Law, Policy & Markets
Law, Policy & Markets
2025: "It’s Tough to Make Predictions, Especially About the Future.”
In this episode, host Allan Marks and Milbank partners Erwin Dweck, Apostolos Gkoutzinis, Fiona Schaeffer and John Williams forecast what’s in store for markets and policy in 2025 in the US, Europe and globally. They also share what they are reading now, recommending surprisingly diverse and wide-ranging books.
About the Speakers
Erwin Dweck is a partner in the New York office of Milbank LLP, the Practice Group Leader of the firm’s Real Estate Group and a member of the firm’s Global Executive Committee. Read More
Apostolos Gkoutzinis is a market-leading international corporate finance and securities lawyer and a partner in the firm’s European Leveraged Finance/Capital Markets group in London. Read More
Fiona Schaeffer is a member of the firm's Litigation & Arbitration Group and an international antitrust lawyer with over 25 years of experience practicing on both sides of the Atlantic. Read More
John Williams leads the Derivatives practice at Milbank globally and is a member of the firm’s Alternative Investment Practice. Read More
Allan Marks is one of the world's leading project finance lawyers. He has advised developers, investors, lenders, and underwriters in the development and financing of complex energy and infrastructure projects around the world, as well as acquisitions, restructurings and capital markets transactions. He is a Senior Fellow at Columbia University’s Center on Sustainable Investment and teaches law at both the University of California, Berkeley and UCLA. Read More
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Disclaimer
Okay, we're recording. I'm going to say to Fiona hang on a second, no problem, join us at 3.15. Okay, chrissy, I just told Fiona, 3.15 is fine, okay, okay. So, irwin, this is stuff. We'll go at the end, so I'll. I'll ask you now and we'll talk about the books and that kind of stuff. So, irwin, what books are on your bookshelf for?
Speaker 2:a nightstand. In the middle of reading two books right now, alan um complete opposite ends of the spectrum. One is John Meacham's book, the Soul of Our Nation, or the Soul of the Nation, which is sort of timely and interesting in light of our current political environment, and the other one, strangely, is this brand new translation of Maimonides' Guide to the Perplexed. Oh, who translated it this time Len Goodman, and it's the first translation from the Arabic to the English and not indirectly through the Hebrew.
Speaker 1:Oh good. Which is which is an amazing, just an amazing way to really access that I don't know if you're far enough into it to know, but how different is it from the other? You know other translations that people who speak English might be more familiar with if they've read Maimonides.
Speaker 2:So there was an attempt here to translate it in a way that was less technical from the Arabic or through the Hebrew, and so it's meant to be a bit more accessible. I would say I haven't read a lot of the older English translations, but it seems like it's a much easier read, it's a much more accessible read, but I suspect you're probably losing a little bit of the nuance in the way that it's delivered that way, because Maimonides intended this book to be read and studied over and over again, and so there was a lot of nuance, and in the introduction to the book he talks about its accessibility and how it could or would be accessible or made accessible to its readers, and I suspect in trying to make it very accessible through the English, you're probably losing some of the nuance and some of the messaging that he was trying to achieve through the original text.
Speaker 1:Yeah, and it's actually interesting. He's so, on one, on one level he's he's complicated right, because he's looking at really deep things, but on the other hand, he's actually, compared to a lot of his contemporaries, really clear and direct. I mean, he was a physician, he was, you know, he wasn't just some abstract philosopher. I mean, he really tried to tie things down to well, how should you do this and what is practical. In order to be less perplexed after you've read it, one hopes where you go and have children delivered.
Speaker 2:But when you think about, you know, a thousand years ago this guy, who was a refugee, was a doctor, was a philosopher, was familiar with not just Greek or Aristotelian philosophy but also the Islamic philosophers of his day, somebody who had written very legal texts in Jewish law, someone who was the head of a community, someone whose full-time job was being a court physician. And you think about writing a treatise like this just trying to get his arms around or to teach other people how to get your arms around, how you reconcile what was then modernity, what is now modernity, with faith, with not just faith, but just just how you kind of understand one's place in the world, irrespective of your faith in a lot of ways. And so I kind of look at, I look at him and, by the way, the irony of it is, if you actually look at a lot of his philosophical writing, some of them you would you would think were even barbaric at the time. Just you know, for instance, his treatment of women was something that I don't think anybody today would kind of feel comfortable getting around. But he was a man who lived in a very particular time and a very particular locale. Right At the time he was writing this, he was living in Cairo. Yeah, had he moved there from what's now Spain, from Southern Spain? Yes, so just an incredible. I mean I love it, it's just an incredible work I think resonates a thousand years later still, and so that one's definitely that one's not. You know, that's not easy reading. I think I try and look at that from a from a studying perspective.
Speaker 2:They're thinking about Meacham's book on the soul of America. You know, when he had written it he was coming off of Trump 45. And a lot of it. It seems a lot more unclear to me where his views would land today. What is the better angels in our current political environment? Not to bring it back to Maimonides, but what is the idolatry of our current environment? And a lot of those things aren't as clear to him, I think, as they would have been two or three years ago. Clear to him, I think, as they would have been two or three years ago the place of xenophobia, the place of wokeness, the place of, you know, on one side the right, on one side the left. How does this compare to McCarthy era? How does this compare to the interwar period and reconstruction? And when we talk about the political challenges we have as a divided country. I I just think when he wrote it it it kind of has a different feel to it than as I'm reading it today, a couple of years later, which is, I think that's probably right.
