Odd Lots - The Anonymous Meme Account Chronicling Credit Market Craziness

Episode Date: January 25, 2024

The past few years have been pretty wild for anyone working in credit, the business of selling and trading corporate debt. First you had the pandemic, which changed working patterns across Wall Street. Then you had a surge in deal activity that had everyone working overtime to meet demand. Meanwhile, private credit's been booming and is now competing with banks' cash cow businesses of selling bonds and leveraged loans. And finally, everyone is wondering how long the credit space can withstand higher interest rates, and how frothy the underlying deals actually all. High Yield Harry, an anonymous social media account, has been chronicling it all -- making memes out of junk bond offerings, and cracking jokes about conversations with investment committees. In this episode, he talks about his experience working in both private and public credit, what it's like to run an anonymous FinTwit account, and the outlook for bonuses this year. High Yield Harry's voice is concealed in this episode to preserve anonymity. See omnystudio.com/listener for privacy information.

Thanks for listening to OddLots. Follow the show on Amazon Music for more future episodes or just ask Alexa, play the podcast, OddLots on Amazon Music. Hello and welcome to another episode of the Allotts podcast. I'm Tracy Alloway. And I'm Joe Wisenthal. Joe, we're about to do something we've never done before. I'm very excited about this. This is something that I've always sort of like wanted to do. Maybe even before we had a podcast, like even since I was like a little kid watching TV.

What? No, like seeing like some like news show Because we're gonna talk to like Someone disguised right Yes, we are going to talk to an anonymous source An anonymous person Someone who's anonymous online But will also be doubly anonymous on this podcast

And we're gonna be disguising their voice Yeah, I'm really excited I've always wanted to do that Because you know like those old like I don't know Like investigative shows Where they have the shadows The shadow You see the silhouette

Yeah they sound like a robot And stuff like that And it's like, oh, it's so cool. And, you know, it's like there's no reason we can't do that. Okay. Yes, that is exactly what we're going to do. I'll just go ahead and say it. We're going to be speaking with high yield Harry, who runs a couple of different accounts on social media.

He's on Twitter and also on Instagram. He also has his own newsletter where he's basically chronicling some of the craziness that happens on Wall Street in various ways, but also in the credit markets specifically. And listeners know that. private credit and it's sort of differences to traditional public credit markets, so publicly issued junk bonds or leverage loans, has been a topic of interest for us. But in general, credit markets are always interesting things. And we have been at a sort of interesting juncture in them where last year turned out to be a fantastic year for credit if you got in at the right time. And that is despite

lots of people expecting that this would be the area where you would see the impact of higher interest rates. This was the frothiest area of the market in some respects, certainly leveraged loans. And that would be the place where you would see trouble from the rate hikes. And yet, early 2024 haven't really seen that. So we talk obviously, as you said a lot about credit, we talk about a lot in the macro sense. Where is the investor demand coming from? What is the effect or not effect of higher interest rates? What is the effect of Dodd-Frank and shifting lending capacity from banks to other non-bank institutions, et cetera? And all that's great and all that's important.

But you can't really like understand it just from the sort of like numbers without understanding like someone who would just like talk about like the world of like actually like making the loans and making the deals. Right. The incentives that go into doing this and like who are the players in this market. Yes. So, without further ado, I am very pleased to say we have high yield Harry with us. As mentioned, this isn't his real voice. I think it will be obvious when the episode comes out. But Harry, thank you so much for doing this. Yeah, hi, Tracy. Hi, Joe. Thanks for having me. You know, glad to be the exception. And, you know, I'm interested in hearing how my voice is going to sound.

Me too. Might be sounding like the Riddler, you know, holding Gotham for ransom. But it'll be interesting to hear how it works out. So first question, I want to give you the space to, you know, explain who you are without giving too much away and doxing yourself. But who are you? And what do you do? Yeah. So I'm a junior professional within the world of public credit.

