Show V/O:
This is Alternative Allocations by Franklin Templeton, a monthly podcast where we share practical, relatable advice and discuss new investment ideas with leaders in the field. Please subscribe on Apple, Spotify, or wherever you get your podcast to make sure you don't miss an episode. Here is your host, Tony Davidow.
Tony:
Welcome to the latest episode of the Alternative Allocations podcast series. I'm thrilled to be joined today by my good friend, John Bowman. John, it's great to have you as we celebrate our fourth season of the podcast series. You, of course, were the guest on our very first episode.
We've come a long way as an industry, and I think it's a great setup to talk about your new paper, “The World Rewired”. What is that all about, and what was the impetus to actually think about how the world is changing so rapidly around us here?
John:
The origin story of “World Rewired” actually is counterintuitive, and it became a bit of a surprise to us. So just to be completely honest, it started as this innocuous tour of the world and our introduction and dialogue with our members for my new role as CEO at the beginning of last year, 2025. It was meant to be kind of this inclusive strategic planning process.
I wanted to go into listening mode, as any new CEO rightly should. And so I organized eight what I called leadership roundtables with CEOs of asset managers, CIOs of big LPs, certainly some managing directors at the GP level of different asset classes. And we were sitting around a room just to kind of give the listeners a sense for how to visualize this. Let's call it 15 or so guests in the room across eight different cities, as I said. So 120 or so executives of some of the largest firms in the world at all levels of the value chain, and two and a half hours per, so over 20 hours of discussion. So it was a absolute goldmine.
I came with a number of questions, but I'm sure I'll shock you, Tony, in saying that with that group around the table, I kind of got one out, and then they just talked for two and a half hours. And we were just in digestion mode, just a sponge. Out of the accumulation of all those conversations was just so much information and foresight into where we were going as an industry that we felt obligated to kind of take this to the market, to share it with the world.
And so I've always said I kind of went trout fishing and caught a great white. Like we were shocked at the progression of this discussion. It was really meant to be part of my onboarding process, and it turned into feeding into one of, I think, the most important seminal reports we've published in our history.
Tony:
I think one of the most important reports for the industry. I think, again, it's beyond just looking at what CAIA had typically been known for, which was alternative investment education, but it was really how the entire world is grappling with this changing landscape. Maybe if you can, let's talk about a few of the key findings, and then maybe we'll peel back the onion a little bit.
What were the key findings as you finished your tour and put it all pen to paper?
John:
Yeah, so you can imagine there was a huge inventory. And so the biggest challenge was taking all of this noise and trying to categorize it into a few big takeaways or decrees or findings that we thought leaders could hang on. And so there were three big kind of pillars.
One was a macro push and a macro shift, as we called it. The other was a kind of industry shift, product architecture related, and finally was an organizational shift, which had to do with talent and a brand new radical to thinking about building a talent map. So it was basically geopolitics, structure of product set and taxonomy within the industry, and then ultimately the types of people on the org chart, and perhaps even a combination of humans and agents on the org chart.
So that was kind of the flow across the three shifts.
Tony:
Let us kind of dig in a little bit on those. And maybe just from a macro perspective, what I thought was interesting is there were some unique perspectives. I think the perspective in APAC and the Middle East were very interesting because, of course, I sit here in the U.S. and I feel like I've got a pretty good sense of how advisors and the overall industry is reacting to private markets kind of becoming more mainstream. But it was kind of interesting to hear some of the perspectives outside of our world here, an area of the world that you're very familiar with, APAC and Middle East, but maybe just share some of the regional sort of differences that you experienced.
John:
I would say in Asia in particular, there was greater adoption and perhaps anxiety around AI in the org chart. I heard more versions of we've paused our intern program or we no longer think or perhaps the industry doesn't need to be hiring entry level anymore. That conversation about AI's invasion and kind of tension with the human came up everywhere to be clear, but I think it was most acute and most consistent in Asia. And look, maybe Asia has always been a little bit more tech-forward than the West, but I don't have a great explanation for that.
The other thing I would say about Asia, interestingly, is a year after I started in the industry was the Asian financial crisis. Started in Thailand, quickly spread, following year was the Russian ruble. Those of us with a little bit more gray, I think, still have visceral scars from that experience. I thought I was smart for about three months when I entered the industry and then everything fell apart very quickly and humbled me. As a result, the generations my age and older, in Asia in particular, have a lot more risk aversion and they ask tougher questions. They are a little bit more circumspect on the shiny new object.
