Q4 2019 Earnings Call

You're not required to update or revise?

Any of these statements following the call in addition some of our remarks made today will include references to non-gaap financial measures. You can find reconciliations of those measures the most comparable gaap measures in the artist earnings release. I will now turn the call over to Eric Olson Michaela and thank you everyone for joining the call or reading the transcript.

Given the significant and ongoing change in the investment management industry. It's more important than ever that we at Artisan Partners know who we are and that we understand our Competitive Edge.

It's also important that our clients and our shareholders understand this so, you know what to expect and what not to expect.

Artisan Partners is an investment firm. We provide differentiated and high value-added investment opportunities to sophisticated clients we are not nor do we aspire to be a product manufacturer engineering distribution oriented strategies to build scale and compete solely on these are Edge is the combination of our talent and our operating off we partner with talented investors to build and develop investment franchises that deliver for clients. We provide our investment franchises with a unique combination of investment on Ami and operational and business support. Our platform is designed to serve our investment franchises their success equals client success, which equals our success in everything we do is design for investment talents and thrive.

We are a growth for thoughtful growth is important to our people.

Clients and our shareholders as an investment firm our business growth has followed and we'll follow the success and development of our investment strategies and capabilities.

As we Mark our 25th anniversary, we continue to believe that this business model and philosophy are right for our firm and for our future we have driven the long-term results wage growth. I will discuss any minute and he will guide our operations and decision-making going forward. This is Who We Are

Turning to slide to we continue to position who we are as a firm within the framework of long-term asset allocation and managers structure since we do not engineer projects or vehicles for short term fads. We must be thoughtful about investment opportunities and talent for the long term as we have stated in past calls. This will produce a lumpy results.

Our first generation strategies that long-term demand for investment style market cap and geographically oriented strategies.

our second

generation strategies that participated in the globalization of asset allocation and manager structure

with our third generation strategies. We are in the early Innings of the current Evolution driving demand for low-cost exposure products on one end of the spectrum and alternative and private life classes on the other end.

We have been clear about where we fit and where we don't we have no Edge in the path of business, which is about scale packaging and distribution.

On the other hand alternative asset classes fit. Well with who we are the space is talent-driven plants are looking for something different and they're willing to partner what they trusted invest adviser to pursue High value-added results over a longer time periods.

We expect the current trends and our investment mindset to push us into deeper relationships with clients and business partners to deliver investment opportunities to compound wealth

if we

Execute as we have in the past we expect our business to continue to evolve away from the scales Asset Management firms, providing package products and further towards an investment firm providing differentiated high-quality investment results.

Flight three shows more specifically how we have reacted to the asset allocation trends.

Over the last ten years we have grown from five investment teams to 9 added capability to the global Equity franchise expanded from 11:00 strategies eighty-two seventeen.

The talent we have added and the strategies we have launched are all in the direction of Greater degrees of investment Freedom greater ability to generate differentiated investment results less likely to be replicated with exposure oriented products.

Expect the future new teams strategies and investments will continue in this vein. We also expect that we can and will maintain our recent pace of growth and diversification provided. We are able to identify and Source the right investment Talent.

The data on flight for validates the business decisions shown on slide three and in less than six years. We have built the 3rd Generation strategies into 12.1 billion including 9.1 billion of net inflows all 7 third-generation strategies that performed well for clients.

Degrees of freedom have also worked in our second generation strategies, which include are three original Global strategies during the decade. The second-generation strategy is Greg from 1.9 billion to 44.1 billion and a um, that growth was driven by strong investment returns including excess returns as well as more than a $19 billion and net inflows.

Lastly are first-generation strategies on which this firm was built generated at approximately $56 billion of investment returns for clients in Iraq, and approximately 8.8 billion of returns in excess of benchmarks.

Outflows from these strategies more than offset the organic growth in the rest of our business a significant portion of the net outflows represent Successful profit-taking by our clients.

The first generation strategies remain relevant for large portions of the market that retain more traditional asset allocation.

Put it all together during the decade r a u m Grew From 46.8 billion to 121 billion.

We generated approximately 81.9 billion of investment returns for clients including approximately 13.3 billion of returns in excess of Benchmark indices.

Expanded are non us business primarily with the second-generation strategies. We deepened our reached into the wealth Marketplace, especially with our third generation strategies that we maintain fee rates that reflect the high value-added differentiated nature and relatively limited capacity of our investment offerings.