You know, I did the typical stint from the sell side to credit. And I've experienced wearing different hats in terms of public credit and private credit. right now my focus is on public credit you know i like the opportunity set there um and i'm more of a market-based individual as opposed to a deal team guy so that that kind of drew me to public credit but you know i've dipped my toes and both and have uh done plenty of investment committee memos for both types of offerings i'm really excited about this i want to get into you know the world of credit and what you've seen from the inside and all of that but uh now before we do talk about like your public persona the high yield hairy persona on Twitter and

Instagram. What prompted you to adopt this persona and what do you know what come from? And why are you one of the only good ones? You're too kind. I was I was sitting around in mid 2020. COVID was going on. Was in my parents' basement. And you know, there was a lot going on the credit markets back in like March and April. But after that, it really settled down and had a lot of time on my hands after some, you know, more stressful like 2 a.m. nights and had decided I really wanted to, you know, make a finance meme account. Finance memes in particular on Instagram really originated back in like 2017. And, you know, I would say that was really the golden age of finance memes. And I was really as a younger guy, enjoying all the memes coming out

from all those accounts. And I noticed some of those guys were starting to post a lot less. So I figured, you know, I should try my hand at this. So I figured, you know, my favorite show is succession. You know, I love that show. And I figured, you know, I should probably do some memes and incorporate succession into it.

And look, that got a lot of popularity early on. And, you know, as things developed in the credit markets, especially with all the M&A activity and craziness going on in like 2021 and early 22, you know, I think people took interest in the account. These are popular meme formats, but you're kind of using them to say very specific things about the credit markets at time. So what is it about the meme format that lends itself to sort of credit analysis or credit commentary? Yeah, that's a good question. I mean, it's funny how niche you can really get, like, you know, you can get very complex and talk about, like,

liquidation preferences or, you know, pick for like payment and kind and all these, all these different nuances from the form of a viral meme. You know, I'm not really sure what drives that psychology. You know, I just, I just know people, people love it and react to it in a very unique and niche way. And, you know, it's just really hard to, like, capture that in a bottle, I suppose, but as long as people are enjoying it and enjoying all these goofy memes and videos, then I'm happy to oblige and keep the party going. You know, I've heard people say things like, you know when you're becoming fluent in a foreign language, when you have a dream in that language.

And I think there's an equivalent where it's like, you know you actually understand an industry well when you get the jokes in the memes and the more niche the better. And I, you know, it's like, because there are memes. pages for like literally every industry. There's like, you know, trucking memes and then truck driver meme pages and then freight memes and freight meme pages. It goes a broker, broker meme, and it's like I get some, you know, I look at them because we've done a lot of freight and I like get half the jokes. I'm like, okay, I still have more work to do. That's right. When you use the distracted boyfriend meme, it's like a proficiency certificate in your area. Yeah, it really is. It's like can you make

a meme for an industry that the industry participants themselves find funny and most people can't do it because they don't know enough. But like that is, I do think, like sort of like the test of industry domain expertise. Can you meme? Can you get the memes and can you make the memes that the other people find funny? Yeah, yeah, absolutely, Joe. And, you know, I think as time has gone along, it's, it's taken me a very short amount of time to make some of these memes. And, you know, I wish I had a more useful skill, like a skill to provide more economic value. but you know I I watch a lot of TV, I watch a lot of good TV shows and I kind of have like etched in my brain use some of the great quotes or some of the great scenes from them and you know all

a sudden you might get a like no country for old men or Sakaro meme you know associated with finance and you know that's the type of stuff that like people people love out of nowhere and you tie that to something niche and you know it'll pop off. I definitely have more questions on the social media side of things. But why don't we talk credit for a bit? You know, I'm sure you've been listening to some of the episodes that we've done where we're digging into private credit. But how would you characterize the difference between working in private credit versus working on the public side? Great question. Yeah. So, you know, there's pros and cons in each, you know, I think with private credit, I was, I think there's higher compensation for the individuals in there. So, you know,

