Vonnie in the united states, fractional gains for the s p, up about 0. 25 . 3. 3 two stocks, at t up on the news that elliott has taken quite a substantial , andion in the business part of that is that the stock rises by 50 , and that margins expand pretty rapidly. Up 3. 5 as well. It will be interesting to see what happens tomorrow at the investor day. Investors looking for all sorts of answers, including whether les wexner continues to stay at the helm. Guy sticking with the markets and the Global Impact of trade and a long list of geopolitical concerns, we are joined now by mark redman, omers global head of private equity. Big canadian pension fund, so youve got a pretty clear view of what is happening around the world, and probably you and your colleagues invest into most of it. Lets talk about what you guys see in aggregate. Its been a very long economic cycle. Is it likely to come to an end . Mark thats a great question, and thanks for inviting omers onto the show. Much appreciated. We had a 10 year uptick in terms of performance, in terms of the markets, in terms of economics. What we see is a continuation of that, but i slow down. The Market Pricing is extremely high. We are 10 years into an uptick. Common sense says that sometime, that is going to change. Theres a number of factors which we all know about which are impacting that at the moment. Obviously around economics come around all sorts of things. Guy Monetary Policy has been, to a large extent, the kind of first port of call when it comes to avoiding the end of the cycle. The fed is probably going to cut rates again sometime soon. The ecb is probably going to go large sometime this week. Theres talk of draghi pulling out the bazooka again. Is it your sense that Monetary Policy is beginning to run out of steam, that the effectiveness it has had is beginning to wane . Mark i think it is the drug the markets have been on for the past 10 years. Probably,at they have to a degree, run their course. Theres not much else that can be done. Perhaps it comes back down to the politicians to do more in terms of things like trade or brexit. Those are the factors which are going to tip the World Economy into recession as much as Interest Rates or related factors. Vonnie mark, we just had a story across the bloomberg that the Canada Pension FundInvestment Board is making a push into private credit to help fill the need for yield. Obviously you are head of private equity. Im curious as to what you see in the private debt market for opportunity. Mark i think theres a big opportunity in the private debt markets, and certainly that something we are focused on and trying to take it vantage of, so we do see attractive opportunities in that market, similar to cpp. Vonnie could you go into a little more detail about where you see those attractive opportunities, what part of the world and what kind of structures . Mark certainly from our perspective, we have taken an increasing focus on private markets, so, for example, if you look at our portfolio today, over half of our portfolio is in private markets. Private debt is part of that. We are seeing opportunities in europe, certainly in north america as well, and that is where we are particularly focused. We are starting to focus a little more in asia as well. Guy why the bigger focus on private markets . Mark we see attractive levels of return there. You have to be more creative in the way that you look for returns, and we feel that private markets gives us more of an opportunity to add value in some ways than private markets. Guy is there a premium . Not quite such a big it comes ton private markets, and gives you more flexibility over different durations. Does the liquidity play in the role of public versus private . Mark from a valuation perspective, private companies and private markets, there is a process we go through in terms of valuations for those assets, so you are right. There is less volatility, so that probably means that on the downside, you can manage those returns more effectively. But there is a process you go through. I think they are fairly valued, but it means you dont have the volatility you have with public its. With Public Markets. Vonnie curious as to how you feel about the likes of softbank , and how the middle eastern money floating around is disrupting the markets you like to play in, mark. Mark it is having an effect. We at omers are investing in venture opportunities as well. We have a venture business, and there is no doubt that the sort of wall of money that has come into the Venture Space has had a substantial impact on valuations. We see that impact all of the time. This is part and parcel of what we seen across private equity valuations, which are a relative alltime high at the moment. Vonnie are they too high, or is there room for further movement . We are at 15, 16 times right now. That is higher than it used to be. Where can ago where can it go . Mark i would say that for us, it is about the returns we can generate from those assets. There trying to acquire highest quality assets in the market, and if we can do that, we are still confident we can deliver the returns we have over the last 10 years Going Forward as well, but for us, it is all about asset selection. If you ask if prices will go higher, i struggle to see that. But if prices go down, youre going to be fine. Guy weve just seen the biggest week ever for ig issuance. What does that tell you . Mark that people are aware but the cycle may be coming to an end i guess. We should read last week, the biggest ever for issuance, as a negative sign . Corporate issuers are aware the cycle is coming to an end, and they went to get out ahead of it. Mark the cycle will come to an end at some stage. Time will tell when that is. But i think people are aware of risk and trying to derisk where they can. That terms of how far the timing of this is really difficult, but theres been some massive