Q2 2020 Ares Management Corp Earnings Call
Welcome to the Irrs Management Corporation second quarter earnings Conference call. At this time all participants are in listen only mode. As a reminder, this conference call is being recorded on Wednesday August <unk> 2020, I would now like to turn the conference over to Carl Drake hit a public company Investor Relations for every day.
Management. Please go ahead Sir.
Good afternoon, and thank you for join US today for a second quarter 2020 conference call.
Joined today by Michael were getting our Chief Executive Officer, Mike Farrell, Our Chief operating officer in Chief Financial Officer.
In addition, David Kaplan co chairman of our private equity group Kipp Deveer had about credit group.
That's working it had about private equity groups will be available for the question answer session.
Before we begin I want to remind you that comments made during this call contain forward looking statements and are subject to risks and uncertainties.
He knows identified in a risk factors in her FCC filings.
Our actual results could differ materially and we undertake no obligation to update any such forward looking statements.
Please also note that past performance is not a guarantee features.
During this call we will refer to certain non-GAAP financial measures, which should not be considered in isolation from four substitute for measures prepared in accordance with generally accepted accounting principles.
In addition, please note that our management fees and clean Air Sea Port Wuxi.
Please refer to our second quarter earnings presentation available on the Investor resources section for website for reconciliations of the measures to most called directly comparable GAAP measures.
Please note that nothing on this call constitutes an offer to sell what solicitation of an offer to purchase the interested in any area.
This morning, we announced a we declared our third quarter common dividend 40 cents per share.
Presenting an increase of 25% although dividends for the same quarter last year.
It didn't will be paid on September thirtyth 2020 to holders of record one September 16th 2020.
We also declared a quarterly preferred dividend of 43.75 cents per series J preferred share, which is payable on September thirtyth. She doesn't 20 to holders of record on September 15.
Now I'll turn the call over to Mike were getting cold starts with some quarterly financial and business.
Great. Thanks, Carl and good afternoon, everyone I hope, everyone is healthy and safe and I wish you and your family as well.
So now with a full quarter be impacted the cobot pandemic behind US. We're pleased that our results continued to be strong and we couldn't be more proud of how our employees have adapted to the current challenges.
Our consistent revenue and earnings growth reflect our regionally and management fees centric business model and our steady growth clients and a U M in the global market for alternative investments.
Our second quarter was our 13th consecutive quarter of sequential fee related earnings growth with fiery $97 million, an increase of 26% in the same period last year.
In addition to reporting record at Bari, Our second quarter also set new records for most of our other key metrics, including management fees are UN tend to be paying at U.S.
Our second quarter FRB margins reached a post IPO high as we continue to gain efficiencies of scale and experienced slower operating expense growth.
Second quarter was one of our best fundraising quarters ever with more than $9 billion raised including approximately 5 billion from funds in our private equity group and our momentum across the platform is continuing into the second half the year.
Our strong fund raising has set us up well for future growth in management fees and earnings which can be seen by the sharp increase in our available capital and shadow at U.M. as Mike Mcferran will discuss in a little bit.
From a market perspective, the traded equity and debt markets have been very volatile in the first half the year with a quick dramatic sell off in March followed by a stark rally in the second quarter school and monetary stimulus coordinating with unprecedented speed and scope.
In the first quarter, we invested aggressively into the public traded markets during the dislocation and in the second quarter as markets rebounded, we pivoted more toward private investing with an emphasis on rescue capital and assisting larger companies with flexible capital solutions.
Well actions and policies by the federal government and the fed clearly helped provide interim support to the economy and markets broadly. During this period. We do think we're still in the early days at the economy filling the broader knock on effects from this crisis.
We continue to believe the tradable market technicals are disconnected from economic fundamentals and we're planning for a slow an uneven recovery over the next few years.
We believe investment opportunities with outsize returns will be available to those of us with patients capital and differentiated capabilities.
As we've talked about before and we'll do more so on our call today, we believe that we're well positioned to take advantage of this dynamic.
