Q3 2020 Earnings Call
This time and like to welcome everyone to the Hamilton Lane incorporated third quarter fiscal year 2020 earnings conference. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session I'd like to hand, the call over to John Oh Investor Relations manager you May begin your conference.
[music]. Thank you Denise good morning, and welcome to the Hamilton Lane Q3 fiscal 2020 earnings call today, I will be joined by Mario Genie meeting CEO, Eric Kirsch, Vice Chairman and it's all Varma, our new CFO.
Before we discuss the quarter's results we want to remind you that we'll be making forward looking statements based on our current expectations for the business. These statements are subject to risks and uncertainties that may cause actual results could differ materially.
For the discussion of these risks. Please review the risk factors included in the Hamilton like implementing fiscal 2019, NK and subsequent reports we filed with the FCC.
You will also be referring to non-GAAP measures that we view as important in assessing the performance of our business reconciliation of these non-GAAP measures to get can be found in the earnings presentation materials, which will be referencing throughout the call and wants to be shown on the webcast.
Materials are available on the public Investor Relations section of the Hamilton mine, but.
Oh detailed financial results will be made available when our 10-Q one spot.
Please note that nothing on the call represents an offer to sell or solicitation to purchase interest payments made.
Beginning on slide three.
Year to date, our management and advisory fee revenue grew by 12% Waller fee related earnings also grew by approximately 12%.
Translated into year to date, non-GAAP EPS of $1.41 cents based on approximately $76 million of adjusted net income and gap, yes, a $1.44 cents based on approximately $40 million of GAAP net income.
And with the two prior fiscal quarters, we had once again declared a dividend of 27 and a half cent per share this quarter, which keeps us on track with a 29% increase over last fiscal year end equates to $1.10 cents per share for fiscal year 2020 with that I'll now turn the call over to Mario Thank.
Thank you John and good morning.
As John noted we are pleased that a tool has joined us as our new Chief Financial Officer, and Treasurer, which became effective on January six.
To bring short for two decades of leadership experience in financial services. Most recently at Bank of New York Melody, where he held roles as head of business strategy and Chief Financial Officer for wealth management.
As many of you know we're still in the press release, a tool will be succeeding Randy Stillman retired from Hamilton way after having served the company for over 22 years.
Randy will be staying on into the year to ensure smooth transition.
Along with everyone at Hamilton way and extend our sincere thanks to Randy and wish him the very best in his retirement.
Now shifting gears, a little I want to address the topic that we here at Hamilton mine are very proud to discuss.
Eighth consecutive year Hamilton mine was recognized as a best place to work in money management by pensions and investments magazine, we only want we are one of only five companies to earn this distinction for eight consecutive years, which is as long as they've been bestowing The award for those who have followed US since we became public you have consistently heard a speak to the importance of fostering a.
Workplace culture that our employees are proud to be a part of every single day, we believe that pride directly correlates to willingness to go above and beyond for our clients and a strong desire to win at whatever we are doing we employed terrific people, who in turn make Hamilton wane, a truly unique and special place to work.
Next I want to touch point, a recent piece of news regarding the relocation of our global headquarters to Conshohocken, Pennsylvania for those unfamiliar with the suburbs of Philadelphia or new location is less than 10 miles west of our current location. We have signed a 17 year lease to occupy approximately 130000 square feet newly constructed buildings.
Slated for completion in late 2020 or early 2021, that's nearly doubles, our current footprint and combined with the long lease gives us plenty of room to grow well into the future having significantly outgrown our own expectations. We have been extremely short and space for the past several years I've been forced to split our team across two locations here in Dallas Kenwood.
We are excited to bring everyone back together under one roof and frankly, we continue to believe that our headquarters location is an advantage for this from both from a cost perspective as well from a cultural one a tool will cover the financial specifics in his section.
Turning to the results for the quarter beginning on slide four here, we highlight our total asset footprint, which we define as to some of our age you EME assets under management and AG way assets under advisement total asset footprint for the quarter stood at approximately $488 billion and represents a 4% increase to our pool.
<unk> year over year, continuing our long term growth trend consistent with prior quarters, you when growth year over year, which was a truck approximately 7 billion or 13% came from both our specialized funds and customize separate accounts I continues to be diversified across client type size of client and geographic region.
Our focus remains simply growing in winning across both lines of business and we're pleased with the success.
Moving to anyway, as we're seeing with the U.M. growth year over year, which came in at approximately $12 billion or 3%.
