Live from Barings 360: Malcolm Gladwell, Mike Freno & More

Greg Campion: Hey everyone, it's Greg Campion here. Welcome to a very special episode of Streaming Income. I am live here at the Barings 360 Conference in Boston. This is the conference where we get to speak to our clients and our partners about all things private markets. We're going to be talking this week about real estate, private credit, BDCs, and many other asset classes. It's really a great event. We wanted to bring you into this event through a series of conversations that are about to follow, and these are conversations with Barings' leaders and speakers at this conference. So you'll be hearing from our Chairman and CEO, Mike Freno. You'll be hearing from our keynote speaker at this conference, Malcolm Gladwell. You'll hear from our Co- Head of Global Investments, David Mihalick. And you'll hear from Greg Eudicone who heads up client portfolio management for our real estate business. We hope that these series of conversations will give you just a little bit of a taste of what this conference is all about. Before we go, just wanted to remind you that you can subscribe to Streaming Income on Spotify, Apple Podcasts, and YouTube, and you can follow our new LinkedIn newsletter. It's called Where Credit Is Due. You can subscribe on LinkedIn to that. Please enjoy this episode. So we're here at the Barings 360 Conference in Boston. This is our flagship private markets conference, and I'm absolutely delighted to be joined here by Chairman and CEO of Barings, Mike Freno. Mike, thanks for joining me today.

Mike Freno: Greg. Great to see you. Thanks for having me.

Greg Campion: Yeah, so we're back here in Boston again this year. I feel like every year this conference gets bigger and there's so much going on. What's special to you about this conference?

Mike Freno: Well, any of these conferences is special because we bring our clients and our partners here. I mean, I think this business is about trust. This business is about relationships. And we're in this for the long term, and so building and investing in those partnerships is 100% the thing we need to do. And this is a great opportunity not only to showcase the talent that we have, but also build those relationships a little bit stronger.

Greg Campion: Yeah, it's huge. So you mentioned the word partnership, and I want to get into that a little bit because this is a big week here at Barings, a big announcement this week. So we announced a new strategic partnership with MS& AD. So tell me a little bit about that. So it sounds like a really exciting partnership.

Mike Freno: Yeah, it's very exciting, Greg. We were able, fortunately, to find a partner that fit all the needs and things that we wanted from seed capital, from general account investing in terms of growth capital. And I think what's really interesting is how long that institution's been around. If you look at the brands that are Barings, MassMutual, and Mitsui, MassMutual is actually the youngest brand at 175 years. So when we think about long- term partnerships, we're not talking about even decades. We're talking about millennium.

Greg Campion: Wow.

Mike Freno: And so it's really special to see them. And what is most important is this. They are aligned in our vision of where we want to go and how they want to support us to do it. We'll do it in the right way as we always have, but now we do have two very, very long- term thinking owners in our business.

Greg Campion: Yeah, that's awesome. And how do you think that that will... You mentioned kind of decades- plus, you look at the long- term trajectory for Barings. How do you think this new partnership will kind of impact that?

Mike Freno: Well, this positions us exceptionally well. I don't think we have a gap in terms of things. If I were looking where we need to go and where other competitors are going to have to also go as well, and certainly five years has much more visibility than 10 to 20, but this is a business that I think Mass wants to own forever and I think Mitsui does as well, and therefore we need to be thoughtful about how we do it. But having the resources, having the capital, having the support to be able to do that in a thoughtful way that will allow for sustainability is going to be imperative. And I think we are very much at an advantage compared to a lot of competitors.

Greg Campion: Yeah, that's great. Well, we look forward to learning more about this partnership, talking more a lot about it. inaudible-

Mike Freno: We'll talk a lot about it.

Greg Campion: Yeah.

Mike Freno: It's exciting.

Greg Campion: In the months and years to come. But let's talk about the kind of topic of the day. So we're all here at this conference talking about private markets. So obviously, you've seen tremendous amount of growth in private markets. I mentioned this conference gets bigger every year. What are you and the management team at Barings seeing today in terms of where you're seeing that growth really come through?