There are two strong long term trends that have benefited our business for many years and have only accelerated the pandemic.
First on the investing front the benefits of our scaled self origination capabilities and our flexible approach had become even more valuable volatile markets as investment opportunities tibbett between public and private markets.
Our coverage and significant relationship network.
Enable us to source attractive opportunities uncover relative value and take advantage and inconsistent market competition, particularly for larger companies.
So while transaction activity today is generally slower the competitive environment has significantly improved with many competitors tending to their existing portfolios, reducing workforces or unable to access attractive forms of new capital and liquidity.
Many banks of retrenching in both North American Europe, making it difficult for certain companies and assets to attract capital.
This has resulted in opportunities for scale players like Aries to step in where the traded markets are not available or not as attractive.
As an example, and the second quarter, we led the largest unitranche private credit financing ever completed a nearly 2 billion pound sterling private financing for a leading insurance brokerage company in the UK.
This transaction is a great example of what we're capable of executing for our clients and why many of them turn to probably be capital for enhanced flexibility and relationship purposes.
In this case, we had both UK and U.S. relationships with the company's sponsors and were able to structure of spoke solution that met the company's growth needs.
As a result, we were able to invest a substantial amount of capital across both our Europe, U.S. and European direct lending funds.
Our bias toward structuring our funds to be as flexible as possible isn't even greater advantage in today's market environment.
As an example, during the second quarter or alternative credit team, let a 400 million dollar transaction for a publicly traded mortgage riet.
We were able to structure and asset oriented solution, which included a term loan with warrants that enabled to read the sharp its financing and go on offense with respect to new investments and potential acquisitions.
Also of note our special opportunities team sourced a 400 million dollar investment solution for another public company, which operates in the outdoor advertising sector in the form of the convertible preferred.
Our teams are focused on helping companies strengthen their financial foundations and enable them to go on offense and consolidate market share.
Overall during the second quarter, we deployed $4.7 billion in our drawdown funds.
Paired to 4.1 billion from the same period, a year ago, primarily in global direct lending alternative credit and our special opportunity strategies.
Second major theme is that investors are continuing to consolidate the relationships in place more of their wallet share with trusted larger scale alternative managers with broad product sets.
In this environment, it's been difficult for investors to diligence, new managers, which is leading investors to commit more capital wouldn't known relationships.
The case for investing in alternatives has also been strengthened given the heightened market volatility in the traded sectors and near zero interest rates.
These factors can all be seen in our strong fund raising statistics year to date and our strong pipeline.
The first half of the year.
We have now raised $15.7 billion organically, excluding the 2.7 billion in how you went from the Denali purchases Q1.
Now puts us on track for one of our best fund raising years ever.
This is even more impressive since none of our large corporate direct lending commingled funds held an LP closing in the first half of the year.
Year to date, we've raised capital directly from 139, institutional investors, including 83 existing Aries investors and 56, new to our platform.
The existing investors accounted for 78% to the capital raised which we believe is a testament to our consistent and strong performance and the deep relationships that we've dealt with many of them overtime.
Specific to our second quarter fund raising approximately 5 billion was raised by funds in our private equity group.
Our special opportunities on you closed on one and a half domain during the second quarter, concluding its fund raising three and a half billion well in excess of our 2 billion dollar target.
Our six flagship corporate private equity fund, which held its first closing during the second quarter closed on approximately three and a half billion with 90% coming from existing investors.
The $7 billion of capital rates by our P. group means we're well on our way towards our goal of having at least $10 billion between the two funds to target investments in this attractive environment for stressed and distressed investing as well as for traditional private equity transactions.
We also raised 3.9 billion.
Across our credit strategies, which included commitments to public vehicles, new commitments to managed accounts and funds and additional closings on our flagship co mingled alternative credit fund.
Our alternative credit fund now stand at 1.6 billion towards its 2 billion dollar target and we continue to expect to meet or exceed our $2 billion targeted by the end of the year.
We also saw about 400 million of additional commitments to our real estate funds, where performance has been consistently strong.
