Thank you so much. It's a real privilege to be there virtually, and I'm sorry I can't be there in person. As promised, we're going to talk about private markets and, in particular, we're going to focus on a subset of private markets that is, certainly, among the areas that are getting the most attention and excitement; which is private debt. If we can go to the next slide. We'll talk a little bit about how much it's grown. We'll talk a little bit about how well it's done since that's a natural question that follows. We'll talk a little bit about, what it gets you, in particular, about some of the risk-reward trade-offs. Finally, we will talk a little bit about what the future looks like, in particular, given this kind of relatively new interest rate and other kinds of macro uncertainties, what the implications of that for private debt are. With that, let's move forward. We'll start with just simply what's happened. Next slide, please. One thing that is clear is that this has got an enormous amount of attention, right? Whether one looks at measures and metrics like the number of funds raised, the kind of commitments made by recent institutions, the headlines and financial newspapers or the like, it's clear that this is an area of much attention. I think it's also a case that this is an area where the real world has, once again, outstripped academia; in the sense that while you can look and see hundreds of papers prepared in the last six months about venture this and buyout that; the research in terms of private debt is really just a handful. What we tried to do here is really glean from both academic and practitioner perspectives, what we can say intelligently about private debt and where it's going and particularly how it's likely to change. Next slide, please. Just to step back for just one second given the esoteric nature of some of the private market stuff. Private debt is exactly what it sounds like, which is namely that it's providing, to either public or private companies, loans. In many cases, this is something that's associated with transactions. It can be used, for instance, in lieu of bank debt to finance a buyout or other kind of transactions. The main difference, of course, between private debt and bank debt is that essentially it's being done through a fund structure with the classic LPGP relationship typically on the order of a ten-year fund life and with somewhat lower fees and carry than would characterise your classic kind of VC or buyout fund. Again, then having deployed the money over the first few years, there's the usual expectation that the general partners will return them, turn the capital subsequently. Next slide, please. In some sense, this is typically linked to or put in the same basket for general, for institutional investors with other things that have an LPGP structure and, in particular, would - typically alongside buyout and venture funds. It's worth highlighting that there are some real differences, aside from the fact that venture and buyout funds are doing equity investments and these are doing debt. Certainly, when we think about some of the hallmarks of private equity investing, we think about the increasing importance of industry specialisation, operational improvements, and a lot of management of companies; both in terms of what they're doing with the business, but also then in terms of the timing of the exits. Here, it's typically much more of a broad brush in terms of where these investors are putting their money, often much less involvement with these companies. Of course, where there's less dependence on the big bang of an acquisition or an IPO because one's getting interest payments and even, in some cases, principal repayments as one goes along. Next slide, please. This is essentially one picture, which is perhaps a little bit misleading but, nonetheless, at least helpful in terms of saying how much private debt has grown in terms of fundraising. Unsurprisingly, the basic pattern is one where it started relatively modestly, and then we saw this acceleration, particularly after the global financial crisis, but particularly in the years around the COVID period with somewhat of a stepping down afterwards. It's worth highlighting that this is just the amount raised in formal funds. We've seen, for instance, a number of banks, setting up private debt funds often with substantial of their own commitments to it, which are not fully going to be reflected in these numbers and mask... This chart, in some sense, masks the growth of the private debt. The one thing that's clear is this has become a real leg alongside - if we think of the main legs of private capital being equity, buyouts, growth and venture, this has really become a 4^th leg that we can see there. Perhaps we'd nominate infrastructure funds as another example, as well. Please move forward. Now, I think it's pretty obvious where the drivers in terms of this have been and, certainly, the biggest one we could point to really dates back to the GFC. In particular, we know that - not only in the US and EU - but probably more generally globally, there was a push to really try to rein in the banks, given some of the somewhat naughty behaviour that we saw manifested prior to the GFC; and that this has imposed all sorts of costs in terms of the ability of banks to do lending, particularly on the riskier side. Then, in some sense, created an opening for essentially non-bank banks - for people who are playing the function of banks, but without being subject to the kind of regulation that the banks are… And you can say, is that a regulatory arbitrage? Not really, right, because in a way always our concern about banks is that essentially if a relative - due to their highly leveraged structure, if a few loans go bad, we can get this unravelling effect taking place, in theory, private debt funds are going to have much less of