher yields you do get in private markets. So the combination of all those factors is driving to greater allocations to privates.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have you seen, you know, and some of your clients and a lot of people I talk to on the show have multi-asset class portfolios? How does that transition of more capital getting deployed in the private markets and fewer public companies turn into potential shifts over the years in asset allocation structures?”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Public debt, particularly when they look at G8. I think in emerging markets, more of these intangible heavy companies are listed than here.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think one other interesting implication is that because the capital needs of intangible asset firms are not as intense as firms that were tangible asset heavy. And because often their secret sources are and algorithms that rather not reveal in public markets, and combined with the fact that might change after the coronavirus induced recession but has been true so far, off a glut of private capital that has gone way past series end can keep companies private for pretty much as long as they're like, both rationally and irrationally, that companies have stayed in the private sector for much longer and perhaps permanently versus five, ten years ago. And that means any institutional investor really does need to think about if they want to capture this opportunity, about private equity and private debt alongside public equity.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“And think of those old legacy tangible assets as collateral in the credit markets, for example, whereas in reality the flexibility of intangible models, the ability to change and transform based on circumstances and to have a capitalite footprint actually gives them an advantage. So we've definitely seen opportunities for arbitrage versus credit ratings and how credit securities are priced because of that intangible trend. But it's powerful”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“About any company in any sector, it could be retail like Amazon, it could be energy and mining that is leveraging technology and data and these intangible assets to change how they work and to change how they do business. And those companies are leapfrogging ahead of those who have been unable to make that transition. Leads to a couple of interesting investment implications for one we believe some of the classic credit rating models undervalued.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe as a megatrend on its own first, we have seen firms that focus on intangible assets, software, data, algorithms, design, R&D succeed and thrive and for those components hard as they are to value and some of them are not even captured under gap accounting as assets RD is an expense become much more important in driving value than some of the traditional factors of production like machinery or labor or factories and eighty five percent of the value of the S&P five hundred is now driven by intangible assets according to some studies up from about 20-25% a few decades ago so intangible assets are increasingly driving value and we think this is not just true about the narrow technology sector or just silicon valley it's true”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“It feels like another dynamic, certainly in the markets, has been this bifurcation of these tech giants who have outperformed in the worst part of the pandemic compared to some sort of old line businesses that struggled with these supply chain issues. I know you've talked some about this concept of a weightless firm. And I'd love you to flesh through what that means both coming out of the pandemic and then also what it means as a megatrend on its own.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“Manufacturing, if your door handle manufacturer has supply chain issues or is under lockdown, we do feel that the paths that are used to manufacture the end product will get more robust and perhaps companies are thinking they went a little too far down the just-in-time spectrum and they need to be a little further on the just-in-case spectrum as well.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we divide the world into two kinds of goods, perhaps somewhat simplistically, but I think usefully. We think on the consumer good sides, the goods you and I and others listening to this podcast might purchase, there is a lot of substitutability. So you can use office grids toilet paper if residential toilet papers in shot supply. If you can't get your beef burger, maybe you can get a lamb burger. If you can't get Tight Coke, maybe you can get Diet Pepsi. So there is a lot of substitutability in the consumer side. And there we think just the increasing use of big data and data analytics to predict consumer demand and actually reduce the amount of inventory will be a more powerful force than the fact that there were shortages in certain areas. Further up the chain in manufacturing and capital goods, where substitution is much harder, you can't suddenly find another door handle for the car you're making.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think in supply chains, one other was just knowing what's your second level of supplier. So you may know your direct suppliers, but who are your suppliers to your suppliers? And that brought about a third piece, which is have you digitize your supply chain? Do you have at your fingertips, perhaps from where you're stuck on a remote working situation yourself, able to understand where things are in the supply chain, what's working, what's broken? And I think investments in digitizing the supply chain and doing more due diligence of second order supply chains will grow. And many of these supplies I shared, so I think increasingly companies will think about what are the lower order parts of my supply chain that I want to make sure don't go bankrupt just because another company might have stopped using them.”
2020-07-20 · Capital Allocators · Taimur Hyat – After the Great Lockdown (Capital Allocators, EP.149) · IDENTIFIED FROM THE TRANSCRIPT · source