Our fundraising momentum is continuing.
Our entire organization is highly focused on surpassing at least $30 billion of capital commitments. This year, which we've only done once before in 2018.
We currently have at least 90 Commingled fund raises either in the market were to be launched in the next six to nine months, including our four largest private co mingled successor funds.
These nine funds showcase the breadth of our offering and together represent at least $25 billion of incremental equity capital commitments targeted to be raised through the end of this year and into early 2021.
They include our fifth European direct lending fund, our six corporate private equity fund our second U.S. Junior capital direct lending fund, our second U.S. senior direct lending fund or alternative credit fund to real estate PE funds, the third Asian secured lending fund from our new areas assets.
Colleagues.
And our climate infrastructure fund.
We launched our European direct lending fund in May.
And it's targeted to be the largest spondon our firm's history.
We've seen strong client interest so far and we expect a significant first close in the coming weeks.
In addition outside of these highlighted funds our fundraising efforts will certainly continue with our managed accounts and strategic partnerships are public funds. Other commingled funds and closed end vehicles, all of which traditionally account for a sizable amount of our annual capital raised.
We're happy to see that our investors are highly engaged they ironed out their work from home investment processes and they recognize the attractive investment opportunities that can arise during periods of significant volatility.
By extending our wallet share with our clients, which include leading pension funds and sovereign wealth funds insurance companies private banks and others. We believe that we have a long runway for growth.
As our clients further expand into alternatives.
And we have the opportunity to gain share for manager consolidation.
In addition, our leading credit private equity and real estate franchises continue to attract a steady stream of new investors and we believe this will only be strengthened with over 115 institutional investors being onboarded with the closing of the SSG capital transaction of which approximately 90 are new to Aries.
We also continue to see an attractive rate of reps into larger existing strategies and the desire to commit new capital into other areas strategies.
Turning to a few other highlights in the quarter, we saw nice snap back in performance across most of our funds in Q2.
The performance was led by our most liquid credit strategies, which rebounded about 9% or more and both our loan in high yield strategies continue to outperform the respective benchmarks on a year to date basis.
Our European direct lending composite and significant U.S. direct lending fund Aeris capital, which were both less volatile in the first quarter compared to our liquid funds returned around 2% and 4% respectively for the second quarter.
Our European and U.S. real estate equity fund composites, which have limited exposure to hospitality and retail properties continued to resilient performance with gross returns of more than 3% for the second quarter.
Our corporate private equity fund composite rebounded nearly 5% driven by strong performance in our public positions, which helped us recapture most of the decline from the first quarter.
Our private equity composite performance would have been up more than 20% for the quarter excluding energy.
Given investor sentiment expected challenges in the energy industry and volatility we like certain other managers are excluding energy from our latest corporate private equity fund.
These activities will be completed outside of our six fund and in our dedicated energy funds going forward.
From a monetization perspective markets continue to be slow for most regular way buyout investing and realizations are likely to remain slow in near term.
On the positive side transaction activity is in the early stages of recovery, which bodes well for perhaps late 2020 or 2021.
The public equity markets have rebounded sharply grading potential monetization opportunities and capital access for certain non cobot impacted sectors.
During the second quarter, we took advantage of the market uptick and generated realized income from the sale of a portion of our flooring to core position in a cop three.
In addition, one of our portfolio companies in a call for the age that company went public through a highly successful IPO in the industrial sector.
By the end of the second quarter A's ACA generated an additional unrealized gain of approximately $1 billion relative to the first quarter.
Also within private equity, we recently completed the sale of our infrastructure and power teams investment in aviator wind the largest single phase single site wind power project in the U.S.
This project, which includes power purchase agreements with two of the 50 largest companies in the U.S. highlights the growing demand renewable energy in corporate America.
It's a lastly, before I turn the call over to Mike I want to provide a brief update on our SSG capital transaction, which closed in July.
So we said before we believe transaction further expands our global leadership position in private credit and enhances our ability to expand our investment capabilities across a strategic and high growth region.
