Q3 2019 Earnings Call
To your investment group earnings conference call and webcast for the third quarter 2019 during the call all participants will be in listen only mode.
After the presentation, we will conduct a question answer session to be added to the Q. Please press star followed by one at anytime during the call. If you need to reach an operator. Please press the star followed by zero. Please note. This call is being recorded today November 5th at 11, 30 am Eastern time.
I would now like to turn the meeting over to Brett Paramount head of Investor Relations. Please go ahead Brett.
Thank you good morning, Good morning, welcome to price your conference call to discuss our results third quarter ended September Thirtyth 2019 picking up on slide three of hardening, our new Investor day before we get started please note that we may make forward looking statements about our future business and financial.
The format each forward looking statement subject to risks and uncertainties that could cause actual results could differ materially probably don't forget that additional information regarding these factors appears in our ASCII filings, including the form 8-K filed today containing our earnings release and in our 2018 form 10, K. any forward looking.
Statements, we make on this call are based on assumptions as of today and we undertake no obligation to update them as a result of new information or future events.
We'll also reference certain non-GAAP financial measures information about any non-GAAP financial measures records, including a reconciliation of those measures to GAAP measures can be found on our website along with a slice that when you are using as part of today's discussion.
Among young our President and Chief Executive Officer answer on our Chief Financial Officer will lead to call I now turn the call over to <unk>.
Thanks, Brad good morning, everyone and thanks for joining us today.
Let me begin on slide five was a poster presentation by walking through some of the highlights for the third quarter.
We reported Ian I per share or 42 cents for the third quarter compared to 40 fives for the second quarter.
The three cents difference quarter over quarter is attributable to higher placement agent fee.
Equity markets depreciation across some non U.S. regions.
Our outflow of 6.2 bidding for the quarter were largely concentrated.
The orphan sub advisory accounts was about two bidding related to victories acquisition off the USA and the related reallocation.
And another two bidding related to continued.
Well allocation from a specific clients in the U.S. large cap equities, so part of Viceroy space.
Looking forward with a potent.
Business mix concentrated in high growth segments of the industry.
We remain confident you know organic AOL and the revenue gross prospects.
Particularly as the Investor interest remains high across many off all quantitative strategies.
And our turns you strategy. This approach there lakes vintage funneled leasing cycle over the next few quarters.
Turning to slide six we have made considerable and the measurable progress in refocusing our business since the beginning of 219.
And the returned substantial value to shareholders along the way.
Streamlining our center resources has generated eight to 10 knitting annual expense savings.
As a result rice fair, it's now a much more nimble and the efficient company with entrepreneurial and performance driven culture.
Our senior management team continues to be aligned with shareholders through a compensation structure.
Focus the I'm out of the money options that keep related costs low anza incentivizes us to remain focused on creating value for shareholders.
Turning to capital management.
Ours substantial free cash flow.
Combined with a new 415 meeting credit facility.
Provides us with ample financial flexibility.
This quarter, we increased both the Sars and lender participation in our new facility.
Which includes a broad range of leading us and the international financial institutions.
We remain prudent with respect to leverage levels.
And the repaid sorry, if I mean off indebtedness in the third quarter, bringing our less that's so adjusted EBITDA level to 1.61 0.8 times.
Oh, so we've repurchased 16.6 million shares this year.
Through the end of third quarter.
It was additional 2.7 been ishares fallback, thus far in the fourth quarter.
We have spent approximately 250 many.
Waters today, it to the share repurchase.
Generating earnings accretion of 13%.
Going forward.
We will remain a balanced capital management approach.
Focused on gross investments.
Trevor discussed a moment.
As well as opportunistic share repurchases as appropriate.
Our growth strategy is all lines on slide seven.
And has four main components.
The first is to leverage our high growth business mix.
Which provides broad participation you know attractive in demand segments of the industry.
We have simplified our financial reporting to align with how we think about or from our differentiation and our growth prospect.
We believe this approach where further increase the transparency of our business model.