Was from across client type and geographic region as we mentioned on prior earnings calls anyway can fluctuate quarter to quarter for a variety of reasons, but the revenue associated with anyway does not necessarily move in lockstep with those changes and while this quarter saw an increase in any way dollars relative to the previous quarter, we'll continue to emphasize.
No direct correlation exists between the scale of the you $8 and revenue generation continued growth and scale of our eight you weigh remains an area of focus over the longer term given the advantages. These dollars bring whoever growth and scale will not supersede our disciplined approach to ensure that we are finding the appropriate match between our services and the needs of the parts.
Ocular client.
Let me now turn it over to Eric.
Thanks, Mario and good morning, moving on to slide five we highlight our fee, earning AUM as a reminder for hearing that you ended the combination of our customized separate accounts and our specialized fund with basis point driven management fees.
We will continue to emphasize it. This is the most significant driver of our business as it makes up over 80% of our management and advisory fees.
Relative to the prior year period total fee, earning AUM grew $4.6 billion for 14% stemming from positive fund flows across both our specialized bonds and our customize separate account.
Taken separately nearly $2.1 billion of net fee, earning a U M came from our customized separate account and over the same time period, nearly two and a half billion dollars came from our specialized funds.
Growth continues be driven by four key components.
One re up from our existing clients to winning and adding new clients three growing our existing fund platforms and for raising new specialized funds. What you also see here is that our fee rates have remained steady even while we continue to grow fee, earning a U M.
Moving to slide six yearning at U.M. for more customized separate account stood at approximately $23 billion growing approximately 10% over the last 12 months.
We continue to see growth coming from a variety of avenues.
As you've heard us say in the past re up from our existing client base remains a key component of the growth. In addition, we continue to expand our existing client base by winning and adding brand new relationships, which in turn provide a growing base for future re up opportunities.
As for our specialized funds growth continues to be strong, we're executing well across our product suite and demand remains robust coming like the rest of our business from a diversified set of investors around the globe.
Over the last 12 months, we achieved positive inflows of nearly $2.5 billion, resulting in a nearly 23% increase in fee, earning AUM.
The main driver is our current secondary fund during the quarter, we held in additional close the totaled approximately $265 million of commitments. This now brings the total dollars raised for this product to approximately $1.4 billion. Two quick reminders first our previous secondary fund totaled approximately.
1.9 billion in size.
Second we have until Q3 fiscal 2021 to complete the raising of this current fund.
Given that fees on this phone started in a prior quarter. This closing did generate retro fees.
The next largest drivers of the U.M. inflows for the Finalization of our most recent Coinvestment bond followed by our credit fund rounding out. The are you on growth was continued success across our various white label initiatives.
As well as positive net inflows for our semi liquid vehicle.
We remain encouraged with the growth we have achieved with our fee, earning a U.M. through this fiscal year to date.
The interest and demand for private market exposures continues to grow and Weve continued to be beneficiary of this growth as a leader in the asset class.
Let me now shift and talk about technology.
You've heard us speak in the past that we see investing in technology as critical to our leadership in this asset class. Our approach has been simple identify unique technology solution providers, who we believe we can help make better and the industry better and put our balance sheet capital behind them.
We not only become a user of the technology with a strategic partner as well. This strategy has thus far proven very successful and we're excited to announce our most recent partnership with can new intelligence.
Good news in early stage SaaS company aiming to eliminate the industry wide problem of manual data entry for investors in alternatives.
The new automates the end to end workflows related to data extraction validation and delivery of hard to interpret.
Unstructured financial documents, including partner capital statements cash flow notices K ones, all items that we and others throughout the industry deal with and high volume.
We are optimistic that can new will help unlock new efficiencies for us and for private market investors around the world.
We are investing into new series, eight participating alongside NASDAQ ventures and others.
Let me end this section with what we believe is a very noteworthy announcement on January 30, Onest Hamilton Marine acquired but limited partner version of the software platform called cobalt from cobalt parent company bison.
While specific terms the deal are confidential the transaction was a mixture of cash from our balance sheet and us agreeing to retire some of our stock in bison.
At some of you will recall, we invested in bison the parent company in 2016 and became the single largest shareholder of the company. Our original thesis, which is played out nicely was that the industry was in desperate need of an analytically driven software solution to manage data and risk.
We have worked closely with the company over the past four years to build out offerings for both general partners and limited partners.
This transaction now allows us to fully control the service offering that we believe overtime can be a growth driver for our company and most importantly allows us to meet the needs of our clients who are increasingly putting value on private market focus data analytics and technology.
