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00:00Let's get started with you Sonali the great asset management role up continuing Legg Mason Franklin Resources this week discussing this and getting joining forces snarly within the private investment world. Are we seeing a similar type of consolidation. We sure are. And you know it's 20 to 30 billion dollars under management is a typical sized deal that you see for people who are seeking sales because they want scale as well. So Morgan Stanley for example about a year or so ago made an acquisition in the real estate sector. Interesting to keep on watching if there will do more. There's some much bigger firms. Deutsche Bank's asset manager sub 1 trillion dollars huge real estate business. The question there is whether they would ever consider a merger or a sale or whether they'll be consolidated themselves. So there's a question here of whether private US managers need to consolidate among each other or simply acquisition targets because of their high fees and revenue diversification for the big giants. Do you have a sense of which or is it both. It's definitely the latter. You definitely see a lot of private asset managers in very high demand with high valuations. Most of the mergers we've seen so far are in the Legg Mason universe in the Franklin universe where there's a lot of pressure on things that focus on mutual funds and equities. Even Legg Mason only about 10 percent of their value right now. That's assets under management are in private assets and they see inflows into those strategies where as the equity businesses are more pressured who's the most likely takeover candidate at this point . Oh goodness. Again 20 to 50. That's not that exciting of a size. We said if you think about it it's the buyers that I find more interesting. So if UBS will do something Morgan Stanley Goldman Sachs will do something will be interesting to watch . Well that brings us to Sara. We've got some more information about how soft banks vision fund is faring when the junk company released earnings. So Sara how significant were the losses in this fund . Well they were not. Not good. Two billion loss in value over the last three months at a time when the fund is now over three years old and you'd be expecting to see things turning up a little bit not going down at this point. So not great news for Softbank here. All right. So what are the main weak spots here . Well the biggest unknown is obviously we work the fund itself had invested over four billion dollars and we work that's less than the Softbank group overall but still it was just so high profile and such a disaster that that's the number one that everybody. Number one investment. Everybody associates with that firm now. Didn't help them. That at the same time that we work with imploding Uber another high profile investment was not doing well. That share price is now actually back up a little bit. So that's one potential bright spot for the fund that we work's future is still uncertain. And then they've just had another a number of other little problem spots here and there . Yeah. And certainly there is a huge question about what this means for the entirety of Silicon Valley given how significant of an investor they have been. They're meanwhile shifting gears a little bit to real estate. The ongoing pain in malls has led to a surge of redemption from property funds in the U.S. and Europe. Natalie how substantial have the withdrawals been. The withdrawals have been pretty substantial so far according to our reports. We've seen a variety of pension funds all across the U.S. pull out or file for redemption from some of the largest traditional real estate funds across the country. One of them being UBS is flagship a real estate fund which has about 25 billion dollars worth of assets. There's a redemption queue of about seven billion dollars right now. And it seems like that could grow. So it's quite significant. So Natalie is this only in real estate funds that have concentrated investments in malls or is it more broad based. This was a big fund that we looked at so far. UBS has a larger concentration when it comes to retail specifically regional malls which some of these funds and some of these investors cited as a potential concern to stay longer. And given the longer underperformance and the uncertain future of what retail looks like and what could happen to those malls. And so we're definitely seeing a lot of investors getting more weary and a little more conservative and wanting to perhaps shift their money towards other funds that have less of an exposure to regional malls. Natalie is there a feeling that the withdrawals will lead to forced sales and rapid devaluation of some of this property or does it seem to be somewhat contained. I think there's a big question out there because one of the interesting things with these redemption cues is the lines have gotten so long especially for this specific fund . But a lot of these investors have to wait two to three years to get their hundreds of millions of dollars worth of cash back . And the question is how will these funds be able to return the money to their investors. I mean they can either bring in more investors and then use those proceeds to pay out the existing ones or they're going to have to sell off some of their assets . And while I'm sure a lot of them would like to offload the regional malls the problem is there just aren't a lot of buyers out there that are willing to buy these individual malls. And so maybe they might have to sell off some of the more popular assets but that could increase their allocation to these malls . So it's it's a question definitely that's up in the air and that a lot of people are looking at right now .

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Burning Issues: Franklin Buys Legg Mason, SoftBank's Missteps & Real Estate Redemptions

Franklin Resources Inc. and Legg Mason Inc. helped pioneer asset management in the 20th century. On Tuesday, the venerable but fading names said they will combine in an effort to compete, as low-cost index funds upend their industry. Bloomberg's Sonali Basak, Sarah McBride, Natalie Wong and Lisa Abramowicz discuss the recent headlines in the private markets on "Bloomberg Money Undercover". (Source: Bloomberg)

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