Geopolitical risk is top of mind but not everyone is reacting the same. Some look through it, others worry about asset prices. How do you see it?
Romaine Bostick
Kamal Bhatia
Risk premium is substantially related. There is a re-rating of confidence around energy valuation. The one constant is a view of more durability in elevated energy prices coming out of the conflict.
Historically we're not at extremes, but can the market live with elevated prices given a strong economy, corporate earnings, and an unabated AI boom?
Romaine Bostick
Kamal Bhatia
We have been across the globe in a very strong position. Economies have been resilient. The market is entering this volatility from a position of strength, not weakness, so it can tolerate more change.
Kamal Bhatia
The key thing is a big focus on flexibility in investors' minds. Investors are seeking flexibility and liquidity in their portfolios, and there is increased flexibility in how they think about allocations between public and private markets.
What's happening in private markets with vehicles providing access? Flexibility and liquidity don't sound like interval funds or BDCs.
Katie Greifeld
Kamal Bhatia
The market narrative is focused on ARR (revenue), but the term everyone should focus on is contractual cash flow. This market is bringing a deeper engagement to look at cash flow, moving away from just revenue profile.
This is a question working through private credit, starting with fear about software cash flows if AI disrupts that industry.
Katie Greifeld
Kamal Bhatia
AI is here to stay and disrupting every industry. It comes down to a company's flexibility to withstand this level of change. Companies without flexibility are being questioned, particularly in credit but also in equity.