Mike Freno: Yeah, look, the markets are going to continue to evolve, and you've even seen some convergence between the public and private markets, which is one of the reasons why we felt we needed to also have some would've been traditionally called public capabilities. Because we know these markets are going to ebb and flow. Undoubtedly, it's going to be larger than they are today. And whether they're in the trillions or tens of trillions, we don't know just yet. We want to make sure we're positioned to capture that. And we've obviously got great capabilities in what we'll say is corporate credit leverage finance area of things from our CLO business, our direct lending business, our high yield business that have all started to converge, but also when you look at other real asset type lending, infrastructure and real estate, we're big in both of those and we expect to be larger. And then I think is the burgeoning and the growing ABF market, which is really going to be interesting as to how that goes. There's all things from specialty finance to more broad river asset classes such as residential mortgages. We are well positioned with a number of platforms to be able to capitalize on all of those.

Greg Campion: Yeah. So we talked a little bit about the growth. Let's talk about the other side of the coin, the risks. So we're seeing no shortage of media headlines these days. We've seen some high profile defaults and bankruptcies, that sort of thing. How are you and the team thinking about risks broadly speaking, and I'm thinking about as we head into 2026 and beyond, curious how you and the team are just assessing that risk?

Mike Freno: Yeah, look, it's always a risk when you underwrite things and risk becomes more apparent when there's a large growth area. People are quick to deploy capital. I think we've been exceptionally wise in how we have deployed capital. And we've grown. We've been the beneficiary of a growing market, but I think we've done it in a measured way. I think one of the things that will always stand out about us is we're not only the asset manager, we're also a principal buyer of everything we own. And so our underwriting is for our own balance sheet at MassMutual, and then many times even in our own balance sheet for Barings. And so our view is very much we're underwriting this, and I've used the phrase, we're a storage business. We're not a moving business. We don't originate deals to move to someone else. We own those. And so we're looking at those over a long period of time. How are they going to perform? How are they going to ultimately repay us if you're looking at a debt business? So I think there's going to be pockets of underwriting that is probably not up to the standard that we would like to see in the industry, but I think we've been very thoughtful and measured about how we grow our business and I'm not alarmed at the growth trajectory that we've had.

Greg Campion: Yeah, that's good to hear. Heading into the end of the year here, into the holiday season. Maybe just to finish up here, kind of curious, one thing you're looking forward to heading into the holiday season and then maybe one thing you're looking forward to heading into 2026 and beyond.

Mike Freno: Yeah, look, I love the end of the year. I love the holiday season. It's time for, hopefully, certainly for me and for all of our teammates, to spend time with family, reflect on what's really important in this and what we do here at Barings is very important, but certainly the things we do outside with our families are more important than that. So I always enjoy that period of time. It's a time to reflect, it's a time to refresh. But as I look back on, at least from a professional standpoint, I couldn't be more proud of what we've done as a company this year. I mean, the cohesion, the collaboration that everyone's supporting, the vision that we've set, and the strategy, and we've accomplished a number of things this year that I think often get lost in the shuffle. We've acquired another real estate business in Artemis. We're very grateful to have them on board. We have a strategic partnership with Invesco on the distribution and the wealth side of things. We continue to grow our core asset classes and then finally bringing it down with the announcements that we just had recently. We've really accomplished a lot in a year's time, which I think will allow us to, again, relax, reflect, and be thankful for that, and then hit the ground running in 2026 because we've got to continue to grow.

Greg Campion: Yeah, awesome. I love it. So much momentum here and-

Mike Freno: It's fun.

Greg Campion: ... and a lotto be excited about.

Mike Freno: It's fun.

Greg Campion: Well, thanks for stopping by. Go enjoy the rest of the conference.

Mike Freno: Thanks, Greg.

Greg Campion: Next up is my conversation with bestselling author and renowned podcaster, Malcolm Gladwell. I am joined today by renowned author and podcaster, Malcolm Gladwell. Malcolm is, of course, the author of eight New York Times bestsellers. Welcome, Malcolm.

Malcolm Gladwell: Thank you.

Greg Campion: Excited to have you here. So you have just come off- stage and where you delivered what I would describe as a very captivating keynote speech to our audience here. The topic of conversation today and topic of you were speaking about was the idea of weak link and strong link systems, and then we talked about how that relates to AI. So tell me a little bit about that. Can you explain this concept of kind of strong link and weak link systems?

