[Applause] I'm here with Todd byy and we're going to cover so many topics when I got to know Todd about 10 years ago um he was just starting Eldridge and had two companies or three maybe he was invested in now he has over a hundred um it's been explosive growth since he started and as you know from the sizzle resel uh Eldridge has been paired many times to birk Hathaway for being early to buying an insurance company um so we're going to get right into it um we're going to talk about sports media entertainment we're
going to talk about Asset Management credit real estate hopefully we'll get to all of it so Todd welcome thank you so good to see you good to be here so first I just wanted to talk about with all the different Industries you cover they seem really disperate what is the thread that runs through all of it like what is your investment approach well we started looking at the world thinking about what do people need and what do people want and the kind of the lens of what do people need and what do people want has
been uh allowed us to stay true to you know what we've been focused on as we've been building our portfolio of businesses and obviously you know insurance is a we have one of the largest Industries in the world there's more hundredy old insurance companies than any other industry in America the business model is really robust you've got very long-term liabilities uh which allow for um you know investment strategies that can take advantage of those long-term liabilities and then you have all the sports and the media uh and that's really what people want and I think
if you think about like what really cuts through today and all the noise you know there's nothing like a live sports event uh to attract an audience uh and you I think that's just going to continue to grow so um very very early to buying an insurance company there have been many followers after you and you've been very very early to credit investing talk a little bit about where you think um credit and insurance are going to go and asset management Insurance are going to go well I think the two go hand inand and I
think the building you know a very Diversified Credit book and being a a a problem solver uh Capital Solutions and right now we're in a world where I think there's going to continue to be a premium on liquidity and liquidity Solutions and I think the stable funding source of the insurance companies really allow for the execution of all types of different credit strategies so right now we're equipment leasing and financing uh we're real estate credit structured credit uh and of course of course you know private credit and broadly syndicated credit and When The World Turns
you know there's good opportunities for distressed right you know so I think that you know the combination of those long-term well-funded liabilities with the opportunity to move across different credit activities uh you know allows for us not to be levered to a single asset class you know because asset classes generally you know go um they they they they move in a pack yeah and you know within asset classes Industries move in a pack you know so if you look through kind of defaults and how defaults work generally you know defaults are concentrated within an industry
at any one point in time uh so really outperformance and credit you know is about understanding the collateral package that you have uh and you the the the um you what the what the assets are worth because no matter how messy you know a credit situation gets as long as the business or the real estate asset is worth more than the loan it's going to work out okay you made news in December pretty big news that you launched a $74 billion asset manager um talk about why you did that where you see that business going
well what we were able to do was we basically uh you know got teams that were focused specifically on one underlying asset class so stonebrier was our equipment leasing business panogram was our structured credit business marinan was our private credit business uh and um Kane was our real estate credit business and by bringing them now all together under a new brand we have the track records and when they start and you're in you know um incubating them you want the teams laser focused on their activity and getting their track record and no distractions and then
of course you get to a point where you've now got the track records you've got the teams so the mindset becomes you know how do you scale right and of course having four Brands you know is a lot harder to scale than having one brand yeah uh so by consolidating all of them uh into one platform and being able to provide all things credit and GP Solutions which really are in service to the roughly 5,000 private Equity firms that are out there you know we can then play you know in all elements of credit as
well as kind of Capital Solutions or GP solutions that you know we think are are you know more creative so you rolled up your own you did your own private roll up you rolled up your own businesses all in different aspects of credit to create this $74 billion asset manager I mean where do you want to take it well I think the the number one thing that we're we're focused on is how to continue to outperform yeah and I think the the the lens that you need to be able to look at the world you
know has to allow for a broad funnel yeah right because I think if you're very limited to how you can move in and out of things then you're just going to become a derivative of that asset class right and so the key is to be able to have lots of elements and one of the things that you know we we'll be working towards is you know how do we solve you know acquisition Finance recapitalization you know and Equipment Leasing and provide those Solutions all to the same company at the same time and I think you're
you're seeing you know things get more and more efficient and as you get more thoughtful about how you can be more creative around how to provide financing uh you know and and not just look to check boxes you know that's where we think that you can generate Alpha okay and we will get to sports media entertainment in a second I know everyone wants to hear about that always but before we leave the asset manager and solving complex problems you talked to me a little bit about a couple of the deals that you've done now that
would be within the asset manager um something with Morton salt it was really interesting can you tell us that story well I think again you're you're always thinking about how do you solve problems so you know there was a company called kizner kizner made 200 million of iua Morton salt was owned by a German phosphate company and Morton salt was going to be sold in order to pay off maturing debt there was a whole group of buyers kizner was a strategic so their view was we have 200 million of iua Morton has 200 million of