Speaker 1:I mean people say, oh gee, we were so polarized, now it's the worst it's ever been. It is bad, but it is certainly different than the 19th century. We had a civil war and in fact even if you go back before that, when the Constitution was written at the end of the 1700s, we were also. You can kind of see within it the fissures, fossilized between urban and rural and between native and immigrant and between enslaved and exploiting, and you know, whatever language one wants to wrap around it, you can see the gaps in society that are kind of crystallized in that Constitution and the fact that we somehow have managed to use that same document as the basis for what is fundamentally a very different sort of world. Now, two centuries later, I think the jury's out on where we're going next. I'm interested in your take, but reading Beecham and others like that again probably puts it in a different lens.
Speaker 2:Yeah, I don't know where we're going To tie it to Maimonides, perhaps. I like the idea of what I'll call interfaith dialogue and the search for common ground, and interfaith in that setting clearly doesn't mean religious interfaith, but it means left-right political interfaith dialogue. You know, I don't know. I don't know that this political environment is any better or worse than it has been. Certainly, things like social media and Twitter and X and Elon Musk can exacerbate or accelerate some of these processes. You know, you read historically about the amount of time it took for information to disseminate. Just a really, really different the role of media in disseminating that information. I think you start. I think, when Meacham talks about McCarthyism, he's talking about the role that the media plays in disseminating information. At the time and people were starting to think and starting to see that actually the media can play a really important positive or negative, depending on your view role in how that information gets disseminated and how to couch that language and how to couch that information.
Speaker 2:At some point you can unstrip everything through Twitter and not have any ability to kind of focus the dialogue or even fact-check the dialogue, or even fact check the dialogue, whatever fact check means in 2024 or 2025.
Speaker 1:Well, there are still facts, there are. We lose sight of that sometimes, but it's interesting because if you look at like I want to tie that together for a second, because you have this medieval reference that you mentioned with Maimonides and a few centuries, four centuries after him, right, we get cheap paper, cheap printing and the print and movable type for the printing press and suddenly there's this media explosion and how-to books and religious books and everything are just printed and disseminated and we have other media revolutions over time. I mean it's just in the last century we've had radio and before that, telegraph and we've had television and the idea of those later media sources is that they were intermediated, right, this whole thing. Like you know, the medium is the message We've got. You know who is the editor, who is it that's doing it, and relatively few options. So it's mass media and everybody's following it In some ways, if you will.
Speaker 1:The disintegration, the use of social media platforms and other ways of communicating to mass audiences that are then fragmented and siloed and often in echo chambers, without that intermedium editor, is much more like that original explosion that we had a thousand years ago. It's kind of an interesting take on it and I'm not saying it's a good one, because I do think there's real value to the curated, edited, fact-checked. It can have a position, it can have a point of view, for sure, but I do think there's a real role for that.
Speaker 2:Yeah, I don't disagree. I guess the challenge would be is how you bring that back into, how you put guardrails or you bring that back into some semblance of discernibility, just given the wide, the ability that it has to kind of widely distribute and then throw in algorithms and all that sort of thing where you can just accelerate voices that should not have otherwise be accelerated.
Speaker 1:As you're thinking that you know, the voice that should be accelerated is the one that like fill in the blank, I mean, obviously, if I have a medical problem, I might go to a doctor. If I have a problem with you know, if I have a legal transaction that I want to, you know undertake and I need a commercial real estate lawyer, I might come to you. Right, I might go to somebody who actually knows their stuff. I'm unlikely to want to just go down to the wrong person. If I need a you know a car repair, I go to the mechanic. I don't go to, you know, the doctor.
Speaker 2:You know, to stay with the law analogy, you know sometimes we tell our clients that if they're going through a workout it's much better to go to a different law firm that has a different point of view, because there won't necessarily be a defensiveness to the reaction and to the feedback that you get and you're able to get a thoughtful and intelligent view on your documents.
Speaker 2:Now, that's not always the case. It sometimes is the case. There's sometimes a competitive law firm that may have an incentive to make you look bad. It may not, but what I wouldn't recommend them doing is going to a solo practitioner who does residential closings in the suburbs of Boise, Idaho, and say can you look at the commercial real estate documents that Milbank drafted up and give me a critical eye? But if we take this analogy of Twitter and X to its logical extreme, if that resi lawyer in Boise, Idaho is able to have the most fanciful language and a very, very quick wit, it may be that that voice gets, whatever the right term is accelerated in a way that is not helpful for anybody.
Speaker 2:Amplified.
Speaker 3:Amplified.
Speaker 2:That's the word. That's the word that you're going to use In a way that it shouldn't be. Now, if you went to any of our competitive law firms, or even law firms in the top 200 that deal in this commercial realm, I think that's probably fair. And so what you don't have is the ability to really narrow the focus of the criticism or the constructive feedback or the points of view to those again within the guardrails or within the framework of what is sort of useful and helpful for the particular issue or topic. Right, Wonderful.
Speaker 1:All right, fiona, I see you've joined Fiona. Fiona, if you can hear me, sorry, just coughing and getting off mute. Oh, that's okay. That's okay. So Erwin and I were just recording the last bit of what we'll cover, which is the book recommendations, and we got off to a really interesting conversation, I think, on that.