Flight 5 summarizes where we stand today. We have nine investment franchises with outstanding leadership strong track records and capacity for growth recent investment performance has been particularly strong last year on an asset weighted basis. We generated 578 basis points of gross returns in excess of benchmarks about translating into approximately 4.8 billion of excess returns.

13 of our 17 strategies outperform their broad-based Benchmark after fees

Are developing World fun beat the index by 2352 basis points and finished in the first percentile. If it's Morning Star Pura group for the year off five other artists and Sons finished the year and the top decile of their Morning Star. Groups and 10 of 15 finished in the top quartile an absolute wage index relatives and pure relative terms 2019 was an outstanding performance year for our firm.

When demand and distribution was also stronger than indicated by the headline number firm wide net outflows 11 of 17 strategies had positive net inflows five of our strategies had net inflows in excess of five hundred million with our International smid strategy Leading The Way with one point four billion in net inflows.

For the year are third-generation strategies at three point nine billion and that inflows and organic growth rate of 63%

On the outflow side a significant portion of the outflows from are more mature strategies for driven by Clan rebalancing not terminations. That's particularly true Global opportunities and Global value strategies.

Turning to slide six. We are well-positioned for the future our platform and model are improving across generations of talent multiple autonomous teams different classes and long time periods. There's a good supply of talented and entrepreneurial investors looking for a home operational distribution and Regulatory hurdles continue to drive demand for our model. We are excited to add additional talent to our platform and expand our investment capabilities even more importantly we continue to develop our existing franchises evening Talent pools expanding investment expertise and laying the groundwork for future strategies and capabilities.

We plan to launch a second strategy.

For our Global value team later this month and we are actually working with other franchises to expand offerings in the relative near-term.

All of these ideas are talent-driven with the goal of establishing our investment franchises as go to resources for a range of compelling investment ideas.

We're also optimistic that our overall distribution outcome is improving. The third generation strategies are well-positioned to continue to raise funds aided by upcoming anniversaries wrong Pipelines.

And are more mature strategies, we expect continued rebalancing and headwinds consistent with recent experience having said that given strong track records and client demand. We bought several of the first and second generation strategies are poised to grow organically over the next year or so.

On January 1st. Chris crane started as head of global distribution Chris brings a wealth of experience to the job. Yes served as a distribution leader at several other firms and he has a deep understanding of Artisans model having spent the last four years successfully leading distribution for developing world team.

Bye-bye.

We're reviewing our distribution structure and strategy. We want to make sure we are appropriately matching Resources with opportunities optimizing both our service and sales efforts. I regularly speak about the changing distribution landscape the rise of the wealth Channel and relative decline of the traditional institutional Market the importance of reaching people digitally globalization a buyer's market in terms of fee structure and vehicle preference.

demand for customization and tailored Solutions

many of these Trends have cemented in recent years.

It's important that we objectively review how we manage and grow the business of each artist and franchise and make adjustments to maximize client duration and accelerate growth where we have investments in life.

Addition to reviewing our own structure and model. We continue our has historical practice of exploring third-party distribution relationships.

You folks.

On relationships that provide leverage opportunities and access to different geographies and client types. We are excited about several of the opportunities. We're currently working on Thursday.

All of these distribution efforts will be consistent with who we are as a firm our distribution must complement and enhance our Edge as an investment firm protecting investment in time and finding the right clients on the right terms for what each franchise does.

We have done a good job of that historically and I have confidence. We will do a good job going forward. I will now turn it over to CJ to discuss our recent Financial outcomes.

Thanks, Eric. I'll begin one slice 7 I said it's under management and it's a year at $121 billion dollars which was up eight point five billion or 8% compared September 2019 quarter and I'm twenty four point eight billion or 26% compared to the end of 2018.

growth in both

Ordering your primarily due to Rising Global Equity markets and strong access performance partially offset by net client cash outflows.

And then client cash outflows during the quarter in a year included 470 million of outflows related to cash dividends paid but not reinvested in our mutual funds.

The 12 months ended December Thirty One two thousand and nineteen excess returns added approximately 4.8 billion and more than offset. Net client cash outflows of 3.3 billion.

Eric discuss the ten year history of our strategies by generation slide eight shows the progress we have made over the last year as stated. We now managed over $12 billion in seven third generation strategies almost double the um from a year ago, and now those strategies represent 10% of total.