For the past decade, SSG has established itself as one of the leading secured lending and special opportunities investors across the Pan Asian region and is widely recognized by institutional investors and the corporate communities that they target.
The teams experience long tenure and track record or particularly valuable and the current market environment.
Like other parts of the platform SSG continues to successfully expand its capital base with a recent closing of approximately $800 million on its latest secured lending fund.
During its a UN as of June Thirtyth to 6.9 billion.
Going forward.
Expect Aries SSG will capitalize on the growth opportunity using its broad Pan Asian footprint and seek to replicate the success that we've achieved scaling and diversifying our business across North America and Europe.
In addition, our new strategic partnership with SMBC further expands our relationships and connectivity in the region, which we expect both only bolster our opportunities.
And now I'll turn the call over to Mike Mcferran for his remarks on our business positioning and the quarter's financial results Mike.
Thank you, Mike Hello, everyone I Hope you and your families are safe and well.
I will begin with some highlights on the quarter and then provide a more in depth review of our results at current financial position.
The second quarter was our 13th consecutive quarter of sequential F. R E growth.
The steady growth is driven by our management fees centric business model withdraw 84% of our realized income and the second quarter.
Our fr your margin stands at over 34% as we continue to scale and improve margins.
The over $9 billion of gross fundraising helped assets under management and fee paying AUM reached new highs, which increased 11.5% and 18% respectively over the last 12 months and this fund raising drove our shadow AUM to 27.8 billion.
During the quarter, we saw fairly broad based recovery in the performance of our significant funds across credit private equity and real estate.
We also realized a portion of our position for the core highly successful publicly held position at our private equity group were supported our realized income this quarter. Despite the muted overall realization environment.
Now, let me take it to the results in further detail.
He related earnings for the quarter totaled 97 million, an increase of 26% from the second quarter of 2019.
Year to date, our fee related earnings of 190 million was up 28% from the same period last year and highlights our continued growth trajectory even through times have significant volatility.
Fee related earnings growth was driven by 13% management fee growth from the prior year period as well as a decrease in general and administrative expenses, which declined over 5 million from the second quarter of 2019 in part due to continue travel restrictions.
As we grow our AOL and fee paying aone through fundraising and deployment across several new strategies are at party margin has continued to expand.
For your margins were 34% in the quarter for the first half of 2020 compared to 30.5% for the first half of 2019.
We always income for the quarter totaled 115.2 million, which represents an increase of 20.9 billion or 22% as compare to the second quarter of 2019.
After tax we always income per share of class a common stock not a preferred stock distributions was 39 cents for the second quarter, an increase of 22% from the second quarter of 2019.
Next I'd like to spend some time in our AOL and related metrics.
Our AIU I'm as of June Thirtyth totaled 158.4 billion compared to 142.1 billion last year, an increase of 11.5% year over year.
Are you on was driven by additional gross commitments across our fund strategies with near record inflows in the quarter as was significant market appreciation, which recoup some of the depreciation we saw in Q1.
Our gross new capital commitments totaling 9.1 billion in the quarter, including the first close of our six flagship corporate private equity fund as was the final close for our special opportunities fund, which accounted for more than half of the fundraising for the quarter.
Our fee paying AUM increased 18% year over year, driven by me for deployment and our European in U.S. direct lending strategies special opportunities and alternative credit strategy as well as additional commitments within our liquid credit strategy.
We ended the quarter with 105.5 billion a fee paying AUM, which is represented by approximately 75% credit funds, 16% private equity funds and 9% real estate funds.
Our available capital increased to a new record high of 39.2 billion driven by additional commitments from our flagship fund families and putting corporate private equity special opportunities and alternative credit strategies.
We ended the quarter was 27.8 billion of AOL, not yet paying fees of which approximately 25 billion is available for future deployment, which have deployed corresponds to annual management fees totaling 253 million.
Last our incentive eligible AUM increased by over 6 billion to 91.8 billion of this amount 30.7 billion was uninvested at quarter end.