Malcolm Gladwell: Yeah, it's an idea that... It's just used to describe how to characterize the structure of an organization. A weak link system structure is a system which is as good as its weakest link. In other words, that everyone matters. And if you have 20 people and there's one person who can't do their job, the whole thing fails. A strong link system is the opposite. It's where the success of the organization is driven by just a very limited number of highly talented actors. So I gave the example of basketball is strong link. You have LeBron. It doesn't really matter who else inaudible. Yeah. But soccer is weak link. One weak defender can destroy the success of an entire team. And that distinction I think is really useful for understanding a lot of what's going on in the world right now, particularly with respect to technology.

Greg Campion: Yeah, tell me a little bit more about that with respect to how that kind of concept applies to AI.

Malcolm Gladwell: Well, I think a lot of people, myself included, have been struggling to conceptualize what AI is and more particularly what it does. And one I think useful way to think about what it does or at least what it can do is AI is really great at strengthening weak links, that it's a tool that can be deployed very quickly and efficiently to shore up that point in a complex organization where the level of expertise is below where it needs to be.

Greg Campion: Now, this conference obviously is all about private markets, so you're speaking today to a lot of private market investors. You went out of your way to make sure they all knew that you had no private markets expertise in particular. However, I think the message you were delivering was very applicable to this audience. Tell me a little bit, maybe from your perspective, how this concept of strong link, weak link, especially as it relates to AI, could translate to this world of private market.

Malcolm Gladwell: Yeah. Well, the question I was posing to the audience in a roundabout sort of way was, is your world of private markets weak or a strong link? Traditionally, I think financial markets have been strong linked. They've been driven by very gifted, very charismatic financial decision makers, star portfolio managers, George Soros. We can list them all. John Paulson. But I think that when... My understanding of the private credit markets world is that it is structured very differently, way more complicated, involves way more parties. It has more dimensions to it. It's far more volatile and unstable. There's asymmetrical risk on. I could go on, and on, and on, and on. Those are all things that sound to my mind like a weak link system where a problem being tackled is one that will require the interaction of a very large number of parties in an organization and that the success of an organization in that world is really a function of the death of their bench as opposed to the quality of their stars.

Greg Campion: Yeah. I think that makes a lot of sense that the quality of their system, especially in credit markets, as we think about asymmetric risk, there's more downside than there is upside essentially, and it's all about risk management, and I think that you made a very compelling case that what you really need is a very... You need to strengthen your weaknesses when it comes to your risk management kind of across the board.

Malcolm Gladwell: Yeah.

Greg Campion: I thought it was a very, very interesting concept. I want to switch gears for a minute and talk a little bit about tipping point. So you very famously brought the phrase tipping point into the common vernacular I would say 25 years ago with your initial book, Tipping Point, and then you've revisited it recently in your latest book, Revenge of the Tipping Point. You probably get this question all the time, but I want to ask you anyhow, if you look across society, you look across politics, you look across maybe even for our case capital markets, are there any ideas that you think could be on the verge of, quote, unquote, tipping?

Malcolm Gladwell: Sure. I mean, one of the hard things about tipping points is that what makes them so powerful is that they are so hard to predict. They're difficult to manage because they continually surprise us. The classic tipping point that I described in my first book, the decline of crime in major American cities in the nineties, was something that absolutely no one saw coming, even people steeped in law enforcement. I'll give you a random one that I've been thinking about, which is I think Ozempic, the weight loss drug, is a massive potential tipping point both in the fortunes of the pharmaceutical industry and in the relationship that consumers have with that world. And it has all kinds of other implications. To this point, pharma has been defined by its failures. The struggle of the pharmaceutical industry has been to find a way to sustain a pace that is really, really difficult and where 90% of your ideas fail. What if that's flipped? Then the issue becomes, how does society pay for a world where suddenly we have 10 times as many use for drugs? It's a whole different problem. We never even thought about it. What if the... Drugs are now, what, 15% of the healthcare spend? What if they go to 50%? Are we prepared for that? That's an example of something where it begins, you add AI into the mix, and all kinds of other quantum and all kinds of other things, you can begin to see a kind of model for how our entire set of expectations about our relationship to an industry may be turned on its head. That would be one that I think... The other would be the impact that AI is having and will have on education. I mean, the model is... It's already broken. I mean, it's like everything we've been doing for thousands of years, we can't do anymore. I mean, not everything, but a huge part of it. So we have to rethink it really fast.

Greg Campion: We know the kind of industrialized model with teacher in front of 30 kids is not the most efficient and effective way to educate.

