The Exchanges

Q What are some of the other aspects of having an insurance company as a parent that permeates the organization?

A I think it is one of the best, if not the best, ownership structures. Being owned by a mutual company, we're able to build our private Credit in our EM businesses in 2013. That was relatively early. It's become something now that folks are looking at again. I think it speaks to not only the willingness and the mindset of the overall enterprise, both at bearings and mass mutual to be looking ahead and seeing where the trends are going to go. But we started building that direct lending business in 2013. And we were able to do that and be early because we can take a longer term horizon. We're not looking at quarterly We're not looking at annual type things. We're saying what's going to be in the best interest of our stakeholders a decade from now. We have policies that sit at MassMutual that are 80 years old. So they're not just concerned with what we're doing today and tomorrow. What they really care about is are we going to be there to meet their needs decades from now and generations from now. And so that mindset really allows us to take a long-term approach to things when you're building a business And I think it has benefited us tremendously in being able to be ahead of the curve and be patient. We're disciplined with things. There's things we've certainly done that haven't worked out that we've moved away from. But generally speaking, if we think there's a trend in the futur…

AI assessment note: “we were able to do that and be early because we can take a longer term horizon.”

Q How do you describe bearing strategy across what you're doing?

A What we've done recently is form a strategy statement that's relatively succinct and talks about what we do and who we do it for. We don't do everything for everyone everywhere, but we look at our clients as institutions, insurance companies, and intermediaries, and what we do for them are fixed income, both on the public and the private side, real assets, which includes not only real estate, but also infrastructure equity and real asset strategies on the private equity side, and then capital solutions. Which is really a broader state too. I mean, capital solutions can be portfolio finance lending. It can be a structured equity component for providing liquidity to a fund investor. That's how we bucket the three capabilities that we do. Some of them overlap, but we've tried to say to clients when we sit down, these are what we do.

AI assessment note: “That's how we bucket the three capabilities that we do.”

Q Which two people have had the biggest impact on your professional life?

A One, absolutely for sure, and this is an individual who wasn't in my working career. It was my youth soccer coach, and what he taught me really early on was no one is indispensable. No one is that important. As a teenager, I was pretty pleased with myself at times, and that level of showing me that we are going to be successful or fail as a team, not as an individual, Has resonated with me through my entire career, and that's where you hear the phrase confident humility. He was the right person for me at the right time, and that has just stuck with me forever. I've always been a part of successful situations when it's a team-based approach because of that. It is just something that I am much more comfortable with now. It is something that I think is better suited to my skill set, and folks have asked, how did you get to where you are within bearings? I stepped into a situation that had a cultural and a mentality and a philosophy that fit where I was most comfortable. And I think if I had been in other situations, probably wouldn't have had the degree of at least we'll say corporate success that I've had. So there is no question, Jerry Lancaster was his name. On a slightly different note, the partner that I worked for at PwC on the tax side was only for a year and a half. But the level of compassion and care that he showed to his team Was really an element that I just was enamor…

AI assessment note: “It was my youth soccer coach... the partner that I worked for at PwC”

Q In addition to those pivots, what were some of those things you alluded to that you didn't know when you stepped into the seat?

A I don't make all the decisions, but every problem is now my problem. And that's hard too, because everything that goes off everywhere in the organization is now something I have to be concerned about. And the tendency to want to fix it as a lot of folks do is hard to resist. And so again, sitting back and learning that, but what I also wanted to make sure I didn't do, and I've seen a lot of people do this is when you come from a certain line of business and everyone comes from From somewhere where their skills are probably more skewed and stronger than others, is you have a tendency to gravitate back towards those when you're uncomfortable. When you're in that uncomfortable situation, you go back and go, maybe I'll sit down on the trading desk and start talking shop again. I had to pull myself away from that. I still do it by the way, which drives them crazy. And folks that are out there today, if I get off this and just sit down and say, Hey, what are we trading? They'll roll their eyes as they should, but that tendency to want to move to the things that are comfortable. But I had to say, look, I've got to start building muscles that I don't have, which means I need to spend more time over here. And I need to be listening more to my chief operating officer, my chief human resources officer, my chief financial officer. Okay. Help me better understand what's going on in this par…

AI assessment note: “I don't make all the decisions, but every problem is now my problem.”