And the better illustrates the underlying progress across all Quantus solutions are turning tubes, and the liquid arfive segments.
A key differentiating factor for price fair and our organic growth outlook.
Is that 66% of our management fee revenue is derived from the prolonged and solutions and our turn to segments.
Nicely aligning with secular demand trends.
Second.
We're focused on expanding our capabilities in high demand higher fee areas.
Seeds and employee investments remain key leavers to diversify our affiliates business and it provides greater stability across the franchise.
While also positioning us to participate more broadly in high growth higher face segments of the industry.
Seeded products building momentum, including Quanta solutions single factor multi asset class and China Ishares strategies.
As far as liquid are far emerging markets equity and leveraged low capabilities.
These and other basic seeded products are expected to generate upwards of three bidding in gross inflows intelligent lighting and into early and 20 to 20.
We continue to innovate alongside our affiliates.
And have several alternative strategy is currently in development as well.
In addition to working with individual affiliates.
I'm excited to shared that's we're working with some Mercer.
To develop a series of customized investment solutions to address the long term return investment needs of institutional investors worldwide.
This is spoke strategies.
What's bringing together Bryce fears highly regarded sways of investment capabilities.
With mercers industry, leading CIO expertise.
To provide attractively priced open architecture investments framework.
Early reaction on mouth select global clients have been very positive.
And we're optimistic about the potential for this new Elias.
Our business model provides a unique advantage offering this type of products.
As we can bring together.
Independent investment process and the philosophy of seven distinct highly specialized affirms into a single point of access for investors.
Moving on we are actively engaged in cultivating relationships with a range of high quality teams platforms and businesses was complimentary investments capabilities, including decreased alternative credit and the infrastructure.
We have entered into late stage discussions with several attractive businesses and are pleased with our progress today.
As it was all elements of our business.
We will continue to maintain strict return discipline.
In evaluating all potential transactions.
Third we remain focused on increasing they penetrating growing markets.
In key areas afterwards.
Our global team has established multi level relationships with many of the worlds largest banks [noise].
Several wells phones and family offices.
The markets, such as China, Latin America, Europe , and the Meatiest.
In addition, this quarter, we expanded our newest coverage to include the insurance general towns segments.
More and more insurance companies are looking to outsource their investment needs to high performing specialties like our affiliates.
Finally in everything we do we remain focused on creating value for shareholders.
Our strong recurring free cash flow from operations supplemented by prudent levels of leverage provides financial flexibility to finance, our gross initiatives and opportunistic share repurchases.
As we have infused the organization was a rigorous expense discipline.
That is focused.
Allocating resources to maximize growth.
Thank you once again and now let me turn the call over to Soren to discuss our results in greater detail sorry.
Thanks go wrong.
Turning to slide nine we provide an overview of our three segments, which we believe best reflect the three distinct parts of our business.
This enhanced segment disclosure, we're providing restaurants more transparency on our differentiated business mix.
And better identify the growth drivers going forward.
It also allows investors to figure that progress across each of our key business lines at a more detailed level.
As an aside and in case, you're wondering we will continue to provide asset class level you M. disclosure.
But we have provided historically and you will see it in the 10-Q.
So turning back to the segments.
Tracking solutions segment shown on the left hand side on the fly.
Include strategies, where we are leveraging highly sophisticated proprietary technology to process vast amount of data to deliver strategy isn't solutions to our clients that are tailored to achieve their specific risk and return objectives.
For example, our affiliate Acadian has consistently invested in its technology for decades to allow them to isolate and deploy a multitude of factors across asset classes geographies and currencies.
Second best produce the outcomes sought by the clients.
We see strong secular tailwinds supporting the segment as clients are increasingly seeking differentiated capabilities.
This segments should also benefit as clients continue to ask for highly customized solution for their target outcomes instead of pre packaged offerings.
The strategies into segments, such as low volatility multi asset class.
Multi allfast single factor multi asset income are all highly scalable and provide tens of billions of dollars of capacity to meet the growing local demand.