Malcolm Gladwell: Particularly when the kid can do everything he or she wants on their cellphone. So now you got to think about what does it mean... I mean, it's possible that what teaching looks like in the future is way more labor- intensive.

Greg Campion: Labor- intensive?

Malcolm Gladwell: Yeah. The only way to teach now is if everything has to be in person. The minute I send you home, the jig is up. You're just going to do it on AI. So maybe I can't. Everything has to take place in the classroom, in which case, everything has to take place in some kind of personal... inaudible it's not a bad outcome. That's actually a great outcome. If you told me that 10 years from now we would've twice as many teachers, I would say that's actually fantastic. Twice as many nurses, twice as many teachers, twice as many... And half as many lots of other things. That seems to me a good resorting of the way we use our human resources.

Greg Campion: I think so. Maybe teaching becomes a much more attractive career for people to pursue as well. Okay, the last question. This is a bit of a selfish one as somebody who produces content for a living, but I couldn't let you go without asking a little bit about storytelling. I think you've really mastered the art of storytelling over a 25, 30 year career. Your books, your podcasts, keynote speeches like you delivered here today, everybody has to tell stories in some way, shape, or form. Salespeople are telling stories. I'm telling a story to my kid about our family history. Everybody's telling stories. Maybe one of the real few things that really identifies us as human and how we connect with one another. If you had to give one piece of advice to people, aspiring storytellers, whatever story they're trying to tell, and all that you've learned, what would you say?

Malcolm Gladwell: Oh, it's a good question. Well, I always say the definition of a story, one of the definitions of a story, is a narrative that defies the audience's expectations. So I think that we need to understand that the intention... Any storyteller has to have a clear sense of what they want to accomplish with the story. And what you're trying to accomplish with the story is you're trying to move your audience in some direction, somewhere where they didn't think they wanted to go, they didn't imagine they were going to go, just something. It is that element of surprise about where you end up as an audience that keeps you engaged. And so I think when we think about that, that that's what our task is, so to move people, that's really useful because... And that's the thing that has to be in your head when you begin the story. The story can't be like... The minute the story becomes a kind of aimless exercise, that's when the audience bows out.

Greg Campion: Yeah, okay. That's great advice. I will take that to heart. Well, with that, we'll draw this to a conclusion. I want to thank you for the stories that you've continued to share with all of us over the course of your career. I want to give you a plug to your most recent book, Revenge of the Tipping Point. Highly, highly recommend it. And go check out Malcolm's latest season of Revisionist History: Alabama Murders. It is absolutely riveting. Malcolm, this has been awesome. Thank you so much.

Malcolm Gladwell: Thank you.

Greg Campion: Next up is my conversation with David Mihalick, Co- Head of Global Investments at Barings. I am absolutely delighted to be joined by David Mihalick. David is our Co- Head of Global Investments. David, how's it going so far?

David Mihalick: It's great. It's great to be with you.

Greg Campion: Yeah, awesome. Thanks for being here. Love this conference every year. It feels like it gets bigger every year, and I think maybe one of the reasons why is because there's an increasing number of options for investors when it comes to private markets. So I think let's start there. It'd be really interesting to hear just where you and the team are kind of seeing this growth, where you're seeing the most interest across the private market space today.

David Mihalick: Yeah, well, it seems to continue to be the headline of the day. Anytime you turn on the financial news, people talking about the growth of private markets, talking about the opportunity as well as the risks. I think for a number of years it was all about the growth, the growth, the opportunity. There's been a few headline issues in the press recently around private credit and people starting to think about it's not a risk- free asset class like any asset class. There's risks involved. And so I think that balanced conversation is healthy. I think when we look at where we see the most interest, private credit continues to be a source of great interest amongst our clients, so we see a lot of activity there. I think the conversation around private credits evolving beyond just direct lending and middle market lending, and so private IG is a big topic of conversation. Real assets is a focus area. I think real estate is something, both debt and equity, interesting. I think a lot more conversations picking up around real estate equity, which for a number of years, post- pandemic, issues in office and things like that, that may have influenced people's thoughts on that asset class, which create a lot of interest in real estate debt and now spreads have compressed there. I think more and more interest in equity as an option. Infrastructure's another big topic of conversation. There's a headline a day around data centers and what's the investment needed to power AI. Not just the data centers, but all the power that goes into that. So no shortage of things that are sort of happening in the real economy that are translating into investment opportunities, and those are the things that our clients are very focused on.