Bison remains fully focused on its platform cobalt GP, which provides the GP market would be a central tools they need to collect analyze and report on fund and portfolio company metrics.
We intend to continue using the cobalt brand for our LP offering and remain in close strategic partnership with bison as well as remain the key shareholder.
As part of our original investment and bison not only did we become a large user of the software, but Hamilton Lane had secured exclusive distribution rights to the LP version, along with the revenue share arrangement with bison.
We began selling that LP offering in January 2017, and we've been using cobalt LP, both offensively and defensively.
Offensively as a way to provide a service for Lps with whom we've not yet had any relationship and defensively as a way to differentiate from competitors and door to hold overall pricing.
At present, we have three types of clients utilizing cobalt. The first is simply those who have purchased a subscription to the software independent of other Hamilton Lane services.
These clients represent the largest component of our subscriber accounts.
The second our clients with committed a large amount to one of our specialized funds and have received an initial free subscription with the ability to renew as paying customers and the third our separate account advisory and or back office clients, who have security cobalt subscription as a component of their overall relationship with us.
For competitive reasons I will not go into the granular metrics around our cobalt offering.
But as of the end of January the annual recurring contract value for disk for direct to subscribers of cobalt LP was $1.8 million.
In addition, we receive additional revenue from bison four data licensing to their GP product now while admittedly starting at a basis zero just a short while ago, our annual growth rate year over year does stand at over 100%.
The dedicated cobalt revenue today sits in our reporting and other revenue line item.
We are extremely excited about adding a full blown SaaS offering to our platform and believe that our willingness to invest in technology and data continues to set us apart from competitors.
Most importantly, it enables us to best serve the needs of our existing and prospective clients continuing our focus on wanting to be able to work with any eligible investor seeking any level of assistance in the private markets and with that I'll now turn the call over to a tool to cover the financials.
Thank you, Eric and good morning, everyone.
Marty I mentioned earlier I have come on as the new CFO for Hamilton Lane I'm excited to help build upon all the great were already in place and look forward to working with you all.
Now moving to slide eight of the presentation here, we show the year to date financial highlights for fiscal year 2020.
We continue to see very solid growth in or does it.
Good management and advisory fee up 12% versus the prior year, driven by stronger Phil accrual for core products and services.
Our specialty funds revenue increased $14.6 million.
The prior year period, driven by approximately $1.4 billion rave.
Latest secondaries fund in the current fiscal year and approximately $500 million rave between period for our latest co investment fund.
We recognize $2.8 million here today in vitro fees from the co investment fund compared to $1.1 million in the prior year period.
As many of you are likely aware investors that come into later closes at the fundraise for many for prouder the retroactive fees.
Getting back to fund first close.
Therefore, you typically see a spike in management fees related to debt funds for the quarter enrich subsequent closings occur.
Revenue from our customers separate accounts increased approximately $4 million compared to the prior year period.
The addition of several new account in Rio from existing clients.
Revenue from our advisory and reporting offerings was relatively flat compared to the prior year period.
The final component of our revenue is incentive fees.
Incentive fees for the period was $17.5 million were approximately 9% of total revenue.
Noteworthy this quarter that we saw an additional four vehicles move into realized incentive fee position.
While the dollars a small it continues to show a positive trend, but strong performance.
Increasingly diversified forces have carried interest.
And lastly, the overall agent for a carry generating vehicle.
Moving to slide nine we provide some additional detail on or unrealized carry balance.
We saw strong growth in this quarter with the balance of 15% from the prior year.
Even as we recognized approximately $27 million.
Incentive fees over the last 12 months.
As you can see from the slide the growth came from both adding new Kevin generating fund as well as appreciation in existence.
Turning to slide 10, which profile for earnings.
Our fee related earnings year to date were approximately 12% versus the prior year period.
As a result, if the revenue growth we discussed earlier.
In regard to or expenses total expenses year to date increased $4.4 million compared with the prior year period.
Gee, they increased $7.3 million due primarily to increases in commissions from foreign closings in the current year period.
An increase in consulting and professional fees.
And an increase in technology related expenses.
Total compensation and benefits decreased $2.9 million.
Due to the nonrecurring for the Earnout expense from our real asset acquisition.
Alluded in the prior year period.
As one of the decrease in incentive fee.
Related compensation.
The final item on expenses relate to the commentary Mario provided earlier on our new lease.
Over the last five years, we have grown headcount at over 10% a year.
At the same time or headquarter space has not changed.
As we contemplated or new headquarters in this important to find a solution that could support our expected growth far into the future.