Although the market decline caused a decline in our net accrued carry balance in the first quarter. The strong market rebound at a successful IPO of the age that company helped drive our net accrued performance income to 289 million, 23% increase from March 30 Onest.
Strong levels of Shadow AOL, along with our net accrued performance income. We believe we have the building blocks in place to generate and recognize meaningful long term value through additional performance fees.
We believe our history of invested across market cycles, combined with a white away a flexible fund strategies represents a significant competitive advantage as we navigate through the current and future market environment.
From a portfolio perspective, we feel good about the general health performance of the portfolio as the vast majority of our investments are at the top of the capital structure and resilient less cyclical businesses.
Firmwide, we are overweighted in areas like health care software and various services businesses, and generally underweighted and more covert impacted sectors.
Let's take a moment to address our strong financial position and our recent long term debt issuance.
As Mike stated, we recently took advantage of the low interest rate environment and rebound in public debt markets by issuing 400 million and 10 year notes they successful offering a 3.25%.
Substantially lower rate that our existing notes this puts our balance sheet and an excellent position and provides us with the ability to generate accretive returns on our capital for the management company.
We ended the second quarter, nearly 2 billion on liquidity with 890 million in cash on the balance sheet and no amounts drawn on our 1.065 billion corporate revolving credit facility.
We have no maturities until 2024 and was subtracting all of our data from our cash we have nearly 250 million of cash left over.
As a reminder, our outstanding 300 million of 7% perpetual preferred stock is callable as of June 2021.
As we get closer we will evaluate calling and retiring this equity as it is comparatively expensive.
If we elect to do so we expect to would be meaningfully accretive to our earnings.
We ended the back half of 2020 extremely well capitalized with no not that no near term debt maturities and no March market balance sheet leverage.
We believe our strong balance sheet and significant liquidity gives us great optionality and flexibility to be opportunistic and patient during this expected volatile period.
In conclusion, we believe that our business is very well positioned and the current environment and for what lies ahead.
Our management fees centric business rooted in credit and flexible strategies, coupled with our balance sheet light model and strong liquidity puts us at an excellent position to drive continued growth and profitability and to be opportunistic as this market evolves.
We have significant fund raising momentum with a large pipeline a flagship funds and our investors recognize our ability to perform well during volatile and down markets.
Our investment professionals are finding creative ways to make compelling investments that's a competitive landscape provides opportunity and the collaboration across our platform has never been stronger or more valuable.
Our shadow Aon puts us in an excellent position to invest well and generate attractive growth in revenues and earnings.
We feel good about the health of our overall portfolio and we have excellent portfolio management teams maximizing value sharing best practices and generating synergies across our global portfolios.
We are so impressed by the resilience and correct that our teams have demonstrated and we are grateful for all of their incredible to work to deliver yet another record quarter of results. Despite all of the current challenges.
We appreciate all of your continuing support for our company and thank you for the time today operator could you. Please open up the line for questions.
Thank you at this time, if you will like to ask a question. Please press Star then one on your Touchtone phone. If you will have to withdraw your question. Please press Star then to you.
Please hold momentarily, while we assemble our roster.
And our first question will come from Robert Lee with KBW. Please go ahead.
Great. Thanks, I hope everyone through well thanks for taking my question.
Well, Mike maybe the starting with a summary, I mean that.
Who is the corner and it's still pretty positive about the outlook.
No curious can go maybe specifically, but then you know they had a good first close but.
The it's still feel a LIFO they caught up I guess the.
No I think previously you kind of suggested.
I forget the number about 30% upside there is kind of what you're thinking for that is that still seem like a reasonable objective or.
Given the environment.
Yeah, I think it's a reasonable objective one thing I would clarify.
In the prepared remarks to one of the things that makes us unique in terms of our approach to distressed investing is that our special opportunities Slash special sits capability sits in our private equity group for a lot of reasons, we articulated historically.