Q When you think about bringing in a manager and the organic growth potential, there are only a small number of asset managers of this scale you are. How do you organize that distribution platform so that it works for the fund managers doing what they're doing?

A We run a general sales force, which I believe is the right way to really get proper scale. We challenge ourselves all the time. Is having a specialist sales force the right way to go? Just very difficult to get operating leverage in that scale if you're doing that, because every asset class, if they want to be in every region and they want to be in all the countries we are, that gets pretty expensive, candidly. So we have run a model where we have a general sales force, And then behind that, we have client portfolio managers who are really the experts and the liaison between the investment teams and sales. But I think one of the questions is, how do you make sure that you're serving all the people that you have? Because they're inherently, and it's healthy at the right level. There is friction between sales and manufacturing. If you want to look at that way, I'm not getting enough sales time or no one's selling my product or my product's not selling as much because you're paying attention to Someone else's product. That's a balance. I want a little bit of friction. I want a little bit of challenging to be like, hey, maybe we can do better, but it's all part of making sure your culture is there, that we're listening to one another, that we're being transparent, that sales is sitting down, showing the time that they're spending, not only with a particular team's products, but all…

AI assessment note: “We run a general sales force, which I believe is the right way”

Q And alongside of all the activity you're doing, as you look at your own growth as a leader of this organization, where are the areas that you're most excited about? To explore and get better at.

A I love the strategic side. One of the other things I've got really good advice on early on in my role here was give yourself time. There's a lot of demands for the calendar. Make sure that there's white space. Make sure that there's time to think. Make sure that there's time to think big. Make sure there's time to come up with ideas that people look at you like you're crazy. I love that aspect of it, and I think that is really my job is to be thinking In the next five years, where do we want to be? Me challenging my leadership team and my leadership team challenging me. Okay, we're going to go down this path, or we're going to actually get out of this business. That's hard. I think I've gotten better at that component of it. Long way to go, and I'll never have it figured out. That's for sure. That's the exciting part of every day when you wake up is you're learning something new, and if you have a level of self-awareness, you know, you always will have a lot of things to learn, but I love that aspect of it.

AI assessment note: “I love the strategic side. One of the other things I've got really good advice”

Q At the scale that you are today, how do you think about the A culture of the organization that differentiates any of those individual products from one of the competitors?

A I love the question on culture. We're in 20 different countries, and so culture's different in some of them. What is the same is our values and the way we treat one another and focus. And I think what is core to us And it's a characteristic that folks at Barings have heard me use a lot is the confident humility. That's the way we want to approach each other, approach what we do every day. We have to be confident because we're managing large amounts of capital, but we also need to have a level of humility that we don't have all the right answers all the time, and we may need to be reaching out to our partners internally to help us do things. That's really one that I've tried to instill, and I think we've done a really good job Globally of approaching that.

AI assessment note: “characteristic that folks at Barings have heard me use a lot is the confident humility”

Q We've certainly seen that Accelerate as a trend. In your case, it started on the insurance side and the others are buying into insurance. What's so special about the insurance assets that have made that so desirable for asset managers?

A I think there's a couple of ways you look at it is insurance companies have an existential need for asset management capabilities. So there is a symbiotic relationship between the two because they take their premiums in and they need to invest those prudently to be able to not only meet the claims, but hopefully provide a return to, in our case, whole life policy orders. In many cases, it's a stable form of capital, which allows asset managers to grow their business. Because it is more stable than going with some other forms of capital to do that. So I think because there is a natural need for the capabilities within an insurance company, it helps the asset manager because it's a more stable, longer term form of capital. It makes a very, very nice relationship to build out capabilities with the purpose of then showcasing those capabilities to other third parties. I think that's a very nice balance for both asset managers and insurance companies.

AI assessment note: “In many cases, it's a stable form of capital, which allows asset managers”

Q What are some of the other core values that you espouse regularly?

