Hello to everybody and welcome to once more this webinar organized by FAO within the Cities of Knowledge Dissemination Dialogue on AMR. Thank you all of you for joining. I see from the list there that many of you, many of you, it's very early in the morning or late in the afternoon. Many participants from other from the Americans are from Asia. So thanks again for joining despite not being a very good time. So this, as I was saying, has become almost a traditional appointment and a monthly appointment for the time being and I'm happy to inform you that already for this month's department is doubling. And from now on, we are going to have a webinar twice per month, the first Thursday and the last the fourth Tuesday of the month, just to give the possibility to many of you who have contacted us to be able to share your valuable experience and get being in contact with many other colleagues all over the world. So this webinar is organized by the FAO working group on antimicrobial assistance together with FAO Sustainable Livestock Technical Network. I don't want to take any more time because we have a very interesting presentation ahead of us on the research results and strategies to reduce the use of antimicrobials in the Canadian poultry sector and we're going to hear also about the impact. We have with us, we're going to share with us our incredibly valuable experience, Professor Martin Boullien, who is the chair of poultry research of the Faculty of Veterinary Medicine of the University of Montreal, Canada. So now, Marina, the next slide, please. Just, I think all of you are very used already to participating webinars, but just a few reminders, keep your microphone mute. If you can rename yourself for just acting for instance the country you're coming from or your organization so you have an idea or where you are participating from. Just note that Professor Boullien views are around and not the one of FAO. Please, in the chat, you will have, we will hear for half an hour to a presentation, and then you will have half an hour to pose your questions so please write on the chat box and we will address them after, you know, the second part of the webinar. But please refrain from advertising any service or your company, any commercial product and so on, that's very important for us. And this presentation, this webinar will be recorded. So after we will receive the recording of the webinar and also the presentation, together with also some other advice on further reading. So don't worry about taking notes so you can concentrate on eating Professor Boullien. And I think it's all for now. So I will give the floor to Professor Boullien. Thank you again for joining us, despite being early in the morning for her with Space in Canada. So, Martin, floor to you. Thank you. Thank you. I'll thank you very much Daniela for the invitation I very much appreciate the opportunity to share with the audience, our research results and the strategies on antimicrobial use reduction in Canadian poultry and their impact as well. So briefly, I'll draw a quick community portrait. Then describe what the chair is what we do in terms of research and will describe in terms of historically what has happened on AMR and AMU surveillance programs both at this governmental and the producer levels. So we have a we're located, as you know, Canada is located is located in North America, and we are a federation that is divided in 10 provinces and three territories so you can already see that in terms of it. It has in terms of legislation some issues, for example, when it comes to drug licensing or antimicrobial use. Basically, it is a federal government will do the drug licensing and the provinces will do the drug use regulation so you'll see differences between provinces in terms of it in their prescription, as well as access to medication. You might see now it's more uniform but it used to be more different. The structure of the poultry industry is based on the producer more than 90% of our Canadian chicken farmers are family owned and operated there's no or very little vertical integration. And also what makes this poultry system unique in Canada that is, it is managed by a supply management system which was created in the 70s. So that means that the producers must pay to have the right to produce that must acquire quota, and the price paid to the producer on the other end is based on production costs so there's no losses, and the production is usually predicted according to consumption. So, in terms of, of course this has to be managed and usually at the heart of the national management supply system you'll find that chicken farmers of Canada with also the various provincial organization or producer association that are responsible for either the inter-provincial trade at the level of chicken farmers of Canada, or inter-provincial trades at the level of the provincial poultry farmers. So it seems to be a bit complex but it makes for a simplification of the structure. When there's a problem, we have a single body where to refer to, ie the chicken farmers of Canada, nationally speaking I mean. In terms of statistics, to Canadians are big chicken, and big chicken eaters. In 2021, we were eating 35.8 kilos, we've produced 1.3 billion kilos every serrated weight in the same year, and contributed to the Canadian gross domestic product, the GPD, by an amount of $8 billion. In Canada, when you grow chickens, basically you're, you plan to reach a weight of 2.3 kilos in 35 days. So your chickens are going to be fed through different diets that all will have antimicrobials to prevent certain diseases, mostly necrotic enteritis and anti-coxidios to prevent coxidiosis. And this is what we call the conventional prevention programs. And it used to be also that we were using antimicrobials at the hatchery. But you'll see that there's been some changes regarding the type of antimicrobials that we're using in the coming minutes. The chair that I'm holding has been established in 1999 and was founded by the various five feather federations or associations in the province of Quebec. And basically I like to say that the chair has addressed in the past years societal changes in consumers' requests such as a decrease of antimicrobial use in animal production. And then more recently, alternative housing to conventional cages and layers and the effect that is as had on basically the laying hands. In terms of antimicrobial stewardship, we are working on trying to reduce the use of antimicrobials, even to eliminate it by searching also various alternatives to antimicrobials. Back to the core of our story, history of AMR and AMU surveillance programs in Canada. Well, as you all probably remember in 2001, the World Health Organization had a strategy to curb antimicrobial resistance. And in Canada, the Health Canada, which is the agency for human health, basically ask an adversary committee to report regarding the uses of antimicrobials in food animals in Canada and their resistance and their impact on resistance in human health. So that report came out that group came up with a series of recommendation in the lengthy report that recommended, for example, integrated approach through Health Canada to develop a coordinated and going national surveillance systems for antimicrobial resistance and major pathogens affecting food animals. And also they had different recommendations regarding antimicrobial regulation, the fact that we needed to have a compulsory prescription implementation of the Canadian Veterinary Medical Association prudent use principles, etc, etc. So in parallel, C-PARS, which is the Canadian Integrating Program on surveillance of antimicrobial resistance, was making its first steps. And although we had surveillance infrastructure for disease animals and humans, there was no existing sample collecting system for abattoirs, retail and farms to build upon. So this is why we knew that there was it was essential to have active surveillance to successfully collect data in Canada. So, this is why we C-PARS, basically, that's its main objective was to provide an integrated approach to monitor the trends and antimicrobial resistance in both humans and animals. And that was to build on a database that would help us better understand the emergence and the spread of resistant bacteria and to facilitate also the assessment of the effect the impact on public health, as well as to support the creation of what we wanted to do with evidence based policies to control AMUs. So, this is basically how C-PARS was created, we had samples from the human population going to a national laboratory. We also had, of course, already established a system where we were looking at the pathogens from toxic animals, but what C-PARS did was to establish a retail system, a collection at the retail level. And then they were doing the data and kid integration. So the first annual report was published in 2002. That was the first step. And parallel again in 2003, Health Canada did publish a classification system for antimicrobial. And basically the categorization that is used in Canada is different than in other countries. It's quite unique. It goes from category very high importance in human medicine from one to four, which is low importance that our drugs basically not used in human medicine. And, of course, one, two, and three are considered to be important in human medicines from very high to medium importance. These are some examples of the drugs that are meeting those criteria. And you'll find in the very high importance, the C-PARS foreign, and I'll come back to C-PARS. And in the category two, you'll find other antimicrobial that are frequently used in prevention programs in poultry, such as virgin amycin, for example, used to be, I should say, or basic tracin, that is a class three. And of course you have your ionophores. They are anti-coxidules. What is not categorized are the chemical coxidustates as well as avillomycin, which is an orthomycin that hasn't been categorized yet by Health Canada. And these are basically drugs that have been labeled in Canada for use in poultry. What happened very shortly after the first year of existence of C-PARS was that in 2003 and 2004, well mostly in 2004, C-PARS reported the emergence of acetylpheria resistant salmonella, Hallerberg, and both retail chickens and humans. This was observed, as you see here on the graph, mostly in the province of Quebec. And we had various discussions with the industry and the government. I was part of these discussions. And we were, the Quebec hatcheries decided to voluntary withdraw the use of C-PARS at the hatchery, which was usually done in a subcutaneous injection at the day of age. And at that time also, gentamicin was another drug used, but it had been not available for a long period. So this is why the hatcheries were relying mostly on C-PARS. And they decided in February 2005 to stop using this. And unfortunately, because of some problems in the field early mortality and so on, there was a partial re-institution of C-PARS in 2007, but in rotation with another drug, which was Nicomycin spectanomycin. So here, and this is a publication that was key in showing basically a direct relationship between the use of Nanda microbials in food animals and its