And so much of what we might call, I don't like this language, we could talk about it, much of what we call the semi-liquid product proliferation is not as attractive to the average Asian consumer retail investor as perhaps it is in the West. We have short memories over here. And so I think that those were the two big takeaways from Asia.
The Middle East and the Gulf, which is why, by the way, CAIA is allocating despite the conflict that we all hope is ending soon, allocating a lot more resources, both human and op-ex, to that part of the world. It is the new capital of private capital in particular. You guys at Franklin have been very aggressive there in Saudi and in the Emirates in particular.
And so we believe that that has huge opportunity. That has fundamentally evolved from what used to be kind of a fly-in, fly-out culture because you had these huge sovereign wealth funds looking for manager investments and manager allocations. They've got their own ecosystem that is just humming from an infrastructure and private credit, private equity, real estate perspective. It is tied in with national goals. It is long-term. It is very well kind of nurtured and supported by the central government and a lot of the ministries that are building up the tourism and the sports and the infrastructure capabilities. So it is just mesmerizing to watch what long-term thinking can do. We saw it in Singapore decades ago. We're now seeing it in the Gulf.
So there were a lot of lessons there. But those were kind of the two big takeaways from those parts of the world.
Tony:
I recall in the report you talked about the need for education in both of those markets. And again, I'm thrilled to be partnering with your team in developing some new content for the Middle East. So it's exciting because I think you and I are both passionate about we need to lead with education. Make sure everyone on the ground understands how these structures and strategies work in advance.
I did want to pick up on your comment. You and I have had this discussion I think for a long time. I don't like the term semi-liquid because I think in many respects it has provided a false impression to the market that these strategies are liquid more like a mutual fund where you know the reality is they're illiquid by nature. That's in fact what makes private markets special. I prefer the term evergreen or perpetual because it describes what they are on the shelf and available with a small liquidity provision. But they're illiquid investments.
I think if we kind of fast forward and we look at today's environment, I think we've found ourselves getting a little bit of trouble with private credit for a number of reasons. We had some concerns about were there more risk in the market than there should be.
I think our research has suggested we do not see any systematic risk with private credit. We think it's fairly isolated. But we do think the redemption problem was fueled by a lack of understanding and a lack of appreciation by both advisors and investors that these are illiquid investments. And I know that's something you covered in the report and I know you even went so far as to suggest that maybe we go even further down that path and talk about tokenization.
Maybe just broadly what are your impressions either from the report or just what you're seeing in the industry about this rise of evergreen, the role they have ultimately in making these strategies more available to the wealth channel and our need for better and more consistent education.
John:
Yeah, I think I largely agree with everything you've said there, Tony. Now, let me be abundantly clear. Just objectively, I do think there's probably implications for traditional SaaS industry from AI. I think there's a lot of decapitation of SaaS enterprise implementations that will be better and more cost-efficiently solved for, replaced by Claude and other enterprise capabilities. So I do think there's real cash flow and valuation implications there. I don't think we know to what extent yet, but that is real to be concerned about it.
I would also say that, look, we just talked about the Asian crisis. If you've been through a few cycles, in every single cycle, humans are humans. And there's no doubt, well, I have no doubt, that covenants and underwriting standards probably loosened up a little bit. And so my guess there is some rationalization to occur within the books. Now, because they're private, we don't know to what extent. We can't see some of the metrics as we could if this were a publicly traded bank where you're just, you're watching the time series of defaults and you kind of know what's coming.
So I just want to open with, I do think there's some legitimacy there. However, I agree with you that the majority of this is misunderstanding. It is the way that we, as an industry, I think, in retrospect, the way that we have articulated this to advisors and wirehouses all the way down to the last mile of Main Street, is basically that, yes, these are long-term assets, but if you want your money back, you can kind of have it.
Now, I don't want to second-guess what actually happens in closed doors, but even language like semi-liquid plays to the worst psychology of the individual investor. We have a fetish for liquidity. We've been conditioned for this in most of our lives investing options and alternatives – alternatives with a lowercase A.
And so as a result, when we kind of play to that or sit in this halfway house where we're hedging a little bit, I think that has been very dangerous. And we've seen, experientially, very publicly that blow up, that misunderstanding. Now, there's probably some blame to go around on the manufacturers, the advisors, and the clients on that.