iua there's 200 million of synergies we should be the best bid yeah but the German company was really worried about the Department of Justice and getting kizner through the acquisition of Morton and they had to pay off debt because of the monopolistic situation well I wouldn't call it monopolistic but they were worried about you know the bad words I'm not going to be up here saying that sorry after the fact so so you know we basically went to the the German company and said we'll provide you a line of credit and if you need to
draw on it you can draw on it to pay off your debt but let kizner have the time to go through the Department of Justice process and then of course that acquisition was so valuable to kizner given the 200 million of synergies we basically said to kizner once this gets done our loan to the the German company is going to roll into your proor of capital structure in the form of a preferred and they offered us compelling terms for solving the problem because most private Equity firms have a very specific mandate right and therefore they
weren't able to actually provide the loan to solve the problem so we provided the loan rolled into the capital structure had three years of non-all and got Penny warrants for rough roughly 5% of the company so we created a really nice piece of paper that was probably you know six times deep on a business that's probably worth 11 times you know with uh you know the non- call three so we knew we were going to get you know at least one and a half times our money plus whatever the warrants were worth but by figuring
out like how do you play in that Solutions business you know we think that there's going to continue to be more opportunities CU you know right now the world's continuing to look for Solutions so diving into entertainment and sports for a minute um talk about how your credit lens the way you invest actually applies to something like the Golden Globes which I'd love to dig into um The New York Times just called the recent January 5th Golden Globes a complete turnaround a complete Triumph I mean that was a turnaround situation but why would a credit
investor get into the Golden Globes well I mean again this is what we're looking at in ual property yeah and the value of intellectual property and our Theory all along with the Globes is that okay they've been through a lot you know and um having watched what they had done to themselves right it was really a interesting case study because if you actually wear their um perspective as you think about it the internet really hurt journalism the opportunity to provide access which is what the Hollywood Foreign Press had at one point in time the value
of that deteriorated and so this group got very insular because their ability to make money as journalist using that seat was getting threatened because all of the sudden that access was less valuable because celebrities were everywhere and you were able to get information everywhere and the internet changed all that uh so they had a classic footfall and you know we were able to come in I became interim CEO of the company and kind of turned it around and the number one thing that I did was I broadened the voting base so we went from just
the hfpa members voting to we created a global voting panel of entertainment experts and then we're able to reboot it but in the end it's all about what's the intellectual property Worth right and that's going to be a d ative of okay how big of an audience do you the Golden Globes command and you know after a couple Rocky years you know for the first time in a long time three or four years where because it went from covid to the boycott um you know we're now playing offense with that intellectual property and I think
one of the things that the New York Times was who who who doesn't really throw compliments around generally no they don't um was saying that our reboot was is the reason now why you know Demi Moore is talked about is being an Oscar Contender so all the big Oscar strategists are going to be looking at the Golden Globes you know now we have a three-year deal with Nikki Glazer and we have a 5-year deal with CBS so everything is kind of stable so instead of playing defense we're now back on offense that's really an amazing
story um let's get to sports which everyone wants to hear about Lakers Dodgers Chelsea football you are so early in investing in sports you were also early in predicting that institutional investors would get into sport talk to us about your philosophy of sports as an asset class so the first one was the Dodgers and by the way I brought after the there go my Dodgers after the Dodgers you know we're now the evil empire I told Andrew fredman that he needs security every every where he goes I won keep this on for long I know
distracting but the you know the first thing we saw about the Dodgers was obviously you know when you look at what the the the Dodgers um represent right 5 million homes in La and you know you start to think about what are those 5 million homes worth and so you know we did a lot of math on that and you know when we paid 2.1 billion for the Dodgers we got lambasted you know overpaying and you know and then a year later we sold the media rights for 25 years for you know 8.9 billion right
so the present value of those meteorites exceeded you know what we paid for the team and with it we got a stadium we got 200 acres of land and so you know I think just looking at it differently right because those media rights I just saw them as a media company is going to give birth to an investment grade Bond right so we had CBS Time Warner Cable uh and Fox at the time all competing for those meteorites because what did media companies do they got Sports and fox would go to all the mvpds and
say all right if you want the Dodgers you're taking FX1 and FX2 and fx3 and so they would bundle their distribution of all their other products on the back of the sports deal so you know I think we became pretty clear as to okay we think it's definitely worth you know 7 billion uh and when we ended up getting closer to nine you know that was uh the upside of having you know a proper auction pretty big upside and talk to us about Chelsea Chelsea is doing better Chelsea's doing better I mean I think the
if you look at big big brands in the world right Chelsea is one of the biggest brands in the world you know you're in West London uh you know you're you're you've got a fan base that is global uh you've got a team that's global and I think we're in the early days we've got the club World Cup coming uh so in the US you know the top FIFA sponsoring which Doone just took down the meteorites for and you know paid you know something like a billion dollars for the meteorites for the debut Club World
