Brad Rogoff: All right, Drew. So, we've both been on the road a lot. You've been seeing Credit clients. Very volatile market times, but Credit's not really the eye of the storm. So what are people saying to you?

Drew Mogavero: Credit clients, they're keeping their head on their shoulders. They're, you know, still very focused on yield. For years it was just yield, yield, yield. Yields still overall are drawing investors into Credit. So, I think people are trying to navigate the hour-to-hour volatility, but keep in mind the big picture which is still pretty reasonable and pretty benign.

Brad: So, the other thing Credit investors are doing is trading, right. We look at the evidence, right. We see some of the data. We've done some research on some of the data. They're trading a lot. They're trading so often...

Drew: Especially on Fridays.

Brad: Which is a big change for Credit markets. And they're doing Portfolio Trades, right. We're using the ETF ecosystem more so, there’s a ton of changes. How are you seeing that in these times too?

Drew: First of all, it's a good thing for the market. Like, so, you're seeing during periods of volatility, Credit investors are able to get done what they want to get done. And they're able to get it done in more size than historically maybe has traded, but it could also be small trades from, you know, small notionals with tons of line items to big notionals with fewer line items. There's a lot of activity across a lot of different client types. It's all enhancing to the liquidity of the market. And quite frankly, it's showed itself pretty well during periods of volatility.

Brad: All right. So, liquidity, right. And the most liquid stuff is certainly something that comes up

in a lot of our conversations. But for example, when I was out at, and you were too, at the Milken Institute Global Conference, I'd say the number one topic was actually the opposite of that, was Private Credit. Which is the less liquid stuff.

Drew: How do I get product?

Brad: Yes. And so it's something we've started doing research on for the first time, really. And I look at it in two different ways. One is on the Leveraged Finance or High Yield side, where you've got Private Credit that looks a lot like what traditional Leveraged Finance has been, with some nuances, some differences. And then you have Investment Grade Private Credit, which is the more newer form of Private Credit, or certainly the one that's in the headlines a bit more.

And there, it's not a perfect substitute. It's not a company deciding, should I issue a regular

AA bond or go to the Private Markets? A lot of it's asset backed. A lot of it's really complex financing. So how are you seeing that come through and how does it make for running a credit business so much different today, I imagine?

Drew: I think the way I look at it as clients are in need of new opportunities, new origination, new ways to get access to risk, they're clearly trying to think about how do I get more product at scale.

And in my mind, that's where you start to see the private piece come in alongside the public piece, where people are looking for different ways to access product. Maybe you can create some structure around that, some illiquidity premium, you know, a just a different way of, of looking at traditional exposure to a credit. So in our mind, the way we're thinking about it, is trying to segment our risk taking and how we think about the day to day flows that we take, how we think about working with Research to, articulate and market our best ideas, how we work with Banking to provide, you know, solutions or Credit solutions in bigger size to our clients.

Then ultimately, how do you finance that product? And that's the glue that brings it all together. And if you can kind of get these these four buckets right, you create a bit of, an infinity pool, so to speak.

Brad: Well, I like the infinity pool analogy as it’s getting nice and warm out these days.

Thank you, for catching up, Drew, this is super helpful. Look, I think for Research, we love that there's this evolution of the markets going on and it makes our life easier for things to talk about.

Drew: Always. Thanks, Brad, I appreciate it.

Brad: Thank you.