Speaker 3:No, that reminds me I need to get my books in front of me. Thank you.
Speaker 1:No problem, have them ready for the end, because what we're going to do is we'll record the rest of the stuff now, and then I'll let erwin go, and then you and I can do our book thing at the end okay, right does that work?
Speaker 1:yeah, good, um, before I forget, I want to record a concluding bit where I'm going to thank you both for taking the time to get together and and so we have a sign off, just in case I forget to do that before we let you go, irwin. So here we go with that part. So, fiona and Irwin, thank you both very much. It's been a real pleasure talking to you today.
Speaker 3:Likewise Alan Love doing this with you. You're a consummate podcast host.
Speaker 2:Thank you very much and Alan, I feel the same way. It's been a fun ride since we first started this and it's been great and interesting to listen to you over these years.
Speaker 1:Thank you. Well, 32,000 downloads and 62, 64 episodes since. Yeah, it's been quite a fun five years so far. So thank you both. Thank you, thanks, good. Okay, so that'll be our conclusion. So let's go back to the beginning and I'll ask you each kind of what you're going to see for this year. I want to stress this is not going to be released until the beginning of January, after I have sailed off into my consulting partner gig, whatever that will end up being here, but I know it won't involve a lot of day notes.
Speaker 3:Tell us about that.
Speaker 1:Yeah, so we'll talk more about that after. But, um, I wanted to start out, uh, just uh, I'll jump real kind of right into it and ask you what you guys each see in your you know respective fields for 2025, um, and then, if there's I may or may not talk about, you know what's what do you? What's the biggest surprise you've seen? That's changed since we recorded first five years ago, um, four and a half years ago now, but, uh, and kind of what surprised you about that? And then, and then, fiona, I'll ask you about the book center when you'll be free. All right, okay, very good, fiona, is that? Is that good?
Speaker 3:yes, I mean I was going to in in the response to the first question. Talk a little bit about when we last spoke yeah, we talked about big tech in particular spoke. Yeah, we talked about big tech in particular, and antitrust. Yeah, so I was just going to give a little summary of what I thought the highlights of the Biden administration have been just in a couple of sentences and then lead into what to expect now.
Speaker 1:Good. I would encourage both of you by short sentences that I can then interrupt with follow-on questions. Make it very conversational. Okay, good, fiona. Erwin, thank you very much for getting together today. Great to be here, alan, likewise.
Speaker 1:So a lot has changed in the four and a half or five years since I recorded the initial episodes of the Law Policy and Markets podcast with each of you.
Speaker 1:At the time, you know, we were looking at the beginning of a pandemic, was not sure what would happen, erwin, with commercial real estate. Fiona, when you and I talked, there had been hearings on Capitol Hill, in the House, in particular, on big tech, particular on big tech and this is before the con period began that the FTC and antitrust, of course has really risen to the forefront in the US and, of course, competition policy in Europe as well has really taken a much sharper view of not just big tech but a lot of economic concentration on the one hand, but in other ways, perhaps is acquiesced to some of the power that some of those companies have. So I thought maybe, fiona, we could start with you and looking here now that we're in 2025, at what you think the next year, next couple years, might bring with respect to antitrust policy with the new administration in Washington. With you know political uncertainty in Europe. Interested in your take new administration in Washington. With political uncertainty in Europe.
Speaker 3:Interested in your take. Thanks, alan. Well, we've just about concluded the most aggressive antitrust enforcement regime that certainly I've experienced in the US since I've been practicing as the Biden administration wraps up, and with that we've seen a number of cases against all of the big tech players Apple, google, etc. Sorry, I'm going to. Can we just do that bit again? Ok, you'll edit that out.
Speaker 1:I'll edit all this. Don't worry about it, just let it roll.
Speaker 3:OK, I think what we can expect in a Trump administration. There are, I think my impression is a very large number of deals that have been waiting in the wings for a friendlier administration, so I think we're going to see a lot of deal activity. Of course, interest rates need to cooperate as well. Antitrust is not the only barometer here, but I've certainly seen from firsthand how clients have been reluctant to bring more challenging deals out of the boardroom in what they perceive to be a very hostile administration towards M&A activity. I think the Trump administration will be viewed as less hostile, more favorable to business.
Speaker 1:And is that true across the board, or is it viewed as more favorable to businesses than it views as supportive of the administration in some way?
Speaker 3:Well, it's helpful to remember that Trump won was not exactly laissez-faire on antitrust. So, for example, the concern about antitrust implications of non-competes and wage fixing in connection with workers and labor that was something that came out of the Trump administration was certainly amplified in the Biden administration. But the concern about labour, I think, will continue and that may be evident in the review of M&A deals, as it has been in the Biden administration. The Trump administration was also looking at vertical deals, notably. The Trump administration was also looking at vertical deals, notably, and perhaps infamously, the Time Warner transaction with AT&T that they challenged.
Speaker 3:So the Trump administration, I think, will continue to be aggressive. Its targets may well be different from what Biden was looking at. I think the focus on big tech will remain, and that's already been clear. I think there'll be less emphasis on fossil fuel deals, probably equal emphasis on healthcare and pharma, because that's an issue for every American. And there may be some other you know pet kind of focuses and projects that Mr Trump and perhaps others around him are very interested in that we don't yet know about. Expect a light ride on antitrust, that there is still, I think, an aggressive administration in place ready to challenge the most antitrust-concerning deals Right.
