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i think what's interesting also
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is that it's been a year where deals
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have fallen apart or not even been done
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so i think the question is at this point
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i think everybody agrees when we started
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off this event at the beginning
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um mukul said you know last year was
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just kind of frightening
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everybody was fearful of everything well
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a year later it definitely does feel
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different
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um but how different and what's next is
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the big question and i think
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the question is can you do profitable
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deals
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uh in this environment what kind of
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deals can you structure um
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and that's what we have this panel for
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so before we do that though um i want to
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turn it over to you folks
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and jeff let's start with you because
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you've heard a lot today some different
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perspectives on the outlook um
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jim lockhart is still a bit worried
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certainly when it comes to residential
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housing
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some other folks bob told kind of said
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nope you know we're seeing the
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turnaround
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still some questions about the recovery
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where do you think we are okay
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so yeah thank you very much we're
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advisors for many of our clients on risk
00:01:08
on transactions and
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i think where we're seeing a tremendous
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amount of activity right now is
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our clients looking at deck debt deals
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where
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we're doing a fair amount of due
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diligence and the due diligence is
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really focused
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just like it was an equity transaction
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so clients with
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they're really focused on um sort of uh
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loan to own strategies right now
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and and a fair amount of it so and
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that's the difference i mean
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people want to do deals but they
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understand the risks now having lived
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with what we've lived through over the
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last couple of years so they want
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either some hedging or so on involved
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yeah so i mean some of the things that
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we're doing on behalf of clients i mean
00:01:47
it seems to be the most savvy clients
00:01:48
right now it's it's a risk-averse
00:01:50
environment many of our clients are
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backed by pension funds right
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and they also have loans on various
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different transactions which sort of
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limit the
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downside of risk and what we're doing is
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looking at
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identifying uh and quantifying risk in
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different transactions
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and actually using the insurance market
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to cap and hedge
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the risk to help these transactions go
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through so the insurance markets
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is is definitely changing um uh over the
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past
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year uh insurance you know markets are
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actually
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having a very profitable year so they're
00:02:22
looking at new solutions we're
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developing new solutions to help
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our clients transact in this marketplace
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so essentially identifying those risks
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quantifying those and in areas where
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we can use the insurance market or other
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markets to cap or hedge those risks for
00:02:36
doing those and then
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building those costs in the overall deal
00:02:39
cost and grant i want to bring you into
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it but i also want to
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if at any time you folks have a question
00:02:43
you want kind of want to jump in please
00:02:45
just raise your hand we'll bring you
00:02:46
into the conversation we'd love to do
00:02:47
that
00:02:48
so what about your perspective yeah
00:02:49
thanks carol and i think uh similar to
00:02:51
what uh jeff was describing in asia
00:02:53
which is the region that
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uh that we really cover um it is also a
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story of distressed debt
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um with the possible exception of china
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where i think
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it's it's arguable there's a property
00:03:04
bubble forming uh the more mature
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economies
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uh are certainly those in which we think
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that the majority of the opportunities
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are
00:03:10
through the debt channel buying real
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estate through effectively senior
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secured debt
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uh in in a in an asset uh which you find
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attractive from an underlying
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perspective um i think asia now having
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been in the region
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for about 15 years uh is incredibly
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similar
00:03:26
to where it was probably 10 years ago
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with the currency crisis
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we all know that growth is is in the
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long run
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um you know most probable if you look
00:03:35
around the world in the asian
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uh zone but we also realize that that
00:03:40
right now there's probably a once in a
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sort of five or seven year
00:03:43
uh buy side opportunity um i think the
00:03:46
critical thing in asia is to avoid
00:03:47
equity recapitalisations the experience
00:03:50
of groups that have done that and have
00:03:52
caught the falling knife has been
00:03:54
pretty much disastrous so we think it's
00:03:57
a market to be very cautious to be
00:03:58
patient and to buy
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uh deep into distressed debt situation
00:04:02
whenever possible you mentioned bubble
00:04:04
in china
00:04:05
yeah i mean how bad might that bubble be
00:04:07
what are you guys talking about
00:04:08
you know it's it's it's difficult to
00:04:09
understand because i said to somebody
00:04:10
the other day the um
00:04:12
the issue with china is just uh how do
00:04:14
you rely on on data for a country that
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is
00:04:16
almost a continent in and of itself and
00:04:18
with incredible
00:04:19
diversity um but but i think that you
00:04:22
know the question mark for china is if
00:04:24
the u.s export markets don't recover
00:04:26
and if chinese consumption isn't lifted
00:04:28
you know what will that do to the world
00:04:30
economy writ large
00:04:32
and i would say that's a question mark
00:04:34
as opposed to something that we could
00:04:35
have a
00:04:35
firm view on either way um but i'm
00:04:38
certainly not a china bull equally i'm
00:04:40
not a china bear i think again it's one
00:04:42
of those markets where it just pays to
00:04:44
be
00:04:45
really driven by numbers to be cautious
00:04:48
and to keep your eyes and ears open for
00:04:50
that one unique opportunity that makes
00:04:52
makes it all worthwhile carlos i want to
00:04:54
bring you into this i mean earlier
00:04:56
folks had mentioned you know about a
00:04:57
bubble previously in brazil but
00:04:59
no signs of that now you've just laid
00:05:01
out a lot of data i mean give me
00:05:03
a good snapshot of what the brazilian
00:05:04
real estate state market is like right
00:05:06
now
00:05:07
i believe the one thing about the crisis
00:05:11
we were hit in two ways in my view first
00:05:14
was the the crisis of confidence so
00:05:16
nobody would buy anything
00:05:18
and the developers they wouldn't do
00:05:20
anything they would just stop
00:05:22
projects and another thing was the the
00:05:25
credit
00:05:25
so it wasn't available to anybody the
00:05:27
credit during
00:05:28
a certain period of time and what
00:05:31
happened
00:05:32
was that that was kind of good for
00:05:35
brazil i believe
00:05:36
because we were growing growing fast and
00:05:40
i believe that we we couldn't handle
00:05:42
that
00:05:43
that demand you know we we don't have
00:05:46
infrastruct we don't have
00:05:47
that much of infrastructure or
00:05:49
production production of
00:05:51
raw materials or everything so if
00:05:54
uh if there was no crisis maybe
00:05:58
now we would be like with inflation high
00:06:01
and
00:06:01
things like that so we weren't heat
00:06:04
because we
00:06:04
weren't that developed so we didn't have
00:06:07
that many
00:06:08
uh cdos or uh spread out in the market
00:06:12
so i believe that there's a really good
00:06:14
room to
00:06:15
to grow now that brazil has a really uh
00:06:18
interesting fundamentals so the
00:06:20
inflation is controlled
00:06:22
the interest rates are down a lot of
00:06:24
investments are coming in
00:06:25
in in the market so i think that that's
00:06:27
a really good
00:06:28
good space to should be right now
00:06:43
you