That's one thing. But, you know, I think with private credit, you can structure things in a lot of different ways. And, you know, the opportunity set is very large. You know, you can look at something from a lower middle market lens, middle market lens, or you can even eat and share in the broadly syndicated loan market. You know, I think with private credit, one thing in particular is you can get a lot more in the weeds. You know, you can get a lot more comprehensive data room. and really get in front of the management teams,

really make sure they're answering the questions you need. And I think the relationship with sponsors is a lot more important in the private credit world, where in private credit, a lot of our deal flow came from sponsor relationships, you know, may come from a banker, but it also may come from a sponsor in terms of, you know, we want you as the lender that we're going to work with

or, you know, here's 10 lenders. We're going to pick one or maybe we'll pick four. And you guys need to get a term sheet in our hands as soon as possible. You know, I think one of the cons with private credit, though, is I think from a fun standpoint, you're a little more concentrated on your bets. And then there's illiquidity as well. So, you know, when you really make an investment, you know, I think you need a lot higher conviction given that is, you know, it's not necessarily something you can trade out of.

So flipping over to public credit, from the liquidity standpoint, you know, you may have 100 lenders within a broadly syndicated loan. And, you know, if it's a billion dollar loan, you can get decent liquidity there, you know, even if it's like a B minus credit. So, you know, I think having that liquidity is a big positive for public credit because with private credit, I think it's a lot harder to change things or have a loan change hands as things go south. you know, the con with public credit in contrast to what I explained with diligence in the data room and, you know, getting in front of management and what have you is, you know, you get on a lot of these lender calls as a public credit guy and management will frankly just toss your question to decide or say, oh, you know, we'll follow up with you offline about that or, you know, say, oh, we're not going to disclose that for competitive reasons. And, you know, some of these

questions are things you need to know is a underwriting. investor and it's unfortunate, it doesn't be an answer, but that's kind of how it's structured. And you know, you'll get a data room in public credit too. That's a lot more thin relative to the private credit. And then the last component too is, you know, documentation where, you know, I think public credit, we've seen this massive wave of covalite loans, you know, no maintenance covenants and, you know, looser docs in terms of what a sponsor can and cannot do. I think in private credit, you can get some stronger protection and more of a heads-up as things go south. You know, I think as the private credit loans get bigger, there's, you know, there's looser

documentation, but, you know, for a general middle market or lower loan, you know, I think you're getting stronger documentation. I'm June Grasso, inviting you to join me for the Bloomberg Law podcast. Every weekday, we help you make sense of the legal stories that shape the nation and the world. for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets, from corporate law to constitutional law, and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars, and policy experts to break down what the rulings really mean.

We do this every weekday, then bring you the best conversations in our daily podcast. podcast. Search for Bloomberg Law on YouTube, Apple, Spotify, or anywhere else you listen. On the East Coast, listen as you start your day. And on the West Coast, catch up in the evening. That's the Bloomberg Law podcast with me, June Grasso. Subscribe today wherever you get your podcast. Can I ask a definitional question? Is a data room literally a room where you walk into a sealed room and look at information and can't take it out? Or is it virtual? Like, what is a data room?

Yeah, well, it's funny. You know, a data room gets a lot of jokes like that where people meme about it being a physical place, but it's actually more of a virtual place. You know, it could be on a website like CynTrack or it could be on something as simplistic as Dropbox where a lot of data is inputted into an online database. So that can be financials, can be a confidential,

information memorandum, SIM, you know, lender presentation, legal documents, KPIs, and just a lot of various information that helps an investor assess an investment opportunity. Can I ask your take? This is a question that comes up in every credit conversation, and I'm not always satisfied with the answers. But what is the attraction for investors to go into private credit? Because people say, it's correlated, but it's like, yeah, of course it's core. And it's like, and it's like all the returns are higher, but, you know, as you say, it's a liquid, no market to market. How would you characterize the appetite from investors to lend via the private credit channel? Yeah. You know, I think as like sofer and base rates have, has increased,