So I'm not casting culpability individually on any one firm or any one even waypoint on that spectrum. But there's no doubt that, and actually someone in New York, so I mentioned there were eight roundtables. There was one in New York, big private credit firm that all the listeners recognize, and they had decided, and this is a year ago, so you can kind of play through, rewind through some of the big news stories since then. So this is early in maybe some of the question marks coming up. And he said that we have pulled back on some of our pursuit of BDCs and interval funds because we think the industry is a little bit over its skis, meaning the equilibrium between product proliferation and education is out of whack, and we need to see that balance come back. I mean, he was speaking our language, of course.
And so that sentiment that I kind of played out when you asked me about Asia also was impacting some of these CEOs as much as a year ago and how they're thinking about positioning for this because I don't think we have the story quite right. We've not done a good enough job on education. It's been about the products versus the underlying assets and how to think about the psychology of holding a patient, long-term, heavy piece of asset within this allocation or portfolio and kind of looking the other way, similar to how we think about our 401Ks. And I just don't think that's been imputed enough into the buyers of a lot of these strategies.
Tony:
I wholeheartedly agree. And I think we need to lead with education. I also think that it's always an interesting sort of tension, that behavioral bias, right? Because everyone wants the excess return that you see and it's easy to have that intellectual discussion. It's more difficult to have the emotional discussion, which is I'm essentially giving up control of this asset for 7 to 10 years. It's an uncomfortable discussion, but I think it's an important discussion to have upfront, not afterwards.
And you on this podcast, our very first podcast, as a matter of fact, talked about liquidity is just a feature. It's not necessarily a bug, but I think we have learned our lesson and hopefully we move forward from that. I don't think there's anything wrong with the structure, but we need to make sure in advance people understand these are illiquid investments – that's what makes them special. You're not going to capture that long-term illiquidity premium if you think of them as mutual funds and you think that's the first sign of any noise you're going to head for the exits. So, John, thank you for repeating and amplifying that message.
I do want to take the discussion maybe a little further down the road. And this is an area that I'm definitely not an expert on. But in the report, you did talk about tokenization and blockchain, and I will tell you that people within our organization definitely are spending a lot of time thinking about and working that through.
I'm not going to get into the mechanics of how that works, and I'm not suggesting that we do it here on this podcast. But I do wonder, does that proliferate this problem of thinking of these as being liquid investments? The more that we make it easy to get in and out, are we actually creating a problem for us down the road?
John:
Yeah, the more exit doors, the more they might take advantage of them. I think that's a fair argument. The context for what it's worth in which we heard a lot of this on the road and then validated through our membership body around the world was as a potential better solution than the redemption window or these liquidity mechanisms for peer-to-peer transactions at any point.
And so you wouldn't have this kind of spooked run on the bank issue that ironically, every single redemption request begets more redemption requests, not just psychologically, but as a function of being a co-investor when everyone's rushing the door, by definition, then your assets and the fund are going to have pressure on them. And so you're perpetuating the problem that you're concerned about by rushing to redeem when you've got an illiquid investment. I don't think a lot of folks understand that.
They're hurting themselves, they're hurting their co-investors. So you have to be aligned on time horizon and risk tolerance with your co-investors. And what we're seeing is they're not necessarily within these funds. So that's just another point.
The specific application of tokenization and blockchain rails was about perhaps we're having the wrong conversation is how it was framed. We're debating the merits, the struggles, the poor communication, the need for more education on these 5% liquidity mechanisms. Is that really the best we've got? Aren't there other ways to have a continuous window that are peer-to-peer that are not as maybe psychologically alarmist in their nature? And there's price discovery that can happen a little bit more real time.
So the conversation was really about solving for a few issues that it seems like the analog world of the 5% liquidity mechanism is not quite meeting despite maybe best intentions. So I think it was applying some of this innovation to this semi-liquid fund. Again, I'm using that language just for simplicity here, for a way to maybe meet some of these demands, but not create some of the problems and some of the kind of sensationalist narratives that occur through the run on the bank situation.
Tony:
Yeah, and we'll have to see how all this plays out. And I appreciate that perspective because I think, again, we have to be careful that we're solving for the right things. And the right things, I think, are making these very versatile tools more broadly available to the wealth channel and the retirement channel, which I definitely want to touch on in just a little bit.