Speaker 1:I want to take a look then too, also at another area of the economy which is certainly top of mind for people and very sensitive to interest rates and, fiona, you mentioned interest rates being a factor kind of behind the scenes and that's real estate, especially commercial real estate.
Speaker 1:You know, Erwin, we've just seen, already in December, that the Federal Reserve did two things it lowered interest rates, which people expected in the Fed funds rate coming down, which is just short-term rates, and it also stated that the expectation for rate cuts going forward would be fewer cuts, maybe smaller cuts and certainly less frequent, which had the impact, of course, of raising long-term rates when the markets reacted to the expectations then that perhaps US interest rates will not in fact go down as low or as quickly as people had thought. What's your snapshot view at the beginning of 2025 of the real estate market?
Speaker 2:So a lot's changed, obviously, since we last spoke, but I think the enduring takeaway from 2024 is that we've finally found price discovery, which was really slowing up a lot of the ability to resolve existing debt problems over levered situations, and the market was not willing to really allow things to resolve in a positive way or in any way, frankly, until there was price discovery. So with price discovery happening and by that I mean we're actually seeing trades that people can point to, workouts that people can point to at valuations that investors can be comfortable with- it's going there for that.
Speaker 1:They can attract debt and finance.
Speaker 2:Exactly.
Speaker 1:Without that confidence in the value, there's really a lot harder to attract the debt capital that's needed in order to lever these up and make them you know pencil out.
Speaker 2:And it does two things. One is it allows resolution of existing problems. We're all hearing about the phrase the wall of maturities and the wall of maturities, and we can extend and we can pretend and we can do all those rhyming words that you hear the investors use all the time, but you'll have, on the one hand, resolution of existing problems Right, we're in the middle of working on one of those right now that will resolve into 2025, in the beginning of 2025. Complicated capital stack, big development project in Manhattan, the west side of Manhattan but, by the same token, as you get, price discovery and all you need is a stabilization of rates. Right, you don't necessarily need low rates, but you need a predictability and stabilization of rates.
Speaker 2:We're now seeing new money, new financings, new acquisitions coming out, because people can price debt. They can price assets based on what their presumed or assumed price of debt will be, so there's plenty of new money coming out. Obviously, we can talk about the details of where that money is going. Some of it's going to be a surprise and we wouldn't have bet on that in 2020 when we last spoke, for instance, retail. Others of it we may have been able to guess, like the data center craze, but it still stands to be geographically specific, asset-specific, industry-specific.
Speaker 1:So you mentioned when we talked five years ago that there are some things we could have predicted, like data center and digital explosion, but maybe not. The course of others, like retail, and obviously the trajectory of the economy as a whole globally, not just in the United States, reflects in large part, I think, different reactions to the pandemic from governments and different capacities to be resilient by economies around the world. So some of that has led to, I think, greater concentration perhaps of wealth and that's, you know, fiona, certainly an antitrust issue. So it has also just changed the patterns of how we behave and where we do it and, to the extent, locations have changed for where activity occurs. That's a real estate question, it's a land use question, it's a transportation question, it's an energy question.
Speaker 1:There's a lot of questions, but I think, erwin, it fundamentally also comes down to, you know, are people going to go back to downtowns and into office buildings? Are they going to want to live in, you know, suburbs? We've seen the greatest growth in the United States in residential investment has actually been in suburban and exurban areas, not in inner cities, which are still being built out, but maybe based on deals that were approved a few years ago that maybe are in a market that was very different, based on deals that were approved a few years ago that maybe are in a market that was very different. So for each of you, I'm kind of curious what do you think if you look back five years and you look at the responses to resilience and also, still, I think, some of the kinks that are in the system as we try to work through some of the uncertainty that we've had, what really surprises you the most about how we got from there to here and that might influence where we're going to be five years from now.
Speaker 2:I'll take that one. I'm certainly most surprised by the resilience of retail In 2020,. Everybody was talking about the retail apocalypse. The retail apocalypse JCPenney, jcrew went through bankruptcy. Is the mall, the modern mall, dead? Can we convert big boxes and malls to distribution centers? And what does the future hold for retail? And you fast forward to today retail again. It's not necessarily the malls as you knew them in 2020, but retail as a sector is really strong. Not quite as strong as it's ever been, but the foot traffic going down Fifth Avenue is as much as it's ever been. You have smaller footprints and the stores are not as much about selling as actual product as much as they are as destinations. You have grocery anchored, suburban exterior corridor malls where people are. The amount of foot traffic there is just growing.
Speaker 2:You have gyms and you know, I think my wife went to, to what is it called Orange Theory, those sorts of experience-based locational I'm making up words, you can cut this out and Cressy will redo it but experience-based locations and people are actually utilizing those retail spaces and they tend to, in addition to being large anchor grocery store, anchor type of places, you're getting the smaller mom and pop coffee shops, not just the Starbucks, and so there's been a renaissance there. What's been really surprising to me on the other end, is that in 2020, everybody was thrilled about building, you know, built to suit distribution centers for Amazon. You know, within the last year, 18 months, we've seen Amazon subletting those space, terminating a lot of those, and it seems like there's been too much capacity for logistics-based, industrial-type product, mostly Amazon and other large web-based retailer-based and that's already come and already shrunk in that four-year period, which I would not have guessed. So it's really hard, alan, to answer your question, to really guess the trends and see where they're going to go.