you're getting a very attractive return. And then, you know, I think also from the covenant standpoint as well, you know, that provides a little more structure relative to leverage loans or high-yield bonds potentially. And then look, I think private equity has shifted a lot of deal flow to private credit. So naturally, if you're looking to invest in credit, you know, you're looking to include some private credit into that mix as well. You know, I'm still, I'm still bullish on private credit. I think there's a lot of smart and sophisticated investors in the space. But, you know, I think there's also a lot of deals that get done on a relationship basis. But ultimately, you know, you get pretty, pretty decent double-digit returns.

And, you know, you have a first lien position as opposed to an equity position. So, you know, on an LTV basis, I think you're fine with a lot of these names. Talk to us more about how a private credit deal actually comes into B. versus, say, a syndicated loan or something like that. Because I think, like, the actual process by which an issuer chooses to go the public or the private route is still something I'm kind of, like, wrapping my head around. Like, what is the, I guess, the catalyst for going one way or another? Who's, like, calling the shots or who is influential in this process?

Yeah. So, you know, I think a big thing I saw on private credit was people are. sponsors would favor private credit in situations where banks or someone else is moving too slow. And, you know, like private equity would want to partner that moves fast and moves quickly with them. So, you know, I think, I think that's an instance where private credit can come in and, you know, help provide a level of execution and certainty, which, you know, I think is massive. You know, I do think the public credit market makes a lot of sense for a lot of these bigger issuers. But in terms of like, you know, on the smaller side, I think I think private credit comparably makes a lot of sense.

So in terms of how these deals end up getting done, you know, like I mentioned earlier, a lot of this is from relationships, you know, might be a banker who gives it out, but it's predominantly going to be a sponsor who's seeking out. from from lenders, you know, in terms of assessing this, it's all about, you know, myself as a junior person and then, you know, other other people on the totem pole from like VP to director of MD, you know, assessing the data room, you know, getting in front of the sponsor to make sure we're getting what we need to answer before we can take this to an investment committee, you know, confirming internally whether senior individuals in the firm have have interest in continuing with the process. And, you know, a lot of these, a lot of these deals end up, end up following a timeline

where it's like, oh, you know, we already have term sheets or indicated interest from a lot of other lenders. We need you to move fast. And part of it too is like a sponsor testing you of like, you know, you need to move fast because we want to work with the partner who will move fast with us. So, you know, we work pretty hard modeling a deal out, you know, billing out like an internal memorandum, which, you know, is our, is our story for the investment of, you know, detailing the transaction, the sponsor, the company, you know, getting nuts and bolts on how, on how the company

works, you know, any key risks and mitigants from like a vendor contract, cost structure, industry standpoint. And then, you know, thinking internally how we want to go about the pricing we offer and, you know, any other components there. And, you know, And look, too, I also, you know, spend some time, you know, doing a little bit of equity as well. And, you know, whether we could provide a lending solution that's first lien in conjunction with some other lenders or whether we want to provide something from a one-stop shop situation where you're also contributing equity to help, you know, really carry the deal is a key component when modeling it out, when doing research and kind of measuring returns. And look, from there, you go to your investment. investment committee, you figure out what needs to be addressed, whether the risks have been mitigated. And if it has been, you're able to go and get an indicative term sheet out to a sponsor.