Greg Campion: So you mentioned private IG, and that's a term we're hearing come up over and over again. What do you think is kind of driving the interest in private IG?

David Mihalick: I think there's a number of things. One, if you look at investment grade, liquid spreads are super tight. So when people look at that investment grade part of their portfolio, they're open and maybe they've gotten more comfortable in below investment grade private exposure, and so they're looking at their investment grade portfolios and willing to trade some amount of liquidity to capture a spread premium, and then just the number of options that are available. It's not just corporate private placements. There's portfolio finance. We've seen a tremendous amount of interest that traditionally a bank product now being provided by non- bank lenders. We've certainly seen a lot of interest in that capability for us. I think asset- backed finance is a huge opportunity and that's really taking private credit needs and sort of different types of collateral. And in there, you're doing structured offerings that you're able to cut the cash flows up and to create an IG product, the below IG product. And you can then pick the collateral that goes into that. So when you think about the underlying risk you're taking, it could be a residential pool of loans, it could be a consumer pool of loans, it could be some sort of esoteric asset class. So there's just a lot more opportunity that people can sort of think about strategic asset allocation and create sort of bespoke assets that meet their needs for their portfolio. And when you have liquid spreads as tight as they are, the ability to sort of do that and create a portfolio that meets your needs, I think creates really interesting opportunities for people.

Greg Campion: Yeah. That makes a ton of sense that portfolio finance and asset- based finance in particular, which have seen massive amounts of interest this year, which I actually just had Dadong Yan and Jim Moore both on our private credit outlook. So very, very topical at the moment. One of the things that we love about this conference is all the conversations that happen kind of offstage or in the hallways in between meetings. Curious as you have those conversations this week, what are some of the kind of key things that are coming up? What are the key challenges, I guess, in particular that you're hearing from clients and partners?

David Mihalick: Yeah, it's interesting when we're doing this the week before Thanksgiving. So you're sort of coming into the end of the year. I think it's been a super interesting year. You've had the tariff noise, you continue to have geopolitical issues, wars and things like that, that almost seem like they faded into the background but are still out there in terms of influencing people's macro view of the world. You had the Liberation Day events in April, massive sell- off, and then a very quick recovery. And so I think people, to me, naturally, this is a time of year to sort of catch your breath. Certainly, there's no sort of finish line at the end of the year in this business, but I think inevitably human nature is you get to the end of the year and you sort of reflect on what's happened over the course of the year. I think there's a lot of conversations around economic outlook, the path of rates and inflation. That continues to be top of mind for everyone. Most people thinking there'll be another cut, but inflation seems to be a bit persistent. So I think that's not a foregone conclusion. And then really is it, how strong is the economic outlook and does that justify where generally high valuations are? So whether it's high equity valuations, tight credit spreads, I think people are sort of thinking, heading into 2026, portfolio positioning, relative value, again, fundamentals to me, risk- adjusted returns and where are there opportunities in the market? And that's really... It's what the conversation is at almost any conference, but I think when you're to the end of a pretty choppy year like this, I think it's even more top of mind for people is, okay, generally gotten through this year pretty well, what does next year look like?

Greg Campion: Right. Yeah. It makes a ton of sense. Well, speaking of next year, so next year, the Barings' 360 Conference will be in London in May. I know predictions are tough, but let me ask you, if you were to make a prediction on what may happen in private markets, how things may evolve over the next six months, what would you say?

David Mihalick: I think you'll start to see more and more differentiation, which I think is what you see in any sort of, and I'm not calling the end of the cycle, but the recent headlines around a couple of high- profile defaults and private credit. I think over the last five or six years, the proliferation of managers has been widely published. There's a lot of new entrants into the asset class, a lot of money flowing into the asset class, which means a lot of money that gets put to work. And so have people been disciplined in how they've done that? And again, a couple of high- profile defaults in the market have certainly created that as a top- of- mind issue for clients. And so I think when we get another six months down the road, again, I'm not calling for a deep cycle or anything, but you'll have... Jamie Dimon referred to them as cockroaches. You'll have defaults inevitably that happen. To the extent any of them are high profile, I think, it'll continue to cause people to go back and sort of understand the partners that they're with in the asset class, understand the managers that they've hired. And again, that's where I'm hopeful that our decades of history in these asset classes, the disciplined approach we take to underwriting, that will hopefully put us in a good position on a relative basis. But I think that'll continue to be something that I think clients and markets are focused on.