In terms of the need to not just be buying distressed securities in the public markets, but to be able to leverage private market origination and portfolio management to improve those situations. So when I think about capital raising capital deployed in private equity I think of that whole complex SLF plus a cost.
And when you look at the success that we had in SLF given the positioning of that fund and the market opportunity ahead of us as well as the momentum that.
First close on a cost I think our aggregate capital raising plans for that group.
Should continue to meet if not exceed the targets.
Okay, Great and I know you talked about no.
The success, you've had with new Lpvs and bring them on board last couple of quarters from fund raise it but kind of prospectively mean since.
Yeah, I guess some of what you saw this quarter was kind of them process, you know everything or anything.
Your sense any kind of changes you kind of look further down the path in terms of the ability to get you know that incremental new LP is that kind of price I assume that maybe not but that.
He started slowed down and you know they be kind of from here, even though optimistic maybe kind of getting.
Maybe become more dependent on existing they'll keys.
Couple of quarters versus bringing on that incremental well paid.
The.
Yeah. It does the the simple answer is no, but obviously the theres still alive uncertainty in the world US as we talked about in the prepared remarks, I actually think when we all went to a remote work environment. It actually benefited the larger managers deep embedded relationships and managers.
As who are already in market with large fund offerings, it's actually take advantage of distressed. So when you look at our positioning coming into 2020, we had already been actively pre marketing your marketing a lot of the funds that were raising now and I think that's that's one of the reasons why we've seen continued.
And then potentially another record.
Raising here.
I would have had a little bit more concerned earlier in the year, but we're actually seeing a lot of the institutional investor platforms adapt.
Their processes for remote.
Seeing a healthy amount of new Lps come onto the platform as well.
So at least what we're seeing today are up im not seeing any any change behavior and actually become more optimistic that folks are now able to diligence new products and new strategies that should benefit something offerings later in the year.
Okay, great and if I could maybe there's one more quick one on SSG.
Or any.
Yeah, you mentioned, they just completed a fund raised but you know.
Talked about potentially a new one with.
The first one with.
It's being on board, we can maybe up there's a little bit on kind of how we should think about the financial impact and no. It's fairly modest that we should think about that.
How that may flow through the you know.
Yeah happy too so just to remind folks SSG as I mentioned has about $7 billion of assets under management.
As it sits today it has to.
Core investment offerings, one is what we refer to add special situations, which is kind of the founding a strategy of of the group getting back to their tenure.
And then the second is what we refer to as secured lending a which is more akin to what we all would think of as regular way direct lending.
Ah SSG had a very meaningful close on its fifth special situations fund in the fourth quarter of last year prior to our announcement.
And then launched post the announcement pre closing a their latest secured lending fund.
And that's the fact that I referred to during the prepared remarks with.
Has significant.
Momentum as you would imagine given the world.
The financial impact you'll start to see reporting next quarter now that we've closed stride July one or two and likely will be reported a separate segment along with other strategic initiatives that we're undertaking at the management company. So you'll begin to see the the financial impact.
Deal is accretive.
The nature of the deal that we we structured and the momentum at the company has our long term ambition is to see SSG.
Grow to just in the credit business, but to expand its product set and its reach into the other.
Capabilities that we have here real estate private equity.
Restructure it set us pretty big ambitions, and I think that we had a pretty good place.
And our historical success scaling the business is that we haven't North American Europe.
And a lot of the strategy teams that are working with SSG on that blueprint and business plan or are.
The same folks at it actually execute on the expansion plans and other places one.
Okay, great. Thanks, taking my questions.
Thanks, Rob.
The next question will come from Gerry O'hara with Jefferies. Please go ahead.
Great. Thanks, Thanks for taking my questions. Good afternoon, perhaps one or sort of just around the deployment and a if you could maybe add some context around the environment as it as it relates to you know what you mentioned in prepared remarks with respect to still some some runway before we start seeing regular way private equity.
Deals return and I guess, just trying to get a sense of what the opportunities that could be for your now record levels available capital and as a as your latest vintage a private equity fund starts to come online.