If they select you or you in another group of lenders, you know, you might find yourself in the Midwest look like on the floor of like a widget manufacturing company and, you know, working hand in hand with legal sponsor to really assess the deal and make sure it closes and you know, you feel very comfortable and have a strong conviction in your deal. Were you ever involved in a deal where you had to take back the keys, as they say, and like, you know, you end up running the widget manufacturer accidentally? No, I haven't. And I think that's a function of the current credit environment where things are still okay.

you know, if we've had a massive rise in interest rates. I think it takes a while for that to like filter out. I think those taking the key situations are going to be an interesting storyline over the next few years. You know, I think maybe to get ahead of myself, you know, I think pick and payment and kind is a way right now for a lot of sponsors and lenders to address some of these, you know, 2021 or deals like that that were a little weaker and, you know, give it a little bit of a little bit of, a longer timeline to run. So, you know, I think at the moment we're, we're going to see less key-taking situations. You know, I feel, I feel a little comfortable with 24. It's just going to be interesting, you know, in 2025 and onwards how many key-taking situations we get. Yeah. What do you think also about some of the big investment banks now getting into private credit? Because this seems to be

the irony, right? It's like private credit kind of became a thing because banks were retrenching from lending or it was harder for them to lend. But now they're getting into it. And also like, they're sort of competing with, I guess, their own syndicated bond and loan businesses. It just seems kind of funny. Yeah, it's a little bizarre because it's pretty much balance sheet lending. So, you know, it's a little interesting. You know, I have a harder time imagining, you know, know, banks wanting to hold on to a lot of debt. You know, I think, I think the syndication market works, works really well from like a risk management standpoint. But it'll be, you know, it'll be interesting to see how it develops. And, you know, I don't even know if I want to

call it private credit if it's a bank doing it, right? It's just kind of like, you know, it's kind like bank lending. Is the idea that they're going to create pools of capital to lend that aren't their like balance sheet capital that they're going to get out like essentially create some vehicle for outside lps or investors and then the bank essentially becomes the conduit for it? Yeah, yeah. I mean, there are there are some like balance sheet lenders, but you know, there are also a lot of banks looking at JV partners as well. You know, it'll be interesting to see how it develops. I think like one argument for it is like maybe you can graduate people from like middle, you know, middle market lending.

to larger blending, you know, as a company grows over time. And, you know, maybe that's a good way to have for relationship management. If, you know, because I think, like, historically, you've seen a lot of, like, middle market names graduate over time to, like, the broadly syndicated loan market. You mentioned that for professionals in the space, private credit is currently more lucrative than public credit. Is that basically a function of the necessity of things like relationships or the skill level to craft the right, you know, covenant structure for the deal. As you say, more importance of relationships, more importance of being able to create a bespoke covenant structure that allows the people in the space to make more money.

Yeah, you know, I feel like I've seen a lot of investment banking analysts and associates head over to private credit as opposed to them heading over to public credit. So, you know, I think that's a function of it where, you know, that skill set they had in IB makes more sense than private credit because, you know, it is like very similar to what they were doing before in banking. So, you know, I think that's a key driver. I think fund growth is a key driver. You know, I think the returns, I think AUM growth are key drivers in the moment. And look, I think with public credit to, you know, compensation varies widely depending on where you are.

And, you know, some public credit can be a lot more sleep and night credit as opposed to private credit, which I think, you know, needs significant diligence. And given the, like, illiquidity, you know, you're really, you're really digging in there and spending a lot of hours on it. Well, I think, I think a lot of public credit, you know, if it's more hedge fund oriented or long short oriented, you know, I think that compensates higher. But if it's a little more sleepy of a fun, then, you know, I think it'll comp lower. You actually do a compensation survey on your newsletter, I think.

And I find this a really interesting aspect of some of the anonymous finance accounts now, that they are either collecting or being given information from people in the industry. Primarily, I think, like, younger people in the industry. And this seems to be a big change on Wall Street. Like, you know, there used to be, if you worked at Goldman, Maybe you talk to other Goldman people a little bit about comp, but everything was like kind of secret. Like there wasn't a lot of transparency on Wall Street, but it feels like that's changing, even though it's just to be clear, it's not the banks themselves that are driving this transparency. It's like the actual workers and primarily the junior ones.

