00:00So then why did we bid? Because it was a place to start. We are short at public debt at
00:06what I termed really optimistic level. So buying it at down 35, even with these adjustments, it's probably going to
00:12be an OK investment.
00:13You say you're short public debt, like you're short, like a matched high yield debt against getting long this stuff?
00:24Or is it missing something?
00:26Yeah, a huge part of our capital is to provide investors tail protection. And so our domain expertise is credit
00:33derivatives. And so the liquidity in high yield credit derivatives is such where you can put on tens of billions.
00:39And so I have that as a short. In some sense, this discount fits as a long, because if we're
00:44right, and if these buys at minus 27 or minus 35 are bad buys, look out below.
00:50And I point you to when the Cliffwater news came out since that minute, you say high yield has been
00:55suffering compared.
00:56Yeah. As you say, you say, look out below. Like, is there like a is there like a scenario where,
01:01like, the stuff you can be short in high yield totally diverges from like.
01:08PDC software loans like. Right. So you're bringing up a good point about basis risk, right?
01:14This is not a match trade. But and the average company in the high yield index is quite a bit
01:19bigger and even better than a private credit portfolio.
01:23So, you know, leave it to the ingenuity of Goldman Sachs. Now they're pitching total return swaps on private credit
01:29portfolios. People want more of a one to one.
01:32And they're pitching it to you?
01:33No, to everyone.
01:34Sure.
01:35Yeah.
01:35Yeah. But you might need it.
01:37But but also, you know, I as I saw in covid, sometimes people who can't sell the thing they can't
01:44sell will sell what they can sell.
01:46And so private credit can certainly infect public credit.
01:49And when I say what I saw in covid, you know, if you ask me, I mean, I often say,
01:53like, my imagination and the markets is not great enough.
01:56First of all, I don't think people's imagination here is great enough because so many people think we're going to
02:00buy none.
02:01So what did I mean about covid? I never would have thought ETFs for high yields could trade at 10,
02:0915 point discounts.
02:10ETFs, they did. And people sold them there because they needed the money.
02:13And so I think actually public markets are very affected by this private credit problem.
02:17I think when you say like people think you're going to buy none, like it's really it's like such a
02:20classic, like, like market maker adverse selection question.
02:23Like you're either going to buy none or you're going to get filled and you're going to probably immediately regret
02:29getting filled.
02:31Probably if we get filled and oversubscribed, our next bid is, you know, decidedly lower.
02:35Sure. I've never been in a spot where like that information, that alternative data set, if you will, is so
02:41desired by the market because actually I'd be curious about a poly market on that.
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