00:00Where is demand growth coming from by type, whether it's pension funds or insurance companies, as well as by region?
00:08So we're seeing tremendous demand institutionally right now, and it really is coming out of the pension plans.
00:13You look at pension funds, pension plans are about 108 percent funded, which means they're 8 percent overfunded.
00:19And we actually saw a little bit at the end of the quarter where you saw some rebalancing,
00:23taking out of the equity market, putting it back into the fixed income market to lock in these long term
00:28liabilities that they have.
00:29So overall, the pension plans have been just a continuous source.
00:32The insurance companies love these all in yields.
00:35They really don't care so much about spreads, but they're certainly aware of them.
00:38But the all in yields are just tremendously attractive there.
00:41The area that we've been looking for for a while is that the moving out of T-bill and chill
00:46and moving out the curve.
00:47And as the volatility is picked up and his thoughts that the Fed could actually hike has really kind of
00:52picked up.
00:53That's really sort of slowed the idea of wanting to invest from the retail market out the curve.
00:58So we're not seeing it in the retail space yet.
01:00But the institutional demand from pension plans and insurance companies have been more than enough to offset this supply.
01:05OK, plenty of demand.
01:07But then you look at what happens in the secondary market, the underperformance of SpaceX and NVIDIA there.
01:13Matt, I'm going to come to you again.
01:15How much more spread?
01:15How much higher of a yield premium do you now need to buy into the next tech deal?
01:21Yeah, so I'm going to have to break out the red card for the SpaceX deal and how it performs.
01:27So very, very sloppy there.
01:29I don't know if it was a mistake on the bank's part or just the lack of demand from their
01:33traditional pension plans and insurance companies.
01:35But that deal has been really, really disappointing one.
01:38NVIDIA as well, but it was actually a much tighter spread there.
01:41So those deals have really shown the market that these hyperscalers and NVIDIA is really kind of one of the
01:48new hyperscalers as well as SpaceX.
01:50There's almost seven hyperscalers now.
01:51But these large borrowers for large CapEx projects have continued to flood the market.
01:57And they're pretty much price insensitive.
01:59They don't really care from a spread standpoint if they have to push the market another 25 wider in order
02:03to get their deal done.
02:04Because to them, this is the greatest opportunity that they've ever had in their business lifetime.
02:08So we expect that to continue.
02:10And I think in the third quarter, you're probably going to see a surprise of one or two names that
02:14weren't even on our radar previously.
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