Cup so as they continue to think through how to optimize the calendar and have you know more and more competitions you know we think that that intellectual property is going to continue to go up in value so I mean the value of these assets are just so huge I think it's one of the reasons why the NFL has allowed institutional investing right because the numbers are just too big um tell us I mean Sports seems just to be on every Investor's mind right now what are your what's your perspective on where that will go and
what are the watch outs well listen I mean if you think you know the question is would you know a simple question I always ask people when they start ringing their hands around you know what's the value and where they going to go right would you rather run the NFL or would you rather run Netflix right so Netflix right now is trading for $400 billion roughly you know and if you looked at the NFL and said every team was worth five billion which is probably low so let's say every team is worth six billion you're
still sub 200 billion right so here you have intellectual property that I think something like 95 of the top 100 rated shows last year on broadcast TV were NFL games and you know you had the the the Macy's Thanksgiving Parade you had the Oscar the gramys you'll have the Globes you'll have um um there's one other I can't remember but anyway there's 90 oh the college football right so you had those five and then you had 95 NFL shows so what else is out there that will not allow time shifting right right and it delivered
an audience and and so you know and broadcast is really good at delivering audience at scale and not buffering yeah so I just think that there's a lot more room to run and I think the Premier League if you think about like the Premier League media feeds they there's only two countries that don't pay for it in the world Russia and North Korea everywhere else pays a license fee to get access to the content and I'm sure Russia and North Korea are getting access to the content they're just not paying for it right do you
see a future where retail investors can invest in sports teams I think the evolution of it uh you know is is going to allow for that right as kind of each stage gets broken down so you know I would think that there's going to be ways to get exposure to teams and Retail products obviously it's already started in the institutional market right right with major league baseball and basketball and and now the NFL uh you know hockey as well um Premier League's already been there uh so I think you're going to be uh you're going
to continue to see the fractionalization you know of the asset class that will allow for you know the consumption of the asset class and smaller and smaller units okay let's talk about real estate for a minute you have a huge Real Estate Investment Portfolio tell everyone about that and talk about a couple of the very interesting projects you've got going the one in Beverly Hills a lot of people here go to the milk and Conference that is um tearing up the milk and Conference but will be really incredible tell us about your real estate so
we're Partners in Amon and the Aman group at the holding company and big Believers in Aman as The Benchmark of luxury and so if you look at what Aman here in South Beach you know is trading for you know it's over 7,000 bucks a foot wow New York is 10,000 bucks a foot now on the second secondary market and the New York Ammon has outperformed all expectations and we believe that the project in Beverly Hills which is you know basically 1.4 million square feet you know it's 17 1 12 acre plot it took me 15
years to put together and get the entitlements you know we're going to be you know the only Towers in Beverly Hills two residential Towers one will be 28 stories one will be uh 32 stories and you know we every unit in those residences will have 35% more square footage than is quoted because everything will have outside Terraces and plunge pools and so when people look at oh it's 7,000 bucks a foot you know when to look at the comp set you know and and and and of course you don't need to pay all that up
front so when you think about it's actually 7,000 bucks a foot in 2027 you know you think about it's less than that but then you add the square footage of The Terraces and you know I think it's going to be a product like no other and we're platforming over M Griffin Way which separates La Country Club and the Beverly Hilton so there'll be 1172 acre with 4 and a half acres of gardens we're going to have 200,000 Square F feet of retail you know we're getting all the big big brands are interested we've already signed
really good Lois you know but if you're interested in security amenity Serenity and privacy right there's going to be no better place you'll just drive in and you'll go right up from where you park and you'll be in your you know apartment and um so you know the the demand has been uh very robust and you know we haven't even gone internationally with it yet because there's so many people in La that have been thinking about okay I don't want to pay for my yard I don't want to pay for my service providers I don't
want to think about security uh so that's been a you know a big good project for us uh and you know I think we're pretty uh pleased with you know the the partnership that we have with Alan and uh the the development there you know and then here in Miami we just built 830 Brickle yeah uh which is the newest office tower and you know I think we underwrote that at 60 bucks a foot and you know we're going to end up you know I think we just uh leased up the the top floor of
course it's the top floor but that was 200 bucks a foot so when we look at what we are able to achieve you know in that building that building's been been phenomenal we built the Edgewater and uh sorry the masonian Edgewater we're building the unaa tower which is the last tower that you go over uh that you'll see before you go over to kis Gan you know and so Florida's been you know a great place for us as well as we've been developing real estate opportunities that's great I want to make sure I cover for
all the investors in the audience again the credit markets going forward everyone seems to be in credit I mean if you look at the agenda of any conference like this it's like Credit Credit Credit Credit Credit Credit do you have any concerns about the future and there are some Jitters in the market the media is starting to sort of poke holes in some of the listen I I my view is that secured lending is a business that you can be in day in and day out yeah and you know what happens is as the market