Yeah, yeah, absolutely. You know, I think that's one of the better parts of running this platform is just the compensation, transparency that's been able to come out of this, especially in credit, because, you know, I think with investment banking, you can kind of figure out structure of where analysts and associates get paid out. But, you know, once you start getting like credit associate and credit VP compensation level by city, you know, you can provide a lot of transparency. And I've had a lot of people come to me and say, you know, they've used it in terms of making sure they're getting compensated appropriately when getting a new job or something.

something along that line. So, you know, I think there's also some private equity compensation in there, too, within the survey. And, you know, I run this like every March. And, you know, I think you learn a lot from it. So I'm excited to see what I find out in the next month and a half or so. But, you know, I think you can really learn a lot from it. And I think, I think over time is, you know, more followers, you know, increasingly become more senior. It's going to be really interesting to provide more transparency beyond just, you know, the junior level and really dig into like, okay, you know, I'm a mid-level professional. What should I be making? You know, what type of carry interest should I be having even? And, you know, I think that type of granularity is going to be good because I think especially like the mid-level, you know, there's not much transparency. Are you cool with coming on and Tracy, should we do a lots more in March with the results of the survey? Yeah.

Yeah, come back. Can we have you back on in March and do a little mini episode with Reveal the survey? survey results? Yeah, yeah. Let's see what happens. Yeah. It comes out via my newsletters. But yeah, no, that'd be cool.

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When news breaks, we'll have an episode up in your podcast feed within minutes, so you're always getting the latest stories and developments. Get the reporting and the context from Bloomberg's 3,000 journalists and analysts. We're all over. the world. Listen to the latest from Bloomberg News Now on Apple, Spotify, or anywhere you listen. You mentioned that you started the account in 2020, you know, a lot of people at home doing things on the internet. One of the things that, like, I've come to appreciate about that era, or 2020 and particularly 2021, it was very evident in, say, like, tech investing, that, like, there was just this explosion of deal flow, like, particularly private tech investing. So, like,

People, maybe someone had a substack, maybe they had 10,000 followers on Twitter. And suddenly they could like plug and play into AngelList and they started like signing over Zoom and doc you sign Angel deals. And then I sort of later on like realized it wasn't just tech that like in real estate transactions, a very similar phenomenon that a lot of people got in, you know, these sort of crazy years and syndications of like, hey, let's sort of, you know, buy up apartment buildings and the sunbelt and stuff. And so you had all these like newcomers. Can you talk a little bit about like what 2020 and 2021 was like from the private, from the credit perspective or the private credit perspective, those sort of like, those sort of like crazy high speed like go go years? I think during that time frame, I can speak a little more to like public credit as opposed to

private credit. But, you know, I think there was there was a lot of deal flow in 21 and, you know, a lot of LBOs came to the market. You know, I think I think a little bit later in 2020 as well. Yeah. And, you know, you have this massive rush of deals. You had investment bankers getting really worked to the, work to the brim. And, you know, that provided like a lot of a lot of compensation increases where, you know, a lot of people across the industry at a junior level were all of a sudden getting like a 25K bump, 50K bump, you know, great bonuses.

and, you know, I think that was great in terms of enhancing junior compensation, but, you know, also in terms of deal flow, you know, you had a lot of deals get done at a low rates and high multiples and, you know, we're competitive processes. And you'd look at some of these deals and be like, oh, geez, like, do we really want to underwrite this? You know, this kind of isn't good. And look, I think the biggest thing from this and, you know, the more challenging, part of being a credit investor is you looked at a lot of these 2020 2021 financials and you have this company have a gangbuster year, you know, and do an amazing job. And then they come to the market to refinance or take a dividend or something like that. And then look, all of a sudden

you have all these people do these deals and then you realize it was a COVID bump. Like, you know, you realize everyone was stuck at home and there's, you know, there's all these companies that one time big big events and then now financials are down like significantly relative to heights and look that that makes up a lot of the distressed market you see in public credit at the moment and I think this is probably a similar story on the private credit side as well and you know I definitely screened a lot of deals that had like a gangbuster 2020 or 2021 and then you know really fell off and you know you don't want to catch a falling knife there I guess it's easy to say this in hindsight, but not a lot of people actually did it was, you know, to kind of spot the