Greg Campion: Yeah. Yeah. Makes a ton of sense. All right, just to finish up, I guess, what are you most forward to over the next day or two at the conference?

David Mihalick: We got 250, 300 people here, I think. People in from all over the world. It's a great chance to spend time not only with clients but colleagues at Barings. And so we have a diverse representation, private credit, real estate, debt and equity, infrastructure, people from our BDC team here, and then clients and partners of all those businesses. And it's really the exchange of ideas. And to me, again, I think it's a unique time of year when you're coming into Thanksgiving and the holidays, that's a time for people to reflect, start talking about reflect on this year and then quickly talk about next year. And so obviously, we've got a lot going on at the firm, a lot to be excited about. And so I think we're really well positioned to serve our clients, which is what we're focused on every day.

Greg Campion: Yeah. Fantastic. All right. Well I know you're a busy man at this conference, so I'll let you go, but thank you so much for stopping by.

David Mihalick: Thanks, appreciate it.

Greg Campion: Next up is my conversation with Greg Eudicone, who runs client portfolio management for Barings' real estate. I'm delighted to be joined today by Greg Eudicone. Greg heads up client portfolio management for our global real estate group. Greg.

Greg Eudicone: Thanks so much for having me.

Greg Campion: Yeah, good to have you here. How's the conference going so far?

Greg Eudicone: So far so good. It's great to have everyone in town.

Greg Campion: Awesome. Awesome. So tell me a little bit about what people are talking about. The thing I love about this conference is that there's just so many conversations in the hallway. Everybody's buzzing about different things and you can hear some of the trends that are really shaping global real estate markets and private markets overall. What are you hearing so far this week?

Greg Eudicone: So far, it's rates, dispersion, relative value, the debt versus equity, where we see future allocations, many of our investors seeking to get alternative asset exposure. Maybe that's senior housing, medical office, selective office. So there's really good discussion going on like, where's the next opportunity? I think we see a new cycle emerging, and so that new cycle won't be like the last. And so how do you pick the right assets for what's moving forward? So that's a lot of what our discussion will be today and tomorrow.

Greg Campion: Yeah. Yeah. So much to talk about. So you mentioned kind the debt versus equity piece. Let's talk a little bit about that because I feel like this time last year, and maybe really this is true over the last couple of years, real estate debt has really been in focus. It's been the star of the show, so to speak. Where are we today on that trend? Is that changing, still the same, or where are we?

Greg Eudicone: Real estate debt has been one of our fastest areas of growth, I would say since 2020, '21, after COVID. And to me, the discussion is changing more along, is it debt via equity or is it debt alongside equity? The relative value in real estate credit has been incredibly strong since 2020 and we see that continuing and that thrust is because of bank retrenchment, that banks are still in troubled waters and that allows non- bank lenders to step in and really have an interesting foothold into the market. A couple of years ago, real estate equity was just not attractive or as attractive from a relative value perspective. I think the discussion has changed to this really interesting opportunities in real estate equity now. I would say value- add strategy, so deeper level of transition at the business plan, globally is interesting. And so now it's less of debt versus equity. It's like, how do you play your debt and your equity simultaneously? I think really the challenge or the exciting thing about this is we see more private corporate credit investors seeking to diversify their corporate credit exposure with real estate credit. So there's less of a debt versus equity in terms of, am I going to allocate my next real estate dollar to credit or to equity? Now you have new credit investors that are coming into our space. And now for real estate equity, it's really those property investors that are back and seeing relative value. So I think the market is changing in the investor sentiment and how they allocate it is changing, which is really exciting for us.

Greg Campion: Yeah, that's super interesting, the private credit investors investing into real estate debt. And I guess at this conference, all they need to do is walk across the hallway-

Greg Eudicone: There you go. It really is all right here. inaudible.

Greg Campion: ... literally go from aprivate credit meeting to a real estate debt meeting. You mentioned the word dispersion. That seems to be a word that I'm hearing more from the team, and I'm hearing a little bit people talking about this week. What do you mean by that when you talk about dispersion?