gets more aggressive right kind of pricing starts to fall and then documentation starts to get worse and right and then there's a reset and pricing goes out you know but even when kind of markets are tight right there's still a business and as long as you're top of the capital structure and your documents are good enough so that they can't gut assets out of your collateral package and kind of you know run away with them so to speak you know even if you don't have covenants if you have protections maybe you can't force your way
back to the table immediately but as long as the documents allow for you know the fact that you're protected I believe that secured lending whether it's you know equipment Finance real estate credit you know private credit senior secured private credit I think those are businesses that you can be in in day and day out and you know returns will will EB and flow but within a range yeah right so that's why I think High Bond investing is a business that you should be into out of every five years roughly right so when highle bonds are
you know treasuries plus 300 you know move along when investment grade bonds are you know 90 basis points over what are you doing right so when you look at 10 years from like 2014 to the end of 2024 and go to Bloomberg and just pull it up and say okay what was the cumulative return on investment grade credit from the Bloomberg index the US Treasury cumulative return Double B loan index single B loan index and then JP Morgan triple BCL Index right the cumulative returns from 20 uh 123 from 2014 to the end of 2024
roughly 8% cumulative for treasuries yeah 20% cumulative for investment grade 55 for the doubleb loan index 60 for single B loan index and the JP Morgan Triple B clo index 88% right so you know I think that to me you know understanding where the return is and it's fascinating right if if if Silicon Valley Bank and Republic Bank own aaac Clos instead of long data treasuries in a 2% 10year environment which like buying long data treasuries in a 2% tenear environment I don't know what you're thinking yeah right so right but if they had bought
AAC Clos or Triple B Clos they'd still be here with us today yeah right so I think when you really start to unpack where returns are you know I think that's what we're laser focused on and you know I think that um the credit markets are going to continue to grow right because you know if you think about what the value of the world is right right you know you're able to blend 70% against the value of the world whether that's in senior secured or mezzanine or high yield so it's by far the 800 pound
gorilla yeah right and then when you start to think about the total value of real estate the total value of corporates you know and obviously take kind of the big tech companies out because they're not going to be borrowing money at these rates but you look at kind of midmarket and larger market kind of opportunities there's it makes sense why the credit markets are continuing to grow so before we finish um I want to make sure I ask you you know you have a couple you've Boys in college looking at their whole future um you've
had such an unbeliev I it's not over but it's such a dynamic successful career what advice do you give them as they're looking at their Futures so um yeah know the number one thing I tell them is just be nice you know Willie Nelson's wife told me once she said I have three rules okay don't raise an don't raise an and don't raise an I love that right so I think that's the the first thing that uh you know just no reason what was William Nelson's wife tell you Annie Annie well Nelson said you know
don't raise don't raise oh oh she said that was her line oh I love it yeah and um so you know I think that's the the first thing I would say the second thing I would say is be adventurous right the worst thing that can happen is you fail yeah right and if you fall down you get back up yeah and it's no big deal right so you know be willing to fail especially when the stakes aren't so great yeah right and then do what you say you do you know do exactly what You' said
you do you know and and by the way if you can't do it just say I can't do it quick NOS right there's nothing more satisfying than a quick no I love that all right and with our last minute left I always like to ask someone like you I call this the check this out question like what are you obsessed with what should everyone in the audience check out a show an app a book what are you obsessed with right now well I'm super excited about the opportunity that America has and spending a lot of
time you know in Europe and trying to figure out like like how does America like if you think about the evolution of countries right why is Europe not growing right right and how do we not become Europe so so you know I think the the reality is you know right now we're we're going through an interesting period And I think you know buckle up and you know one of the things I learned from people who are very close to Trump you know is they told me don't take them literally but take him seriously and I
think if you take him literally you end up like no but if you take him seriously you see right when when I was playing football one of my first coaches said right always watch a guy's hips never watch his eyes right because if you watch his eyes he's going to deak you right right and if you watch his hips he can't go anywhere without his hips so I think that the reality of what we're seeing right now is a giant reboot yeah and you know I think it's pretty exciting for the capital markets I pretty
pretty exciting for you know our our government I think Scott bessent who I've had the chance to spend some time with I think he's really thinking creatively about how to you know monetize assets yeah right and how interesting is it that the Tik Tock deal that everyone's talking about right now Trump wants warrants right so Trump wants warrants in the Tik Tock deal right and 80% of that is going to pay down debt and 20% of it's going to go to our new Sovereign wealth fund yeah and those mindset that's we've never had that mindset
it's interesting right and I think that's going to drive rates down as people start to see that we're going to be really creative about how to repay debt and I think that's going to be really good for our Capital markets and our Innovation is a derivative of our Capital markets we have the deepest best Capital markets in the world where anyone with a good idea has a chance and that to me is great God Bless America we're out of time thank you all for coming [Applause]