A large extension that footprint, coupled with the 17 your before.
The newly success and start when we have the right to take possession.
Which is expected to be in late Threeq you sometime during Fourq you off this calendar year.
Due to this timing will likely be expense in both our current and future headquarters leases for a short time period.
As it stands today longer term, we expect the impact to Archie Andy expense will be in run rate increase of $4 million to $5 million.
I mean from the new leave.
We expect to be Fred and any upfront and for the buildout of perceived to be expense evenly over the 17 year term.
However, at the onset of secondly, the cash outlay for rent excluding to build out would likely be less than what gets excess due to the built in gradually step up in rent payment over the 17 year term.
A portion of the new rent expense is likely to start in or next fiscal year.
We are however, still finalizing the detailed and the exact timing this market finally.
Given the private public disclosure around or move we wanted to share what we do know as soon as practically possible.
Moving to our balance sheet on slide 11, our largest asset on the balance sheet is investment alongside our clients in a cut for my separate account, especially funds.
The growth this asset, which increased 27 per cent compared to the prior year period reflects the growth for business.
In regard to reliability senior debt is our largest liability and we continue to be modestly levered.
And with that we thank you for joining the call and are happy to open it up for questions.
Ladies and gentlemen to ask a question. Please press Star then the number one on your telephone keypad, well pause for just a moment called acuity roster.
Your first question comes from Ken Worthington with JP Morgan Your line is open.
Hi, good morning.
Maybe first the incentive fee outlook accrued incentives continues to rise how should we think about to gross incentive income.
In 2020 versus 2019.
And maybe any color you can share.
Cadence if that is at all possible.
Sure Kevin. Thank you, it's Eric we're happy to take that I would say as we kind of adult within the script.
This story continues to be a positive one the pieces that we can control our how many vehicles are we raising that actually have come to carry component and you see that that continues to grow very strong year over year until we've essentially added about 20 accounts over the last two prior years.
The other piece that we can control is making sure that we're investing in good transactions and I think you can sort of see that reflected both in the performance of the vehicles and you can sort of see that flowing through in terms of the unrealized carry appreciation and what we're sort of showing on the other income which is effectively our investments alongside clients. So all of that to us points.
Hi, good results good growth around that you also see that those assets are continuing to age. We note that for vehicles rolled over and are now unreal realized carry position, you'll recall that we're using again sort of the most conservative scenarios here around how we treat Kerry we've got to be in the full cash position. So I think this is all.
Then become so we would say very well positioned now what sort of depends on what happens with the markets at the markets continue to stay as they are I think we expect to continue to see good results across the carry pool.
Okay.
And then just maybe a cobalt pricing.
Yes, you were I think retiring shares like is there a taxable loss here or is your taxable gain here is there anything that actually.
Flows through the piano.
You know of of any substance and maybe not.
Then just hi is this the first time, you've fully has acquired a technology company before like you've got a lot of investments but is this the first time, you've you've got all the way with like a 100% ownership and and maybe you can do one more time why does it make more sense to acquire all of cobalt versus to continuing.
To participate it through a Rev share inflation.
Sure So Ken it's Eric I'll stick with that one.
The answer to your first question around is there going to be any kind of tax will impact or flow through the answer to that is no. So the acquisition was a mix of some cash off a balance sheet and thats simply agreeing to retire some of our stock, but no impact there on PML.
Your second question in terms of.
What does this all mean is this the first time the answer to that is yes. This is the first time that we have wholly acquired technology, 100% and have fully brought that piece in house.
To your third point of does this sort of makes sense or was there another way to participate the business at bison was set up as we noted into sort of two components. One that is very clearly selling to GPS and one that selling to Lps for us we don't want to be in the business of selling to GP, that's not our focus it's not our core target audience.
We deal with LP is only so I think having bison the parent continuing to focus on the GP market makes the most sense. The reason we believe it makes sense for us to fully acquire the LP side and bringing in house.
Really it lets us to kind of control the destiny.
Bison has been an incredibly important strategic partner to us and it's a relationship that we value today and we'll continue to value in the future as a large shareholder and I think the fact that we're keeping the brand reflects the fact that we intend on working very closely side by side with the two components, but us owning this outright means that we can decide pricing strata.
Jeez investment in R&D technology direction footprint for that we feel like the product has good traction. It has good brand we have obviously a customer base that using it very successfully and so we think it's at a maturation point, where we think we can help sort of move it to the next level and be core and strategic to our business.
Great. Thank you very much.
Thank you.
