Welcome to Thoughts on the Market.
I'm Lindsay Tyler, Morgan Stanley's lead investment grade TMT credit research analyst.
And I'm here with Michelle Wang, head of investment grade debt coverage in global capital markets.
On this special episode, we're recording at the Morgan Stanley Technology, Media and Telecom conference,
and we will discuss the latest on the technology space from the fixed income perspective.
It's Thursday, March 6th, at 12 p.m. in San Francisco.
What a week it's been.
Last I heard, we had over 350 companies here in attendance.
To set the stage for our discussion,
technology has grown from about 2% of the broader investment grade market about two decades ago to almost 10% now,
though that is still relatively a small percentage relative to the weightings in the equity market.
So can you address two questions?
First, why was tech historically such a small part of investment grade?
And then second, what has driven the growth sense?
Technology is still a relatively young industry, right?
I'm in my 40s and well over 90% of the companies that I cover were founded well within my lifetime.
And if you add to
that the fact that investment grade debt is by definition a later stage capital raising tool when the business of these companies reaches sufficient scale and cash generation to be rated investment grade by the rating agencies,
you wind up with just a small subset of the overall investment grade universe.
The second question on what has been driving the growth, twofold.