How This Investor Creates A Lasting Legacy With Smart Investments [10:03-15:04]

Does it sit in the category of being a private equity firm slash at investment advisory firm? So we're an investment advisory firm and as an investment advisory firm, we're focused primarily on private credit. And we also do private equity. Private equity too. So private credit and private equity are two areas that you guys are really focusing on. Correct. No venture capital. Well, within private equity, there's venture capital, there's growth, and then there's leverage buyouts. And so all of that is within the work that we do within private equity. We're right at the edge of spring, financial literacy month in April. What do you see from the private credit space right now, especially with all these negative hate lines coming out on it? So every asset class goes through a bear market, right? Every industry goes through a bear market and sometimes individual companies go through their own private bear markets when things go wrong. And we can sit here and talk about dozens of them where that has occurred. And so we have to expect that when you have over a decade of positive investment results and the kind of growth that you've experienced in private credit, that at some stage, the party had to end. And now what we're seeing are cracks in the private credit space, we don't know how deep those cracks are. We don't know how wide those cracks are getting, but we're seeing cracks. And when you see cracks in an asset class, that generally leads to people trying to head for the exit. And they want to shoot first and ask questions later. And this challenge that you're facing right now in private credit is that investors expected that when they want it to call their capital back, to redeem from those managers, they'd be able to get their capital back. And some of the most high profile managers, some of the larger managers in the space, specifically Blue Al is having a challenge giving investors their capital back. And you and I both know that if we went to the bank and we tried to get our money out and the bank told us we couldn't, the next thing you know, there'd be a line around the corner. And so that's what you're starting to see in private credit is redemption starting to accelerate because people are getting the sense that there's an asset liability mix match. I want my money back and for whatever reason, they can't give it back to me. You said the cracks is software, is that a main contributor to those cracks because we just talked about AI at the very top. And someone was asking me just for a perfect example about why I wouldn't hire someone to go build me a website. And I said, well why? Claude can do it for me like that. I don't need to go do that. And I'm thinking that that's crossing over into a lot of these software companies because with AI being so good at a lot of things, do you still need as many software companies out there? Is that where a lot of those cracks are coming from? And look, we don't know how real that concern is. But it is a concern. And money moves based on rumors. Money moves based on suspicion. Money does not need facts confirmed before it moves. And so you're starting to see some great technology companies, those that have really powered the indices for the last 15, 20 years, being sold off despite the fact that they're generating record performance. And that has all to do with this concern that AI is going to disintermediate the software space. And so I'm not so sure that that will happen, but there's enough suspicion that it's starting to move capital in and out of these individual names. Back to your question about private credit, yes, there's been a lot of lending to technology companies. And we all know that unlike kind of old school companies like utilities and manufacturing companies that actually do produce profits, most of your largest technology companies can be in business for 15, 20 years and have never generated a single dollar of profit. Now you have to ask yourself, if someone came to you, Jabari, and you had a bank, and they said, I've been in business for 10 years, and I have never produced a single dollar of profit, but I want you to loan me money. Would you do it? It depends on what type of return I was going to get. But they've never produced a dollar of profit. So we have to pay interest in principle back on debt. And so I think that that risk was miscalculated, and I think that it provided an alternative way for technology companies to finance themselves. I'm not so looking back on it right now. It was the smartest move for some of these big private credit funds. And so I think, as they say in our business, when the tide goes out, you see who's swimming naked. The tide is going out. Now you're starting to see who's overexposed to technology and their private credit portfolios. Yeah.