headlines. , is the creditet market one area of risk . People are trying to figure out where the bubbles are. Credit feels like it could certainly be one answer to that question. Does the credit market feel in a bubble . Does it feel reasonably valued at the moment . Mark i dont think we would focus on the credit markets is a risk factor. Risku are looking for a factor, it is probably going to be as much political issues. It is going to be trade wars, brexit, those things that change fundamentally the confidence of the markets. I think there is the risk much more than a particular market is inflated. You can look across all the markets and see element of inflation in all of them. On the other hand, businesses are still performing. There is still Profit Growth out there. Vonnie everybody wants the top assets come about what metric are you measuring them but by but metric top assets, by what metric are you measuring them . Mark we have a number of factors. Market leaders, cash generative, great management teams, preparing to reinvest, demonstrably resilient to recession, and diversified by geography and product. You focus on those criteria, youve got a good chance of acquiring those assets. Obviously the proof comes when you actually make those returns. But we believe those assets are still out there and we can acquire them. Vonnie mark is sticking with us. Mark redman, omers private equity. Lets check on the markets with abaco too little. Abigail we are looking at very small moves for the indexes around the world. The s p 500 the nasdaq, very small gains, up about 0. 2 . Nonetheless, extending the last few weeks of risk on tone. We also have the dax in germany higher, along with the emerging markets. The bigger story on the day, some stocks arent moving all that much, but a bit of a risk on tone. Confirming that risk appetite, bonds. Lets take a look at the 30 year bond, back above zero once again. Up one basis point after having been negative. Bonds pulling back. Higher,see that it is up by six basis points. Haven bonds are selling off. Bonds are selling off more than stocks are rally, but nonetheless, risk on his driving the investors higher. We also see oil up for a fourth day in a row, and that is helping the energy sector. Banks and energy are two of the top sectors on the day. Finally, on the rally we have seen over the last two weeks, the s p 500 back above its 50 Day Moving Average in yellow, but over the last year and a half, you will see at wrestling with that nearterm and the longerterm average in view. We really arent out of the woods yet, remaining in this range. It will be very interesting to see how it all plays out. We probably make new alltime highs, down in that range between the 50 day and 200 Day Moving Average. More whipsaws ahead. Vonnie thanks for that. Now, a programming note for you today on bloomberg technology. At habakkuk p. M. Eastern, the atkedin ceo jeff weiner 5 00 p. M. Eastern, the linkedin ceo jeff weiner. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is the european close on bloomberg markets. Vonnie lets check in on the first word news with courtney donohoe. Treasury secretary Steven Mnuchin says that officials has made progress on trade talks with china. He also said the trade war has not affected the u. S. Economy. President trump heading to North Carolina this evening ahead of a closely watched election for a congressional seat. State officials invalidated last years elections due to allegations of voter fraud by gop operatives. He will also go to coastal North Carolina to inspect the damage made by Hurricane Dorian. British Prime MinisterBoris Johnson says the u. K. Has an ideal amount of time to achieve a brexit deal with the european union, but irish minister leo johnsons keythat demand to remove the irish border backstop is not ideal for ireland. In saudi arabia, the new Energy Minister says there will be no radical change in oil policy. King salman dismissed the previous oil minister and replaced him with one of his son, the first time a royal Family Member has been put in charge of saudi oil policy. He was the face of opec diplomacy come about last week was removed as chairman of saudi aramco. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im courtney donohoe. This is bloomberg. Guy. Guy courtney, thanks. We are back with mark redman, omers head of private equity. You talk about how invested you are now into private markets. How much further does that go for you . How much further do you get into that space versus the Public Markets . Ultimately, where do Public Markets go if big funds like you are doing what they are doing . 5050 inare around public and private markets today. It will grow. If you think about private debt as well, it has a way to go. What does that mean for Public Markets . We are still investors in Public Markets, both in terms of as a Capital Market investor, and as an ipo for some of our opportunities, but there has undoubtedly been a trend away from Public Markets and toward private markets. I think it is from a various number of factors. Can developbusiness in a more effective manner under private ownership because that is that strong linkage with investors, with employees, and it enables you to get stuff done and to grow. Sometimes it is easier in the private domain to do that. Ideal . That the why are they bothering . Theres plenty of cash in the private equity world. Mark i think it is principally because of scale. There is more and more capital available within prague what a within private equity, but the fact is when a business gets to a certain size, it tends to grow out of the private equity domain. While there are large public to private transactions we see, the majority of investors, when their investments get beyond a certain size, it is not possible to fund it within private markets anymore. Vonnie yeah, thats been the case, but you wonder if there are fewer and fewer going public