Our alternative segment and the middle column, primarily comprised of private market strategy like private equity real estate and real assets such as far as street.
Most of our revenue in that segment comes from stable management fees from long term committed capital and not performance fee.
These strategies continue to enjoy strong demand from institutional investors, which we believe will drive meaningful organic growth for us going forward.
Particularly as several of our strategies approach there next vintage fundraising cycles.
Over the next few quarters, which will grow our you've I'm in the segment between 2020 and 2022.
By way of restaurants, we raised approximately 12 and a half billion dollars an hour alternative strategies in 2016 to 2018 fundraising cycle.
No liquid Allfast segment on the right most column.
Includes a diverse mix of fundamental long only public security investments across a range of asset classes geography and capitalization ranges.
In this segment, we have proven track record of outperformance across market cycles over long periods of time.
While we have seen elevated outflows in that segment.
From LOPI us equities of advisory area.
We continue to develop in seed higher fee higher margin strategies, such as emerging markets global equity and leverage loans.
As a result, our margins in that segment continued to be healthy.
So looking at our Threed segment, and the fact that quantum solution and alternative segments that together comprise two thirds of our revenue are enjoying strong secular tailwinds.
And our liquid Allfast segment nicely complements our overall business.
It positions the company very well to produce strong organic growth.
We would expect quantum solutions and alternative segment to account for more than 80% of our business in the coming years and generate strong revenue and earnings growth for the company as a whole.
We also continue to seed and are also open to acquiring new end demand strategies, particularly in those two segments.
Should we expect to generate additional growth on top of our current positioning.
And we're taking these end demand strategies to new geographies, such as Asia, and new channels, such as insurance has gone earlier mentioned.
So this diversified business mix and our suite of 100 plus strategies across the three segments.
Enables us to offer to our clients comprehensive product like total solutions.
The gone mentioned.
And these kind of product show the true power of our multi affiliate model.
And also the diversified business mix produces very strong cash flow.
Which we can continue to used to repurchase our shares and generate additional EPS growth.
So to summarize on the fly our comprehensive and differentiated business mix is well positioned to produce organic growth.
And we continue to invest in new product and these two areas, which we expect to generate additional growth.
Now turning to each of the segments individually on slide 10, we show the results for the quarter from our quantum solutions segments.
This segment continues to generate positive flows given the trends favoring differentiated strategies and solutions.
I touched on earlier.
And while there could be inter quarter movements from time to time. This segment should continue to generate strong long term organic growth.
The adjusted EBITDA in the segment remained consistent as last quarter at 35.9 million.
And the drop in EBITDA compared a year ago quarter was driven by Fourq, you 18 market decline.
Turning to the alternative segment on next slide Slide 11.
This segment has produced strong growth for us generating 12, and a half billion of high fee flows between 2016 and 28 team.
That I touched on earlier.
So coming off of that strong UN growth 29 team has been primarily focused on deployment of capital.
And as I mentioned earlier, we would expect to get back to growing our a few of them into segment between 20 2022 .
Multiple strategies are nearing their next vintage fund raises.
And our track record continues to be very strong.
As you will note from the Pie chart on the left.
Most of our a you I'm in this business is invested in private market strategies in private equity real estate and real assets.
Related Lee the Pie chart on the right shows that most of our a ramp and the segment comes from long term capital either in commingled funds are separate accounts.
Additionally, 90% to 95% of our revenue in the segment comes from management fees and not performance fees.
The adjusted EBITDA for the segment came down from 12.1 million last quarter to 8.8 million, primarily due to give you a timing of the outsized placement agent fee that was mentioned earlier.
And the revenue and EBITDA versus a year ago quarter are lower due to absence of catch your feet as we've mentioned in the past the funds raised in 2018 generated catch a fees accruing from the time of course closings of those vintages, which were in 2016 in 2017.
This year, we do not have any catch a fees as we completed the fundraising of those vintages in 2018.
Having said that this dynamic will reverse in 22.
Between 2020, and 22, when you start fund raising with new vintages.
Turning to our third segment liquid Alpha segment on slide 12.