Our next question comes from Michael Cypress with Morgan Stanley. Your line is often.
Hey, Good morning. This is Peter solution standing in for Mike Sypris, I'm, just hoping to give some color on a potential seasonal uplift in fundraising and calendar on Q, just noting that that's historically been one year stronger quarters. Thanks.
Sure, it's Eric ill take that Peter Thanks for the question I think what you see is there is some seasonality, but I would say it's also largely driven by just where we are in the product cycle mix. We have said on prior calls and we'll reiterate here again.
Our products tend and again historically have tended to have more barbell approach is to fund raising your.
You're giving clients oftentimes in incentive to come into a first close with some sort of the closing discount that's very much industry norm today, and so you entice people to come into an early closing to be anchor and to be supportive.
And then you have the rest of the group that tend to want to wait until the very backend and so you tend to have heavy front and having ending I think for us on the secondary side. The fact that were at the 1.4 number and are sort of sitting here in the middle we think bodes well for where that is we've got a lot of time left on the calendar to continue to raise that we note that its.
Really into Q3 of fiscal 2021, and so we think we're very very well positioned for that the other part that does tend to be calendar oriented is around some of the separate account not surprising to you that some of the clients will make decisions at at the end of calendar year, and so you often tend to see clients focusing on re ups.
New contract extensions at the end of their calendar year period in the.
The end of effectively the fourth quarter.
Your next question comes from Alex Boston with Goldman Sachs. Your line is open.
Hi, good morning.
So maybe follow up to Ken's question earlier around cobbled and the opportunity you guys see for Hamilton Lane by owning 100% of that part of the business. So.
I think you said the A.R. is 1.8 million.
Can you expand on that a little bit meaning are there other sources of revenues that could be a little bit one offish as that business grows and more importantly, how do you guys think about the addressable market for this part of the business now that you own it.
Maybe talk a little bit of like percentage of your Lps are currently use them, where they could go over time, just to kind of help frame the opportunity better.
Sure, it's Eric ill take that so I think the way we think about this as we noted just kind of this offense and defense. So on an offensive side cobalt has a very much of an empowering tool to Lps, who want to have some element of kind of do it yourself component to their analytics and data and so for some of those clients they may not be core.
Hamilton Lane customers. So it opens up in another part of an addressable market for us.
Some of the existing Hamilton lane customers, they're already paying us to do a lot of that work for them and so the way we can use that defensively as a way to differentiate.
I mean, what we're offering and what competitors are offering we've talked in the past about one of the ways, we're able to kind of maintain our fees at a very steady rate is that we're kind of working harder for that dollar today, we believed that the wider the service package get we think thats more pressure that we're putting on competitors, we're going to struggle to kind of match us service for service.
We think by owning this technology it again sort of positions us in a very clearly differentiated way. The other piece, that's nice and again, we're using it as Herman enticement of Hey, if you're looking at our secondary fonder someone else's secondary fund. This is a little park that we can include again by owning this technology outright it just as another.
Thing that we can provide the customer to have their experience with us be very very different than what their experience would be with competitors. We think the addressable market here is very large we continue to see more and more lps flowing into the marketplace and so as we know it's early days the growth has been very attractive and so what we have today, an A.R.R. is not obvious.
Driving our business forward, we think we can use this in a lot of different ways to have both positive revenue impact as well as positive differentiation against peers.
Great and that makes sense.
And just a follow up around the expense guidance. So large comments around the lease and the impact on January but maybe just taking a step back as it were looking into your fiscal 21.
Just frame kind of the the outlook for expenses, both for comp and non comp as you look out into next year.
Sure, It's Eric I'll stay with that one I think what we're seeing here is that I think the DNA story has been sort of a multifaceted. So in the early years of being public. We're obviously, putting in some additional expenses related to being a public company I think what you're seeing now is really the result of being a growth company you're seeing some of the tech spend continue to go.
The Commission's piece, we talked about and Thats. The result of having successful fund raises that you do have some commissions that you're paying out that said I think those pieces will continue to be a factor, but aside from the new rent increase I think we're working very hard on kind of holding the line on additional DNA kind of increases around that.
We've made a lot of the investment now and you're seeing it and you're also seeing and frankly in the comp side comp is actually coming down now part of that is again sort of the result of the earn out not being there, but the other pieces. We're seeing some of the benefit of that technology, making the employee base more efficient and us not needing to go add a ton new bodies every time, we add new business.
Those tools are beginning to start to pay off again early days for that but we think very encouraging.
Great. Thanks very much.