now that there are down rounds, the likes of uber and lyft going public and trading lower. What have you said to your investors . Have you taken down return assumptions at all . What is a successful exit for you today in 2019 . Mark a successful exit for us is a cash to cash exit. A cash to cash exit doesnt typically mean an ipo, so our preference will tend to be a private market transaction, but sometimes it makes sense because of the scale of the business or other factors to go for the ipo route instead. We are open to both, but generally private Equity Investors will look for a cash to cash return, and that will be private transaction. Vonnie it seems like the public route is becoming maybe a little bit less attractive these days. Even on a cash to cash basis, what is your return assumption for investors now . Equity,ross private most private Equity Investors are looking to achieve returns in the large buyout space of , 16 , 18 . 20 that sort of range. We are simmer to loop we are similar to that in terms of our aspirations. Is, pricing as high as it we as an investor tend to assume a diminution in our entry multiple. That can have an effect on returns, but our challenge as an investor is to make sure that we can acquire the top assets, but also do less with them to grow them, make them better businesses, and that way protect the sort of returns weve been achieving historically. We absolutely believe that that is possible, even in the current priced markets of today. Guy mark, thanks for stopping by. Hopefully you will come back again ncs pretty soon. Mark redman, omers global head of private equity. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is the european close on bloomberg markets. Time now for a bloomberg exclusive. The former of Guggenheim Partners is now turning Eldridge Industries into an empire. He controls and the hollywood controls and he the Hollywood Reporter and owns a stake in the l. A. Dodgers. He spoke about the premier league. Football is the biggest sport in the world. The passion the fans have is unparalleled. So when you start to think about what you are trying to build with these teams, you are really trying to, a, win, b, be part of the community, and the opportunity we had with the dodgers was really about a partnership with los angeles. How are we going to win . How are we going to drive championships and build passion . If you look at what the premier league offers, it is all of those things. It is the highest quality play, the best players. You also have a medium market that is just really developing. One of the great things premier league has is is on saturday morning in america. Timeslotan uncongested that is now fully dominated by peer merely fully dominated by premier league. Nbc has done a great job bringing that content. When i was growing up, i didnt know about man united or chelsea or tottenham. Kids these days are fully aware of what is the best, and the premier league is the best. Reporter what are the chances that you will end up owning or investing in one of these football clubs . You can never predict these things. The nice things about them is they are relationship driven and people driven, and therefore it is unlikely that one just gets put up and sold by auction. So by developing longterm relationships and getting to know them, ultimately, whether or not something happens, i dont know, but what i do know is that ive learned a lot about what the fan base looks like, about the global opportunity. I cant believe american football was able to get the word football, because to me, that should be football, but to me, the fact is it is still the best product in the world. Its 90 minutes, so its got a great timeline. The new stadiums they are building, i think they are starting to take some american approaches to building stadiums and making them environments. They were very utilitarian historically, but now they are starting to think about themselves as lifestyle. If you look at what americans are very good at, its been building lifestyle within stadiums. Originally, the stadiums were a place where you would go and leave, and watch an event. Now they are singing about how we entertain you earlier and keep you longer. That obviously works on lots of levels. It drives the experience and the economics, and takes away from the congestion of arrival and departure. Llionaire todd boeg billionaire todd boeghy speaking to us there. The nasdaq is up 0. 3 . The oil and gas drillers doing extremely well today. Guy ftse is down come but the pound is up is down, but the pound is up. Ford motor show ticking place frankfurt motor show ticking place. Getting smashed lower today. The european close is up next. This is bloomberg. Guy 30 seconds until the end of regular trading in europe. We are almost done for the monday session. Mixed. Slightly lower in aggregate but there up in certain sectors that have changed the market dynamics. The pound has been a factor. 7 . Tse 100 trading down the pound higher. The dax is trading higher thanks to the auto sector having a good day. Zurich, the smi has been propelled higher by the big drug names and buy some of the more bond proxy names like nestle. If you want to look at a market that does have many of the qualities the market likes, the smi is one of those. Lets take a look at what is happening in terms of the sector story. Thanks trading higher, up by 2. 16 . Banks having a good day because bond yields are up. European banks liking that story. Well. R sector is doing auto and parts is the name we give it. With the frankfurt motor show underway, is doing pretty good. The bottom end of the market, health care, food and beverage, and utilities, the markets rotating out of some of those bond proxy names. The bottom end of the market is the same as the bond market story. Yields backing up, prices lower. That is what you get in the equity market. In terms of the individual names, iag down 1. 33 . A