Speaker 1:But I think that's actually part of it right, because if trends are compressed, then the uncertainty about what to predict long-term grows, that that can skew investment decisions or chill them. I'm not sure. Um, and of course, fiona, from the from the uh, from your, from your perspective, I'm sure that there's also been sort of this careening back and forth in some ways, legally or on the policy side, that have a similar effect of making it harder to predict where we'll be, not not one or two years from now, maybe that that maybe you can can figure out, but you know five years from now. Maybe that that maybe you can can figure out, but you know five years from now. Or more especially, given how things are different in different countries, not just here.
Speaker 3:I think that's right. Was that a question? It's a question. Yes, that's the question. So is the question how will things be in five years versus two years?
Speaker 1:No, the question is let me rephrase it so for you, fiona, if you look into the future, given the uncertainties, what are you seeing and what surprises you the most in the last five years that might influence that prediction or change it from what you might have expected.
Speaker 3:Great question, alan, the same. And that is despite, I think, some pretty strong rhetoric from the antitrust enforcement team in the Biden administration. When you look at the actual hard statistics on, for example, number of deals that have been challenged, number of deals that have been subject to a second request, number of deals that have been successfully challenged and enjoined in court, the record of the Biden administration is not challenged and enjoined in court. The record of the Biden administration is not very different from prior administrations In some areas, in fact, some would argue they've been less successful in court.
Speaker 3:And so that leads back to a fundamental conclusion, I think, which is antitrust enforcement is only as strong as the agencies have resources to bring cases, and those resources are limited. We have seen a higher degree of activity by the states, and I think that has been maybe one of the surprising elements that that activity is now often independent of what the federal agencies are doing. They are bringing their own cases, they are not just, you know, me-tos to a federal complaint, and I think I expect that trend to continue. Once states understand that they can successfully bring cases, or at least file cases and get settlement, that is a powerful limb to their bow or string to their bow.
Speaker 1:I should say Powerful arrow in their quiver.
Speaker 3:Yes, I mean. What I will say on the international front is there's certainly been in this administration a high degree of coordination between, say, the FTC and the DOJ and the EC and the UK, say the FTC and the DOJ and the EC and the UK, and that coordination has been used strategically in some cases to enable the Europeans and I'll include within that the folks from the CMA in the UK, the Competition and Markets Authority for them to really be the front runners on the investigation and challenge, because they have a superior enforcement mechanism in the sense that they don't have to go to court and block a deal. They can be judged, jury and executioner and decide that the deal should be prohibited. That decision is subject to appeal, but they don't have to run into a court and convince a court in the first place, which is what the folks over in the US need to do.
Speaker 1:Right Interesting. I want to look to a little bit at not just debt and finance and regulatory regimes, but also at equity and, in particular, private equity.
Speaker 1:You know, erwin, in a lot of sectors other than real estate, where I've worked, it's a difficult time to be raising capital, especially if you're a newer fund, and it's also a difficult time to deploy it, for a lot of the reasons that you know we sort of already talked about In the real estate field in particular. How do you expect that to shake out in 2025, as far as both raising and deploying capital? And again, whether it's equity or debt, you can look at both if you like, but I'm just kind of curious where you think we are and if that'll loosen up a bit, given fiscal and monetary policy.
Speaker 2:What's interesting to me is, over the last, however, many years, most of our clients have diversified the buckets of capital that they have access to deploy. So, as an example, when PIMCO started out their first alternatives real estate fund, it was an opportunistic fund looking at 14% to 16% returns. Over time, they've brought in a debt platform. They've brought in what they would call core, a core platform. So looking for smaller or core plus right, and those are usually return-based vehicles and it gives them the opportunity to kind of look at the entire real estate landscape to invest in. Again, debt, opportunistic equity and the like.
Speaker 2:What we're seeing is the opportunistic equity platforms that we do work for, whether it's PIMCO or Prospect Ridge or others, increasingly need to look at what I would say creative opportunities, right, so coming in to fix a broken capital stack to get their equity-like returns.
Speaker 2:And so it forces a lot of the younger analysts and asset managers to really learn a different skill set.
Speaker 2:They need to learn the debt skill set, because becoming opportunistic in a debt investment to make it look like an equity investment or a loan to own, or buying a loan with a deed in lieu or an assignment in lieu in place, or renegotiating a ground lease are all key parts to how you can get to opportunistic returns. So I would say you know you can get to opportunistic returns. So I would say you know, in normal good times you can be competitive and look at a marketed deal and underwrite and make your assumptions and be slightly better than the next group. But now you're really forced to be more creative and you're forced to look at more messy and what we call hairy opportunities, which is where we do well because that's more fun. And so I think the deployment of even though there's different buckets and people can look at boring CMBS or other things it kind of forces our clients and us to be more creative in how we think about and how we structure transactions to get to the required returns.
Speaker 1:Yeah, Thank you All. Right Now, completely shifting gears for both of you. I want to lift our heads for a second out of our daily grind, working on deals and matters and advising clients and so forth and ask you about what's sitting on your bookshelf or your nightstand that you've either read recently or want to read soon that you might recommend to people. Fiona, you want to kick us off. What books should we look at?
