Definitely keep an eye on what is happening with the german 10 year yield. Stocks back to flat. We are very much waiting for that ecb meeting come thursday. Vonnie and of course, u. S. Yields following european yields. 1. 67 rightis at now, so higher in tandem. A little more risk off for the equities portion. As you can see come the s p 500 down 0. 6 . A couple of stocks i wanted to point to as well. Facebook down 1 in conjunction with the broader market. Facebook, google, and apple all todayt so welcome news with the expanded role of Digital Services in europe by the antitrust regulator for europe. L brands having its investor day in columbus, ohio. The very first thing they talked about was a sick individual, referring to jeffrey epstein. Mention him by name, but did say that situation is over with now, and continued on talks. Victorias secret has a lot of work to do. The stock is down 30 plus this year, just higher by about 1 right now. Guy lets get to a bloomberg exclusive. Shares under a little bit of pressure today as we come into the close, down circa 4 , after reporting earnings that missed analysts estimates at Partners Group. Joining us is the coceo, david layton. Reaction to your numbers today. I was going back and couldnt find a reaction like this for quite some time. Any sense of why performance seems to be the excuse . Is that it . David i think theres a lot of good coming out of this period. Assets under management were up by 16 . We have real structural demand for the products and services we provide. We earned a very stable management fee, which has been consistent since our ipo into thousand six, at about 120 aboutour ipo in 2006 at 120 basis points. We sell investments. The market was expecting about 137 basis points of performance fees. We issued 120 basis points we issued 127 basis points, and the market has been chewing on that. Guy assets have continued to flooded to private markets, increasingly on par with Public Markets. Do you see anything that is going to stop that trend . David i wouldnt say there is anything that is going to stop the flow of capital from Public Markets into private markets based on what we see today. We see real, structural demand from Institutional Investors around the world, looking to add more yield into their portfolio. Private equity has been a relatively small allocation historically, a novelty allocation for some. 1 , 2 , 3 . But as yield becomes harder to find, private equity is becoming a bigger part of the story. Vonnie what are you finding in terms of exits . Changing . Ironment is it less attractive to actually exit now . Calls we made a couple of in the First Quarter of this year to postpone some liquidity events. We have seen transaction activity down about 30 from the first half of 2018 to the first half of 2019. At the same time, theres been a meaningful pop act in volumes. We used to have a number of liquidity events we still have a number of liquidity events that our firm is pursuing at the moment, and we think it was more of a shortterm blip as opposed to a longterm, structural change. Vonnie what do you make of what has been happening with the major Silicon ValleyCompanies Like uber, lyft, we work, which obviously hasnt gone public yet . Valuations are a little bit under pressure in the sense that investors seem to be wanting more proof right now. Is that also a blip . David im not sure if that is a blip or not. I think the reality is there have been probably 180 ipos that have been postponed over the first part of this year, and part of that is from investors really wanting to see more proof. I think we work i think wework is the latest. I think investors will require not just a story, but a consistent track record, and i think that is here to stay. Guy lets talk about what investors really want right now, and that is anything that is safe. Call it what you will. Bond proxies in the private markets are doing well. Bond proxies in the Public Markets, the valuations attached some of these companies, the multiples they trade on, absolutely i watering. Is just extreme, and probably more extreme in the private markets. Can you stretch that elastic band . David i think it is a great question. When we look at what is happening in private markets today, i think the search for yield that pushes them into private markets, and yet people know it is a fragile environment at the moment, so theyre looking for anything that has that sticker that says secure, that says defensive, and bidding up those prices. We see unprecedented valuations for many defensive assets today. As opposed to being the next person that jumps in after that next defensive deal, we think the premiums being paid to those businesses largely negate the defensive characteristics that the underlying businesses have, so we believe that offense is the new defense. Instead of believing that a position in a defensive business is going to carry us through, we are looking for situations where we can actively build defensive characteristics and slightly smaller businesses. Maybe it is not a stable Global Platform today, but when we believe we can help them convert their Business Model over from a be in transactional model. Guy youre still trying to create the same thing. They desire is not going away anytime soon. David not going away, but you have to be active in building it as opposed to helping you can go by it in the marketplace because it is too expensive. Lulu what do you make of vonnie what do you make of . Lizabeth warrens proposal proposal. Hink it is a the idea is that you would interlink liabilities between Portfolio Companies for fund managers. I think that is a structural change for the way people have viewed risk historically and it needs to be looked at very carefully. York new york was the invention of the limited liability corporation. The fact that people could take risk without a fear it would spill