direct impact on public health and resistance in humans. So you see here in 2005, deal with voluntary withdrawal of C-PARS at the hatchery and the impact it had on the insinus of Salmona-Alderberg resistant, C-PARS resistant strain. So we see a decrease and it's followed by a short increase once there was a partial re-institution of C-PARS use. And in parallel, you see also the same effect on E. coli in the retail chickens. So following this, at that time, well, at that time also at the Chair in Cultural Research, we did a one-year observational study and we looked at if there was a correlation between AMR and MEU in chickens and turkeys. So we found that there was a lot of, well, some strains of enterococcus were resistant to as many as 11 antimicrobials in chickens, a bit less in turkeys, but also significance associations between AMU and AMR for both enterococcus acorn and E. coli. In E. coli, we saw that the use of Satiophere was indeed associated with the resistance in E. coli. So at that time, the chicken farmers of Canada in 2011 did an internal study in the antimicrobial use, their own audit, while C-PARS started also their on-farm antimicrobial use surveillance system, which consisted basically in sampling across the various provinces with the support of various veterinarians, a number of broader and tricky flocks, and nowadays layer flocks as well. And then they can basically look at the amount of antimicrobials that are used. We also did at that time a one-field trial at the Chair in Cultural Research on antibiotic-free chickens. Basically, we followed over a year period eight farms with two similar barns to match the management, the feed, the chicks. And what we found is that even with alternative, preventive means, we had 25% of the flocks that were affected with necrotic enteritis caused by clostridium perfringence. And we showed that clostridium perfringence can persist in consecutive flocks and the same strain will persist and that was based on PFGE. We also looked at the importance of coxidia, having a good coxidia prevention to prevent necrotic enteritis. And we worked on the importance of optimal brooding and developed with the industry a basically a fact sheet to help the producers to optimize their brooding period. However, in 2011, the chickens became a problem to the public. In fact, we have a program in English Canada that is called Marketplace that likes to dig some facts that can raise the interest of people if I can say that. So what they had, what they had was basically they went to the supermarket, collected chickens and then went to a laboratory and they came up with the results showing that 90 bacteria, that they out of their samples, they tested 100 samples with 90 bacteria spined, found in 60 resistance to at least one antibiotic. There was probably some problems in terms of the scientific procedures, but nonetheless, for to the general public. This created a sense of insecurity when it came to broiler chickens and the chicken farmers of Canada reacted in launching a voluntary strategies regarding antimicrobial use in 2012. So the first step consisted in 2014 to stop using, well, to stop the preventive use of category one and antimicrobials, i.e. fluorokinolones and cephalospherin, and in the end of 2018 to stop the use of category two. They were also planning on stopping the use of the preventive use of category three antibiotics, such as basic tracin. At the end, well, this is now to be determined with a pandemic, we had some delay, let's say that. So we helped the industry in doing another field trial and looking also at the effect of the cephalospherin withdrawal. So a year after the withdrawal, we had, we came up with some interesting results at the Chair in Poultry Research. We sampled in 2014 and 2015 breeders hatchery and broiler flocks, receiving cephalospherin 2014 and linkospecting or no antimicrobials in 2015. And we show indeed that the withdrawal of in-view, in-able cephalospherin administration led to the reduction of the prevalence of resistance gene in the meconium, genes resistant to cephalospherin. And as well as, but however, we found that replacing cephalospherin with linkospecting was not the answer since we observed a development of multi-resistance strain of E. coli resistant to as many as eight to nine different antimicrobials. So when it came to the field trial, we had to help the producer realize that they could produce chickens with no antibiotics category one, two, and in three. So basically we did a year study again on different farms in pair barns, and we wanted to look at the impact on performances and intestinal health, as well as seco-microbial composition. And the treatment consisted in basically administering the birds strictly ionophores with or without organic acids in the feed, the butyrate, and the eventually raised chickens were compared to these flocks. We showed that there was no, basically, if you look at the various utility parameters here, there was no impact of using ionophores, or ionophores, butyrate over a period and no difference with the conventionally raised chickens. And surprisingly, when we looked at the microbiota of the chickens, the seco-microbial at age of slaughter at around 35 days of age, we observed that the main driver for that microbiota composition was the flock in the farm. It wasn't at the time of slaughter the antimicrobial program, which was very surprising to us. So in this, knowing this, our producer's feral reassured and well equipped to face the second withdrawal of preventive use of category two antimicrobials. And we, however, since then what we've seen, when we are talking about consequences is an increased early mortality, which happened basically mostly, I would say in the first year after with the withdrawal. And then slowly people, the producers, not the producers, sorry, the hatcheries and the breeders worked on improving the egg sanitation, the egg quality, the chick quality, and that mortality, even if it's slightly higher to what it used to be with antimicrobial just at the hatchery, is now, I would say, fairly good producers. It used to be that 0.8% was what was considered to be normal in a first 10 days. Now we see more 1.2% and we consider it to be a problem when it's 1.5%. Now, what will we see in the emergence of an enterococcal spondylitis and nostril myelitis. This first came in Canada in 2008. And we've seen the number is increasing the point that enterocococcus ecoreum infection is almost as frequent as colibacillosis and certain provinces, not all of them, it seems that it's a problem, mostly affecting eastern provinces. And we also see that enterococcus ecoreum is a multi resistant bacteria. And that has led this emergence of enterococcal spondylitis and somalitis to make use of category two antibiotics in some provinces. And that is definitely something we have to work on and we're investigating at a general research, more closely enterococcus ecoreum. So, in essence, since CPARS since its establishment has been able to capture the human and animal data before and after the volunteer withdrawal by the industry and to see also the impact is as had on the public health. So, this is basically here in a graph showing basically the correlation between the retail chicken and blue, and then at slaughter that you see that those are too closely related. But mostly the human case isn't great. So what we see is the industry wide band on the preventive use of category one and time accruable safety of fear and the impact it has had in 2014. So a decrease in basically in the number of cases. So, also the surveillance system from CPARS both AMU and AMR has shown that AMU has decreased since 2016. This is what we expected as well as interestingly, the resistance to three or more antimicrobial classes for Salmonella, E. coli, and Kimpilobacter. They also have observed a diversity, a decrease in the diversity of antimicrobial classes reported to be used. And this is this has been consistent of course with the timing of the elimination of the preventive preventative uses of category two antimicrobials as you can see here in this table. So overhaul we have here, and this was a very brief and rapid picture that they drew of the Canadian situation but we have here changes to the antimicrobial use that was that were brought by the by an industry by the chicken industry, and not only chicken the poultry industry because turkeys and this also I basically focus my talk on chickens but the turkey industry that is actually exactly the same. So we then have an example as I was mentioning of a kind of poultry producers that have decided to looking at the numbers and the data that CPARS show them that they had to change their way of growing their chickens. And this is something that is very nice also with the CPARS and I have to congratulate my, my colleagues at that agency but CPARS is always being very open and transparent for their results in sharing and discussing and bringing a further understanding to the various stakeholders. And I can only speak for the poultry industry but I'm sure they've done the same also with this one and the dairy industry. So in closing I would like to acknowledge the work of our first Canadian veterinary epidemiologist who developed CPARS to Dr. Rebecca Erwin and you see detail for their leadership. And also I'd like to thank Dr. Annex, who knows, who's been helpful in helping me with a presentation with her contagious smile and generous support. And I'd like also to acknowledge the work of all the Canadian poultry producers that have taken up that such a challenge because this is not an easy task. And they knew they had to do it and the chicken farmers of Canada was exemplary in consulting with the various stakeholders in providing educational material to their producers and supporting research as well. And finally I'd like to thank the staff and the students from the Chair in poultry research. We will have been quite numerous in the past and well since they established establishment with chair and on this, I guess that my time is up. Thank you. Thank you very much. It has been a fascinating overview through the history and now Canada and the poultry sectors managed not only to reduce the use of antimicrobials but what is very interesting and promising because that's happened also in other countries, especially to reduce antimicrobial resistance. So I think it gives a lot of hope and a lot of push to all of us to keep on working in reducing the use of antimicrobials. And let's see if there are already questions coming up. So I will invite you to address the first one by Yusuf Ibrahim with asking why was a safety fewer reintroduced in 2007. It was because of the increased early mortality. And because this is not a vertical integrated system production system, the producers are buying their chicks from the hatcheries. And there were many complaints that the hatcheries had to deal with. So they stopped using safety of her for a while. Then they started using lancospectin and thinking that it would be better to start rotating products and knowing the long withdrawal of the genitomycin, they opted to use safety of her but on a rotation basis. And that was basically to counteract the early mortality that were on felitis