Posted Thursday, May 4, 2017 – 6:20 PM
By Laura Coleman
The Milken Institute has shifted noticeably over the years, and its 20th Global Conference, held at The Beverly Hilton this week, proved an opportunity to reaffirm what it has become.
Stated Michael Milken: “At the institute, efforts are focused on changing the world and helping you change the world.”
If one only knows Milken from his eponymous conference, one observes a man with an uncanny ability to create and engage in panel discussions that are generally lively, informative, surprising and often philanthropically minded. This year, more than 4,000 people from 50 countries attended some 200 panels tied to the theme of building meaningful lives.
One of the more surprising revelations at this year’s conference was that the U.S. economy is heading for a downturn with a low likely to hit within two years. Now, whether the market double dips, or triple dips, or does something absolutely unpredictable, the good news is that smart money will survive and there is an abundance of opportunities in the marketplace.
Panelists on a “Global Real Estate Outlook” discussion agreed that among the asset classes, real estate continues to be the darling for investors with stable returns. Whether or not that good run will continue amidst changing local and geopolitical strategies remains unknown, although there was a general expectation that an exploding deficit would noticeably hurt the market.
“I think the real estate cycle is coming to an end,” opined Equity Group Investments Chairman Sam Zell. “The over supply of capital is much more capable of turning on a dime than people expect.”
With such current extreme global uncertainty, which includes the very real possibility of a North Korean cyber attack, panelists underscored the importance of investing with firms that have proven experience navigating a market riddled with risks. Indeed, at this year’s conference, over 60 private equity firms were represented.
At the “Common Sense from Uncommon Investors” panel, speakers offered hope for investors amidst the changing tides.
“It’s probably the most exciting time but the most treacherous in the last 30 years,” said Calamos Investments Founder John Calamos Sr.
Canyon Partners, LLC Co-Founder/Chairman/CEO Mitchell Julius advised attendees: “Complexity creates opportunities, such as in the secondary market.”
Blackstone CEO Stephen Schwarzman highlighted just how critical it is for firms to focus on growing businesses, both new and acquired companies.
“The challenge,” said Milken during Tuesday’s luncheon presentation, is to “get money to new entrepreneurs that can employ numerous people.”
Access to capital markets remains key to allowing people to build ideas, particularly in a globally uncertain environment which includes China’s over-extended credit market. But history has shown that even concerning fundamentals can provide great returns.
“The American Dream is that dream in which life should be better and richer and fuller for every person,” Milken said.
Indeed, attendees at this year’s conference, many of them billionaires, were quick to point out that there was excess capital chasing opportunities. Such understanding highlights the importance of fostering creative solutions to help create jobs for people, particularly as technology increasingly replaces humans.
Allowing people who have been forgotten to get back into the economy might also prove to be a partial solution to the sweeping opioid epidemic observed several panelists. Whether or not such change is something the White House leads remains to be seen.
With a new administration comes new fiscal policy in the U.S., the effects of which have yet to be fully realized given that the business community is still struggling to make heads or tails about just how the new taxes will work. Still, the consensus at the Milken Institute Global Conference was that the president’s new taxes will continue to make the rich richer. P
anelists speaking at “White Swans, Grey Swans and Black Swans for the Global Economy” agreed that President Donald Trump was first and foremost a businessman.
“I think it will be to the benefit of corporations and the benefit of wealthy individuals,” said Janus Capital Group Portfolio Manager Bill Gross.
Pundits remain skeptical that the economy can continue on the short term to grow beyond one percent annually.
“The economy needs to grow … by four percent,” said Ross Perot, Jr., chairman of the Perot Group. “With growth and optimism this nation will still continue to grow as it should.”
To conclude this year’s conference, Milken offered optimism for the future while moderating “Space Travel: From Mars to the Stars,” where panelists talked about the how the future of man depends on a successful partnership with machines.
“Providing an extraordinary tomorrow is what creates a better today,” said astronaut Mae Jemison, principal at 100 Year Starship.
Said Milken: “We have this unbelievable planet that we need to protect. Will anyone in the universe even know we ever existed?”