this issue; even though, as we know, many of them will also use leverage themselves, which is an issue we'll come back to a little bit later on. Next slide, please. The other thing that - at least over the course of the decade of the 2010s and early 2020s - was really a driver in creating the legitimacy of this asset class was really the phenomenon of just super-low interest rates. We know that one of the typical responses of investors, particularly institutional investors, during periods of extremely low interest rates is to essentially reach for yield, to try to figure out other ways to get returns; even if it means taking on somewhat greater risks. Certainly, during this period, private debt looked attractive as saying, 'These are seemingly relatively low default rates, but attractive returns.' Certainly, far more so than, for instance, corporate bonds where bonds were offering… Now, I think, those of us who are on a little more cynical side say, 'Well, there's not a free lunch,' but we'll come back to that in a moment. Next slide, please. Even today where, obviously, the alternatives in terms of getting yield from traditional products - whether Treasury bonds or corporate issues or alike - are much more robust, we continue to see a strong exposure to private debt, as this chart shows. Probably most dramatic in terms of the insurers, but we see pretty much across the board - with the possible exception of the sovereigns - this really substantial increase, a continuing increase, in the allocations to private debt. Again, with insurers being the largest piece of it, at least in part because they historically have played a role here. Next slide, please. When you look at where people are today, it seems that still there is a substantial momentum, even in today's higher interest-rate environment for private debt. This is essentially a relatively recent survey that was done in terms of a wide class of pensions, foundations and others in asking them, 'Are you over/under or just right in terms of your allocation to private debt?' Pretty much across the board the yellow, or the under-allocation, was the consistently most common response. This really begs a question though which is, 'Is private debt a fad? Is this something that's a flash in the pan or is there really a compelling case that can be made for it, given the seeming interest that we see here, really across all kinds of institutions?' With that, can we jump forward to one more slide? So, in a way, the at least initial question we'd really want to ask is, 'Has this thing has this thing really delivered?' In particular, over the last 15 years, or 20 years, do we see evidence that private debt has performed in a satisfactory manner? Here we dig into the State Street database, which really goes back a couple of decades to what's probably the dawn of the modern private debt industry and say, 'What can we see in terms of the returns?' We can take the next slide. The basic answer, if we compare it to venture and buyouts, is that returns have been attractive, but certainly not as attractive as venture and buyout funds in general. Here the private debt is the yellow, and what we see is perhaps a not unfamiliar story that during the very early days of private debt, one had exceedingly high returns rivalling that of buyout funds. When you look over the bulk of the 2010s, as the influx of money came in, returns came down substantially; certainly below that of what we saw in terms of venture and buyout funds, though still, at first glance, certainly looking attractive in the running somewhere on the order of 10 per cent per annum. Now, you might still ask, 'How do we think about that?' One thing we might say is, 'Well, isn't debt less risky than equity? As such, the expected returns would be lower,' which, of course, brings us to our next slide. One thing we do see is assessing risk is not without its challenges, but one way you can look at that is to look at dispersions. Here we took those same three lines that we saw in the previous chart: the buyout returns, the venture returns, and the private debt returns again in yellow. As we see, at least over the course of the last decade, the private debt returns have been lower. When we look at the bands which represent the difference between the 75^th percentile and the 25^th percentile - as opposed to the median, which is the line - what we see is immediately present, you can immediately see with the naked eye, that the bands are tighter for the private debt. Put another way, one of the defining characteristics of venture and buyout funds is this enormous dispersion across managers that, while by and large, venture and buyout have been attractive if you get saddled with the wrong manager, things are not nearly as nice as they might be. Unlike in public markets - where often much of the evidence suggests that the best performers are the ones which charge the lowest fees presumably because there's so much bunching in terms of the performance - here we, essentially, see that the dispersion across managers is much smaller, which we might interpret as being consistent with the notion of saying, 'This is an investment that has much less risk.' That we know that if you set out into the venture game and just head to Silicon Valley and just give random funds to the first half dozen venture investors that you meet, it's unlikely to end with a happy story. Here the element of manager selection is relatively more modest, which suggests that the confidence with which you can approach it is potentially higher. Next slide, please. Another way to capture this is to look at the relationship between the standard deviations of an index of private debt on the one hand, and that of venture and buyout funds on the other, and compare it to the annualised returns. Now, I think we should probably caveat going in that our ability to really measure the