This segment has generated and maintained strong long term investment performance of clients over a long time periods through high quality teams and disciplined investment processes.
As we touched on earlier, we saw elevated flows this quarter of 6.8 billion of which approximately 2 billion was related to victories acquisition of USA and 2 billion was from continued reallocation by a specific sub advisory client in the U.S. Largecap strategy.
While the victory USA transaction.
Was episodic and one time, we do expect to see more outflows from the client in U.S. Largecap strategy for next several quarters.
So while the latter issue is not onetime it is a finite issue given that it's only one point.
And having said all that these outflows are generally as we had mentioned from low fee strategies.
And we continue to see inflows in higher fee strategy.
As a result of this diversification into high fee strategies and continued expense discipline our margins in that segment continued to be very healthy.
Moving to slide 13.
Maybe compare our key metrics for Q3 19 to prior quarters.
On a consolidated basis.
I want to call out on the fly our weighted average fee rate on the bottom left hand side.
Which decreased from 37.5 Bips in Q2 19.
35.9 business this quarter.
This decrease was mainly driven by market depreciation in higher fee asset classes, such as emerging market equities.
Along with the with the increase in placement agent fees.
That they'd be touched on earlier, which directly reduce the management fee as a contra item against revenue.
These two factors primarily led to the decline in our EPS from 45 cents to 42 cents.
The next slide Slide 14 shows our net client cash flows and revenue impact of flows by segments.
The chart on the left hand side shows the net flows for our quantum solutions segment and alternative segment have generally been positive.
With negative net flows concentrated in the liquid Alpha segment.
For this quarter quantum solutions and alternative segment had 0.6 billion of.
Positive net flows while liquid Allfast segment had 6.8 billion of negative net outflow nexmos.
Total net client cash flows was negative 6.2 billion.
Our gross sales declined slightly quarter over quarter from 5.1 billion to 4.6 billion.
While the gross outflows weakened from 7.8 billion to 12.1 billion.
Which included the 2 billion, we mentioned from victory is acquisition of USA and the 2 billion from the Subadvisory Cline.
Inflows were at 34 Bips.
While outflows were 30, Bips again, highlighting the concentration of outflows in lower feed products and our continued migration toward higher fee strategy.
Please note.
On this page that our NCCN and revenue impact of NCCN.
Now includes income and distributions reinvested by clients.
And excludes realizations to more accurately reflect sources of recording flows and to provide more granularity on our flows.
Now I'll also point your attention to slide 23, and 24 in the appendix.
Where we do provide additional.
Granularity on our key segments.
Note that the other column here, primarily reflects our headquarter expenses and corporate level items, such as interest and taxes.
Now I'd like to turn the call back to the operator, and we're happy to answer any questions you may have.
At this time those with a question should lift their phone receiver and press star followed by the number one on their telephone keypad to cancel a question. Please press the number sign please hold for a brief comment well, we compile the Q and a roster.
Your first question comes from the line.
Craig Siegenthaler from Credit Suisse. Your line is open.
Hey, good morning young.
Morning.
Coming back to the commentary you guys had on acquisitions.
How do you think about buying and in demand business and in Kwan for alternatives, but at the valuation is much higher than your current five times be multiple.
Yes, Hi, Craig.
Okay. As we've said Doug everything we do we there's an intense focus on EPS and and a return on the capital so any acquisitions.
Our seed feeding any new strategies, we compare all of those things.
To what we can get from repurchasing our own stock.
And thankfully there is a high bar.
As you noted repurchasing our own stock at six to seven times fee is highly accretive and and we've noted that and have repurchased.
No no every quarter in a meaningful amount.
So we essentially that's how we look at M&A.
Even though we are looking at in demand strategies.
While it may not be compete comparing to repurchase.
On the same quarter right off the bat, we look at the overall levels. It has to be more accretive and repurchases for us to do something on the acquisition side.
Crack limit your sad.
To that.
The team. So we're talking too there are happier was our motto. So it's not necessarily just.