Growth has been through both investment performance and that client cash influence our first and second generation strategy is also generated strong excess returns for their clients offset impacted by continued outflows driven in large part by client profit-taking and rebalances away from ActiveX.

Turning to our financial results slide nine highlights the changes in our in 2019 and 2018 given strong growth in the fourth quarter of 2019 and ending at um at $121 billion We Begin the 2020 calendar year with a 9% Head Start Over average AUM in 2019 of 111,000. This is a very different position than in 2019. When we began the calendar year at AUM of 96.2 billion as a result of the sharp decline in global Equity markets month. Fourth quarter of 2018 is always I will focus the remainder of my comments on adjusted results, which we utilized to evaluate our business and operations.

Our complete Gap and adjusted results are presented in our earnings release.

Revenues, which are on flight ten ruin the quarter of 3% compared to the prior quarter and 9% compared to the December 2018 quarter reflecting higher average AUM cult a slight decline in the effect of fear eight year over year due to the mix of our AUM across vehicles.

For the year average AUM was 2% lower than in 2018 largely reflecting the lower levels of AUM at the beginning of the year.

Revenues were 4% lower in 2019 and they were in 2018 reflecting the lower average AUM and slightly lower effective average fee rate partially offset by an increase performance fees and 2019.

Changes in operating expenses through and slide eleven and the quarter and year they were largely due to the variable expense components of our p&l adjusting to the level of revenues these variable expense incurred primarily consists of incentive compensation and third-party distribution costs and make up almost 60% of our operating expenses.

Operating expenses were up 1% compared to the same sequential quarter primarily as a result of higher incentive compensation expense due to increased revenues and increased travel costs money. Mostly offset by lower equity-based cost expense.

Compared to the same quarter last year operating expenses were also up 1% primarily as higher incentive compensation expense was partially offset by lower equity-based topics page and one boarding costs incurred the December 2018 quarter related to the nine us small meet growth strategy.

For the year operating expenses decreased primarily as a result of lower incentive compensation and third-party distribution expense due to decreased revenues and lower equity-based complex pants off 2018. Also included the onboarding cost for the new strategy. These decreases were partially offset by increases in occupancy expense related to Investments relocations higher compensation and benefits expenses on an increased number of full-time employees and increased technology expenses.

Our operating margin in the quarter increased to 38.1% from 37.2% in the September 2019 quarter and 33.5% in the December 2018 quarter worth reflecting the impact of higher average AUM and revenues.

for the year

Our operating margin declined to 35.5% compared to 36.8% in 2018 primarily as a result of lower average AUM in revenues partially offset by lower fixed wage as items. I explained earlier

Johnson net income was 58.5 million seventy-five cents per adjusted share and the December 2018 quarter. This is up $0.05 compared to the September 2019 quarter worth $0.14 compared to the December 2018 quarter for the year adjusted net income was $200 million $2.67 per adjusted chair.

Looking forward to 2027 RAV on position at the end of 2019 and so far into 2020. We have a strong forward lean into 2012 edition. We will realize in the first quarter of 2020 performance fee of approximately 2.5 million from our Global opportunity strategy.

And close are difficult to predict. We are confident that our third generation strategies are positioned well for continued growth, we will continue to invest in people and Technology to take advantage of these growth opportunities and expect salary and benefits costs to be approximately 10% higher in 2020.

Consistent with our historical practice. We granted Equity Awards this quarter which will increase shares outstanding by approximately 920000 Shares are approximately 1.25% off the full year equity-based compensation expense will be down approximately six million in 2020 as we roll off the 2015 Grand and roll or an amortization of our 20 20 grand off occupancy extent should be approximately 1 million lower in twenty-twenty has 2019 included several investment team relocation expenses.

As a reminder seasonal benefits costs which include employer contributions to health and retirement plans and payroll taxes typically increase compensation by the expense by about four million in the first quarter of each year. In other 1 million of seasonal expenses related to non-employee director compensation is also recorded in the first quarter.

Yeah.

For management discussion begins on slide 13 the company's board of directors declared a variable quarterly dividend of $0.68 per share of class a common stock with respect to the December 2019 quarter and a special annual dividend of sixty cents per share which represents the remainder of the cash generated in 2019.

Total dividends paid on 2019 cash generation the $3.08 per share which represents approximately 9% yield based on current share price levels.