trends of like, oh, you know, this isn't really sustainable and, you know, don't invest in this type of deal because, you know, if you did, now you're looking at a distressed or more challenging situation, something that looks a lot worse relative to your underwrite. And I think there's a lot of like market participants who are now dealing with this hangover relative to 2021 and, you know, are stuck with a lot of distress names and, you know, worse situations or, you know, took a hit when they, when they didn't really need to. Speaking of things not being sustainable, does it feel like the balance of power is starting to shift, I guess, away from the junior analyst? Because this was also a hallmark of the 2020, 2021 boom times, right? Everyone was working super

hard. There was so much deal flow. And that kind of gave a lot of employees the firepower to start pushing back against some of their working conditions. So for instance, we saw the, I guess, infamous at this point, Goldman presentation where I can't remember if it was interns or the analysts, but they basically presented or they disseminated a presentation to Goldman Senior Management surveying their working conditions, their work hours, and making the point that things were getting worse and they were even having to work on Saturdays, which historically was something that was preserved on Wall Street. Is that starting to shift now as interest rates go higher and maybe deal flow has ebbed a little bit in 20, well, not a little bit significantly in 2023.

Yeah, you know, I think that dynamic started changing even like 2022. And, you know, shout out to liquidity on this. Yeah. For getting that GS presentation out there. I think he got a DM to him and he just posted it and, you know, that really helped spark the movement of people getting paid more. I think this dynamic started change when deal flow went down in 22 and, you know, I think that's when you first started seeing cuts amongst the junior level. You know, there's been some private equity and private credit junior cuts in 23.

But I think, I think a lot of the people that ended up worse off were people, for people who kind of stuck around investment banking a little too long. You know, a lot of people who didn't get that like associate offer after their two years in banking or, you know, I like I know people they got zeroed on their on their comp. Wow. From a bonus standpoint or, you know, they got bonus and like, you know, they worked like 90 hours and got like a 20K, 30K bonus, which, you know, is a lot less than what you can find in public credit, private credit.

So, you know, I think I think people forgot that like 21 was an extraordinary year and, you know, not how you want to measure future compensation. So, yeah, look, there's the criticality. And, you know, I think if we don't get deal flow ramping back up in 24, then, you know, I think things get increasingly challenged. And look, I think most people are back in the office at least three days a week, if not four. I'm not a fan of five days in, but you know, I think the tide certainly has turned. And, you know, but look,

the reality is it's so much better than it was in like 2019. You know, it's so hats off from that perspective. Wait, just real quickly, I get you're not a fan of five days in the office. I'm just curious, do you notice any difference of working at the office first not and on productivity on how the team operates or whatever yeah you know you know i think i think if you're in a deal team structure like if you're in private credit i think it's i think it makes a lot more sense to be in the office um but if you're siloed off like if you're in public credit if you if you're covering a certain industry and most of your communication is with your portfolio

managers, then I think remote work really kind of favors that. You know, I think I think to be fair to a lot of people live in like small Manhattan apartments. So, you know, being in the office, especially when, you know, it might be anywhere from like 10 minutes to 30 minutes away, isn't that big a deal. But, you know, I am kind of bullish remote work over time because I think for me in particular, right, like I, you know, I do my job and then I also do this high yield Harry's stuff off to the side. And, you know, that involves a lot of work at my apartment. And, you know, I'm certainly productive when I'm doing that. Joe's trying to bait me into another rant against return to office. I'm not going to do it, Joe. No, no, the only reason I ask is because,

like, it's such a charged topic that the only person I would ever trust to get a good answer is someone who's anonymous. Wait, but Harry actually, you brought up exactly what I wanted to ask you next. What are the logistics of actually running an anonymous social media account while working in the industry? And do you ever have weird situations where, like, you're sat in the office and someone brings up one of your memes? Yeah, yeah. You know, it's tough to get too, too granular on that. But, you know, I have a lot of people who I work with or I have worked with who follow the account, who like my stuff all the time, who are subscribed to my newsletter. So, you know, that's always, that's always interesting. And, you know, I think it's, I think it's humbling too. And, like, someone I looked up to at, like, an analyst level, who's, like, a little bit older than me, like, likes my stuff and, you know, says, oh, this is good or whatever.