But I did want to go back to something that I thought was fascinating. When you were talking to a lot of these asset managers, they talked about talent. And sometimes I think we forget about that and we need to kind of go back and think about how you and I started in this industry and oftentimes you would hear technology is going to come along, it's going to replace. And as a young lad at the stock exchange in the ‘87 crash, I remember how crude our technology was back then. And candidly, a lot of that happened because the technology couldn't keep up with the pace of change. I almost feel like we're having a little of that now.
And I wonder as those firms were thinking about the role of AI and technology and the skills of the people, there's this natural sort of tension. But as you get past that, AI potentially makes things more efficient. And I think in the report you were suggesting maybe AI does more of these rote sort of menial tasks and more analyst level is interpreting the AI data.
How do you think that all plays out? Because I think it's such an interesting challenge for the industry. We know what the right movement is, but we don't want to move too quick.
John:
Let me contextualize this for the listeners first so that the first shift, as I said, was geopolitics. And what I've often said is the most real estate of those 20 plus hours of discussion was on that subject. The most passion, however, was on this third shift that you're hitting on, which is talent implications. So it didn't occupy quite as many hours, but it certainly seemed to get the table enlivened. Let's put it that way.
I had an Indian CEO put it this way at the Mumbai round table. He said, the era of skills training is over. It's time for systems thinking. There was another in Singapore. There was a CIO of a big LP that you would all recognize that said that the industry and by the way, I'm looking in the mirror here, the professional bodies, all the supporting kind of factors that go into training up our organization and our talent historically. He said the industry has been way too single-minded about on-the-job training and kind of specific tasks. So what do we mean by all that?
So systems thinking, if you've got this kind of collision of public and private, if you've got geopolitics and kind of the balkanization of the world, and you've got AI, which is what your question was, amongst other themes all coming together, then what you don't need as much any longer is someone that is just an expert at valuing a piece of commercial real estate or underwriting a private loan to a small business.
What you need is somebody that can think laterally. That's what a Toronto LP said. We need lateral thinkers that are multidisciplinary, that are flexible, that are nimble in the way that they think.
It also gets to your point, Tony, which is we need to be more human about the recruiting and the development of our humans, because AI, to your point, segueing to that, it's going to be able to fill a lot of, not just the back office, but the investment tasks that we used to do. And so when I first entered the business, I've already kind of exposed my age here, but ‘96, so just before the ‘97 Asian crisis. I remember, and I followed consumer and software, and I'm sure you've all heard the old tradition where if you were following retail, you would go to the parking lot at the same time on the same day every week.
So I followed Walmart, so I would go to a couple of Walmarts, and it was Tuesday afternoon, let's just say. And you would basically create a time series of cars, and then you would extrapolate, well, that must mean that they're having a great quarter, because we've seen every Tuesday that number trending up. Not only can AI capture that through geosatellite now, but it can actually capture actual underlying credit card transactions.
You don't need to extrapolate from how many cars are in the parking lot any longer. So just think about the inputs on the front end of what used to be the analyst's job. And by the way, even kind of the midpoint of developing the spreadsheet and the cashflow expectations and ultimately the valuation.
Back to my systems thinking, where humans are most effective is taking all those inputs and then prescribing judgment, understanding, well, what does this mean in the context of some of the trade difficulty that we're having with this country? And what does this mean that this industry is struggling because it no longer has access to the right resources, right? The AI is not going to be able to connect these dots in the way that a human can.
So I think there was a lot of discussion about ensuring that the type of talent that we're recruiting, and by the way, the pools by where we are fishing for that recruiting, and then how to develop them, what type of skills to allow them to kind of engender and develop are providing more roundedness to an investment professional. The investment professional of the future needs to be much more rounded than I think most, particularly on the private capital, should I say, private capital folks are. And so to your point, the org chart in the future, you know, you can imagine that, it's got a bunch of boxes, right? The hierarchy probably is populated by certainly some humans, some in agents, and some what you might call automated workflows. And sometimes you're actually managed by an agent. Other times you're managing agents.
What does that mean for culture? What does that mean for what it means to be at work or to be working with somebody? So there is massive disruption, and I would just say of all the different shifts, geopolitics is kind of a defining feature of your investment thesis.
Product architecture, as we've talked about, is not being quite calibrated correctly for this wealth push. Systems thinking transition, I think, is the most radical, most challenging, and maybe the one that is most offensive. If I can just say it that way to the industry. And I worry that we're not going to adapt fast enough in this space.