risk - particularly as measured by standard deviation or correlations when it comes to these private investments - is limited because of what we often call the Stale Pricing Problem, which is something that us private equity nerds like to talk about at great length. Probably don't need to inflict it on you, but we know that, essentially, the market-to-market process is often relatively leisurely in these industries. When we look at this, we see something that's very consistent with our intuition, which is that, yes, private debt does have lower returns - somewhat lower returns than venture and buyout - but when you look at the annualised standard deviation of those returns, it's also substantially lower, right? We essentially have a lower-volatility investment, even though it comes at the cost of somewhat lower returns. Next slide, please. Another way we can make the case that private debt is less risky than private equity is to look at how certain you are in terms of getting your money back and how speedily you do so. What we did here is we looked at different vintages of funds - so different years the funds were started - and we contrasted traditional VC and buyout funds, which are in the light blue, with those of private debt in the dark blue. we looked at the ratio of how much money had been returned to the investors relative to the stated value. We know that one of the frustrations of limited partners and funds is cases where you have groups that have very high stated TVPIs. In other words, where they say we've created a lot of value. This is something we see today, for instance, with a lot of the Chinese funds, but where they're distributed to paid-in; so, in other words, how much money they've actually returned to the investors is tiny. In those instances, often, there's a little bit of eyebrows raised, or concerns raised, saying, 'How much of this value is really there or is illusionary?' What we see here is that really, across all the vintages - and particularly striking for the younger vintages - is that one sees that the private debt funds are much better at getting money back to the investors than the VC and PE. Now that, in some sense, is not surprising because they're getting interest payments from day one. If you invest in a venture fund, you really have to wait till an IPO or some sort of acquisition or some secondary sale to get a liquidity event. As a result, it has the benefit of not only having less risk but also of being more rapid in terms of returning of the funds. Next slide, please. Another way one could think about this is essentially to say, 'It's unfair to compare private debt to private debt to venture and buyouts.' I mean, even though they're often in the same buckets, what you should really be looking at is other debt instruments. One way you can do this is to say, 'Let's calculate what us finance people call Public Market Equivalent.' In other words, saying, 'How much would you have made had you gone and invested in private debt, as opposed to putting in money at exactly the same times and getting it back at the same times with essentially a public debt index?' Essentially bigger than 1 means when outperforms less than 1 means that one underperforms, and when you look across the vintage years since the GFC, what one sees is that one PME of around 1.3. Another way to say that is that essentially it does 30 per cent higher returns than what it would do in an aggregate bond fund. Again, viewed this way, consistent outperformance at least relative to what might be the most apples-to-apples comparison of essentially private debt to bonds. Next slide. Certainly, viewing this as an alternative - not necessarily to VC or PE - because it does have both different risk and reward perspectives, it does seem to have certainly an attractive alternative in terms of fixed income. Next slide. I'm now going to diverge very briefly into a little bit on portfolio construction. This is the kind of stuff that us finance nerds love, but most of the world starts glazing over when we get too far into this. What we tried to do is at least do a few illustrative calculations to highlight how private debt can fit in and enhance a portfolio. The next slide shows one way that we thought about it. If we go to the next slide, please. Which is to say, let's just think about a setting where one is simply holding stocks and bonds and then layers in more or less levels of private debt. So, ignoring the fact that - essentially starting with your classic kind of 60/40 portfolio and then saying, 'Let's put in some - and ultimately an absurd level of private debt in there and see what is it that happens to the performance of the portfolio as a whole?' Again, I think we regard these more as illustrative calculations, but it does suggest some of the power here. Next slide, please. Here you get something where you say, 'Wow.' What you're basically seeing is that as you add in private debt - and here we added up to 50 per cent and beyond, which is of course a little extreme - what we see is that, again, based on historical return numbers, not only are we getting higher returns relative to the 60/40 portfolio, but we're also getting lower standard deviation. It looks and feels a lot like your proverbial free lunch until one reaches some sort of crossing point where the riskiness of the portfolio increases. Now, we might say, 'That's a little absurd. We know that pretty much all institutions are going to have some element of VC or PE there.' So, if we go to the next slide, we can look at how what happens if you already have essentially holdings in VC and in buyouts. So, we put a 10 per cent slice in each and then add in private debt. We get some of the same phenomenon taking place, which is to say that as you add in some degree of private debt, it ends up essentially reducing the standard deviation of the portfolio and increasing