Sure I'll give you my view and then I'll, let Matt or David give you some PE specific commentary field.
If they feel like it but just to contextualize or deployment.
In the second quarter of 2019, as I mentioned be deployed about $4.1 billion in our drawdown funds.
If you look at the number in Q2 that was about 4.7.
Interestingly, we deployed about 5.5 billion in Q1, and a drawdown funds, which I'll come back to.
And where to look at the 4.7 billion that number would grow to about five point I mean, when you include the but non drawdown funds. So deployments been consistent if you remember what we talked about on the last earnings call the way that we've.
Kind of simplified the framework for how the best through the crisis is in phase, one which was kind of March into the first week or two of April there was so much volatility and dislocation in the liquid markets that we were very active there and that's why you saw a little bit of the spike in the Q1 deployment.
We're now in a phase two which is kind of.
Good.
On the existing portfolio provide capital to incumbent relationships build liquidity bridges.
To the extent that you can get paid to do so a and then begin to go on offense in terms of the newish market. Some of things that we talked about in the prepared remarks, any alternative credit direct lending and special ops parts of our business I think are pretty good indicators of the types of opportunities are coming.
Our way.
When you get two phase three which is a little bit more market stability, a little bit more earnings visibility normalcy in market. That's when you see more regular way deployment, but still very very attractive rates of return because typically you're getting paid significantly higher rates of return.
Current for significantly lower risk given the change in the multiple leverage environment. So we're still squarely in that second phase.
But I think is we're getting deeper into this health and economic crisis and a lot of the company's it built liquidity bridges in March to June based on a view that we would have a V shaped recovery or a snap back or that the fiscal stimulus would actually support meaningful economic growth I think are beginning to grapple with an ability that the liquidity bridge.
Is that they built may not be long enough and so the pipeline is starting to.
Reaccelerate around being a solutions provider for some of those companies that are our high quality franchise companies are assets just aren't.
[laughter] access the capital the way that we are.
Hey, that's a that's helpful.
Color commentary would like to add on a pea.
Sure. This is Matt it's worth so from private equity perspective, I think.
We think our flexible capital mandate right now is probably is relevant and balanced as ever and are we sees things really both on the distressed side.
And on the traditional side you know one thing I'd point out on the distressed side is.
The small and medium businesses or the middle market, you know really struggling more than you would be led to believe if you just follow the S&P 500 or the NASDAQ.
And so we're seeing a number of really tried to rescue capital opportunities on the distressed side because the middle market doesn't have the access to some of the government programs that the large caps do.
On the traditional side, you know as Mike alluded to there just some industries in some companies that are doing okay. You know in have growth opportunities in front of the can go and play often so yeah I think the backlog for traditional throughout the industry and certainly for ourselves is growing I think in the second half of this year.
This stays on trend.
We'll see more regular way private equity here before the end of the year and probably bigger in the second half the news on first though.
Okay helpful. A couple comments and perhaps one follow up you've obviously been active with but that's just she and I suppose SMBC, but Mike could you, perhaps give a sense for what what the for an appetite is.
I've seen a capacity for additional strategic partnerships.
And M&A type activity at this point in the cycle. Thank you.
Sure the appetite appetite as significant as we've talked about historically, but the bar.
On organic growth continues to get higher for us just as we scale.
We're finding that we can build businesses by doing team lift outs are taking builds use our capital scale to.
On them and drive meaningful growth. So our alternative credit group, our special opportunities grow those are groups, where we were able to engage in meaningful scheme build and you're seeing the value creation come through in the successful fund raising in pretty firm order. So I'm talking about historically, when we're gonna do M&A.
It has to check three simple boxes that are.
That easy to check it has to be financially accretive.
And the economics, you need to make sense, we need to have a path to add value to the business, but we also need to see that that business is going to add value to our platform by bringing differentiated distribution or information or capability and then it's got to be a great cultural fit.