A It's respect. We run everything as a team-based approach. We have investment committees for all of our products. We don't have the star portfolio manager that a business is built solely around. We have incredibly gifted individuals, but they are so much more powerful working collectively and collaboratively than they are as individuals. That doesn't just work and apply to what we typically call the front office or the investment This is something we have instilled across the entire organization, because I think one thing that asset management as an industry has discounted is the importance of building up your operations, investing in your technology, making sure the plumbing works all the time. You've seen it in other industries too, where sales outpaces manufacturing and you get ahead of yourself. And so you've got to bring this along all the way We've just gone through a three-year technology transformation, and we're just coming up on the end of it. Everyone was in this together. And when we set out, we said to everyone, everyone's going to get about 75 to 80% of what they want, which means you'll all be equally unhappy. But the good news is you're going to get 75 to 80% of what you want. And I think when everyone has heard that over and over again, and they said, okay, great, we know that this is the best interest for the business long term. It's been an incredible thing to…

AI assessment note: “It's respect. We run everything as a team-based approach.”

Q Have you thought about the shift that traditionally heavily public markets on the fixed income side to increasing private assets?

A I don't want to discount how important it is for us to have a core liquid fixed income business that we do. It's very important to maintain that, and we continue to expect that to grow, but there also are emerging and evolving markets in other asset classes that are now candidly just taking from the public markets. It's become more apparent really in some parts of direct lending. The large scale direct lending is really starting to bump in a little bit more towards The syndicated lending spot of things. We tend to traffic more in the lower middle market, so we haven't seen those forces coming together that much, but we want to be a part of all of it. Despite how much the exposure, I will say, on an insurance company's balance sheet to private assets, it's still largely liquid assets. We still want to maintain those capabilities. We have to maintain those capabilities, and we have to be able to provide out performance for our parent company and our other clients If we want to be the service provider for all of that, we want to be able to sit in front of clients and say, for the most part, if you want to come into fixed income or debt, we can be your solution for all of it.

AI assessment note: “there also are emerging and evolving markets in other asset classes that are now candidly”

Q What are some of the ways that you took your own style and created the Mike Freno approach to how you're going to manage bearings?

A I have a fairly casual approach to it. I like to think I'm driven. I make decisions quickly. That's probably one thing that I've had to learn a little bit more of is I've always had a philosophy that we can always pivot, and I have a great team that pushes back on me at times that says, well, maybe we should slow down a little bit. I hope it is one where there is a level of shared respect, transparency. Our values aren't for everyone. There are other business models that work very, very well who don't look And act like we do, but for us, that's it. So I've had to learn to let go of a lot of things. I think that's probably one of the hardest things. Every time you move up in a new role is the things that you used to do, you should stop doing. And the reality is I should model what I expect other people to do. And I should make fewer and fewer decisions as I move up the organization. I should make bigger decisions. More important decisions, but they should be fewer. And what I had to learn early on was to, when people would bring me decisions, often I'd have to look and say, I think that's something you can make. I would tell people when they first would report to me, if I had a new report, you're going to make 10 decisions in a year. Nine of those decisions, I'll agree with a hundred percent. One of them I may actually hate, but guess what? That's your decision to make, not mine…

AI assessment note: “I have a fairly casual approach to it. I like to think I'm driven.”

Q So you've already taken this a long way in the eight years since this rollup came together. If you look out another eight years, what are the goals that you're ascribing to achieve?

A It used to be the topic of, do you have enough scale? Scale was the one that people always talked about and scale a few years ago was a trillion dollars. My approach to that is I think business model dictates what the definition of scale is more than AUM and dollar amount. You could have a trillion dollars and that's not enough scale, or you could have fifty billion and have plenty of scale. So your business model will really dictate that. So I have never Tried to say this is a certain number that we need to get to, and it was interesting, and I'm not sure how well this was always received, but when I was asked the question of how much you're going to grow next year, I was, well, what's the market going to grow? I just want to outpace the market and gain market share, so if the market is flat and I grow two percent, then we've done well. If the market shrinks by 20 and we shrink by five, we've killed it. If the market goes up by 20 and we've gone up by 15, we've underperformed. So that's always been our day-to-day focus of how we're doing it, but we are hopeful that we will be able to find an acquisition that we can make that will increase our capabilities. I will continue to do the smaller ones, but I'd love to see something that fits strategically with us that was larger in scale. I think we've put the business in the right spot to be able to do that. It's got to fit cultural…

AI assessment note: “I just want to outpace the market and gain market share”