caroline: from bloomberg's world headquarters in new york, i am caroline hyde. bloomberg has brought together some of the biggest names in finance at the invest will conference. our conversation is focusing on key issues driving investors, smart money, institutional money, how they can navigate an uncertain environment. we will have key themes from our guests. we will start with john rotors, the well-known investor telling me he is in value right now, he

is a key investor in the value change but you have been talking about asset management. romaine: we had a great discussion at -- discussion, anyone who wants a career in finance look at her. julian salsberry at goldman sachs, made conversations about spacs and whether they will be legitimate in the long run. >> we are not offering stock vehicles to our clients -- spac vehicles to our clients but they are investing. do you believe in the owners, the people who are raising the money, allocators of capital. it seems like there was a boom of spacs, but as a vehicle it's likely to be when that will be around for a long time. >> what we have seen in spacs is

how difficult it is for companies to go public and companies are more and more choosing to stay private. i don't necessarily think that is a good thing. until we get some alternatives, that excess return is being captured by institutions. at the moment, it is very clear that the public market ipo process is not as efficient or easy as people need it to be. >> the spac product or up or is a solution for companies. it was overly exploited in the early part of this year when there was too much euphoria around it. it is a useful solution for a seller of an asset, not only because they are able to get to the public markets but they are able to achieve greater secondary quiddity than is possible through a traditional listing. it is a useful solution, a useful product to have in the

market that was used to ferociously in the early part of this year, given some of the economics around those wrappers. that will lead to some companies going public that were not ready. there will be some disappointed's over the next few months and i think there will be a period of consolidation that will be healthy for the overall market. romaine: julian salisbury is at goldman sachs, david hunt at p jim -- pgim. they talked about a wide range of things. we did not touch on issues surrounding inflation, the growth value debate. caroline: growth value is where my conversation with john rogers went, amazing man. he set up investments in 24, and he has funds in these small and mid-cap space that is outperformed. romaine: those people make you

feel small. caroline: he was trading in stocks as a kid and was a growth man until he found the contrarian view. he went into value and at the moment this is that. talking about getting into banks, calming the inflation risk, take a listen to what he said. >> i think the s&p 500 that is so dominated large growth stocks is very expensive on a historic basis. i'm not surprised to see the most recent retreat and correction we have been going for -- through. but the small and mid-cap value sector is undervalued. there are a lot of bargains and orphans left for dead that no one cares about. it is a tale of two orchids, a large growth stocks are expensive but the undervalued small and midsized -- markets, a large growth stocks are expensive but the undervalued small and midsize markets two. --

we are always looking for stocks that are cheap, low price earning doubles on a historic asis, we want to find companies that are selling at a 40% discount to the private market value. caroline: he was talking about these orphans and said a good opportunity is manchester united, which a brit would not like to hear. but he was talking about opportunities in life events, madison square garden, some interesting stock picks. sonali: he hated some of the retail picks like crypto, names. but a huge retail pic that we've been talking about in the sidelines, that idea of value, we need to talk about valuations, carlisle ceo said he is not too worried about inflation but is concerned about the impact on rates and valuations. >> a little bit of inflation is

not the worst thing in the world and we are focused on it, but i am more worried about the impact on interest rates and valuation multiples. asset prices are incredibly high. you are seeing that for a bunch of factors, one of which is very low interest rates. and to the extent that transitory price pressure has become less transitory and gets built into inflation expectations and to the extent that through policy and other things you see rates start to back up or valuation multiples start to come down, you could see corrections. certainly china has gone through a bit of correction. we may be seeing a little now. but we are in the long term business. sonali: do you think now is a good time to be selling assets given where valuations are? >> we are seeing -- we are

putting more into industries we find attractive. the benefit of our platform, we are always selling, buying, but make no doubt about it, when valuations are high to the extent that we can in our per folio we will take advantage. sonali: we know that carlyle consists of the world's largest private equity fundraising so they are starting to put work in. they are ready to buy the dip. romaine: interesting speaking to these people. a lot of them talked about the idea of taking risk in an area where we may have an economy that i hate to use the s word that you used, stagflation, but more reasonable economic growth. we are starting to see prices rise and what does that do to asset allocation, and that framework, particularly when you are so use to framework where