Tony:
And it's intimidating. Change is intimidating, but the rate of change, which you talk about throughout your report, can be intimidating to a lot of people. Those who embrace it, those who kind of think where we're going as opposed to where we are, I think would be much more successful.
I did want to talk about the other exciting trend that we're seeing in the marketplace is we're now starting to see these mega IPOs going public, the SpaceX, the open AIs, and the Anthropics of the world. And I'm fascinated with SpaceX in so many ways, but I think in many ways, SpaceX represents this convergence of public and private that you've been talking about for quite some time. And we need to remind folks that, yes, SpaceX came public at a $2 trillion valuation. Let me say that again, $2 trillion. But what people probably aren't paying attention to, it's a 24-year-old company. So it was very intentional that they stayed in the private domain because it gave them the freedom to execute a long-term strategy, think long-term.
And that is a really important mindset. So Elon Musk probably knew that, you know, after the first three rockets blew up that if he was in the public domain, he would have gone bankrupt. And he was smart enough to say, I'm going to manage this in a private domain until it's ready to come public 24 years later.
So we definitely have this convergence of public and private, and we see it in those big name opportunities, and maybe that gets the attention of investors more. But I'm curious what your thoughts are. It seems like we're seeing these companies coming public at a much more mature phase, which is a good thing for individual investors.
There's also this discussion that now they're actually starting to go into indexes sooner. So individual retail investors are getting exposure to this good, bad, a little of both.
John:
Yeah, you know, it's funny you talk about the ability to be disciplined on long-term enterprise value creation versus the machinations of the merry-go-round that is the day-to-day noise of the public markets, right? So I think sometimes we forget that both of these markets have major dysfunctional disadvantages, right? Clearly over the last 30 years, when you've seen the IPO market drop half, more than half, dry up, public companies collapse for just this reason.
The private markets are now mature enough and have enough velocity and capital and interest in them to basically meet and satisfy all the needs that in the ‘80s and ‘90s, there was this urgency. There was this halo. It was just a burden of process to get to the IPO moment.
And I think now it's a necessary outcome only when you need it. Now there's very little urgency around it. So this year is really interesting in that you've seen a lot of the major, and I would say brand champions, even though they're in the private markets, these are household names, which is also a huge change because the private markets used to be a little bit hiding in the shadows. There was the smaller startups, new economy, emerging areas. And now you're seeing these names that we watch on TV or buy at the store or experience in our daily commute become public. Is it good or bad?
I think it's probably a little bit of both. I mean, because of how long they're waiting to go public, the question I have, and we've seen this with, if you look back across all the MAG 7 IPOs, the large majority of the enterprise value, a few years after going public, occurred in the private markets. So a retail investor has to be very patient because a lot of the juice has been squeezed out of the lemon at this point.
And so the question is not the entry point of the IPO back in the ‘90s and the early 2000s. If you were patient, you were bound to capture the majority of that organization's maturity and rise and cash will increase. I don't know about now, because again, 24-year-old company SpaceX, just as an example, has reaped a lot of their profits and their capability, not profits literally, but a lot of their progress in ways that you have to believe a lot of things for that to create the value that I think buyers now think it will.
So I do worry about timing, that you're leaving retail investors out until the eighth inning of it. It's a hard one. And I think the reality is that we have to be much more circumspect about valuation and what assumptions are built in to some of these models now for some of these trillion, $2 trillion companies.
And by the way, we're gonna have three trillion plus companies going public. I mean, it's just unfathomable even five, 10 years ago that we would have something like that. I think there's one other element going on too, is that if you look at the three big ones this year, there is AI in all of them, and there is data center, compute, build out, infrastructure, arms race going on.
So I don't know, and Elon and I haven't texted recently, so I can't get inside his head, or Sam's, or Anthropic, but the reality is they need a lot of capital. And I think that probably they're going to market not just for the brand and the halo and the maturity of becoming public, as I described back in the ‘80s and ‘90s, but I think the reality is that in order to keep up with these multi-trillion dollar race to build compute out, they've got to go to the public markets, that they've kind of exhausted, I think, the private markets. Or the public market fundraising process is too periodic, it's too rhythmic, and they need cash now.
So I think there's another angle to that that is perhaps a warning signal, that we could be seeing another fiber optic build out or railroads build out, they're in sore need of cash to fund the next data center as well.