Speaker 3:Well, alan, I am really excited to be heading to a writer's retreat on January 3rd. Actually, this is going to be recorded thereafter, isn't it? Can I just start that again? Yes, you can. Actually, this is going to be recorded thereafter, isn't it? Can I start that again? Yes, you can. Well, alan, I am really excited to be headed to a writer's retreat in the next few weeks and I actually have some reading that I need to do before that retreat. I actually have to read five books, but I will just highlight three of them. One is by the person who's running the retreat and it's called Detour, and it's about her own journey through mental illness. She calls it her bipolar road trip and the and the. The book is entitled Detour by Lizzie Simon oh, fascinating. And the next one is St Ivo by my friend who's a wonderful author, joanna Hirschhorn, and I think it's described as part mystery, part delving into family trauma and midlife crisis and how marriages and families can be torn apart by secrets and lies.
Speaker 1:Wow Is that fiction or nonfiction, that one.
Speaker 3:It's fiction, but I'm I'm curious to discuss with her whether there is any element of of truth underlying it. And the third is everything is under control, a memoir with recipes by Phyllis Grant, and I think that is again looking at marriage, kids moving from New York City to California God forbid and how food can sustain us through all of our journeys in life.
Speaker 1:Yeah, I would say moving from New York to California is not the end of the world. It might be the western edge of the North American continent, but it's not. If the world's round, we can keep going Right. Well, you've got some really good reading lists there. That's terrific, erwin. We'll turn to you next and we already have, so we'll edit that. All right. Good, I might re-record now if you both got like two more minutes, just to kind of the end.
Speaker 3:Yeah, and. I want to re-record one of my responses also, if that's okay.
Speaker 1:Oh yeah, let's do that first. Which one?
Speaker 3:Where does this go? We probably don't need.
Speaker 1:Erwin, for that do we.
Speaker 3:No, we don't, that's fine I guess we'll do that after Good.
Speaker 1:Well, I must say, as this looks pretty good. So I must say it's really been a pleasure talking to both of you, alan, it's.
Speaker 2:Sorry.
Speaker 3:Why don't you say it? Also, is there anything else you want to add, anything else you wish we?
Speaker 1:could cover, because I realize it's sort of an awkward thing to tack on real estate and antitrust or anything. I can't own the same thing, but I'm glad we're doing it together. It's nice, but anything else you want to.
Speaker 3:Let's start again, and Erwin, you go first, I'll follow Okay.
Speaker 1:Okay, well, thank you both.
Speaker 2:This has really been a longtime listener and admirer of the podcast and I'm glad to have been a part of it now two times.
Speaker 1:You know it's funny, when we first recorded, you know, back in 2020, you kind of took me by surprise and I was not, as I was not practiced in this at all and I think he said oh yeah, yeah, long-time listener, first-time caller, and I was completely what.
Speaker 2:As a child who grew up listening to WFAN and Mike and the Mad Dog here on the East Coast, I felt compelled to throw my two cents in. It was wonderful.
Speaker 1:And Fiona, I remember when we started because the first time we recorded it we had to redo it because there was an echo and things and I remember asking if you could go into your coat closet, turn out the lights, not read anything and just have a nice natural conversation and it ended up being a really great first episode.
Speaker 3:Well, you were right that recording from a coat closet was a lot better, even though I didn't find the keys to Narnia. It was a lot better, even though I didn't find the keys to Narnia. But you are, Alan, I think everyone will agree with me the podcast MC extraordinaire, and I've always said you've got a great voice for radio, but that does not mean you don't have a great face for TV.
Speaker 1:Oh, thank you. Actually, I've always thought I've been told once that I have a good face for radio. So there's that.
Speaker 3:I think you have it all combined and we've really enjoyed these podcasts. We've all learned a lot along the way and we would love to continue the connection.
Speaker 1:Thank you. That's very gracious of you. I appreciate it and I look forward to seeing both of you in person very soon. Absolutely, thanks, al. Good, okay, thanks again. So, erwin, thank you you you're free to go thank you, you know, we can re-record your other one and you'll you'll be in the breakers right now I will be at the breakers, for sure. Yes, I'll also be in the in the new york office briefly um for some project finance stuff we're doing on january 15th, right around there okay, all right.
Speaker 2:Well, I will probably. I think I will be skiing then, but I will see you in the breakers.
Speaker 1:I'm sure I will be skiing a lot more in the next few weeks. Take care.
Speaker 3:Hope you both have a lovely holiday.
Speaker 1:Thanks, erwin, okay so. Fiona which part did you want to rerecord?
Speaker 3:Well, I obviously like had that brain freeze on the big tech thing. Can I start that one again?
Speaker 1:Absolutely. Do you want me to tee it up with a particular question that I can rephrase?
Speaker 3:Yes, and maybe you can splice some of the prior answer together, because I think some of it was fine, sure, and then I thought on my second answer I kind of meandered a bit.
Speaker 1:I would like to have another. You meandered way less than most people do. I wouldn't worry about that.
Speaker 3:And again we the surprising part or the I guess we were talking. The thing I wasn't crazy about was the cross-border collaboration. Answer.
Speaker 1:Maybe we could have a better go at it. So we can do that. So, fiona, if you could also maybe comment a bit on some of the ways that no, I'm sorry, let me think of a better way to put that. So, fiona, one of the other differences that strikes me between a Biden administration and the Trump administration is the degree of international collaboration, because we may be pulling into a period where there's more of an isolationist tendency. What's your take on that?