that we were seeing. We have another question by Eugenie by I was asking why Canada is using a different kind of categorization of antimicrobials mean different from the rest of the world. That's an excellent question. And we would have to ask someone from the public health agency, but from from a user point of view, when I looked at the various categorization that they have done. It is a good representation of what is important and what is less important since in terms of discrimination. And for the veterinarians that gives us more chance in our more tools in our toolbox. If you want to decrease the use of what is really important human medicine, then we have to be left with some tools. And that probably gives us this possibility. Thank you. And now I will take the liberty of chairing it was a question myself. You're showing a very good as a collaboration between the governmental authorities and the private sector. What do you think is the secret for that good collaboration for that good exchange of information and you know what would you advise to other countries or to other people. I, I guess communication and everything was science base evidence base. And this is what was very, and it becomes then very easy to show the evidence and to discuss what needs to be changed. And this is what that was a strength of C parts to be evidence based from the very beginning and deciding that we need to collect data before imposing anything, and then open the discussion so and bringing everyone around the table. Because of course I was talking C parts is a federal organization but you also had to gather around the table the various provinces as well. So, they have to deal with different organization, the governmental agencies, as well as producer associations. Thank you. And by the way, I would like to ask our former colleague and now my team colleague colleague Agnes Agundo with sharing a very interesting document in the, in the chat. So thanks a lot, Agnes, and that we will collect also if you want you can share other interesting resources and documents we will collect those, and then also share at the end of the webinar with the registration of the recording of the webinar and the Martin Boolean presentation. So thanks for contributing also in the chat and if anybody else would like to further contribute and share interesting resources or links to publication, please do so they're always very useful. And we have an additional question by Eugene Leibai was asking if the higher immortality before the antimicrobial band could be because of poor biosecurity and the quality of the chicken son, is it a possibility. Well, we've had various scares with avian influenza in the past decades, and that has markedly improved the biosecurity measures in in Canada in Canadian poultry farms. So, we knew that the biosecurity measures were somehow good but compliance is not always. So that is one point, but most of the problem related to early mortality is as Eugene mentioned, the quality of X. So this is why it's very important to work on I genes and egg sanitation, both at the breeder flock level and at the hatchery level. Of course, hatching eggs is an art, and it requires the most important, well, attention to details, but it goes back to a quality X sanitation in order to obtain a quality of check. And also, this is why also we put, we wanted to equip the producers with a tool to help them in optimizing the brooding, because I do think that the breeding period is extremely important as well. And we want to make sure that we have a chicks that will be in a comfort zone have access to feed and water as quickly and early as possible to be able to develop its immune system. So this is why we've developed a fact sheet and videos also that are available online to help our producers in asset in evaluating and assessing their own brooding with a few tricks and recommendations. We have a question by a brain law with asking who owns the exclusive rights on the possession distribution of antimicrobials, especially antibiotics for veterinary use in Canada, of course. So that is an interesting question the way that it, and I'm, I'm, I hope that I understand a while the question but the, it is now by law a, an obligation to have a veterinary prescription to administer antimicrobials to the feed, the water or various means of distribution to food animals. There's no over the counter type of medication. And the only people legally you can or the only professions you can sell drugs, or pharmacist pharmacies or veterinarians. So you have basically the, the, the, the companies will be selling their products to pharmacist or to veterinarians to be used in food animals. I think we have partially already replied to this question, also by Eugene by who assumed that the antimicrobial band is for metafilaxis and prophylaxis. If you consider also those added in feed so the medicated feed. The band indeed is for the preventive preventative use. If you have sick birds, you can use a category two antimicrobial in the feed or in the water if you have a sick bird. The problem is with enterococcus decorum, often time when we see sick birds, it's already too late to treat. So a practice that we've seen and we're trying to, and this is something that we're trying to curb at the current moment is the use of metafilactic penicillin, for example, or amoxicillin in the feed in chicks for the first 10 days, for example, in order to decrease the load of enterococcus infection or pressure, if I can say that this is a practice that. Well, we don't know what are the risk factors that are associated with enterococcus from the lightest and the soma lightest and this is something that will be working on.  And you need to understand how the disease develop, how it's been transmitted. So at the Chirinpultree research, we've developed PCR and QPCRs to identify commensal and pathogenic isochron strains based on some scientific data. And we see a lot of enterococcus acorum commensal strains out there, but also many pathogenic ones, it seems to be a very, there's a lot of plasticity in the genome of that bacteria as well. And I'm not too sure how we'll be able to find develop a vaccine anytime soon, but we definitely need to better understand how it happens. We know that there's an early infection, but we don't know what are the risk factors. But once we better understand the risk factors, we'll be able to really put in place the measures to curb that problem. But in the meantime, we're working a lot on hygiene, cleaning, disinfection, disinfecting, not only the barns, but also the water lines. And we also, that's something I forgot to mention, we start on fresh litter every time, don't use build-up litter like in the States. So that's a good start for our chicks as well. But again, we need more research with that bacteria to better understand and decrease the use of the current use of anti-microbles we've seen. We've seen an increase differently in the last few years because of that disease. Thank you. Another question by Yusuf Ibrahim. Are there alternatives that the Canada poultry farmers use to reduce antibiotics, to reduce the use of antibiotics? Yes, there are numerous alternatives that are available to the poultry producers. A number of companies have developed products that are mainly consisting of herbs, for example, or organic acids or essential oils. So what you see in other countries we also have in Canada, they are, it used to be, and that is a, I didn't mention that it is the federal who does the licensing of the drugs. And there is, there was a problem regarding the licensing of these products because they are not licensed antibiotics, they are not as effective. And you have to use them very early on if you see something and you need to be very, working without antibiotics but without, and without alternative is like working without a safety net basically. And so, yes, these products are available. Some of them are more efficient than others and we have tested many of them in our lab in vitro. And we do see it, but the difference in, like it's going from in vitro to in vivo that is interesting. And there's so many challenges on the farm as well. In the delivery mode also is important. So yes, we do have these products. And what is interesting also is that we might have also some phages. There's a company in Quebec that has been working on trying, they brought their first phage product to the regulatory body. So it will be interesting to see how it goes. Yes, we do have various products that are available. We've tested, and as I mentioned, we have tested a few, and of course organic acids like what you see in other countries that is, it's the same here. Thanks, Martin, and with respect to this particular topic, I would like to take this opportunity to inform everybody that Martina, together with other experts participated in the meeting of a organizer beginning of July, exactly to address what are the alternatives that could be used in the nutrition field, the different alternatives, different strategies to help to reduce the use of antimicrobus. So the report of that meeting is in preparation. It will come up as an FAO publication in the coming month. So keep tuned because you will all be informed and I think you will find out, you will find interesting information there, elaborating even more on what Professor Julián was saying. And now let's go to next person, I think very interesting also by Namit Peter from Ilri in Kenya, who is asking if the farmers were receptive to reducing the use of antibiotics. What they were doing, I think it brings the component of behavioral changes. And I think it's another interesting topic to address to you, Martin. Yes. Well, of course, there's always resistance to the change. And the, as I mentioned, the chicken farmers of Canada were excellent in developing a good communication program. And they first started by obtaining data from C bars, realizing that there was a problem and it's probably because part of it is probably due to the fact that the chicken is short lived. And, but we were the commodity with the more important prevalence of resistance to various antimicrobals for the various food pathogens at C bars was looking at. So that was easy to to see they had their own internal study to look at the, what was the use and also the perception of their producers regarding who does the prescription does decide for the drugs and so that that was also interesting. And then the consulted the various stakeholders, the hatcheries association, the processor association, the various veterinary groups in the country and we had numerous of these round tables and sessions we were discussing the pros and cons and the risks. And eventually, they came up with a very structured plan, step by step as you've seen, but also they came up with a numerous tools to support their producers in the transition. They developed videos, they developed booklets regarding the explaining their strategy explaining antimicrobial resistance, the risk to public health into. And also, not only the risk to public health but also in terms of how the producers, what were the tools for them to improve their, their life basically or their chicken quality of the chickens house with different tools. So that