the returns. Of course, it's much less dramatic since it already is largely correlated with the private equity portfolio, as well. You still see some benefits, though not as the extreme case you did, where you're just adding in private debt in lieu of stocks and bonds. Again, I think viewed this way, it again makes the case that this can be a potentially attractive investment. Next slide, please. As we look at these correlations, it can give us some clues that's here, and if we go to the next slide. We can look and see how private debt is correlated with other asset classes. One thing that was somewhat surprising to us is that - while we might think this is essentially really a debt-type instrument - we still see quite strong correlations with buyout investments in particular. When we think about why that may be, again, much of it may lie in the fact that many of the private debt loans are basically going to leverage transactions being arranged by financial sponsors and others. As a result, there is some degree of linkage there in a way that may not be super intuitive. Next slide, please. I think to just wrap up this section, we can say, 'Well, both the historical return numbers, as well as the correlation analysis, seems to paint a pretty positive view of private debt,' but we immediately have a caveat, which is this is essentially backward-looking. 'How do we think about the future?' is, of course, something where us professors who are great at looking in the rearview mirror, but not so great in looking in the future struggle with. I guess if we were good and looking forward, we wouldn't be professors. With that caveat, I will plunge in, at least talk about some of the arguments for or against private debt going forward. Next slide, please. I think one thing that we should really highlight is that even though we said that the divergence across managers is less in private debt versus venture capital and private equity, it's still substantial; and that, certainly, anyone who is doing an investment program relative to the stocks and bonds world has to make a substantial effort to really understand who the managers are, what their track records are, and what the likelihood of persistence is. Then, in some sense, I think we're so programmed from a public market side to say, 'Really, asset allocation is the thing,' that we need to step back and remind ourselves that manager selection is likely to be a very important consideration here. Next slide, please. I think probably the most obvious question that we might want to ask is, 'How is the dynamics in terms of interest rates?' In particular, those of us who believe that the rise in terms of interest rates is not, and will not, be a short-term blip, but will be more a fundamental set of issues, how is this likely to affect the attractiveness of private debt? I think on the negative side of the ledger, it's easy to see at least a couple of considerations; the first of which is that, reaching for yield is in some sense a phenomenon that's most dramatic in periods of depressed interest rates. It may well be that as we go forward if we have high interest rates continuing, the pressure to essentially go for more enhanced yields than traditional bond offerings will ease. We were just talking today to one of the US State Pension Fund managers who's basically evaluated on a scorecard, which doesn't essentially change with the rate of inflation or interest rates. He's delighted because he's like, 'I can basically satisfy my State Treasurer by essentially just moving to substantially less risky investments and still hit the bogey or the target in terms of the return I need.' A second side, of course, is on the ultimate credit side. In many senses, who are private debt people lending to? Well, most of them are, in some sense, people that either are on the riskier end of the bank-lending spectrum or can't get access to bank lending, at all. We know, at least historically, during periods when interest rates have risen sharply, that we often see those people struggling to repay the loans. As we'll talk about, one of the attractive aspects of private debt is that these are typically done at variable rate rather than fixed rate, so there's the ability to reset the interest rates. Essentially, if your borrower didn't anticipate interest rates going up and is unable to repay you, your ability to charge a higher interest rate doesn't really solve your problems or allow one to adjust successfully. Next slide, please. At least if that bad thing doesn't happen - in other words, that your clients don't fail to repay you or default on loans - then essentially, you're in great shape, right? The reset process or the floating rate process of private debt means that you're hedged in a way that, for instance, as a bondholder, one wouldn't necessarily be. It gives a kind of flexibility in an era of uncertain interest rates that can be much more attractive, certainly, than if you had gone and bought a hundred-year Austrian bond and a very modest coupon and are now looking at having lost 75 per cent of your value or the like. Next slide, please. In a way, we really can think that this is an area where there are several things in the favour of doing this, doing these kinds of investments, continuing to invest there. We might think that, in a higher interest rate environment, the demand is likely to be strong, that banks will engage more in capital rationing and, as a result, the private debt will be able to have more high-quality lenders who are in interested in borrowing from them; particularly, in an environment where equity markets are highly volatile. Again, firms may be reluctant to go and issue new shares due to the delay associated with the securities/the equity issuance process, and the danger that there might be a negative shock afterwards and a large block of disenfranchised or unhappy