Like, you know, that's, that's definitely humbling for me. But, but, yeah, you know, it is, it is a little challenging to try to navigate that, you know, especially when someone makes a joke and we're just kind of, like, wondering, oh, you know, I think, I'm pretty sure I made that joke. social media like a few days ago. High yield, Terry, that was so much fun. Thank you, yeah, thank you for coming on and letting us disguise your voice and sound like the Riddler or a robot. I actually don't know what it's going to turn out like, but I'm really looking forward to listening.

So thank you so much. Yeah, thanks for having you, Doug. Joe, that was so much fun. I have to ask, do you have a burner account? I have an alt. I've said it. Oh, yeah. It's where I post really controversial.

takes like my view on the Jones Act and work from home and return to office, things that, you know, really things that I would not want to be associated with publicly. I've often been tempted to start an anonymous alt, but I haven't done it. I am on Reddit anonymously, but I think that's like, that's pretty normal. That was really fun, though. I really enjoyed that conversation and just sort of like hearing about it from the insides, especially the fact that he's done both private and public credit. I thought it was really interesting this idea and that hadn't clicked to me before but it makes sense that private credit is more like IB skills investment banking skills and that public credit is probably just like more like

traditional analyst skills where you're looking at a balance sheet and you're like okay are they going to be able to make this payment and the idea like that is the the the different skill dimensions there not something that had really clicked to me before very much relationship building in private credit But I would just push back against that a little bit, which is like if you're syndicating deals in the public market, there is an element of that because you have to build the consortium and you have to talk to your potential investors. But yeah, absolutely. It feels more I be like. I also thought it was interesting what he was saying about some of the pressure on speeds of deals. So the idea that like, well, maybe a company is going to want to do a private credit deal because it's faster than talking to. a bank or the bank is taking too long to, you know, tick various risk management or regulatory boxes or whatever. It does feel like in business, there is like a real value to being able to like produce cash

at any time at any at a moment's notice. And it feels like, you know, it's like the rest of us, you know, plebs. So if we want to like buy a property, you know, it's like you go to a bank and you fill out hundreds of pages of paperwork and then you hear back and then maybe months later it gets approved whereas if you actually like want to do business if you actually like want to do deals in a real way you really need to have that relationship where it's like hey it's me joe hey tracy i need a million dollars because there's an opportunity to buy this self storage space on monday and you say yeah i know who you are joe uh here's the million dollars and if you have that

relationship that is incredibly valuable versus the person that sort of has to go the traditional route. Hey, Joe, I need a million dollars to buy a chain of self-storage units. No, I'm not lending it to Tracy. I don't know your track record and I think, and I think self-storage is overvalued. Okay, fair enough. Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast. You can follow me at Tracy Alloway. And I'm Joe Wisenthal. You can follow me at the stalwart. Follow our guest, High Yield Harry. He's at High Yield Harry. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashel Bennett at Dash. and Kel Brooks at Kel Brooks.

And thank you to our producer, Moses Ondom. For more Oddlots content, go to Bloomberg.com slash oddlots, where the blog, transcripts, and a newsletter. And you can chat with fellow listeners 24-7 in the Discord. Discord.org.g. slash oddlots. And if you enjoy Oddlots, if you want us to have Harry back on to talk about his comp survey, then please leave us a positive review on your favorite podcast platform.

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