For the first time in two years, the Beverly Hilton Hotel in Los Angeles this week hosted one of the most prestigious events in high finance.
Over 2,000 people gathered at the Milken Institute Global Conference, the elite gathering hosted by former “junk bond king” Michael Milken.
There were moments of tension at round tables in spacious ballrooms as well as quieter gatherings at the on-site bar and more exclusive parties in the hills.
Rising inflation and supply chain malfunctions threatened a 40-year bull run in the bond market, participants worried. The nosebleed asset valuation left fund managers with little to buy.
“It just got harder to steal stuff,” said Howard Marks, the founder of Oaktree Capital, who at Citigroup in the late 1970s was one of the first buyers of Milken’s breakthrough debt, on stage. .
But there was also a lot to celebrate. Since the end of the pandemic, hedge funds and private equity firms – many of which were founded by Milken underlings at the late Drexel Burnham Lambert – have thrived as asset prices soared historic highs and that the political stalemate has stifled the chances of systemic change.
Mixing in a secure space, in every sense of the word, the Masters of the Universe tackled the major challenges of the day brilliantly. The usual celebration of economic Darwinism was associated with intellectual content on public health, philanthropy, and diversity, as well as a pinch of celebrity. Actor Uma Thurman hosted a talk about the benefits of psychedelics while former heavyweight boxing champion Wladimir Klitschko was spotted scolding.
Financiers disagreed on the trajectory of inflation and cryptocurrencies, but there was near unanimity that capitalism, financial success, and wealth were fundamentals under threat.
Two different prominent fund managers who had left New York and California explained that their flight to tax-reduced states was not purely financial, but also related to the “rhetoric” in Sacramento and Albany that made them successful. professional did not seem to be appreciated.
Appearance after forgiveness
The formal roundtable program often resembled a sideshow at the wheel and negotiation. Fund managers have set up war rooms in suites and restaurants along the cluster of luxury hotels that dot the intersection of Wilshire and Santa Monica boulevards, trying to recoup their share of the billions accumulated by pension funds and sovereign wealth funds.
Participants had to both be vaccinated and produce a negative Covid test result. The conference distributed their own jet black KN95 masks to be worn indoors at all times. Dozens of room monitors clad in hot pink vests fearlessly moved to berate any rogue member of the global elite whose masks have slipped off.
The irony was clear. Michael Milken made his legacy on Wall Street by flouting the rules and ultimately the law. At 75, after receiving a presidential pardon from Donald Trump last year, Milken moderated several eclectic discussions – including those about the resumption and development of the global pandemic in Africa – where he served a few zingers. Before a session, Milken had a warm chat with Maxine Waters, the Democratic MP who has long represented the predominantly black neighborhoods of southern Los Angeles.
The reverence for Milken came from his former colleagues. Leon Black, the former Drexel merger banker turned private equity kingpin, ran for months after stepping down as director of Apollo Global Management following the revelation of his financial ties to the pedophile Jeffrey Epstein. Black and his wife Debra attended a discussion on troubled debt where their son Ben explained how his own investment fund was playing on the Spac craze.
Among the rich and famous were a group of once disadvantaged young people who had been selected as Milken Fellows, with their tuition paid by the Milken family and a lifetime of mentoring.
“He has nothing to do with any of that,” said Ahmed Reza, a son of Bangladeshi immigrants whose Ivy League education twenty years ago was paid for by the Milken Foundation. “He always wakes up at 4 am and goes to work. I wake up at 4 a.m. too. Why? Because Michael does.
Caring for the oppressed
Milken began organizing rallies in the 1980s to evangelize his unwanted ties in a forward-thinking convention known as The Predators’ Ball. At the time, corporate looters were widely condemned as asset-stingy strippers, but Milken and his infantry believed they were fighting corporate cronyism. In their view, takeovers fueled by unwanted bonds would bring unprecedented egalitarianism and innovation.
This week’s event had its own roundtable titled “Democratizing Finance: Leveling the Rules of the Game for the Next Generation” whose featured participant was Cathie Wood, the founder of Ark Investment, who achieved huge returns during the year. pandemic by betting on disruptive and high growth. technological actions. Wood hailed the rise of retail traders, many of whom use the Robinhood smartphone app, telling the story of an elderly woman who first started trading stocks after watching Wood on YouTube.
Impact investor Jean Case, another panelist, wanted to lower the barriers that prevent inexperienced investors from making stock bets, complaining that it was easier to place a bet in a Las Vegas casino than in venues. financial instruments.
Two other panelists, Orlando Bravo and Jonathan Sokoloff, were perhaps weird adjustments: private equity titans whose funds charge high fees and only cleared well-heeled backers. Sokoloff, a Drexel colleague from Milken and frequent speaker, even reflected aloud, “I’m kinda on the wrong side.
Despite a list of attendees who, unsurprisingly, were overwhelmingly middle-aged, Caucasian and male, the event debated the plight of marginalized groups. The discussion tended to focus by default on market-based solutions, such as the “Investing in Wealth Growth for Women of Color” panel. Wealth taxes and reparations were not on the list.
But it was not all sweet. Michael Piwowar, resident of the Milken Institute and former Republican Commissioner of the Securities and Exchange Commission, moderated a lively session titled “Promoting Greater Equality of Wealth”.
Michael Tubbs, who had tested a universal basic income in his former role as mayor of Stockton, Calif., Wondered why the big banks were given ‘unconditional’ bailouts when welfare programs were loaded. requirements.
“Critics of remittances and UBI are rooted in the ideology that some people we can trust with money and others not,” Tubbs said, describing the inequality of riches in America as “obscene”.
The session, while interesting, took place in a remote and uncrowded meeting room.
This was not the case for someone who turned out to be one of the conference’s biggest draws: Bari Weiss, the provocateur and so-called martyr of free speech.
His appeal to older financiers was known, but it became crystal clear when his session titled “Talking Back to Cancel Culture” drew a large crowd that left some stuck outside in a line of events. ‘waiting. Weiss spent several minutes criticizing her former employer The New York Times and denounced what she called the “revival philosophy.”
At one point, Weiss compared his professional struggles to the life of Galileo Galilei, the Italian scientist who was forced to give up his views on heliocentrism to avoid being burned at the stake. His interviewer, conservative political pollster Frank Luntz, implored Weiss to throw his hat in the ring for the open seat of the United States Senate in the home state of Weiss, Pennsylvania, an idea that was met with a salvo of applause, marking Milken’s rare lecture. talk where spectators weren’t playing with their phones.