was, and they even had podcasts I remember during the coven, we were taping podcast and so on so forth so they were very very proactive and I do think that, yes, there was a resistance but that the, it came also with a. The, that for them to see the compliance, they are two different ways. There's a health sheet flock health sheet that is being sent to the abattoir by the producer when they're shipping their birds to slaughter. And in that fact sheet or that flock health sheets, they have to report the various vaccines that birds have been administered but also the drugs, dosage, reason mortality. So then once the abattoir receives the information they know if they have had a sick or a healthy flock, but the CFI you can see if there was a carcuse of antimicrobials. And by law they have to write the right the proper information. Also, the, the, there's a surveillance and what is being used, and this is, and then the, there are fines also if the producer is not basically, complying to these new regulations. So that's all within their producers associations. Thank you. And the use free brain is asking you in about your experience on the fact that effectiveness of bacteria vaccines against diseases such as the Colibacy losses for instance. They. We have just finished writing a chapter in vaccineology for the upcoming Indian disease journal, and we have written my grad student and myself a paper entitled bacterial vaccines from faster to genomics. So, what I can say is that we now have the tools the genomic tools to develop vaccines which will be more effective. We can crack the sequence a genomic sequence of our bacteria, we can compare by reverse vaccinology we can compare commensal and pathogen extremes with the proper tools also we need to make sure that we can differentiate both commensal and pathogen extremes properly, but then we can see what are the genes of virulence that are most common and this is, and from there will be able to basically design better bacterial vaccines and I think these will be very important in key to raising birds without antibiotics, or with less antibiotics, regarding colibacylosis. There is a what we call airway deleted E coli vaccine. And we see it working very well see it working with different efficacy I guess it's probably depends on the coli streams you have on your farm again. Bacteria such as E coli in Torococcus, C quorum have a high level of plasticity if I can say that multiple genes of virulence for E coli, but not a single one that is present and all of the back to all of the E coli. So this is why it becomes it still is a tricky one, but it does reduce when used in for example laying hands and brother breeders it has shown to reduce the use of antimicrobial for example the mortality and the severity of the clinical science related to colibacylosis. So I have great hope with our genomic tools to come up with new bacterial vaccines. That will be very effective. There's, for example, and some of them will be recombinant like there's a new salmonella vaccine that is a triple sugar deleted salmonella vaccine means that that bacteria when given into the host cannot survive because it needs tree sugar that are available easily in vitro. And provided those sugar but it won't survive very well in the host. And what they've done is that they have added to the bacteria that triple sugar deleted salmonella they have added a plasma that does carry genes of virulence. They added a gene of virulence net be for necrotic enthritis but since we also have net be negative strains then that are present in the field, it doesn't have necessarily the best. It's not 100% protective but it does protect against the net be positive costume prevention strains that are out there. So, as I was mentioning it is important to know our enemy to better fight it. And this is why we know to, we need to understand the various genes of virulence that are important as well as the risk factors. Thank you very much Martin and I think with this we can really conclude on how important this to have a combination of scientific information, technological tools and advances, but also the right policy legislation in place, and the good collaboration with private sectors, communication with the farmers and so having all these elements in place, but then the good news is by having all of those together, we can reduce the use of antimicrobials and eventually we can reduce antimicrobial resistance so I think it's very awful. The message that is coming from your experience and your sharing of information that I think it would be a good take on message for everybody. There is a lot we can do and we can have good results. So with this I would like to thank you again it has been a wonderful share of information and the availability and addressing all these questions and being with you in this hour. I would like to thank all of the participants coming from attending from such a diverse number of countries from Philippines and Australia and Russia to Colombia and Canada and passing by, you know, going through Senegal and South Africa and Spain, the Netherlands, and South America, Greece, really a very wealth of different geographical things in Madagascar I mean really, really many of you. So thanks again for being with us. Thanks to Matina tabullaro working behind the scenes, just to make sure that everything has going smoothly. And now I would like to leave you with some information on what is for coming in the future. So thanks, Martina, if Martina you can put up the last slides. Yeah, so just keep on being informed about what was coming up, but next presentation will be on the 26th of September. As I was saying, now we're doubling the number. We are going to hear quite different perspectives. So by Jonathan Rushton, Professor of the University of Liverpool in UK, we are going to look at how to address the economic burden of antimicrobial user assistance in livestock using a very specific tool, which is a global burden of animal disease program. So again, a different angle, very interesting. This time we're going to have earlier in the morning for the European, essentially European time 930, 1030 to make it easier for the Americans and for the Asian colleagues to follow. And then from January onward, we are going to have webinars earlier in the morning for us European and later in the afternoon. So we will better address the need of the participant attending in America and the nation, not to being too cumbersome for that. So with that, thank you very much. Please remember, we will share with you the presentation and the recording and the interesting information which has been shared. Please don't forget to give us your feedback through the question that I think it's online and in the chat box. It's very important for us and if you're interested in sharing with us the results of your research, information and so on. We're always very happy to hear from you, contact us to the address which is on the slide. And again, thanks to everybody and looking forward to be with you again in a couple of weeks. Thank you and goodbye and have a nice day.


Okay, hello and welcome back is episode 87 of the market maker podcast. And if you are watching this in video format on our YouTube channel, you can see Piers has morphed into Stephen. Stephen, how are you doing? Good morning. Yeah, I'm very well. Thank you. I'm going to try and do as good a job as I can filling in for Piers. So I think it's on a beach somewhere, which is very nice. Well, perhaps he's in the what is it the Dominican Republic with Boris, just chilling, waiting to come back. I think it's time. On that note, of course, we do have to talk a little bit about this trust, the circus that is UK politics at the moment. I think we're right up there at the moment lots of tweets about us in Italy, not the Euro finals but more like UK politics where we're neck and neck at the moment for what's been going on. So we'll talk about that the latest state of play. And, and more importantly, how markets have been reacting has been quite interesting over the last kind of 24 hours and then really want to make use of your experience and your expertise Stephen and talk a little bit about one of the main headlines that we saw this week was Goldman Sachs going through another major restructuring so you know what's going on why are they doing that. It's a result of that type of action. And then the other headlines were quite private equity focused. And two real main things I want to discuss on that side one is about what's been happening to some of these firms who IPO during the kind of post pandemic pandemic boom. There were a couple of strikes of a couple of them. I think it was door dash a few others Robin Hood lift. I was looking and they were down like 80 odd percent, some, some huge numbers. But one of the things and where private equity comes in is about, you know, they're circling, they smell blood in the water. And then linking to that, this talk as well separately about this idea that private equity firms are taking the leveraged out of leveraged which I thought was really interesting and I wanted to know why is that and what does that mean, how long lasting might that be, and so on so that's what's on the agenda for the next, however many minutes we go for. But let me give you a quick roundup of UK politics and I'll try and keep this as brief as I can so trust reversed the top level of tax. She then sacked her chancellor and scrapped the plan to keep corporation tax down. She then appointed Jeremy Hunt to run the Treasury, someone who had actually backed Rishi. Originally when the two are facing off. He decided the whole economic strategy was wrong, had to go. He told the Prime Minister checkers pretty much the day after he came in. And that's the most prosperous history from there. I mean the writing was somewhat on the wall, the Home Office, Secretary left and then everything just snowboard from then it happened quite quickly. So, Liz trust resigning just 45 days means that she's broken British history as the shortest Prime Minister. So what happens next we're all kind of up to speed with with where how we've arrived at this point so candidates to succeed trust. They have until 2pm on Monday to basically garner support now how this would normally happen is there would be a certain threshold where conservative MPs you need to acquire say 20 of them to then put your hat in the ring, if you like. And normally it's like a elimination process. So there's quite a few candidates to start with. If you remember when Boris first came in, they whittle it down. They need to really fast track this because you know we're in an economic situation where their speed is necessary. So basically the threshold is 100 MPs which is actually very high. So we're probably going to end up with just a handful of candidates. And so the fast tracking then should be completed, and a new PM declared that aiming for within a week's time, which is like super fast comparative to normal, normal times. The decision itself, because you might think okay yeah so what do I pop down the voting booth and cast my vote who I think should be to really know you don't. It's not in your hands I'm afraid. It's in the hands of Tory MPs and possibly the Conservative