Process to determine the level of special dividend declared each year involves us assessing the current market environment and business conditions and any needs to retain cash for Strategic investment for purposes absent retaining cash for any of those purposes. We would anticipate the cash generating each year will continue to be distributed to shareholders in the form of a special annual wage.

for moving

Balance sheet just a reminder and then the first quarter of each year portion of our employees Partners pre-ipo Equity becomes eligible for sale in total together with shares eligible for sale from former employee partners and shares a previously became eligible for sale. Approximately ten million shares held by current and former former employee partners are eligible for sale in the first quarter of 2020 early partners are not required to sell any shares. We don't know how many shares they will choose to sell if any depending on the level of employees desire to sell. We may execution a coordinated sale for some portion of these shares.

Our balance sheet summary is on the left side of our balance sheet position has remained relatively consistent in 2019 lower cash balance in 2019 primarily reflects. The higher percentage of cash distributed through quarterly variable digit dividends in 2019 compared to 2018.

overall

Our cash position is healthy and leverage remains modest.

That concludes my comments and we look forward to your questions. I will now turn the call back to the operator.

We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster.

Before we begin, please limit yourself to one question and one follow-up. If you have further questions, you may re-enter the question queue. Our first question comes from my carrier with Bank of America could go ahead.

Hi guys, this is actually Sean Kellman on for Mike. So you mentioned you were reviewing the distribution structure and strategy and looking at some third-party distribution relationships. Can you just tell us what some of the areas of Interest are in terms of channels and geography?

Yeah. Sure Sean. This is Eric. You know, I think we've all seen a pretty Progressive change in distribution partner ships moving to more captive distribution. So, you know a down tick over the last few years and open architecture to more captive wage distribution and there are partners that we want to look at from a regional standpoint to partner with their our partners that we want to talk about with regards to vehicle or holding space delivery to help diversify how we distribute off and we're reviewing those groups which we think will help bring leverage to our model as opposed to us trying to replicate and become dead.

um

Oh, hey a vehicle oriented firm. So we continue to look for those opportunities and as distribution has been changing and network box have been evolving and there's including technology. We're fairly optimistic and the this year and next year of expanding how we distribute wage as partners.

Okay, got it. And then just as a follow-up on performance see do you guys had strong performance this year? And we typically see some fees in the fourth quarter. I know you mentioned a couple million next quarter, but we're just wondering why you guys didn't realize any performance fees this quarter and how we should be thinking about them going forward in terms of seasonality.

Yes, so, this is CJ Sean. You know, we have a number of handful of performance V accounts about 2 billion in a in a um, two of those have a December Thirty One, you know performance measurement. And you know, you know based on on the formula, you know, we just didn't any earn any in those too. So it's quite a limited opportunity in each of the quarters. The one in next quarter. I'm had a January measurement date. So so that one's that one's fairly locked in which is which is why we we indicated that we'd be baptizing that

Okay. Thanks.

The next question is from Chris Cutler with William Blair, please go ahead.

Hey guys, good afternoon. You mentioned private markets and Alternatives. Maybe just provide a little more detail there on because where you think you'll be in a few years and that's page is the global value team strategy, um in that area as well.

Hey Chris, it's Eric. You know first on the global value is not in to the alternative space. It's it's leveraging off of their their current core capabilities with regards to the alternative and private Market space. We clearly see that's where asset allocation wage going. We've you know, think the art model fits quite nicely with the success of some of our newer strategies to log into that that space of asset allocation. We continue to see more teams externally that we're looking at as well as more thoughts of how to develop that within our teams. And uh, you know, you're starting to see an uptick and how people create public-private strategies that

have a crossover capability which

I would Define as just another confirmation of our thesis of degrees of freedom. And we we believe that that should be the broad definition that dictates where we go going forward as opposed to this loose definition of just what is an alternative space. So we continue to challenge our current teams on how to differentiate use degrees of freedom. And we continue to look at new um, investment professionals and strategies that would enhance the direction of the firm and the direct me towards the the alternative or private parking space. It makes sense and then I guess secondly any thoughts on uh-huh have transparent active ETF space. I know it's super early days, but I don't high level or you leaning more positive or more negative on the potential for that rapper.

we

Are very indifferent on the rapper if the the rapper is something that client's request and start demanding. We're very open to you know, package our strategy and the the more effective Raptor for clients and as that takes hold and it fits who we are will move forward on that. We we rarely get excited about a vehicle or a rapper as opposed to investment Talent.