Tony:
I think the one thing that it does as well though is it reminds people of that journey. It reminds people of the advantage of being a private enterprise, which you and I know well and a lot of people don't. And I remember when I was at Morgan Stanley and I worked with a lot of our banking clients, I worked with the Google executives, there was no path other than going public. And now you recognize that a lot of those household names are private, so it's this whole convergence of public and private, I think it's a great reminder for individuals who can now choose to own both, where maybe they were intimidated about private equity because they didn't know the names.
Now they can own some of those names, and it shows them the journey that these companies go on and why there's an advantage of being in the private domain without the scrutiny of shareholders and having that long-term mindset. It's an exciting time, but I do think it really speaks to this convergence of public and private, and probably all of us need to rethink how we think about both of those just because it's a journey and companies will take different sort of paths to get there.
John, if I could, I'd like to close on the one question that you kind of teased a little bit earlier on, and I knew you've covered on your podcast, which I love, by the way, Capital Decanted is just a great listen to anyone who's serious, and that is the emergence of more private market strategies in the 401(k) marketplace. It's something that I've written about a lot. I've had guests on the podcast talking about it. I think it's, again, one of these very exciting opportunities, but like everything that you and I talk about, it needs to be done the right way in the appropriate fashion with education, transparency, and all of that.
Maybe just give your high-level thoughts on where we are with that and how we think that's going to play out over the next couple of years.
John:
I think there's a few elements going on. I mean, the first, the headline response would be that I've always thought that 401(k)s, particularly in a target date fund structure, because it even more acutely creates this psychological invest and leave it alone forever, right? That I think it's probably the best wrapper conditionally for the American in the way that we behave as investors or not behave as investors to create a allocation towards patient long-term capital, just as we talked about earlier. That's one response.
However, I think what we've seen on the BDC and the evergreen and the interval side is that we need gatekeepers. We need sophisticated advisors, and I mean all types of advisors, not just in someone at an RIA. And that could be plan sponsors. That could be the committee within the organization that's choosing these strategies. It could be an underlying, sub-advised investment manager that's responsible for building the menu.
But all of these individuals have to wear and act and behave like true fiduciaries. And the Department of Labor and the SEC should require them not just to have suitability standard, which is a complete cop-out in my view, but to truly have best interest, a true fiduciary standard, so that they're not even on the menu if it's not appropriate. And then going farther on the education side is that, look, for some of you in de-accumulation phase or there are some extraordinary situations where just cash is important, got a bunch of kids heading towards tuition, you've got a big outflow because of a divorce, whatever the case might be, it's okay that you don't allocate. Not everybody should be forced or assume that they have to allocate to private markets. So I think that's the biggest part of this.
And then I think finally plan sponsors to date have been scared to death of litigation. And so this is why this is moving so slow despite executive orders is that, and by the way, it's interesting to hear us talk about private versus public. There's a corollary which is kind of the U.S.'s investment election cycle and the short-termism that it creates, regardless of who's sitting in the White House, you get these big swings of policy and views and what's hot and what's negative. And I think rightly so, plan sponsors are scared to death because what happens in 2028, whereas China can think, just as an example, China can think much more long-term.
They just sit back and they're watching us. So that's a whole nother discussion, but it's interesting because I think this election cycle, short-termism doesn't just play out in retail investment decisions, it plays out in the whole ecosystem reacting or not wanting to react, fearful of reacting. So again, in summary, I think it's the right thing to do long-term.
We've got to have fiduciary standards around it and we have to have some level of comfort, the whole system that we're not going to get partisan wild swings of policy or litigious risk associated with adding some of this to retirement plans.
Tony:
I completely agree. I think it will be a journey. It's the right journey to go on, but to your point, I think we need to make sure that we address it with transparency.
We've got the right skilled people, the right knowledge to make the best-informed decisions as opposed to something that looks good. Private equity looks attractive on a piece of paper. I don't want my two daughters making those selections just because of the highest returning asset class. They need to understand their illiquid investments and how they work. Having the target date fund structure is probably the starting point, but the liquidity management will be critical. So there's a lot of work to be done.
I'm excited that we're having the discussions and it's an open discussion, but I don't suspect we're getting from zero to 20% allocations overnight. It will be a journey, a multi-year journey.
John:
Agreed.
Tony:
Thank you, John. I feel like we've covered so much ground. It's a really exciting time for our industry.
I encourage everyone to read “The World Rewired”. We'll have to have you back in the near future to revisit how this is all unfolding. Thank you so much.
John:
Always a pleasure, Tony. Invite me back any time.
Show V/O:
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