Party party members candidate wise. Nobody has made their intentions to run clear just yet because what will happen is, you've probably seen lots of pictures of Rishi leaving his house very early this morning. Because he's now going to be going around messaging meeting all of the different Tory MPs to get them on side. And so all the other front runners be doing the same. Back is seen widely as the favorite and most likely to make the cup for the final two which will they will go into a run off. And then Boris is back. I saw as a hashtag that Jacob Ries mog tweeted this morning. BBB bring Boris back bring Boris back. That's a scary thought isn't it. So it's a Boris Johnson is for the bookies second in the running with 38 currently as a BBC News this morning MPs throwing their support behind him so far. Another 16 went for Penny Morden to make a bid. So she's sounding out people at the moment. It's kind of all very light touch for now. And what it does mean though is you're probably likely to hear lots of headlines and rumors and things like that over this weekend because the deadlines Monday basically effectively to put your hat, put your hand forward. A couple of things here polling. Obviously, the Labour leaders jumped on this situation as of other opposition parties. They want an immediate general election. Now the reason for that is the rolling average of the latest polls for British pollsters puts Labour around a 30.6% lead over the Conservatives. That's never been that high since the end of that long era of conservative rule when Tony Blair and new Labour came in, kind of that landslide victory in 97. This is all what's happened. Good news for Labour and their popularity. But the idea here is that an actual general election is highly, highly unlikely because effectively Tory MPs have to vote for them losing their job and control of government. So, well, I'm very unlikely to head there at this point in time. So just make that crystal crystal clear from a markets perspective. So interesting because yesterday I felt really bad for this trust actually. Because can you imagine you're leading a company or an organisation or in this case a government, even though it's for short, but the same actually happens as you know, when you see a CEO bank or a listed company leave. Typically when someone leaves, it's very rarely that they resign because of old age and it's just my time to hand over the mantle. It's normally because you're a listed company and you're not performing. And you get pushed out. Or in this case, your political agenda is not working, you get pushed out. And so actually removing the negative agenda unshackles then the uncertainty and we had a relief quite a powerful one in the pound yesterday. But relief, as I always say, as a, as a feeling is very short term, doesn't last very long. And the pound is lower now than it was prior to her resignation. So I guess that from a market perspective. Really, it's about the economic challenge which remains exactly the same irrespective of the winding back that Jeremy Hunt has done so far. We tell sales out this morning in the UK below expectations consumer confidence in a GFK overnight. We're about as negative as we've been since the depths of the pandemic, you know, we are still in the same situation as we were in before this so I thought a good summary was from someone who, if you don't recognize his name he's definitely worth following he's quite active on LinkedIn. He's called Muhammad El Arian. And this guy is the head of Allianz for the strategy side I think these days but he used to be the head of the biggest, the world's biggest bond fund PIMCO is what he's more known for. And he, I think summarized it in three key areas that we need to focus on from market perspective. And it's all about can the UK pivot to higher growth, but ultimately do it in a financially responsible way, which is exactly what Kirtan got wrong, essentially. So here the three things he's looking at our details on the growth plan, including verdicts by independent parties, such as the Office of Budget Responsibility so this is a key element that was missing of course where trust tried to rush through soon as she came in this big proposal, but ultimately without it being verified by independent parties markets don't really believe about how it's going to be funded in terms of these ambitious plans. So the second part is then more details and what will happen to the energy price subsidy. Because remember, a hundred has brought that from what was it two years to April I think for review. Now I think that's intelligent wording personally, because by saying, we're going to do it to April with a review you appease the markets by pulling back on your commitment of the amount of spending, but at the same time you're not saying you won't roll it over. So I think it's a, it's kind of a central bankers textbook play where I'm not committing but I'm kind of committing satisfying the markets, as long as people don't get to cheese off about it. Yeah, because we might roll it over. It's one of those. And then the final point our area makes is that the markets have made it clear that you cannot go down the path of unfunded tax cuts. And so what's going to be interested is that, you know, as far as hunt has been concerned there could still be other things to come. So it's about the devil in the details with all of this. It's been really, really tough to find any good news in all of this. And your summary and suggest that it's all relatively negative. And even if we peel back a couple of the layers to actually get deep into what's going on in this country. There's not a lot of good news. I was, I was thinking about this. I was trying to find some good news from what's been going on over the last couple of days. And I think, well, they trust lasted 44 days. It's a good representation of checks and balances in our system actually working. So the way that our UK political system works is you have the executive sitting within the legislature, which is really messy. It's like the president sitting within the Senate in the US. It's really, really messy. But that is designed for the legislature to kick out bad actors inexperienced politicians, bad leaders, and it worked. So, you know, it took a bit of time for Boris though in that way. It took a bit of time for Boris. If he comes back, then, you know, ignore what I just said, it's a disaster. But the other thing that I think we should be feeling a little bit more comfortable about from a markets perspective is you can't mess with the playbook. You know, you cannot mess with fiscal responsibility with sounding out the office of budget responsibility with consulting the key market participants before you do something. And with working closely with the Bank of England.  It's not just a nice to have. So there's a little bit of kind of return to the mean, which is comforting. Well, I guess this is one of the things about Jeremy Hunt and, you know, whatever people's thoughts might be about him, what he's done in the past. One of the things is he was, he's communicated throughout and I say this because I think this is important for how central bankers, chief executives will operate. If you look at that continuous reassuring commentary, you don't necessarily need to have the solution or the answer. So you're tactically looking back in retrospect how I guess trust could have played that differently was that she wanted to get a big splash really assert that dominant position immediately. So I think that's what you do by communicating your attention of what your ambition was, whilst also sounding out those parties as you said to verify the checks and balances, and then bring the two together. So you're excited you're satisfying that acceleration of communication side to make your stand, but you're also doing it in a sensible responsible way but if I like to use the football analogy. Firstly, you know, not many football managers stay at the same club for the time that the Tories have been in power right you know we need refreshment and you need change. But if you do get a new manager in, don't just fire all of the players and change the name of the club, you know, there's going to be some continuity, you know, that's basically what trust did over over the last few weeks. Yeah, yeah I guess it's such a tough gig isn't it being in politics because obviously her and quasi were were tight coming up in the system. And you have to, it's a game when you have to have people who've got your back and trust, but at the same time, even though they're experienced in some ways they're not experienced at being at the top of that pyramid if you like of control but let's see what happens I'm sure there's plenty more to come and by this time, you know, next week I look forward to talking about Boris Johnson returning as Prime Minister and. Yeah there's an emerging there's an emerging trading strategy going on which is which is tracking flight tracker. The most tracked flight was the was the Queen coming down from Balmoral. The second most track flight was quasi coming back from. Yeah, now we're going to be looking at the flight tracker on Boris, let's see what happens. Orpheus current. Orpheus, yeah, wherever he may be. All right, well look, the situation at Goldman Sachs because I know there's a, there's generally with our community a lot of interest in this, whether it's kind of seat at the table of what they do or working at them as a potential employer. I think this is, you know, important in that regard as well because there's been a large scale reorganization and in fact is the second significantly structuring under David Solomon, the chief exec who's only been in that role for about four years so. So a lot of moving parts here happening. I did see their earnings come out and I saw the kind of pitch book they had for this strategy. But yeah, your thoughts on that firstly why what's happened and why have they done this. Yeah, so essentially, as you said you rightly said and this is the second major restructuring of Goldman Sachs in the last few years, since David Solomon took on the reins of the organization. Now, I think we need to step back in order to understand what's going on today. It's been around for 150 years it's a very storied institution incredible on the investment banking side incredible on the global market side. But it's always acted well it's been a partnership it's there is a partnership, and it was only IPO in 1999. 