you have the support. caroline: maybe it is what everyone takes them warren buffett and john rogers, it does not matter if you are a value or growth stock investor, you have to have a little greed when others are fearful. we will take that. sonali: this idea of classic valuation coming back in a market dominated by day traders and meme stocks for so long, but as the fed starts to taper, does reality start to hit harder? the stagflation or just this idea of a decelerating economy. romaine: taylor used to be my adversary on inflation, now it is stagflation, caroline, we are now adversaries. caroline: i like a debate. we won't make it personal though. we will break down the big scene from the global conference, nir kaissar.

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romaine: we have been talking about the bloomberg invest global conference. we will have the final day tomorrow. it focuses on everything driving institutional investment strategies. we will continue the conversation with nir kaissar, bloomberg opinion columnist joining us now. how do you locate assets in a world where everything is expensive, in a world where you may get some sense of normalization of monetary

policy, in a world where fiscal policy may aid or hinder the process? nir: i think it is tricky question in the first thing that has to happen is investors have to acknowledge it is going to be a lower -- going forward than in the past. if you look at u.s. assets in general, they are expensive. bonds, stocks, private assets. if you look at bonds around the world and credit in general around the world, the question is what you do? it makes sense to san going to diversify but the real danger is accepting not -- say i am going to diversify but the real danger is not -- if you lounge on expecting returns. you can take it or swing for the fences and i would encourage people not to do that. caroline: not to swing for the fences or go for the bright,

shiny object. something john rogers was saying, he is worried about certain areas, crypto, meme, he is finding value in some value stocks. where do you stand on the wood even is value debate? nir: i don't think it has to be that complicated. if you have your stock market on any traditional value measure, earnings, cash flow, price-to-book, we will find a big difference between the stocks that end up in the value kit in the growth stocks. it's not that value in the u.s. is particularly cheap, though it is outside the u.s.. it's that the valuation cap on however basis you want to do it is large between value and growth on historical terms. i think that cap is going to shrink because ultimately, i think it was created to begin

with on the back of earnings growth over the last decade. it was huge and unsustainable. sonali: this is interesting as you have so many private equity firms in the world pushing into growth, kkr, blackstone, carlyle. the old strategy, the warren buffett strategy they vote for so long may have worked better. what does that bode for private asset returns moving forward? nir: private assets are interest -- interesting because the value seems to be that the valuations are quite high. we don't have much data on private equity, going back to the 1990's, but the valuation is as high as you've ever seen. you can understand why people don't like the returns they are seeing from traditional assets and they are piling into private equity. as those valuations go higher, what is that going to do to returns? there is another thing about private equity that unlike the traditional -- you are

talking about a quarter of the sector, highly levered, and then combine that with high valuations and you have got a cocktail. romaine: i'm curious. talk a lot about valuations in the equity market and the public equity market. there has been a lot of talk there are bubble conditions in some corners of private equity right now. is there any way that investors can suss that out on their own given the information disadvantage we have with regards to what is in some of these funds? nir: it is very difficult because it is already opaque to begin with but the information is not widely available on private equity. there is no public markets in general. thankfully, -- i should not say that. i'm a big believer everyone should have access to private assets, but it was going to say because of the cases being with

they are in terms of security, a lot of people don't have access to private assets so it's not an option. we should open it to everyone and also opened the information. when we say something intelligent. but safe to say you have to access everywhere you look, private equity will accept it. caroline: talking about the film it the democratize asian -- the democratization. is that coming from retail, institution money? starting it? -- what is driving ti? -- it? nir: it is both. i think retail is there. i wish i had better data. retail has been in a big way the past couple of years. have a problem where you go. there's going to be balancing with the markets down so you