over into other parts of their portfolio. I think if you tinker with that equation and look for liabilities to be interlinked too much, that needs to be looked at very carefully. Vonnie how has softbank messed with your area . David i wouldnt say messed with our area. Obviously theyve got a tremendous amount of capital. We tend to spend a little less time focused on the types of businesses they are looking to invest in, and we spend more time, to be honest, with pretty boring businesses where we can help them to diversify, help them to expand into new geographies, and we dont have a tremendous amount of overlap, to be honest. Guy its been great seeing you on set here in london. Make sure you come back. David layton, Partners Group coceo. Vonnie indeed. Lets check Global Markets now. Heres abigail doolittle. Abigail certainly an interesting trading day on this tuesday. A mixed picture. Here in the u. S. , the s p 500 and the nasdaq lower. In germany, the dax is higher. In the asian session, the nikkei finished higher. This is true between risk assets in haven assets. Haven bonds are selling off once again, so investors a little bit confused. We take a look at a fiveday day chart of the 10 year yield. This is the biggest backup since the 2016 election. Both stocks and bonds selling off on the day. Take a look at the commodity complex, up 0. 5 on the day. That is a riskier, growthier commodity. Oil trading higher. That haven yen down against the dollar. We have the vix up slightly. A mixed picture, but slightly shades of risk leading the way. When we go into the imap using the s p 500 on the bloomberg terminal, this is a really interesting picture. At first glance, it looks risk off. On top, Energy Trading higher, and sympathy with oil. Hier picture. Wt on bottom, tech is the worst, but real estate down 1. 8 . It is going to be interesting to see how all of these mixed signals play out as they go on, and of course, as the week goes on to next weeks fed meeting. Vonnie all right, thank you. Next up, we are going to speaking with mama saying with manish singh of crossbridge capital. Thats next. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is the european close on. Loomberg markets lets check in on the bloomberg first word news. Here with the details, courtney donohoe. Courtney Boris Johnson is pledging to work on an exit deal with the european union. Lawmakers have blocked Johnsons Brexit strategy. Theyve handed him his sixth legislative defeat in a row. He tried to get numbers of his own conservative party to back his strategy, a guarantee of leaving the eu on october 31, even without a deal, and they refused. North korea sending a message to the u. S. They testfired two shortrange missile after saying they were willing to resume nuclear talks. U. S. Officials expressed a desire for negotiations that made no mention of new concessions. President trumps approval , according to a new poll, is 38 in august, down from 44 in june. Meanwhile, six out of 10 say a recession is either very likely or somewhat likely next year. The richest american would like to see their fortunes shrink under a new wealth tax proposed by democratic president ial candidate elizabeth warninren. Billionaires such as jeff bezos, could have lost billions if they had done nothing to avoid the tax. 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 thank you very much indeed. Investors are counting down to the ecb decision day this thursday. Mario draghi is facing unprecedented pushback against restarting qe. Singh, us now, manish chief Investment Officer at crossbridge capital. Be in any wayg to successful in kickstarting the euro zone economy . They are expected to throw the kitchen sink at this, regardless of what the hawks say. What is he going to do . Manish i dont think he will be able to get the economy kick started. He may end up helping the banks because what we have seen over years of negative or zero rates is there should be enough credit available, but from a household point of view, somebody who is looking at retirement and was counting on 5 return sees that they are going to get. 1 ,. 2 , or negative, you are going to save more and spend less, and that hits your economy. This has been going on for three years now. Guy mark carney was in new york a little earlier on, the governor of the bank of england. Heres what he had to say. Mr. Carney part of the challenge, we think, is that we are not in, but we are getting closer to a global liquidity drought. That is a question in terms of policy space, but it is also a comment on where we see global equilibrium Interest Rates going. Monetary policy is reaching the limits of what it can achieve, how do investors react to that . We seen bund yields going more and more negative. Nevertheless, how should investors do investors need to start thinking about how they should reposition for the point in time where europe is in the liquidity trap . Japan is already there. How do weve invest in that kind of scenario how do we invest in that kind of scenario . Manish im looking at where do i invest in dont lose money, rather than making money. If you want to make good returns, you have a cross between a capitalist economy, and you have the new economy and new business is being created, so it is not happening in europe. You havent had the bankruptcies. Unprofitable assets are still there. You are hearing now that what the ecb is doing will not be correct, so there may be a snapback. Then you invest in equities. Lvmh, all of these which are really a bet on global growth. What the ecb is planning to do or what is in the pipeline, maybe banks finally do better. Youve seen in the last two weeks how european banks have been rallying. So these are the pockets where i would look to invest. Germany is probably in recession, with negative Interest Rates. Bad numbers in the french economy. Inflation has hardly risen by 0. 