shareholders. In many cases, again, in those kinds of volatile settings, people are likely to turn to debt. All this might suggest that private debt isn't going to disappear anytime soon. On the other hand, if we go to the next slide, let's make one other point that this is not just simply a US phenomenon, right? That, when you look at this by region - even though certainly there has been a lot of this stuff in North America - one sees a very substantial presence in Europe. Certainly, the research is less on private debt in Europe, but it's just, again, quite a positive performance there as well. Going to the next slide. However, we also need to have a kind of degree of humility about this area. In particular, it's worth emphasising that private capital, in general, is a pretty young asset class, right? When we think about stocks and bonds, they have been traded for centuries, if not millennia. We pretty much know how they perform under almost any macroeconomic condition known to man. If we think about venture capital and private equity, these are really phenomena of the 1980s. As a result, we've not really seen them tested in a high-inflation environment, until today. We might even think that the experience with private debt, given that we just simply have two decades of the modern private debt industry, we have to approach with a little greater scepticism than even VC and PE. In particular, we know that there have been a lot of financial innovations in history which have come and been the new thing and been very attractive - and attracted a lot of interest - and then, essentially, died an ignominious death. We can think about certainly some of the more esoteric mortgage-backed securities that proliferated right before the global financial crisis. For those of us who are old enough to remember it, we can think about portfolio insurance that did great in the 1980s until the 1987 crash and then disappeared. We can also think about something which is perhaps even closer to home, which is this notion of mezzanine debt - which looks and feels a lot like private credit in some respects - which was very popular in the 1980s; then, with the abrupt downturn in the private equity markets in the late 80s and early 90s, essentially disappeared. in a way, we have to approach this as well with a grain of scepticism, saying that while private debt has certainly performed well based on the evidence we've seen over the last 15 years, this is by no means guaranteed. Not all financial innovations that seem to come out of the gate really strongly continue to do so. Can I have a next slide, please? In a way, I end up with the proverbial half-empty glass that, on the one hand, we certainly have great historical performance relative to reasonable benchmarks. We see a case for diversification and we see an intellectual case for why this may be playing a role as really an alternative to alternative bond offerings. Certainly, from a portfolio design perspective, one can see a compelling case for doing so. Next slide, but at the same time there are certainly some reasons for caution and that, I'm afraid is the stock of our knowledge at the moment. However, hopefully, this chance to review the evidence will be helpful for those of you who are considering this as part of your portfolios or indeed are already in in these markets. With that, let me bring my formal remarks to the end, and hopefully we'll have time for a question or two.

We do. Josh, thank you very much. We've got four minutes for questions. I'm happy to take any from the room. I've got one on the iPad to start off with. Okay, let me take the iPad one first. You made a good defence there for private debt, particularly in Europe. Any comments about the impact that ESG regulation might have and transparency in particular in the trend towards private markets, which by definition are a bit more opaque?

Well, this is a huge and quite substantial issue which is that, in some sense, we know that we've seen in the public markets an enormous amount of efforts to improve reporting around things from climate impacts to, more recently, biodiversity and other areas there; perhaps not perfect, and we can certainly think about critiques that have been offered for public companies for engaging in greenwashing or excessively optimistic presentations of their impacts. We know that this has largely been something which has been addressed in a thoughtful and systematic manner. When it comes to private markets, we're at a much earlier stage here and, in particular, what we see really across both the US and Europe is that by and large, there is very little systematic approach to reporting social impact, or environmental impact for that matter. That's certainly true for the buyout funds, per se, but it's probably even more severe in a context like private debt, given that these are often bigger portfolios with less engagement on the part of the debt providers with the portfolio companies. As a result, when seeing either very limited reporting or else somewhat problematic reporting where there's been an element of essentially cherry-picking which numbers are really the most favourable. Now, I think one way to view this is saying, 'Oh, private markets are terrible; they're not taking these issues seriously.' I think a more optimistic view is that, again, to say, 'This is a younger industry and there's going to be substantial opportunities going forward to address some of these key areas where there are still real reporting problems,' and that we'll see both third-party entrepreneurs as well as incumbent rating agencies and others stepping in to try to provide the more of a systematic framework for addressing some of these issues.

Great. Thank you, Josh. Any final ones from the floor? No. Okay, well, there you go, Josh. Thank you very much.

Thank you for the chance to talk. Really appreciate it.