Speaker 3:That's a great observation, Alan. I think that we should expect to see, from an antitrust perspective, that there will still be a high degree of coordination between the US antitrust enforcers and their counterparts overseas, and part of that is just for practical reasons, which is there are benefits to the US in being tightly coordinated procedurally with, say, Europe and the UK. The CMA regime there and in fact the EC and the CMA have certain procedural advantages that can benefit a US investigation. They have the power to block a deal without having to go to court. So they are what we call colloquially judge, jury and executioner as administrative agencies, whereas our agencies they need to go to court to enjoin a deal, and so it may be to the benefit of the US to have the EC and or the UK do that heavy lifting first while a US case is pending.
Speaker 1:Interesting, very interesting.
Speaker 3:On the policy front, I think, when we think back to Trump 1, albeit there may have been more of an isolationist approach on trade the antitrust enforcers were very much in the mix and in leadership positions in organisations like the ICN, which is the body that consists of all of the international antitrust enforcement regimes around the world, and the US has always been a strong influencer in that body, and that was certainly true in the Trump administration. Frankly, it's been less so in the Biden administration. I think the US agencies have been more internally focused and concerned about international policy developments, and I hope that the Trump administration will return to being a really full part of the international policy developments, because that's an arena where we've traditionally had strong influence, and I'd want us to continue to do so. I think it's in the interests of the American business community.
Speaker 1:And how do multinational corporations deal with the risk that there could be inconsistent results, for example, looking at a business combination or a merger between, say, Europe and the United States.
Speaker 3:This is something we've been dealing with for a very long time. I mean I first came to the States when the McDonnell Douglas merger was being blocked in Europe and that was a huge wake-up call, I think, for the US antitrust community and business community. I don't think they'd ever seen a divergent outcome. In the end we avoided that outcome, but it took very high level negotiations, including President Clinton, to weigh in on that. So there's always been that risk. As far as I've been practicing, I think the risk's actually been reduced over the years as we've come to more of a harmonization on what we think the antitrust theories of harm are and we've had closer cooperation between the major agencies.
Speaker 3:But I think one of the things that has been harder in recent deals to navigate is not necessarily the big jurisdictions taking a different approach, but some smaller jurisdictions, and this is not even necessarily on a merger control antitrust review. It could be on a foreign direct investment review. They are raising issues that aren't really antitrust related. They could be more national security related or could, frankly, they could be purely political and the impact in some cases is to have a large multinational cross-border deal with many jurisdictions at play being held up by a very small jurisdiction where there is very little commerce. So these are the issues that we have to worry about and make sure that we have a good handle on up front, going into the process, and so that we don't have a small jurisdiction with a political issue holding up a huge deal. I can't hear you. Sorry, that's because I was muted.
Speaker 1:Sorry, so I was trying to thank you for that and thank you, christy, for the text. So, yeah, so we'll take that part then that was nice and clean and drop that in where it should fit in the earlier conversation. I'd like to expand a little bit more on the books, in particular the first two, because the mental health tie-in is really interesting, in part because Erwin also went on a while about his books, which was really interesting to me, and I want to make sure you have equal time. Well, I haven't read.
Speaker 3:I haven't read. I've started to read the first one, which is really interesting, but I have not finished it yet.
Speaker 1:But you're going to a writer's workshop. I mean that's pretty cool.
Speaker 3:Yeah Well, I'm trying to unblock my creative writing from being depressed by, you know, 30 years of legal writing.
Speaker 1:Yeah Well, so we aren't going to put that in the podcast, but I know the feeling. How's that? Okay Well, this is wonderful. This is really good, and I I hope we can compare more notes when I see you.
Speaker 3:And I'd be happy to talk about the detour.
Speaker 1:Well, let's talk a little more about detour for the recording. Can we do one more? Yeah, can we do one more on detour for the recording? Sure Good, so tell me more about why you picked detour.
Speaker 3:So tell me more about why you picked Detour. Well, I picked it because the author is convening a writer's workshop or retreat that I'm attending, so obviously I'm going to read one of the works of the leader of our workshop. Um, it's a really interesting autobiography, which is also weaved in with family history and the struggles of a person with mental illness who is also brilliant. She's intellectually brilliant, she's creatively brilliant, she comes from a family of brilliant people stretching back, you know, in history, but it's also a family that has had its share of mental illness. And one of the things that struck me in reading the book and I haven't finished it yet, but this is all of our stories Lizzie is articulating how it looks for her in particular, but every family throughout history has had its share of mental illness, and my family is no exception.
Speaker 3:That is something that we've dealt with in the generations, including, you know, my own generation, and one of the things I find wonderful about this book is how it is allowing those conversations to happen, you know, in broad daylight, without shame and just recognizing the prevalence of mental illness in our society, and it's often associated with high degree of creativity and brilliance. So this is not simply something like a shameful, stigmatized thing. It's also mental illnesses among us in our community. It's with people we love, and those people have enormous, enormous gifts and talents to contribute as well. So it's a really wonderful, wonderful book from all those perspectives.
Speaker 1:That's so important, absolutely. I mean. No family mine included, you know is exempt. I think this taking the shame or the social stigma out of mental illness and having more open conversations where people can share their experiences and their stories, to be seen as they really are, where they need help to get that, but, more importantly, to have empathy and understanding I just think that's so critically important. And this kind of you mentioned things running in the family and, of course, inherited trauma can sometimes run through as a thread through a lot of this in ways that are manifested just in interpersonal relations, without putting a label on it.