Greg Eudicone: I think previous cycles were marked by if you invest in large macro sectors, let's say industrial or multifamily in certain areas of the country in the US or the world, you'd be okay. We as a firm, Barings, don't believe that will be the case going forward. It's going to be more of a, dare I say, a stock pickers market. You're going to really need to know your specific asset in that right location to make sure that you're okay on the way out. So that rising tide lifting all boats, we don't necessarily think that's the case. But that's really exciting for real estate experts or credit experts to understand the micro market, understand what's really happening at the corners of the streets to pick those winners. So we think that the opportunity set is challenging, but also where there's challenge and when there's noise, I think that's where we see really interesting value. So really focus on those micro locations across all sectors globally.

Greg Campion: Okay. Okay. And I know that the research team has done quite a bit of work on those micro markets and it's really fascinating to see neighborhood to neighborhood, block to block, asset to asset, just how different the opportunity set actually is.

Greg Eudicone: And the poster child for that is that dreaded word, office. A couple of years ago, people were completely red taped against it. Now we think there's really interesting opportunity in office, in debt and in equity, but it comes down to that right office in the right location, the right city, in the right section of the city. So it's a new era for office and we're excited to invest into that trend, again, credit and equity, but it's all about that micro location.

Greg Campion: Interesting. You mentioned office. Are there any other sectors that are coming up quite a bit this week? Anything maybe underappreciated, surprising, under the radar? What are you hearing about and talking about?

Greg Eudicone: The word alternative continues to come up and I think when we're speaking to our investors in the hallway sort of at the lunch table, they might have their traditional multifamily exposure or industrial exposure. And so how are they getting alternative exposure within those big exposures? So maybe that's built to rent communities. Maybe that's medical office or senior living. They're trying to grow that alternative platform internally just for further diversification. So we think that's interesting. Office, I think, is having its day again. I think people aren't looking to push all their trips to the table for office, but I think they're more open to it.

Greg Campion: Yep.

Greg Eudicone: Retail has come back. There's just been years of under supply. That's what happens when you don't build for 20 years. And so we're seeing retail exposure. I just got out of a meeting right now inaudible a very large global client. It's less than 15% allocated to retail. That's an issue for them.

Greg Campion: Yeah.

Greg Eudicone: But where there's very small allocations, there's usually really strong competition. So in the market or that was a credit meeting, so a really tight spread. So how are we working through those challenges with our investors where they want to go into a market that might be very competitive, how do they get those spreads? How do they get the right buy price? That's what we're working on today. So retail, office, medical, senior, selective, alternative living sectors, maybe purposeful student accommodation, all things we're looking at today.

Greg Campion: Wow. Wow. Okay.

Greg Eudicone: A lot of things. A lot of things. A lot of things.

Greg Campion: Broad opportunities inaudible. I'm stealing you. You're probably supposed to be in a room or a meeting somewhere talking about something right now. So I'll let you go, but let me just ask you before you go, what are you looking forward to, I guess, the most over the next day or two of this conference?

Greg Eudicone: So I'll be surprised by probably every conversation I have with an investor in a good way, a unique challenge that they have. I just walked out of the meeting this morning on FX hedging costs for an international investor back to the US is really a challenge for them, but they're underweight US, so how does that work? So I always love to have those meetings in the hallways with investors where they provide us with a unique challenge and then we can work horizontally within the organization to try to solve that. And then I'm always interested to have these discussion about alternative exposures, more investors looking at the world in I would say like an investment grade and in a sub- investment grade, maybe less investment style specific. Maybe not just private corporate credit or real estate credit or real estate equity. How do we look at investment grade and sub- investment grade and put more things together? So those conversations, you have that big multi- strat of opportunities that are inclusive of real estate debt and real estate equity. Those are really interesting to me. So I know I'll have a couple of them and it'll give us some things to work on when we go back to our offices.

Greg Campion: Awesome. All right. Well, thank you for stopping-

Greg Eudicone: Yeah. Appreciate you having me. Thanks. Yeah. I appreciate it.

Greg Campion: ...by giving us a little window into what's going on.

Greg Eudicone: Yeah.

Greg Campion: Appreciate it.

Greg Eudicone: Thanks always.

Greg Campion: Thanks so much for listening to or watching this episode of Streaming Income. Remember, you can follow us on Apple Podcasts, Spotify, YouTube, and you can subscribe to our monthly LinkedIn newsletter, it's called Where Credit Is Due, over on LinkedIn. Thanks so much for watching and see you next time.