The price all devaluation selling consideration and our motto allow them to continue to have ownership in there from the foundation so even keep their name.
But more importantly, we'll be able to help them to grow.
Globally, and we can provide seed capital. So so for US is really looking at.
Some of those in demand strategies, and how can join forces together to grow the pie bigger rather than just all rights acquisition of 100% of the inches.
Got it yeah and in the quarter, it's great to see all the buyback activity just taking advantage of the stock at these depressed valuations. My second question is as they look towards next year 2020, and I think about the very large illiquid off fundraising potential.
All that could be coming.
I know you sized the last one I think was 12 and a half billion. How do you think about timing when this could start how long. This could go on how long could we see chunky high fee inflows continue for.
Yes, Hi, Craig this is the third.
So now as you would have seen in the last.
Fundraising cycles that lasted two and a half years from back half of 2016 too.
End of Tony 18.
On the alternative side note fundraisers can be episodic they are not smoothed every quarter.
But essentially.
Overtime.
No we what we're looking at it much more from.
Multi year perspective as opposed to specifics.
Quarter.
But no but did provide that reference point of how much we did.
Last cycle.
And.
That's that's useful to note.
Got it thanks for taking my questions.
Your next question comes from the line of Kenneth Lee from RBC Capital markets. Please go ahead. Your line is open.
Hi, Thanks for taking my question I'm, just want to see if you could just further expand upon the opportunity for developing be customize investment solutions with Mercer, one or two things give a little bump or do you know as to what types of clients, you're you're aiming for and perhaps give us an idea of how the economic.
So I would work for Bytesphere. Thanks.
Thanks, Ken.
If you look at our business model, we have seven.
In a highly respected affiliates offering independence investment process until also phase.
At Bryce Fair, we can provide those strategists, we just single point of access for some of launch.
Hi, Thanks, So we're really talking about so some of the biggest institutions.
Globally.
And in terms of working with Mercer as you know Mercer is really that eater.
In.
Asset allocation and portfolio construction, so early feedback from a group of select.
Global institutional investors has been very strong so we're very optimistic about the potential for the offering.
Oh.
Gotcha, and then just one follow up if I can and it's great that you broke out the different categories between the the liquid Alt Alpha the alternative and the Quanta solutions.
Looking at the operating margin within the liquid off.
Specifically, they look pretty high 40% within that range wondering if you could just give a little bit more insight into into the dynamics there maybe just up.
Tell us why so much higher than some of your other categories and weather has to do with just the the whole dynamic point with the sovereign advisory mandates. Thanks.
Yeah.
Yes, Ken.
So no essentially.
The margins that we that we did we see there are many things that go into it.
One of which has also the.
The minority interest held by the members of the management team collectively.
So it's not necessarily.
Indicative if you will have the underlying profitability, but no doubt, but net net yes, we do get high margins and in that business.
We do benefit.
From.
Oh from teams that have.
Managed money for their clients for long periods of time.
And and can manage more and more capacity.
They as I touched on earlier Theyve also.
Generally most teams had been very disciplined on on on expenses.
And.
And we are migrating towards.
Higher fee strategies, and the and the outflows are coming from lower fee strategy. So it's a combination of although all of the above.
If you will.
So we do expect.
We do focus and margins a fair bit and we do try to proactively.
Due to continued to maintain them.
Very helpful. Thank you very much.
Your next question comes from line of Chris Harris from Wells Fargo. Please go ahead. Your line is open.
Thank you.
So.
It seems like we're getting closer to getting a.
Hey, trade deals signed but China at least phase one of the trade deal. So I'm wondering if that does occur does that potentially open things up for you guys over there or.
Do we have to wait until phase three happens before.
That region becomes a realistic.
Growth driver for you guys.
Oh, Thanks, Chris of Yeah, we hope there would be some meaningful.
Yeah, I'll milestone for us so once the phase one is reached.
We have a very focused on there.
You know we have had many meetings at very high level as far as of working level.
So the trades.
Negotiation itself kind of change at the pace of our progress there.
But we.