will have an automatic amount of assets. in this environment, you are going to take a lot of risk, a bumpy ride in stocks, you will get a three to 5% return over the next 10 years. you will probably say i don't like that but i like it better than 50 basis points in treasury. putting people in a situation where risk asset is rough. sonali: should we all be worried about our retirement funds at the end of the day? nir: i don't think so because what we are talking about is cyclical factors. most people are going to put their money away in investments for 30 or 40 years. you might not get the same returns got over the last century from u.s. stocks and other assets, but you are going to define and it is still the best bet. i would encourage people not to pay attention to the short-term but put money away for the long-term. a low-cost index if you can and it will serve you well. romaine: that was my next

question, we spoke to a lot of us of fund managers today and they extolled the virtues of active management. do you think a passive strategy over the long-term term is the winner? nir: it depends how long you look. my guess is if you look long enough, if we are talking about decades, that in general i think indexes attract the market and will do bad for the majority of people, and it will still be 80% of active managers. i do think the opportunities for equity in desk active managers -- active managers today is as good as it will ever be in our lifetime. i say that because of the gaps in the market and where i think you're going to have better opportunities in some corners than others. a good active manager will sharpen his or her -- and give you exposure. that will pay off in the next five to 10 years. for most investors, they are

looking at very long periods and i think ultimately the broad market index will be as good as any. caroline: thank you so much, great analysis. we are going to dig in or deeply in terms of what the volatility is at the moment for new entrants. we are talking about whether some of these ipos are getting put to one side. this is bloomberg. ♪

caroline: today wecaroline: are focused we learned from the bloomberg invest global conference. what is being said about the current investment climate is a trend we keep seeing for more ipos being pulled back. our returning cautious and facing choppy markets? you have been keeping an eye on this. should we get cinelli -- sonali

on her vix? sonali: i love the vix but it is ipos. there is a big pipeline in october. joining us now is crystal who covers ipos for bloomberg, what are you worried about? this is what you follow all day. >> it is. we have seen pullback globally in asia and europe. there are ipos that are not pricing or delaying the deal, but we are also seeing deals coming forward. so the activity is not as strong. -- bake off activity is not as strong. caroline: i love that you worked in bake-off. romaine: at some point they usually come back to the table pretty quickly once market conditions improve. is there a general sense that

the longer-term outlook for a lot of these deals is intact? >> the pipeline is still very strong. the deals that have filed and the companies that have hired banks, there are so many, we need more than the remaining quarter to go through. we are seeing some deals facing challenges, but there are even bigger deals that are still in the market waiting for investors. we are still seeing activity. it is probably like pullback on valuation. caroline: you are going to get your deal done if you're committed. are you having to reduce what you previously put on? >> the discussion with investors is more difficult, they are getting more selective and they are tough on valuation. that has been true the last few months. there are aspects that still do well. if you are a tech company,

health care is doing extremely well. some sectors within consumer like olaplex haircare products have done well. caroline: olaplex went public? i was too busy using it in my hair. romaine: i had never heard of them and now i see it everywhere. sonali: they are everywhere. >> they are saying hair is a revolution. you are expressing yourself and there is so much you can do. moisturizers, romaine: how is wework doing? >> they are still going through a deal. and the valuation has come down. romaine: they were a revolution, now it is hair. caroline: now it is where people go to work. crystal tse, always fun.

romaine: we need a whole 30 minutes of just her on the british bake-off. caroline: don't try to tell me there's correlation, but we do know the british are good at baked goods and pottery according to remain -- romaine. sonali: one thing we did knock it to talk about was this great interview crystal had with betsy:, -- betsy cohen, about spacs. romaine: i saw that interview and i talked with people during the conference. they made it clear if clients want something they will find a way to accommodate them. sonali: at the end of the day. caroline: people aren't liking crypto.

while the rest of the world did. sonali: 55,000. a rally. caroline: bloomberg technology might talk about crypto it is coming up next. romaine: have a great evening. this is bloomberg. ♪ (announcer) back pain hurts,

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