00:00And now B Capital is blurring those lines even further, buying asset manager Russell Investments
00:05in a $2.8 billion deal that they framed also as a bet on AI. Joining us now is Bloomberg's
00:12Silla Brush, who covers the asset management industry. And when I had spoken to Raj,
00:17he basically was like, watch this space. We might want to grow. We might want to invest in more
00:22things. So they framed it as like AI helping for asset management. What does buying them and
00:28CalPERS, which we should get into, too, while CalPERS is part of this. But what does buying Russell
00:31Investments help them do? Yeah, I mean, I think this is an interesting deal. There's been a lot of change
00:35in the asset management industry. There have been a lot of M&A deals. Sometimes these are about literally
00:40just gathering assets, sometimes about building in a new capability, alternative assets, most clearly
00:46recently. This is kind of a different kind of deal. And it's about sort of using technology to hit more
00:55clients and maybe more individual clients, more financial advisors in a, you know, sort of a more
01:01aggressive way going forward. I think it's a reflection of firms in the industry. Russell sort of
01:08seeing technology change very rapidly and trying to, you know, you know, get on board with it.
01:14What kind of an agglomeration is this, though? You have B Capital and then CalPERS and presumably some
01:19others as well involved. So I think, you know, the points that they've emphasized is this is sort of a
01:23long
01:24term investment. It's not a, you know, couple year sort of lock up here and get out. And that's, you
01:31know, I think that's kind of, you know, CalPERS is, of course, the biggest U.S. public pension
01:35investor. B Capital is a tech investor, most notably original sort of OG group of Facebook. I think
01:43that's it's an interesting group of investors. And what they've emphasized is the kind of like the longer
01:48term nature of the deal. You know, this asset management industry so well. And, you know,
01:53we're in this period where, as you talk about and report about that, there has been a lot of
01:57consolidation. Just how difficult is that consolidation? Because, again, as you know
02:02better than anyone, this is an industry that has a lot of egos and marriages can be tough and divorce
02:07is expensive. Very. I think there's a lot of consolidation. There are a lot of M&A deals.
02:12Sometimes they just simply don't work out in the long term. People leave, you know, the plans to
02:18gather more assets don't really can fizzle. So I think increasingly the deals have been about
02:26building out capabilities or trying to target a part of the market that a firm hasn't been in
02:30traditionally or hasn't been at scale in. And, you know, I think that's in the last couple of years
02:35we've seen many deals. But I think almost every firm in the industry, whether small all the way up
02:48move or be left behind in either a specific part of the market or maybe the market overall.
02:54Yeah. B Capital and the group, obviously, emphasizing the AI elements to all of this. But is there
02:58also an idea of maybe having more permanent capital or being able to do something with the money that
03:04Russell is taking in? I think we'll have to see on that. That was not, you know, that is not
03:07explicit on
03:08that. I think one point that might be worth emphasizing is that Russell's a bit of a different kind of
03:12firm.
03:13They specialize in a part of the market that does a lot of sort of advice and deals for a
03:19whole
03:19portfolio, a broader portfolio. There are other firms that do this in the market. They're one of
03:23the larger firms that do this. And they kind of they sort of handle outsourced mandates from a big
03:30client to sort of assess the entire portfolio. And then they kind of advise on maybe use some of the
03:37internal funds at Russell, maybe use some external funds. And that kind of blending of internal and
03:41external is is a relatively specific part of the market.
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