We're very involved there.
But the way we look at China is really a long term.
It's going to be a very big markets, it's going to be long term commitments of course.
I'd like to show some progress.
Near term, but I think the key is really focused on long term there.
[noise].
Okay.
In terms of your fee rate. This quarter, you now and we know it's impacted by the item that you guys called out.
Should we be.
Modeling for expecting a pretty substantial recovery in the fourth quarter.
So in other words, a $5 million to $6 million uplift.
In the management fee run rate or is that not necessarily the case.
Yeah, and as we met as immense mentioned that one item that we call out on.
There's a footnote on page 11 sizing the placement agent be item.
We do expect to normalized.
Yes. It was prior quarter. It was so it was 1 million.
So there that delta and.
And the mix issue always is.
And impact on for your rate, which is which is hard to.
Quantify that essentially.
Mix between our higher fee emerging market strategies, and lower fee strategies that would be another thing that impacts fee rate and that that's harder one.
Okay. Thank you.
Your next question comes from the line of Michael Cypress from Morgan Stanley . Please go ahead. Your line is open.
Hey, good morning, Thanks for taking the question maybe just on capital management. If you guys have been pretty aggressive on.
Buyback front I think you guys had mentioned 16, and a half million or so shares repurchased here today, roughly like 16% or share count.
I guess, if we just look at the share price doesn't seem to be having.
The reward in the marketplace the intended.
Perhaps intent that you guys are looking for I guess, what point do you get to realization that maybe it's not.
Working out as well as you guys would have intended and maybe lead to a change in thinking around capital management, and perhaps maybe a refocus on the dividend maybe you could just update us your thoughts on the dividend policy, how you're thinking about that.
Yes, certainly Michael.
As we as we look at our our business and our growth strategy.
We feel fortunate that there are.
A number of levers.
From a status gold business perspective, but also from a capital deployment perspective.
That can produce solid earnings growth and EPS accretion for us right and we've touched on the.
Seeding new products acquiring.
New products.
Repurchasing shares and.
And thankfully there are good opportunities across all of those areas. We do compare all of these items that as I said earlier with each other so that the capital is going.
To the best uses.
Rather than rationing capital for across each of the each of the items and.
So we would say did that we'll continue to maintain that that discipline.
You know across these initiatives that whenever the highest return opportunities present themselves, we would execute on them.
The past few quarters, it has been repurchases and that continues to be attractive.
So we will keep that in mind on dividend perspective.
Just looking at all these opportunities it is.
Much more accretive and both on earnings as well as value accretion perspective.
To walk to to our company into the shareholders.
Yes to deploy the capital on those fronts and not dividends.
And then just maybe a follow up on the inorganic growth I think you had mentioned during late stage discussions with maybe several attractive businesses are these more teams or they firms. Just if you can provide any sort of color on how you're thinking about adding new relationships at bright sphere, and if you could just remind us and how much capacity you have today firepower for acquisitions.
I think the cash balances, maybe 116 and a half million, it's not all potentially available for deployment and then also to can remind us on the leverage capacity as well.
Yes.
Well, we can say is there a very highly regarded businesses now just teams.
But the business where the.
Founders, who like to Tim up what we saw a large institution like us to really.
For the next phase of gross particularly.
Globally, they can leverage out of our.
Global distribution and they can.
We can provide we've seen capital.
That type of opportunities where were really focused right now.
Right and then Mike on your on the capital question.
I would say that the way.
We think about our capital is really that no in terms of repurchases. We were generally think about no limiting that too.
Our free cash flow.
After dividends.
So that's a distinct pool of capital if you will know that we wouldn't really.
We don't really look at mid leveraged repurchases.
But we in terms of acquisitions, we do have.
Cash on hand, and then we we have our revolver, which we.
Increased to 450 million from the prior to the 50 million.
So we do have firepower available if opportunities become non.
If some of the opportunities reach finish line.
How much is that an aggregate sounds like it's the fourfifty from the data if I heard you and then it to the entirety of the cash line or is it a portion of that I guess, how much is at the parent versus the the affiliates.
