00:00Credit is a lower beta to equities, as we all know, and software has been one of the big
00:06underperformers. More recently, it's done okay. And there are places there that I think
00:12there are resilient businesses. And if you think about credit is more about our cash flows,
00:18not necessarily what your growth picture looks like in 20, 30 years from now.
00:23And there is a company that I really like that reported last week, and the numbers are reminding
00:29us that actually, this business is not going to die tomorrow. It's going to take long time.
00:34But meanwhile, we're going to be printing cash, which means that I'm going to service my debt.
00:39Depends whether your debt is going to mature in two years time or five years time or 10 years time.
00:44So then you have to kind of look into the curve and say, where do I put my bets in?
00:51And yeah, you can find this.
00:53That's interesting. So there's opportunities in software. Do you generally gravitate to kind
00:57of shorter duration credit then, given all the uncertainties that we're seeing?
01:01Yeah, yeah, that makes much more sense. So if you can model the business dying, for example,
01:07if you say software companies are not going to be there, which I personally don't necessarily
01:12agree. There are some places where they're much more sticky. The client base is stickier.
01:18There's a contract base that you can't get out of this contract quickly enough.
01:21So if you can model that for five years, then five to five years is fine.
01:23What do you think recovery rates look like in software companies? Because these are asset-like
01:27businesses.
01:28It depends. The company that I'm thinking of, they might have some parts.
01:33You're not going to tell us, are you?
01:33I'm not going to tell you.
01:36There are parts of the business, they might have data. So they have proprietary data that
01:41has value in it. They might not necessarily go to zero. So you can shock and value some
01:51parts of the businesses to zero and you still have some recovery in there. So then as a credit
01:56investor, how long does it take for you to get there? Because carry is actually a good element
02:02for credit because the time you wait is actually still collecting the carry.
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