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It was the best of times, it was the worst of times.
Everyone had a different answer about the effects of the post-Liberation Day volatility depending on who you asked at the Milken Institute’s annual global conference, which wrapped up four days of meetings and panels on Wednesday.
Even the eerie AI hologram of Michael Milken lurking at the conference hall drew divided opinions.
Bankers acknowledged an underwhelming M&A pipeline, while some investors speaking to 9fin at the conference said they were left scrambling to comb through their portfolios for international trade exposure while bracing for more social media posts from President Trump that could instantly upend the investing environment yet again.
Christina Minnis, head of global credit and global acquisition finance at Goldman Sachs said that she was “perhaps a little nervous” about volatility, particularly around uncertainty and tariffs.
“There is not a lot of backlog [and] people are cautious,” she said.
Michael Milken and his hologram (via Proto Hologram)
Minnis did acknowledge that banks were still wide open for business but would remain selective over the types of credits they would pick to underwrite.
“For the right credit the markets are open,” she said. “But certainly not to the point of issuing a seven times leveraged dividend recap.”
For others, the tariffs and economic uncertainty were well-known themes before May, which prompted some attendees to say that the overall mood at the conference exceeded expectations.
“The feeling is better than I expected,” one private credit executive told 9fin.
The bulk of people who expressed this feeling pointed out that the playbook has been obvious to them since last year — “If you’ve been following the news at all, you’d know its best to avoid sectors with any measure of tariff exposure from the get go,” said another private credit lender.
For a handful of market participants, there was some regret over not turning enough profit from the post Liberation Day debt trading volatility.
“There was disappointment from clients from not having as much paper for sale and as much panic,” said a trader on the sidelines of the conference. “People were hoping for maybe some more dysfunction in order to put some money to work and get some margins and it wasn't really there to be had.”
Deregulation nation
Adding to the mix was US Treasury Secretary Scott Bessent kicking off the conference with a Monday keynote speech assuring attendees that the Trump Administration has a coherent economic plan, which is centered around trade, tax cuts and deregulation (including banks).
Bessent, who indicated in his remarks that private credit was a symptom of banks being tightly regulated, also alluded to more change on the horizon (and presumably, more volatility as the capital markets adapt to these changes).
“We have uprooted government waste and harmful regulations, we have planted the seeds of private investment and we have fertilized the ground with fresh tax legislation,” he said. “Next, we harvest, and we want you to harvest with us.”
Whether or not that ends up boosting or killing movement in the forward pipeline remains to be seen.