Well all of the 450, we do have the revolver, we do have some withdrawn.
So we have about no.
275 million available on our revolver.
Thats yet to do.
That's yet to be withdrawn.
We have cash on hand, and we also have an upsize.
Feature on our revolver 150 million pounds. So so we do have the.
The size essentially available.
Not to go really up and down the spectrum. We are generally looking at it to go out mentioned.
Teams ambitious teams that really want to grow their businesses much beyond what they could stand alone some of them on earlier stage some of them are more developed.
But none of them are generally outside.
No. The the ranges would be just discuss in terms of capital deployment.
Okay. Thank you.
Your next question comes from the line of Robert Lee from KBW. Please go ahead. Your line is open.
Great. Thanks, Good afternoon, Thanks for taking my questions and I apologize if maybe you covered this earlier I got on a little bit late but can you update us on some of your.
Your global distribution initiatives, and maybe give us the Stan you know if we look at you know kind of sales how thats, how that's contributing to sourcing of assets and maybe update us on some of the investments, you're making or haven't made and and on the.
On it.
Global distribution side excuse me.
I sure.
Robert we have added.
Resources in Latin America Middle East in Asia.
Particularly in Asia, we have added.
Quite a few experienced professionals.
And they're working really try to.
Introduced Bryce fair and our affiliates to some this large institutions there.
So we are we're very optimistic.
Thus relationship where come through and not owning at at high level with those institutions, but also adds a working level and all I can says that they're watching level fully engaged with us.
So we cannot read a pin dining Saturday when those mandates were.
Come through.
But I think again the focus policies really tried to.
Cultivate long term relationships with those institutions.
Across different products, not just one product.
Yeah, well, maybe you know the corollary to that as an outside of the alternatives business. You know that's how we'll get a sense on.
In the aggregate pipeline so to speak a you know a across the franchise I mean is possible.
Great.
There's a way to quantify for at least give us color on kind of this RFP activity starting to pick up you know any kind of color around.
Under the health and shape the pipeline be great.
Hi, Robert we do we do have.
So a very strong pipeline as we mentioned earlier.
On our alternative strategies, we have a very good strong track record.
So we would expect on a lot of client clients coming back.
And gain some new clients across those strategies.
In our content solutions.
On segment as well.
We have a very healthy pipeline with clients interested in.
And in different strategies for different reasons, there there's good pipeline appliance for our low volatility strategy for example.
There are clients interested in multi asset class and single factor. There also compliance interested in China Ishares strategy.
Global equity.
As another strategy, yet and we're seeing some pipeline pickup for emerging markets equity. So I'm, just giving you a flavor that is basically it's a very diversified.
It's not a strategy that is seeing.
You know demand from clients and in terms of being that is these are all institutional mandates with.
The long gestation cycles, and it's hard to really pinpoint.
Which quarter, which specific quarter something would materialize.
We would that's why we're not able to provide.
Specific.
If you will specific pipeline today at more granular, but we're very pleased with our but the health of our overall pipeline.
Okay, great. Thanks for taking my question.
Your next question comes from line of Chris Harris from Wells Fargo. Your line is open. Please go ahead.
So I know, it's not showing up in the flows yet, but I wanted to ask you guys, if you're seeing really any signs.
That investors are starting to have increased interest in the value.
Investing style, because obviously, a turn and that would be a pretty big deal for you.
Yes, we do the Chris we do see green shoots of investors.
No.
Inquiring about.
Value and there are some searches about.
Value.
I would say that Theres also be though.
Sometimes it's also be no.
One step forward and to step back.
So does it change around but it definitely has been.
The longest period of time.
Where value has underperformed.
Growth and.
You know and lot of clients basically would expect amounted to come back anytime now essentially so.
So it's really hard to pinpoint specific timing of when.
Patrick will become the screen.
Okay. Thank you.
[noise]. This concludes our question answer session I'd like to turn the conference back over to go on young.
Thank you all again for joining us today.
Okay.