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If the Berkshire Hathaway Annual meeting is Woodstock for Capitalists, the annual Milken gathering in Los Angeles a few days later is the Coachella of Capitalism, and this week the financial community descended on chilly Beverly Hills.
While the jittery equity markets kept guests in their seats at the Beverly Hills Hilton as Treasury Secretary Scott Bessent kicked off the conference by working to calm nerves, there was no nervousness about the explosion of credit firms, credit vehicles and private (and public) credit - generally a lot of optimism. Loan baby, loan.
This shouldn’t be a surprise given the number of finance leaders who learned at the foot of Michael Milken, but from the kickoff Citadel party, panels, T.V. appearances and rooftop drinks at the Waldorf Astoria, it’s clear that the progenitors of Drexel and those financed by the firm have taken over our world: Apollo, KKR, Ares, Jefferies, the list goes on.
Among the highlights: The CEO panel moderated by David Faber where Citi’s Jane Fraser noted that we’re entering a much more “multi-polar” world with the likes of India and a Middle East that is “win-win, not zero sum.”; Mike Milken interviewing Apollo's Marc Rowan and Blackstone's Jon Gray, starting by noting “We are all U Penn grads.”
Our take: Business and finance leaders were upbeat (we have banned the phrases cautiously optimistic and green shoots in this newsletter). Among the themes from CEOs and others was bullishness about areas such as Europe and Germany (“undervalued” and in need of modernized capital markets); Japan, which came up in multiple panels, is viewed as a great place to invest both through acquisitions and public equities.
Long-term U.S. bulls: While the last few months have raised questions about the “American Exceptionalism” trade that had carried U.S. equities to new heights, savvy global investors, such as Mubadala and Norges, remain bullish. Mubadala’s Deputy Group CEO, Waleed Al Muhairi, said on the CEO panel that the U.S. is still the place to be, noting that his sovereign wealth fund has nearly 50% of its assets in the U.S. and that’s not changing.
Getting personal: Perhaps the most fascinating panel was Bloomberg’s Jason Kelly interviewing cousins George Roberts and Henry Kravis, co-founders of KKR (1976) and LBO pioneers. The two rarely speak publicly, let alone together, and it was poignant to hear about their 70-plus year relationship, as well advice they had for 20-something year olds on building relationships and focusing on emotional intelligence -- “Go out and meet people,” said Mr. Kravis.
Have a great weekend,
GPP Team
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