24 years ago it's quite a long time ago, but it has the institutional memory of a freewheeling high IQ, low EQ partnership where lots of money was being made, but there wasn't a lot of institutional infrastructure, and it didn't feel like a corporate. I used to work at HSBC when you walked into the doors HSBC, it felt like a corporate. There were hierarchies there were chains of command there was bureaucracy there was all of these things that resulted in the organization, HSBC being boring, but being stable. And from an investor perspective, if I'm investing in a Goldman Sachs or Morgan Stanley or JP Morgan, I want to see stability in revenue stability in strategy, and some really really good, boring revenue streams coming in right. So, so when David Solomon took the reins three or four years ago. This is a bank that has been dominated 70 80% of its revenue from investment banking. They're advising companies on their strategy, very, very high quality M&A house, very high quality equity capital markets house. But that's super volatile. We've seen this in the markets M&A's come off totally this year. So you can't really I think they're, I think Goldman Sachs is down 65% in their investment banking. And then the other side is the global markets. Now the global markets, they're a, you know, pretty fundamental part of markets infrastructure, you know, provide a lot of liquidity market making, but that's expensive from a capital perspective, and it's also super volatile. So when David Solomon comes to, you know, comes to Goldman Sachs, or he's been around for a while, but comes to the fore, he's looking at Goldman Sachs's valuation relative to its big rivals Morgan Stanley and JP Morgan. Two things he looks at probably the price to book, or the price to net asset value, and the price to earnings. And in each of those earnings rate earnings ratios, Goldman Sachs trades a significant discount to its rivals. So he's got to ask the question why investors don't like volatile earnings. They don't really really like. They don't love the investment banking in the market side don't much prefer there to be a significant part of the business that was focused more on very stable, very boring banking. JP Morgan does it well with Chase Morgan Stanley and Morgan Stanley does it well with their wealth management division. Goldman Sachs has been trying. So then if you've, you know, spent a bit of time looking at Marcus. Right. Yeah, Goldman's consumer division, which I think it raised, I think it's got about $100 billion of deposits from consumers, which is not bad. It's a huge deposit base for all of their other activity, but it's cost them a lot of money to get to that stage. Their asset management arm, they bought a couple of companies over in Europe, but it's still very, very small. So fast forward to today, David Solomon's trying to get the share price on a par from a multiple's perspective with Morgan Stanley and JP Morgan. The strategy as was announced earlier on this week is merge or kind of join the trading and investment banking divisions together. That's a lot of egos. Yeah, yeah. We'll talk about in a minute and put the assets and wealth management divisions together that kind of makes sense and stick markers somewhere in there as well. Maybe pay it slightly less attention because it hasn't been super successful and then create this new platform solutions group, which is a brilliant way of Goldman Sachs trying to say that it's a tech company. This happened with BlackRock a few years ago when it said, no, no, no, we should be valued as a tech company because we've got 15,000 engineers. But you can see what he's trying to do by elevating those three pillars and making them of equal importance in the hierarchy of the organization to say, look, we want these to be the three major revenue streams. And it's not just investment banking and markets leading the way with these two afterthoughts, they're all up on the same level. You should start markets investors you should start valuing us at the same level as you do JP Morgan and Morgan Stanley share prices pot the share price pot to few percentage points. Obviously there's a lot of ground to make up jury still out as to whether this can actually happen in a company that has got this slightly freewheeling. Excitable lack of governance background is this is this something that can happen we'll have to wait and see. Yeah, so this makes total sense. Why D soul has been all the music festivals because he's because he's engineering a more boring work life. He's got to have this little side hustle where he's DJing you see I will make sense. Well, the question is, is he using the Goldman Sachs private jet to go to a loser and all of these things that you know they haven't disclosed that yet it's going to be quite interesting. So, so question, I think I asked you earlier in the week that I'm quite keen to know is that because I have seen other titles in like a Morgan Stanley who you say goldman's are trying to emulate in some ways in the structural sense of things. I know a Morgan Stanley there's like co heads. Yes, but can co heads coexist when in MS and JP that it's being matured as a hierarchy or a structure, when it's brand new like in goldman's and you've got, I can just imagine and ahead of markets. There's a lot of friction there. There's a huge amount of friction and I think the answer is yes it can work, but only under a certain series of circumstances. So, I can totally imagine it working within the asset management and wealth management division. It's actually a similar range of products and a similar perspective. You know, those two divisions are quite similar divisions. Now when you look at global banking and global markets. They are very very different product types, even though they're still part of the kind of broad investment bank. The type of people that rise to the top in global banking are advisors bankers used to working long hours spending lots of time, you know, for sturdiously analyzing companies doing due diligence all of this kind of stuff. And then the global market side is is obviously a lot of fast paced it's a lot more reactive it's a lot more intraday and it's kind of in its approach. They've got two big personalities with two big egos go running a newly amalgamated unit bearing in mind this is still a partnership so there's still that element to kind of consider. And if they both consider themselves as in with a chance of taking the top role. This could become pretty poisonous. So it's going to require some really really clever crafting and communication and management by Solomon to get these two people. I don't know that you know I don't know their profiles or their backgrounds but get these two people singing from the same him sheet in the context of restructuring, which is trying to elevate to other pillars. It's almost at the expense of the investment bank and markets. So this is going to be fascinating I have no idea whether it's going to work. Yeah, the other thing I can't help but think is take the current situation, and then the initial COVID situation. So during COVID, we had low interest rate environment, everything was going up deal making was through the roof but markets were dead boring because the market wasn't really moving. It's all dipped on its head right now. So you get these massive swings within one single department between then extreme revenue generations, going like this. And it's, you know, and it's, it's, you know, it's a it's a it's a decent business model there's nice dovetailing when one is down the other is up. So we're looking at annual bonuses, quarterly reporting cycles.  Yeah, it's going to become quite difficult to have those conversations, even if they're mature bankers. We're so short termist in our approach, you know, these days that to think actually this is a good 10 year strategy is probably not something that they're does that does that feed into the general perception of the Goldman environment where it's like they want to engineer a place where you are a little unsure, you do have to perform day in day out and that's part and parcel of being part of that firm and their Yeah, it's a really interesting one and it's kind of fascinating that from our perspective and working a lot with students, Goldman's has definitely put up on a pedestal as being the place to go to in investment banking and markets it's very alpha it's it's a brilliant place to having your CV, and then actually thinking that the markets don't value it particularly highly at all, you know, it's a trade on a six or seven times price earnings so there's this quite interesting dislocation there. Yeah, with with regards to can I think it's, can you change the internal culture of an organization that's been around for 150 years. I don't think so. I think that, I think that Goldman Sachs is a investment bank global markets player and trying to, you know, trying to leper changing its spots you know trying to re engineer without doing something pretty big retail bank, you know that that is a similar revenue profile. I think we're still going to be back at this kind of relatively hard edge competitive Goldman Sachs environment that you speak of. Yeah, but we're a tech company. They've got 11,000 engineers, you know that that's brilliant and there's some interesting stuff going on with their platform solutions business I mean, you know providing as it banking as a service that's what they call it providing the infrastructure or the rails of banking for the likes of Apple Pay and things like that. Yeah, that's a nice business that's a high margin business, but is it going to be as big as their bread and butter businesses, not, not within the short term. All right, well, let's, let's, let's talk a little bit then about the private equity situation now there's two sides of this. So how, how, how do you want to tackle it. Let's go. Cool. So the main headline from this week was that three quarters of large US companies that went public. During this, we just mentioned this pandemic kind of ball run marketplace. They're now three quarters of them trading below their initial offering price. Some are deeply underwater, like really bad 80% type margin. And what this is resulting in is it's forcing some to move back into private hands in a fire sale valuation so yeah I just thought it was a really interesting headline because it felt like, you know the market just went nuts two years ago and throw Spax in the mix and all the rest of it. And now here we are.  It's, it's, it's really interesting to, you know, so we all, we all look at history and think and look at hindsight and think how do we get wrapped up in this irrational exuberance of the markets in 2021 wasn't this just like 2000 and if you, if you're a follower of Ray Dalio he loves looking at, you know, historical patterns to better understand what's going on at the moment. But I doubt whether we would have done anything differently from a markets perspective and from an IPO perspective and from a slow perspective, you know, even if we were given 2020 hindsight. It's just what happens when there's so much money sloshing around and not enough places to put it. So it was totally logical in a sense that we had the mega IPO binge that we had in 2021. But it's also totally logical in a sense that come 2022 and a very different macro environment and a very different fed outlook and an activity. We're going to see some of these speculative companies that IPO during the good times fall off a cliff. And I think one of the most interesting stats that I read, trying to power, you know, trying to pair, trying to understand this 76% of IPOs trading and IPO price in 2021 72% of US IPOs, the companies that IPO were loss making almost the exact same number. I'm sure there's some difference there. Whereas in 2009 post financial crisis only 19% of companies that IPO were loss making.  