1 . It just doesnt give you much hope unless you see governments really looking at structural changes, and we havent seen that. We have germany saying they might run an unbalanced budget. We will see what happens with the euro zone. Vonnie what is your view on the euro . The amount you invest in where you invest will depend on the currency, too. Does it weaken further from here . Manish my view is you have to see euro from the view of what is the currency that can take the flow if investors leave dollar. Look at the size of the currencies. Sterling, swiss franc, they cant take the flow. Conversely, euro will keep benefiting as the second largest currency. Even when you see japanese investors coming in and hedging during the hedging using the Euro Currency, it doesnt seem you will see a meaningful correction in eurodollar. Meview has been that despite being very bearish on the euro zone economy, i do not see eurodollar breaching and going below 1. 05. I really dont see Euro Currency really coming under pressure from the view that people have on your zone economy. Vonnie do you like the united states, then . Youve said europe is a place where your not looking to make money. You are just looking to not lose money. Do you make money in the u. S. . Manish absolutely. I think the u. S. Economy is the best economy to be in. What we have seen is a clear turnaround in what the fed was doing. Look at what happened last year. A lot of it is down to what fed was doing. Fed is raising rates. That happens to liquidity everywhere, even in emerging market economies, and then you have a correction in equity markets. Fed is completely backed up on that. If you had one rate cut, you might have another rate cut in 10 days, and that really helps the economy. Consumers are still buying the bigticket items. I also believe that President Trump is backing off on trade war. There is reconciliation from the side of china as well. More buying of assets provided trump is lenient with huawei. I think reconciliation is there. Consumers are not in a bad shape. Services pmi is still quite strong, even though manufacturing is down. The fed rate cut just makes sense to make money in the of us market. Manish, holdonnie those thoughts. We have much more to talk about. Remember the function gtv allows you to browse all of the recent charts featured on bloomberg tv, catch up on kin analysis, and savior favorites for future reference on key analysis, and save your favorites for future reference. This is bloomberg. Vonnie live pictures now from capitol hill. We have a Housing FinanceCommittee Hearing at the moment from hud secretary ben carson. Treasury secretary Steve Mnuchin has been speaking as well. We are looking for updates a little later on on Housing Finance reform. Of course, fannie and freddie have been rallying off the back of expectations that they will be a resolution to the Housing Finance issue in the united states. Dont forget, bloomberg subscribers can follow the proceedings on a terminal. Go. Use the option live < time for a look at some of the biggest business stories, news right now. I rim co. Has picked six banks for top roles in its ipo aramco has picked six banks for top roles in its ipo. It invited more than 20 Advisory Firms to compete. The ipo is expected to be the biggest ever. Home fitness startup peloton plans to start its ipo roadshow this week. They plan to Start Marketing its offering to top it into as soon as tomorrow. Peloton is seeking a valuation of 8 billion to 10 billion. Jack ma is ending his 20 year reign at alibaba, one of the most spectacular creations of wealth the world is ever seen. He is stepping down as chairman of the Chinese Company on his 55th birthday. 58fortune is valued at billion. Ma cofounded alibaba and his own apartment. That is your latest Bloomberg Business flash. Equities are lower in the session. The s p 500 down about 0. 6 . The dow is improving, but still down about 0. 3 . The nasdaq is the worst performer today, down 0. 8 . Guy as we approach the end of the day here in europe, we are seeing European Equity markets bid. Volume is really, really big today. That is certainly what caught my eye. The other thing worth paying attention to is the defensive names, taking another knock today. Nestle, novartis, roche, those kind of names. The banks are on the front foot as we come to the close here in europe. Guy European Equity markets higher but not by much today. Volume is good. We are getting rotation. Rotation is definitely happening. We are seeing defensive names coming under pressure, largely led by the bond market. The yields are backing up. In europe,ng that seeing it in the bund market, the ftse up around. 5 . Oil stocks doing well, the banks doing well. The dax is trading up a similar amount. A similar theme. The cac 40 absolutely flat. It has been dragged lower by utilities. We are hearing what has been happening with ubs earlier on. Lets get into the rotation story. I do not think the action is here at a headline level. The action is one level below the surface or two levels below the surface. This is where things get interesting. Lets look at the top end of what we are seeing in the market. Oil and gas doing well. Run. Continue their solid this is being driven by the backup we are seeing in yields. Resources are doing ok, insurance doing ok. This move continuing with the cyclical names and the banking name. That trend is in place. The defensive names, which the market is so in love with, may be falling out of love with as yields backup. These are bond proxies. Look at the bottom end of the market and what is happening in terms of the rotation. Health care is trading down 1. 2 . Food and Beverage Trading down by 1. 2 . Europere huge sectors in. Absolutely massive. Technology is down 1. 1 . It is tiny in comparison to the sectors. Food and beverage, nestle, these are the kinds of names we are talking about.