00:00We see continued growth, which does sound ambitious given the growth that we've seen already.
00:04But really what we're seeing is that the growth is going to shift. It's going to move where we're
00:09growing within the private credit market, because the biggest trend that we've seen over the last
00:13one to two years is that the private credit market is really broadening. It had its roots
00:18in the below investment grade corporate lending market, but it has extended substantially. And
00:23we're now seeing a much bigger asset class that lends to many different quality and collateral
00:28types. And that really gives us an opportunity to grow in new areas.
00:32So is it just broad growth that you're seeing? Or are there any particular spots that you think
00:36are worth highlighting?
00:38Yeah, we're seeing some unique funding gaps in different parts of the market. I think as it
00:42broadens, private credit is going to be less of one thing, less of a monolith and more of a series
00:48of different pieces of the credit market and credit cycles. And some of the opportunities that we think
00:52are really exciting right now are, for example, in the investment grade private credit market,
00:57which has been extending becoming more interesting for many borrowers and clients in a place where we
01:04think the demand for capital allows lenders to really get great opportunities and structure some
01:10unique solutions. Is that why we saw the take private of Janice Henderson? And are we going to see more of
01:15those into 2026? Because as private credit expands, obviously, the need for permanent capital is
01:20expanding, too.
01:21It's true that the private credit market offers long term capital. And I think as a private credit
01:26manager these days, you really have to be a solutions provider. So thinking about where does the market
01:32want to move? The interesting thing, too, right now for private credit is that we can be solutions
01:37providers on both sides, both to borrowers that want to have innovative new structures and do new things,
01:44and also for clients who are seeing a need for income. And you can provide solutions in new ways,
01:50for example, public private solutions. So how much is the AI data center build out
01:57behind this? Because we see, you know, single companies saying we're going to spend 85 or 100
02:03billion dollars next year. Or we hear open AI saying they have 1.4 trillion dollars in spending
02:09plans. And that's obviously got to be financed broadly. It's it's certainly one of the places
02:15where the market is looking for solutions and where private credit will have a role. It's also,
02:19I think, a really interesting example of why we're building out private credit at Wellington
02:25in general. And as you know, we're a trillion dollar asset manager that has that has a presence
02:32in public and private equity, also public and private credit, global and local perspectives.
02:38And when you think about something like AI, that's a market where you need all of those lenses to
02:43really understand it. Our venture capitalists saw the early innovations in some of the data and business
02:49models. And now it's traveling down and you're seeing the next build out is really in the data
02:54centers and in providing that compute. And it's getting funded in both public and private markets.
03:00So you want all those lenses to understand what's going on and really get a full picture
03:04to make the decisions. Sounds like you have it there at Wellington. But are you not concerned
03:09that a lot of this is based on public trust? And if something happens, and we were close to that a few
03:15times this year, that that public trust will go away. Trust is incredibly important in financial
03:20markets. I think transparency, recognizing what the different funding markets offer,
03:25and also recognizing that there will be winners and losers. And you want to be selective and be
03:29aligned with your clients as you go through these these new areas. So with all of that experience
03:37at Wellington, what does this AI bubble debate look like to you? I mean, are we still in the early
03:44stages? Are we going to see returns starting, you know, in 2026 that it will impress? I mean,
03:50how does how does the overall picture look to you? We're seeing it unfold across markets. So I think
03:54the answer will be different in different parts of the market, whether you're in some of the
03:59venture innovative technology growing companies, whether you're funding the utilities that are
04:04providing the power or thinking about the data center funding. The thing that's been exciting about
04:09seeing this debate unfold at Wellington is that we have a morning meeting every morning where our
04:13investors attend and and real time debate the pushes and pulls of all of this. And I think that helps
04:18us get to that fuller picture, get to an answer where we can do our best to navigate for our clients.
04:24How can you be certain of the returns and the returns you're going to get? I mean,
04:27aren't you depending on a certain percentage return? And what what if it doesn't materialize?
04:33Well, you can never be sure of of the returns that you'll get in the future. But what you can be sure
04:37of is the work that you do to understand the markets to try to move things in your favor. And with
04:43in private credit, one of the very interesting levers you have is structuring the deal. So putting
04:48in things like covenants, where you can monitor how a deal is doing and have options as you go
04:55forward to to make good decisions for your clients. So I think the structuring as we go forward will
04:59really help separate the winners and losers. Do you think it's a safe asset for mom and pop for retail
05:05investors to get into? I mean, should I have private credit in my 401k? I think that with good
05:10transparency, with good communication about what the benefits and risks are of the asset class,
05:15it can fit for a lot of different clients. We're seeing many new clients coming to this asset class
05:19if they have a very long term view and the liquidity is appropriate for them. As I said,
05:25private credit is no longer one thing. So I think there are places within private credit that fit
05:28better for different client types. You know, Mark Rowan went on a bit of a spree trying to bust some
05:34what he called myths about private credit. I'm not sure that all of them were myths. But one of them
05:39that he said was a myth is that these are not rated and that they are actually rated all these
05:45ratings companies. Who do you use? Do you do your own ratings? Well, as we discussed,
05:52it's a very broad asset class. And so within the asset class, you can absolutely find investment grade
05:58notes that are rated by private letter ratings by the NAIC, the insurance regulator. You can also
06:05find deals that are not rated. There's a big diversity. At Wellington, we believe in doing our
06:09own credit work regardless of whether the dealer issue is rated or unrated and really trying to come
06:15to our own view by understanding the dynamics of the deal and of the issuer.
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