Speaker 3:Absolutely Well. The intergenerational trauma is actually something I'm working on in my creative writing. And again, I think all of our histories, we could look at all of our family trees and see some intergenerational trauma there. Again, these are conversations that I would love to encourage to happen in you know, without shame, in broad daylight, and to allow a greater degree of understanding and empathy for, you know, our friends, our colleagues, our family.
Speaker 1:Yeah, absolutely, amen. Good, okay, so we'll put that into the book review part, right. Anything else that you want to redo or add.
Speaker 3:There was the big tech response. If I could just redo part of that and hopefully Cressy, you can be incredibly facile and splice it in.
Speaker 1:Cressy is our producer and in charge, but we'll have a guy named John who will actually be doing the cutting. Okay, yes, so big tech. Fiona, you mentioned the Google case, which I think was actually in the United States, started under the Trump administration as toward the end of his first term, and then, of course, pursued and pursued pretty aggressively in the Biden administration. And then, of course, pursued and pursued pretty aggressively in the Biden administration. But stepping back from just that one case and looking more broadly at big tech and antitrust approaches to it, what's happened and what's going to happen?
Speaker 3:Well, great question, alan. Well, since we last spoke, yes, you're right, the Google case was filed under the Trump administration, as was the Facebook case. Since then we've also had interesting complaints filed against Amazon and also Apple. So the big four all have their share of monopolization and in some cases, and in some cases, section 7 claims that they are still currently fighting. I expect we will continue to see not only those cases proceed the Google case, at least the search cases at the remedies phase, and that is a really interesting time for a change in administration. If we think back to the Microsoft case and the IBM case, who are the big Section 2 cases that one puts in the same category as the Google case, they suffered from a change of administration in the sense that in those cases the Republican regime that came into power really stepped back from a very dramatic remedy and allowed something or pushed something that was much, much less onerous. It'll be interesting to see what Trump does here, because certainly the Biden administration is calling for some pretty aggressive, draconian remedies in Google.
Speaker 1:I could ask you the question if you want. So you know, I want to kind of compare the current cases against. You mentioned the big four and the case against Microsoft earlier, you know, many, many years ago, the case against the broke-up AT&T. How effective are these big cases to break up what is perceived to be a monopolistic actor that is also playing a very large role in cutting-edge technology and communications in society?
Speaker 3:It's a great question, alan. I think many would say that the remedies in these cases, at best the jury is out how effective they've been. I mean, in the case of AT&T, of course it was broken up and there was a long regulatory regime that was in place that was overseen by a judge. I don't think anyone would really advocate for that kind of remedy today, certainly not a long series of regulatory oversight by a judge. And of course the baby bells progressively were allowed to combine and merge and become, you know, very powerful in their own right.
Speaker 1:Well, I think one of the other issues there too is you know, by the time you get through that process, you're really looking at archaic technology, right. So, as the baby bells reconsolidated, you know we were moving also then from landlines into cellular telephony and eventually into, you know, internet access, and it just you know the technology was moving at a faster pace than I think that regulatory regime could handle.
Speaker 3:I think that's absolutely right. But one thing that I've seen in all three of these cases IBM, microsoft and Google is that the case itself, the litigation itself, can be a big distraction. And you know, that's where I think there is a risk that innovation by the defendant gets, you know, left behind to some degree because the focus is on winning the litigation. In the meantime, technology is progressing and the kinds of search technology, for example, at issue in Google really aren't where the action is these days. I think AI and the more complicated technology and algorithms that are propelling that technology or series of technologies, are much more what are going to shape tech 2.0. And so, you know, whatever remedies there are in this Google case may just be something that's a product of history but not particularly important for competition going forward. We'll see. The judge, interestingly, I think, has already indicated that developments in AI will impact his remedy. So he's obviously thinking along the lines of you know how does AI fit into the remedial approach here, and perhaps even you know the severity of the remedy.
Speaker 1:Yeah, and of course, as a user, one sometimes thinks that some of the effects of this concentration actually improve the experience. So if you have AI, that's more effective because it's got a larger language model that it's learning off of, or you know more sophisticated resources for the algorithms that they're designing and you have kind of almost like instant learning, if you will, that it can give you much more targeted, accurate, precise results that you'd like to see you know. From that standpoint, that's actually a good thing.
Speaker 3:Absolutely Well. Network effects provide that benefit and I don't know that there's ever really been a big set of complaints from consumers about any of these tech platforms. We've all benefited enormously from them. I think the concerns have been more from the competitor front than the consumer front, which does say something about the nature of these cases, and the consumer front, which does say something about the nature of these cases.
Speaker 1:Yeah, it does, it does Good, all right. Well, that was fun, I think.
Speaker 3:That was a lot of fun. I hope my answers were okay. They certainly weren't rehearsed or even written down.
Speaker 1:No, I appreciate that. That was wonderful. We got out of the closet. I'm going to figure out how we're going to edit this together. There is a remote chance I will try to untangle these and do it as two separate episodes, if there's time to do that.
Speaker 3:But I don't know, We'll see. Otherwise we'll keep it together.
Speaker 1:Sounds good.
Speaker 3:All right.
Speaker 1:Well, in the meantime, have a happy Christmas and New Year's and I look forward to seeing you next month.
Speaker 3:And please do let me know when you're coming to New York, because I know we wanted to.