Okay. Thank you.

The next question is from Bill cats with Citigroup, please go ahead. Okay, thank you very much for taking the questions this morning. I appreciate your prepared comments. So just starting off with maybe that last sort of like questioning two-part question and then I'll ask my follow-up after that. So first part of it is do you have enough real-time capacity today to more meaningfully competes. It seems like any alternative space among the public trade names. One of the themes is that as being Global Solutions providers, they're able to sort of consolidate market share from the LPS and then secondly just to sort of found you on not scaling the business little bit more those same companies are able to generate significant Alpha on the quantum level of higher-value. So why not open yourself up to a little bit more growth in some of the more scalable opportunities?

Yeah, the part of the real-time capacity to compete for.

What we're trying to achieve and we we review capacities for consistent and um long-term Alpha generation and Thursdays are our team in the middle works with each of the investment franchises to discuss capacity. We make joint decisions and as we see Alpha waning or if it's difficult to put the dollars to work, we will review capacity on a very frequent basis. So my mindset and I think the firm's make sure that it's all about excess return delivery and if capacity gets in the way of that will shut the strategy down and if that doesn't generate the level that the market anticipates for stock price at the client comes first is so is Alpha Delivery and the fact that others can significantly scale up, you know that wage.

that's always something we're looking at at how firms can't compete and

Dale up and consistently deliver Alpha and we will learn from those those firms but will stay true to who we are and deliver the alpha first and foremost the compounding of that wealth in the consistency of those clients and the present value that creates with long, you know duration clients, I think is the most powerful thing in in a in this business as opposed to just pure capacity and asset Gathering. Okay cellphone this just maybe stay on the same line thinking thinking your comments you talked about a number of products wage, um out there that you sort of feel good about it. You look into twenty-twenty and you also mentioned that you know sort of the pipeline. Do you have any sort of color on sort of what's coming in the door for a job in three purses any kind of potential rebalancing you might see and how that might compared to maybe the last year or two or last couple of quarters just in terms of relative impact.

I mean the signaling is what we stated which I think our model given the

Results we produced in 2019 and the consistency and longevity of our strategies and professionals speaks for itself in the marketplace and off that output is highly differentiated of the converse is going to a large hedge fund that's multi-strategy and Thursdays manages a risk at the central at the center of the firm and allocates dollars out versus the risk of going to start your own firm. The model is picking up in the industry. So we were seeing more and more talent and reviewing that talent in the direction is a continued degrees a great Freedom what we've always preferred and and like to do is to take those steps at degrees of freedom. That doesn't tax the operation wage.

To structure at a heavy load and so we've tried to incrementally stepped out and degrees of freedom that links to the operational footprint we have and we've developed um into the alternative as well as to the credit space that we have a lot of operational capacity there, but we will be mindful not to get too extreme.

Thanks. I'll hop back in the queue. Thank you.

The next question is from Kenneth Lee with RBC Capital markets, please go ahead. All right, thanks for taking my question you touched upon within your prepared remarks that you could potentially bring some some growth within the first generation the second generation over the next year. So just wondering if you could just highlight which specific strategies you had in mind what could be poised for growth? Thanks.

They need the strategies were were optimistic about is the there's been a few strategies that there's been some rebalancing around that have picked up capacity as well as have extremely strong performance. And you know, the the, they're revolves around those three points that we do think rebalancing pack abs and flows. And as long as you have a healthy relationship with clients, you can expect that money can come back in the strategies a coupled with we've opened up some of our strategies who are some available capacity as well as strategies such as our Global Equity has quite a bit of overall capacity to grow and given the performance, um that we've experienced last year and now over longer periods. We have decided to make a more optimistic.

statement on

And some first and second generation strategies.

Okay, very helpful and just one follow-up. If I met in the past you mention in regards to the third generation strategies, there could be some potential opportunity to expand further into the institutional Channel wondering if if there's been any progress updates on on that front. Thanks. It's helped us in the in the marketing and distribution to some open some doors that we haven't seen in a while the the choice Marketplace, um more specifically that the endowment Foundation space given our newer strategies wage what that that segment they've those third generation is done well in the intermediary space, but the blending of intermediary and Thursday

institutional

Um kind of fits in that family office endowment and Foundation space. So we haven't seen an enormous amount of wins in there in that space But we continue to see strong interest. You very helpful. Thanks. Again. The next question is from Robert Lee with KBW, please go ahead and try to take my questions. Maybe when you see Jay just a little bit of a modeling question, but I just wanted to be make sure I understood your comments around, expense for them or Twenty twenty. I think you said that up about 10% want to make sure I have that right? And is that kind of assuming kind of static acid levels?