Your next question comes from Chris Kotowski with Oppenheimer and company. Your line is open.
Hi, Good morning. This is Kevin <unk> filling in for Chris and Thanks for taking my question.
The overall landscape for the year ahead, what expectations do you have on journal fundraising trends and as recent news had any impacts on that for example, if LP is focused on geography for estimate has been impacted by news from the drone environments. We've been seeing figures floating around roughly say like a 50 to 100 basis point impact on China's GDP as a potential result.
Hi, Kevin as Mario.
We have not.
If Chinese GDP went down 1% I think we would be sitting here, saying it will have virtually no impact on fundraising I think that the fund raising trends, we see our more secular in terms of the appetite for alternatives across all of them, whether its equity or debt or real assets.
And that everything we have seen everything you have read indicates that that continues the trend towards having more alternatives in portfolios again across all the different kinds of alternatives.
It's something that we see continuing on into the 21 and a few years more so as you look at the landscape I don't think it may be impacted month over month, but it's not impacted in any material way looking out quarter over quarter year over year simply because as I said people want more.
Our alternatives in their portfolios. So I don't as we look at it we just don't see any change in that trend.
Certainly based on any news or anything that is happening in the markets.
Okay perfect. Thank you appreciate it that's it for today.
[noise] again to ask a question. Please press star one on your telephone Keypad. Your next question comes from Robert Lee with KBW. Your line is open.
Good morning, guys. Thanks for taking my questions.
Maybe just following up on the fund raising.
Clearly aren't you talked about the secondaries fund raising and stuff you can you give us a little bit maybe updated color around I know, there's as you mentioned the credit and evergreen funds are also.
Other strategies and maybe not listed here that maybe are starting out or that we.
It.
Could be coming onboard over the next year.
Hey, Rob Thanks, It's Eric ill take that so I think you got it right, which is secondary fund is sort of the big flagship that we're focused on credit as you know is perpetually a focus since that that one year investment cycle. So we're effectively always in market raising.
We didn't go into and we won't go into kind of every quarter, what's happening on the fund flows for the Evergreen. We did note that it's been positive inflows, we continue to see very strong traction there and our again, while it's early very encouraged with what we're seeing I think on the new product side I think for competitive reasons don't want to overly telegraph kind of what we.
Have a in process around that we do continue to work on and are focused on expanding the product offering and so our intend to do that and I think as we start to see more traction there and we get to a point, where we're happy to talk about it will do so.
Okay, Great well then also maybe on the separate account business.
If theres any kind of how if you could give on maybe kind of like pipelines. If we look out over next 12 months is kind of steady as she goes with kind of.
Relatively consistent kind of 10% ish type growth or is there any change in kind of investor appetite around that increased or.
Decreased.
Ron It's Mike.
No it looks to be the way it's been the pipelines good.
That's true demand for separate accounts remains healthy and we feel like we're well positioned to meet that demand as you know the separate account market is one where people want very different things. Some want you know just just geography or this kind of risk return profile.
And as portfolios develop people want more separate accounts because they want something that is tailored to what they are trying to achieve in the private markets. So our outlook and our experience based on what we're seeing in terms of the flow of interest.
That that is a very robust part of the market and we just don't see any any big change in that from what we've experienced.
Great if I could just maybe ask one follow up this is going back to the secondaries fund so.
Understanding the last one was a billion nine and you still fund raising over a period of time being how do you think of it.
Some competitors out there you kind of get the since they do.
Larger fund raises they kind of close it all more quickly is there something different do you think about at your approach to fund raising and how you like to close a fund versus what you're seeing from some competitors.
Sure Rob it's Eric I'll take that I look I think it's a mix I think everybody has a different approach of when they fund raised and how invested they are and what their approaches with Lps I think we frankly have liked.
More of this kind of steady approach, we like the funds being open a longer period of time.
Recognize that some of our separate accounts invest in the products. So having that open having that product accessible to our customers. We think is a very positive thing.
For us to kind of tried to rates that we don't see a lot of advantage to it and so I think this is that sort of to each of their own that we all have a different style on doing that but from our end I think we feel good about where we are we feel good about the capital it's flowing in and as Mario mentioned the pipeline on the product side also remains as robust as it does on the separate account side.
Okay, great. Thanks for taking my question.
There are no further questions queued up at this time of kind of call back over to Eric Kirsch for closing remarks.
Great. We wanted to say thank you. We appreciate the support we appreciate the time today have a nice debt.
This concludes today's conference call you may now disconnect.
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