They're going to fall off a cliff the next year and this is this is exactly what we're seeing. But that's a really interesting stat. Didn't know those numbers. But yeah, I mean and the connection then that we have here to, again, private equity's interest. So, is this a case of as well that private equity was sat on a lot of cash during a period of COVID. And now this is like the perfect storm for them so one man's losses and other man's gain because they can deploy what's been a war chest building. Yeah, so they've got a massive private equity has got a huge huge war chest I think they've got $500 billion in the US alone to deploy. So, you know, in the good times, they harvested and they've saved and now they've got this war chest. It's really really interesting about deploying this war chest, especially circling this 70% of 76% of post IPO companies that have ended up trading below their IPO price. Most of these companies or significant majority of these companies were on the venture capital treadmill or escalator, not necessarily the private equity treadmill or escalator. So venture capital in its model is very very different from private equity in its leveraged model venture capital, you go through the funding rounds and you get more funding. If you can show superior extreme growth, then you get to the next funding round that fuels the next round of growth. Don't worry about free cash flow. Don't worry about profits. We're going to get to economies of scale, and we're going to get to a dominant market position or we're going to build up a significant moat so that we can really start caching in. So what happened in 2021 is off the end of the escalator came a bunch of VC back companies straight into IPO. Now, often, or previously, these companies would be more mature before the IPO or they'd get bought by a strategic. Another company that sees logic in in buying this high growth loss making business and integrating it. It didn't happen in 2021. So you've got all of these companies that have been drinking the VC Kool-Aid and feeding off of, you know, lots and lots of capital to grow, but don't necessarily have a great deal of financial prudence. They don't see a particularly clear route to positive cash flows. And now they're stuck in a public listing where the stock market, the investors in public companies don't like them because they're seeking safer havens and private equity. Although they're circling the traditional private equity model has been by a by a boring, not particularly well run business, pump it full of a decent amount of leverage, because it's got cap free cash flows so that it can service and pay down its debt. Turn it around and sell it. So the private equity model slightly jars with the companies that are in this no man's land of post IPO, but not yet profitable. So this is going to be the interesting dislocation private equity, $500 billion of dry powder. Are these companies the right type of companies for private equity to buy. I think that's the big question. So just from a timeline, the one example I saw was someone called forge rock. Yes, which I'm sure you read about but again falls into that tech catchment of course which probably makes up the largest proportion of business software firm. And it's, well, it's just that they've gone private just over a year after it's set 21 IPO. Step 21. They agreed to sell itself to a private equity firm. Tom a Bravo for 2.3 billion. So presumably though the bank the investment banks are back in picking up some fees on on these transactions. That's a big fee day for that just over one year. And it's really interesting there's so so for drop is a great example I've been looking at looking at mattress companies. Oh yeah, nothing says bubble, more than VC backed mattress companies. So mattress companies, your kind of eve mattresses your casper's. So there's been five or six that have been very well venture capital backed. They're not a tech company. They don't benefit from massively high gross margins they don't have network effects. They're just mattress companies. So Casper IPO in 2020. Well below its private funding round that happened beforehand so IPO did about $500 million. It was sold recently to private equity for $300 million. So decent haircuts, but it's not likely to achieve positive free cash flow until 2024. So it's still not a mature business is still not a business that most private equity firms were touched with a barge pole. So this may be lead on to to the other article that I think we're going to discuss private equity firms giving up leverage. Yeah, and then this is one of those. I guess what could be useful to start with is finance students will hear a lot about LBOs. So perhaps just a quick skinny on what is an LBO and if you have not yet been on the and find me YouTube channel, Steven puts out some incredible short form lessons, they're like two to three minutes. He did one last week that was highly relevant for the market side because it, you know, I meet a lot of students and it's like, we do like a mock interview right. And I'll say tell me about something in markets and they'll go, yeah, credit Suisse credit for swaps. I go, okay, so tell me about credit for swaps. And then they go, hmm, I'm not quite sure. I know it sounds cool, but what actually are they what's their purpose and other than credit Suisse is five years CDS and things spiking and the inversion of that. They say it. I don't actually understand it, but I know you do a great series on that and perhaps on the LBO side. Yeah, it's a quick. Yes, it's super, super quick. I'm a private equity firm. I raise a billion dollars in equity from investors, pension funds, endowment funds, etc. That one billion dollars I need to turn into as much as I can over a five to seven year window. I see a really nice boring company that's generating decent free cash flows that I think is probably not particularly well managed or could move into a better market. And it's acquisition prices of billion dollars. I go with my first option is, well, I've got a billion dollars in dry powder here. Maybe I could just buy the company 100% equity. That's my fund done fund closed. Let's focus on this company. What I could do since the company's producing decent free cash flow that could pay down debt that would definitely be able to service debt is I go to the banks and go, well, if I put in 300 million. Do you mind putting in the other 700 million and suddenly I have an asset worth a billion dollars that I bought for 300 million dollars. I start $700 million of leverage into that transaction. And my goal throughout the five to seven year process is to pay down some of that debt, or at least service it increase profit margins and increase the profitability of the company and hopefully sell for an increased multiple. So these are the three levers of private equity right leverage use using leverage sense of being paying down debt during the transaction, increasing your multiple on exit, your acquisition multiple on exit so you get more equity back, and also increasing your profitability throughout the five to seven years, so that that multiple obviously is on a bigger denominator. So leverage has played such a fundamental role, and private equity has managed to build up so much dry powder, because in a low interest rate environment, it's free money. You know your cost of capital, which is a fundamental part of a private equity equation, your cost of capital has been incredibly cheap for the last seven eight nine years. You know, generated incredible returns, and money has piled in 1015 years ago, you wouldn't get really really boring pension funds, touching some of the more exact exotic private equity firms, but over the last few years, they've had to to get the But now this is all changing and the whole private equity business model is is is starting to be questioned or compromised, because that's getting more expensive. Right. And that's the art that's the then the final kind of headline for this week, which was talking about. I like the way that the FT talks about them, the debt addicted corporate raiders. Yeah, yeah, I wonder which side of the fence they fall on. But they're talking about, as you say, taking the leverage out of leverage buyouts. So this next period ahead then were to expect more like you gave that that example of the billion. Yeah, and I'm taking out this company. So the process of that is to just because the dry powder is so large, and that the borrowing rate is so expensive, it's just as simple as that. And until the macro environment shifts. You know, they can go as long as the war chest has money. Yeah, yeah, there's a couple of points there. So there has been, you know, so the article was talking about all equity private equity transactions which hasn't been seen for a while. I think the first kind of pullback from that article is that yes, there are a few or equity transactions going on, but that by no means means that the transaction will be all equity throughout the 10 year of that acquisition of that holding. So yes I might acquire with 100% equity, because I can move really quickly. Banks are, you know, are not playing ball at the moment interest rates are incredibly high my cost of capital is high, but in 18 months time, if everything starts to smooth out a little bit, then that will come back into the future. So in these models that private equity firms produce, they're not necessarily thinking all equity for the next five to seven years, they're thinking equity for the next six months. Let's see what happens. Let's see what happens with banks. Let's also see what happens with private credit. So private credit, which has been a massive growth industry and finance over the last 10 years sits alongside private equity as an investment vehicle to provide credit to provide debt to private equity back companies. They've started to pull back from the market, which is quite surprising, but it won't take too much for them to get back in and start lending. First, you know, this is not, this is not a enduring phenomenon, I don't think. And then secondly, if there is, if it does become slightly more enduring or at least the leverage part takes a slight backseat, you're now going to be really really focusing on those private equity firms that are operationally excellent. So the firms that are really, really good at turnarounds at implementing really, really high quality strategies and executing on really, really good process within a firm. Because the profitability of the firm that they take private or the firm that they acquire, that's going to become a bigger mover of the ultimate returns of the business because leverage is taking the backseat. And I know firms that just boss it. And a lot of them are the traditional private equity firms that boss it from an operational from a governance from a management perspective, still doing all right. We're not going to see the returns that they received in the last few years, but those guys are probably going to be okay. Well, look, let's let's wrap it up there. Just clocked at the time so thank you very much, Stephen don't forget. Thank you, and don't forget to check out the show notes anyone listening if you want to take part in one of our finance accelerator simulations they're still happening in the public events every week. And we've got the daily newsletter that goes out, which we put out a really cool application tracker with our partners at LSE. So that is super useful. And I shared that out to the community this week. So stuff like that is coming all of the time, all with the objective of trying to try to help you out. So, you know, let us help you. So Stephen have a great weekend. See you next weekend and take care everyone. Thank you.