Yeah, so I was specifically referring to sort of the salary and benefits line, you know obviously incentive comp is going to suck fluctuate with revenues equity-based cop. I think we've we've given some guidance there that that should be down over next year as well in total by 5.6 million. So my 10% was really really focused on the salary line just due to some hiring plans that you know will move forward with for the most part display what the markets do.

Okay, great. And then maybe just a broader question Eric, you know, maybe this is part of the the distribution review kind of you're going through but can you talk a little bit about your your own nine us initiatives or what were you thinking there? I mean for many years that have been kind of an incremental contributor to to growth certainly been a key driver and may I look through the last year, you know the market share of assets from outside US has been pretty flat had a little bit of outflow probably similar reasons to hear from rebound saying but I do feel how do you feel about your kind of nine us footprint. Do you see that as a particular opportunity for growth and investment for going forward?

Yes, we do. We really attacked the non us space over the last ten years from our institutional reputation and institutional relationships. Um, we're broadening the the breadth of of channels. We're looking at life continue to think about how to expand into the intermediary and family office space outside. The US will also believe that some of the strategies such as developing world and Emerging Markets the the sustainable emerging markets in the developing World strategies both have, you know, a good opportunities outside the US that we think look promising in this year and next year and as well as Thursday.

as the global the

Scott Reese strategy establishes their record and the early Alpha generation has been very strong that'll spark another wage. I think another growth phase outside the so it's a combination of having the right strategies and broadening out our distribution footprint.

And and and if I could maybe one last question, maybe it's a little bit more near-term, but clearly given the run up in the markets the past year of past decade, I guess with the past year, you know you talk about obviously something being some rebound thing and we'll call it profit-taking but as we look ahead to this year, do you have any sense that a lot of that actions kind of happened already or would you just expect normally as you get into the new year, you know, you can see some more of that at least over the first part of the year.

Those are those are always hard to predict. I'd be looking into a crystal ball if I answered that, you know so far month through January and there tends to be you know, some rebalancing but most are you know looking at their their asset allocation and then, you know resetting there for Capital Market assumptions and and throughout the corner you'll see some rebalancing and you know a says the quarter progresses will will get a feel for that. But, you know clearly with the

What the the current?

The market of environment, um with regards to the rates and and we're uh, a quality markets are at um, and I think you would see some continued rebalancing away from equities off, but everybody is at a fairly low allocation. So I'm not sure how how much lower they'll go.

Great. Thanks for taking my questions.

The next question is a follow-up from Bill cats with Citigroup, please go ahead. Okay. Thanks to the extra question. I'm just calling back. Maybe CJ for you son Capital allocations. You think about 20-25 give me a commentary around central unlocking of shares that could be sold by employees in the size of it. What is your thought how you thinking about just sort of Capital Management policy between the dividend payout. I appreciate your prepared comments or saying this vehicle look like 2019 strategically, but any sort of subtlety to that flexibility to that to potentially absorb some of the secondary pressure that could be in front of you.

Yeah bill, you know there there really hasn't been any change to our thoughts around, you know, allocation of capital or or repurchasing shares to offset wage, you know the public we you know, the number of shares that have been available really, you know, haven't changed dramatically available for sale haven't really changed dramatically. We do have you know, each year another trench becomes eligible. But you know, that number has been you know, you know, seven eight million for the last two years and you know up to now people have opted not generally to to sell so so the the short answer is now we haven't we haven't changed our thing here.

And just one less qualified. I'm sorry to beat a dead horse. Here are extends the rebalancing maybe answer the question this way since you're through the month of January, how does Thursday January look for rebalancing perspective versus a year ago, obviously a lot going on the market levels as well.

That's a dramatic change year-over-year. You're you're talking a fourth quarter of 18. Now that was down significantly wage. I think there is a little bit of people in client's a little Frozen by the the the major Decline and then the compare that after this fourth quarter and coming into this year. I think there's there's more optimism coming into this year and I think we we see we would I would say we see more opportunities after this was January then last January.

Okay. Thank you very much taken all the questions today.

This concludes our question-and-answer session and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.

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