Episode summary
Mike Milken: Who Gets Access to Capital? | Podcast | In Good Company
In Good Company
· · 39 min · Hosts: Nicolai Tangen · Guests: Mike Milken
Summary
Mike Milken argues that the central question in finance is who gets access to capital, and he traces his own answer back to a 1965 encounter after the Watts riots with a young African-American man who said he would be denied capital because of his race. That experience pushed him to study credit and conclude that many long-held beliefs about risk were wrong, including the idea that investment-grade debt was always safest and that sovereign debt was inherently superior.
He describes how Drexel and the high-yield market helped finance companies and sectors that traditional lenders overlooked, from energy and biotech to cable, telecommunications, casinos, and homebuilders. Milken says access to long-term capital helped create jobs, and he argues that private credit today is largely a modern version of public non-investment grade debt, with the main challenge being maturity mismatch and weak risk management.
The conversation also covers his philanthropy, especially the Milken Center for Advancing the American Dream and his work in medical research. Milken says health care and public health have driven more than half of global economic growth, and he frames his current motivation around his grandchildren, curiosity, and preserving upward mobility in the United States.
Key takeaways
- Milken says a 1965 conversation about racial exclusion from capital markets set his lifelong mission to widen access to financing.
- He argues that non-investment-grade companies created more than 60 million U.S. jobs in the last 30 years of the 20th century, while investment-grade companies created minus4 million.
- Milken says private credit is "really no different than public credit" for money managers, but warns that maturity mismatch can still trigger losses.
- He claims more than 50% of global economic growth has come from advances in health care and public health.
- Milken says curiosity and education are the most important traits for young people because they prevent them from being "stuck in the past."
Notable quotes
“access to capital financial technology served as a multiplier on the world's largest asset human capital”
“we've probably prepared a 100,000 slides and questions to give to people on different things and let them have selfdiscovery”
“more than 60 million jobs were created in the last 30 years of the 20th century by non-investment grade companies and minus4 million jobs were created by investment grade companies”
“the most valuable thing they can do is education and curiosity”
How the episode opens
I asked him, did they go into finance to change the world? And if this was the 1970s, I would tell you that one in four would have told me they went into finance to change the world. When I speak to the incoming classes at various financial institutions, maybe 1% go into finance to change the world.
Hi everybody. I'm Nicolola Tangan, the CEO of the Norwegian Sovereign Wealth Fund. And today my guest changed how the world raises money.
Mike Milkin built the high yield bond market always from nothing, seeing value where other people saw only risk. And today whole industries exist because of it. cable, mobile, media, and many of the biggest names in finance learned the business from him.
He also survived a cancer he was told would kill him. He's given away fortunes to medical research and education, and last year he opened a center in Washington devoted to the American dream. Mike, a warm welcome.
Thank you. Great to see you. — Now, Mike, how did you come across the high yield market? — Well, it wasn't by accident. There is an event that occurred on August 11th, 1965 in America in Los Angeles called became called the Watts riots. And I was back from college at Berkeley and I was in Los Angeles and I went down the next day to try to figure out what was going on. And I met a young uh African-American man who told me he wouldn't have access to capital because of the color of his skin.
How old were you then? — I was 19 years old and I couldn't really understand why people could possibly be denied access to capital — Because of the color of their skin. Uh but meeting this one man changed my life and I went back to Berkeley and I began to study credit for hundreds of years and what I discovered was that every one thing that people said about credit was wrong.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- access to capital
- high-yield bonds
- private credit
- credit market outlook
- medical research and growth
Companies and tickers mentioned
- Norges Bank Investment Management
- Milken Center for Advancing the American Dream
Watch the episode
Watch “Mike Milken: Who Gets Access to Capital? | Podcast | In Good Company” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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In Good Company, this episode and its artwork belong to Norges Bank Investment Management. Octagon is not affiliated with the show; this page is an independent summary.