Everybody forced here ripping 20 22 luminance football hobby six box number four random teams I'm sure the results on screen for you right here You can always find those at latent sports cards comm and there is a link in chat currently as well Let's get started everybody. Come on big year one auto here. I'm feeling it And through a case and a half so far. I think we're due for something really big here Like a Maybe like a green ink or something up in one of the big receivers, that'd be pretty cool Let's see luminance time Got as a likely Mathis or shot white Jalen waddle orange color match six of 50 dolphins Jalen Tolbert Cowboys year one blue auto Cowboys Jalen Tolbert and vestige Fields for the Bears Yeah, I think that's how most people kind of look at it to Apollo Certain products go certain ways as well. I guess for for grading purposes Got a mafe Vontae Wyatt's white Amir Rams gold 101 of 249 Matt Stafford redemption coming up Got a Kyler sheesh Whose redemption Garrett Wilson rookie luminance auto blue vertical Here you go Jets on the Garrett Wilson Jets nice hit No giveaways today just a bunch of new releases Kenneth Walker the third John Mechie Kavon Thibodeau vestige Niners Trey Lance 40 of 100 got Mechie rookie for the Texans 90 one of 149 Hopefully you can beat that cancer man Got jacquerie roverson rookie auto for the Cowboys five of 25 And Traylon Burks Titans dynamic Oh, I say a spiller Belish Jones Chanel got Packers Aaron Rogers to 17 of 249. Oh Chiefs dual relic clad ever-delay or Christian Ocoye None number chiefs dual jersey And fusion Jets Zach Wilson Someone in Tiktok said we only rip college products Yeah I'm not trying to change everybody's mind today Romeo Dobbs Petray Malik Willis rookie God 69 and 99 rookie trailing Berks for the Titans Got Drake London Falcons year one rookie auto nice hit Falcons It'll be in the recap Falcon Savage DK Metcalf Seattle Calamanda the Browns. Hey, that makes sense You need QB depth currently God Tariq woollen Linderbaum Johan Dotson Golden the Kobe Dean Eagles rookie numbered 106 of 249 Paul Warfield trailblazing auto 17 and 25. I pulled three of these so far of the 25 little Clustered collation, I would say bested Draven's Mark Andrews. I appreciate it. You'll we Do work hard, you know You want to we were products that people want us to break essentially now Hamilton Kyron Williams White a savage Colts blue Darius Leonard 47 to 50 dude. He is wrecking. Who is that? Chacoby Myers, maybe geez dude, oh No, that's offense. Yeah, could be Chacoby Myers Aiden Hutchinson 66 of 149 Lions rookie nice Aiden blue color-matched Lions cowboy Jake Ferguson rookie auto numbered 46 of 349 and a quarter L. Patterson sheesh Quarter L. Sheesherson. Hey, I appreciate it. Thanks for watching the following Fonte price. Who's that guy George Pickens? There he is. He's been elusive Haven't seen a lot of Pickens Jordan Davis Gold for the Niners George Kittle 6249 Got Pat's Mac Jones Jersey card not numbered and fusion Nick Chubb Yep, we'll have Mandalorian Chrome Beskar later this week. I would think hopefully by Friday. We'll have him in stock for personals Yeah, I'm excited to see some chrome Mandalorian card. That's gonna be fun Sam won't even know what he's looking. I isn't even watched even though. He said he should got Nicoby Dean Drake Jackson Typhon Thornton rams blue rookie Kyron Williams 86 of 149 86 149 a Falcons again year one rookie auto Tyler Allgaier or al-al-alger Here you go falcons two year one so far Vestage for the Vikings James Cook Book to Philly the big big Philly cut Carson strong What's going on there? She's like a pack to squad them for them now Got Christian Harris he came a Quanu and Skymore You have a pretty pretty good year for the Chiefs Dolphins gold to a 26 to 249 a Washington rookie auto Sam Howell there you go Washington 67 to 75 Commanders in a savage for the Colts Jonathan Taylor. Oh, yeah, we do have soccer We were to bunch of tier one bonus League of before we got to Illuminance today So we have that in stock for personals and group breaks as well. Link is in the bio all of our breaks Charleston Rambo Matt Corral, hopefully he can come back strong Skyler Thompson Dynamic rookie Cardinals or not Cardinals Breeze Hall is a jet 42 of 50 jets breeze hall. You got TJ watt 130 149 Steelers a Texans rookie auto Jalen Petrie 175 a 349 and dynamic for the Saints out in Camara Illuminance 249 99 Rip live or ship sealed personals for a live rip start after group breaks tonight drumford Charles Cross Arnold and Epiketti Epikete serious under Colts 46 of 50 got a relic Niners Trey Lance past card. That's six to 25 on the Lance and Sheesh Ravens mark Andrews mark she strews Really stretching that really stretching that she's coming out. Yeah. I mean looks pretty good. It's The base design probably not as good as recent years. This might be like Too much border for me for a product like this There's Skyler Thompson Christian Harris you give a quote who but the autos numbered parallels the inserts are all awesome Man like this right here gold rookie for the Jags Travon Walker 164 to 49 Got Tyler Beatty Ravens year one rookie auto. Yo Ravens And yandere swift vestige for the Lions Epiketti Christian Rambo Matt Corral. There's a points card coming up. So yeah Dynamic Christian McCaffrey 600 points random to all the ends and there's a Garrett Wilson for the Jets 19 of 149 Go Jets James and Williams Lions rookie for Charles Cross fusion for the Raiders max Crosby number 91 of 100 DJ more Panthers 11 of 249 Colts Jack Cone rookie auto three of 349 and Dynamic James and Williams Lions rookie. Yeah, I mean I Wouldn't say sports card hype is died at all There's just slow times in the market right now's a slow time because all like 2022 football hasn't released yet basketball It's kind of slow right now or world cups in a few months baseball playoffs are coming up Which is honestly like a slower time for baseball cards Weird how it's like opposite of like Desmond Ritter rookie Frisker Jamar Chase bangles 26 and 99 And Jonathan Taylor Colts patch card numbered 10 to 25 Usually the law for sports cards is like earlier in the summer But football releases were still coming out in the summer. So savage Seahawks DK Metcalf plus select has been red hot Select price have been going up. So It's just not everything it's hot doesn't mean that it's it's a down time This is is this number four is number four right? Yeah, it's number four. Yep Charleston Rambo Matt Corral scholar Thompson Packers gold Aaron Rodgers 121 of 249 Titans auto Javon curse 81 of 99 the freak and Nice a quan vector case hit short prints for the Giants say one Barclay vector So I want one Lawrence get pulled last night. I should pull a one-on-one. That's what I should do Well, let's see a one-on-one here Ford Christian Cross We've got a lot of numbered cards. It seems like Packers Romeo Dobbs 5 of 35 on the rookie Packers Aaron Rodgers 10 of 25 Another one Cardinals 98 of 99 Mijai Sanders and Kyler Murray Raleigh card for the Cardinals now a lot of numbered there small Charles Sheesh Just she's Charles Just she's Chase More sheesh. I don't know. I'll stop. Sorry guys Now a Desmond writer for the birds the dirty birds Juan brisker Jameson Williams Alliance Cave on thibodeau 135 of 249 Giants And Aaron Rodgers Jersey card Packers non-numbered Jalen Hurts vestige Eagles Jamal Jamar Chase Jamar Charles Both electric playmakers Kyler Gordon Phillips Calvin Austin Keenan Allen Chargers Blues 66 at 149 auto Steelers Kenny pick it one of 25 Congrats Steelers First pick it auto of the day Steven s congrats on the hit sir There he is KP you guys one of 25 rookie auto Congrats Steelers there we go First pick it ink of the day. We've got vestige Cooper cup, too Good stuff. Yeah, you guys luminance sold out daytime in the evening We have a bunch more luminance as well as other breaks tier one Bundesliga as well released today We got that starting at 5 p.m. Eastern random team style George Pickens rookie Davis Kyle Hamilton Okay, you're a elum for the bills 72 of 149 Got Giants year one rookie auto Wanda Robinson and Vestige for the Cowboys Dak Prescott Yeah, pick it will so the guys to get for it now for sure And after that's like a bunch of receivers and Ritter and and howl That's and I've borrowed Jermaine Johnson at the Vante price orange rookie Epiketti for the Falcons 45 a 50 Arnold Epiketti Redemption again coming up after this dynamic Sam Howell for Washington cool. Thanks Gucci I got auto Jersey Kyler Murray Cardinals nice He goes zone up on the Kyler redemption Jersey auto I Be the first relic auto. We've hit. I believe I don't think we've hit another Jersey auto. There's a Ruckert Justin Ross Tyler Al Gair Algear Jalen waddle sheesh 82 of 100 dolphins Jay sheesh waddle, I don't know. I don't know. I said I'd stop. I didn't sorry guys I'm gonna keep going 66 to 249 Steelers George Pickens great break for the Steelers a Fadarian Mathis rookie auto for Washington 222 of 349 and Fusion for the Titans Jeffrey Simmons I Mean the pick it was pick its biggest hit of the day so far out of this product Haskins O'Jabbo Tyndall Got Pierce Alec Pierce rookie 91 and 99 for the Colts Relic card for the Vikings or patch Justin Jefferson 31 to 49 and on the back is Darin Waller sheesh Got one points card around them We'll do a quick recap if you're watching on tiktok make sure to throw us a follow. We break in all day We do group breaks and personal seven days a week Link is in the bio Full streams are on YouTube and Twitch stream on tiktok periodically 600 points random to all We'll also not be able to see the randoms on tiktok a Five on a random top spot after five is getting the points card One two three four five Going to Chris B. E Chris B. E So we have that I believe these counters case hits if not, they're just SSP a Sake one Barclay Vector for the Giants relics now Vikings Justin Jefferson 31 to 49 Cardinals Kyler Murray Colts 10 to 25 on the Jonathan Taylor Niners 6 to 25 Trey Lance Patch Jersey Mack Jones dual Clyde Everett Zolaire and Christian McCoy for the Chiefs non-numbered That's what I'm saying David Commanders Fidarius Mathis auto to 49 year one Giants Wanda Robinson Kyler Murray Cardinals redemption auto Jersey Got Jevon Curse Titans 61 and 99 That is Jack Cone for the Colts to 349 Tyler Beatty Ravens year one rookie auto Jalen Petrie for the Texans to 349 Sam Howell commanders number to 75 Tyler Allgaier for the Falcons on the year one Cowboys Jake Ferguson to 349 Paul Warfield trailblazers for the Dolphins at 25 17 to 25 Falcon's Drake London year one auto nice hit burrow dirty birds Jacory Roberson Cowboys five at 25 on the auto that Garrett Wilson Jets redemption Rookie luminance blue auto vertical nice hit for the Jets a Jalen Tolbert Cowboys year one rookie auto and a Kenny picket Rookie auto blue vertical one of 25 congrats to the Steelers KP baby there we go moving on to six box number five. Thanks everybody