And the cultural fit piece is probably always the hardest to to check the box on SSG did all of this thing. Thanks, Ross right gave isn't meaningful beachhead tenured manager in Europe region, where we just did not have scaled presence the cultural fit with economic value proposition and now adding things to.
I should be fairly straight forward. So kick we're going to continue to look to fill in product gaps geography gaps.
Distribution gaps through acquisition, but the bars pretty high.
One thing I will remind everybody through prior downturns, we've been very acquisitive, both within portfolio companies like a RCC you know subsidiary companies or at the management company and when you think about deployment, we tend to see acquisition opportunities arise.
To get into this type of dislocations. So while we're obviously working with our corporate strategy to proactively identify assets companies would be good additions to the platform markets like this tend to present optimistic opportunistic opportunities as well and and I think we'll begin to see that developed into the back half of the year.
Okay, great. Thanks for taking my questions.
Before taking any other questions. We have all callers to please limit themselves to one question and one follow up just so everyone will be able to ask a question. Thank you and our next question will come from my carrier with Bank of America. Please go ahead.
Hi, good afternoon, and thanks for taking my question.
Mike Mcferran, given the current margin in a fund raising outlook the deals and then the current backdrop.
Any change in how you're thinking about the out of the margin over the next one did you years never some your path.
No no change at all I think the margins consistent with what we've said since our fourth quarter call, which is we expected to lever up 34% margin. This year. All these 34% than we thought we would hit a run rate of 35% the.
Here.
[music].
Yeah. If you look at the margin for the quarter, it's over 34% we feel as we've talked about our past calls that that you referenced Mike that as we continue to grow recapture benefits of scale or we continue to identify operating efficiencies and leverage lows and all that leads itself to margin expansion.
Which we think there's just a you know continue.
I don't see any obstacles to that they are that.
Okay. Thanks, and then you said a follow up given some of your Guy's comments in like what we see in terms of divergence between public and some of the private market.
You may begin to the employment opportunities are attractive, but just in terms that current portfolio companies. Maybe how are they you know holding up and this backdrop you know area that you're seeing you need some challenges universities in the portfolio, where you're seeing relative strength.
Once you kind of get out of that you could you start to realize.
Yes, so that it's a it's a simple question with not a straightforward answer just given that the breadth of funds on the platform and and the breadth of assets that we touched so.
I will simplify the answer and do you want to drill deeper on any piece, we can but I'd say generally a the underwriting going into the downturn was extraordinarily sound across the entire portfolio and you'll see that for example of Kipp talked about on the a RCC call that while we're dealing with some challenges as would be expected in the portfolio.
So the fact that we are underweight.
The most heavily impacted industries is beginning to bear fruit and show benefit.
The fact that we are underweight hospitality and retail real estate portfolio, both debt and equity is a huge benefit.
So I think a lot of this came down to good conservative positioning and so.
For the avoidance going into the downturn, which now positions us combined with the liquidity that we have within each of our funds to continue to play offense and drive value a as we talked about in the script, probably the one place where we've.
Seen the most negative return has been in our energy portfolio is not surprising or and if you look at the performance as we talked about in the P E.
Composite.
If you look at the non energy returns this quarter and the in the.
Right away portfolio as you would assume roughly 20% type so the focus on health care, a technology, a differentiated consumer that's actually playing out well for us.
And I think that's pretty consistent across the entire you know the entire platform, regardless of the business or the geography.
Okay. Thanks, a lot.
[laughter].
Our next question will come from Adam Beatty would you be S. Please go ahead.
Hi, Good afternoon. Thank you for taking my question one ask about COO is both in the areas manage book and then more broadly across the environment I'm. There was some concern before the pandemic and then kind of a spike in concern as dependent I Kid and it seems as though that the outcome. So far we used has been.
You know milder than than some had feared so just wanted to get your observations in terms of the fundamentals and also the trajectory of rating agency activity lately and whether that's concerning thank you.
Yes, so I, we never fully appreciated.
The significant concerns that the market and maybe the media had with regard to see a low market. You know if you go back and look at sea low performance, particularly on the rated tranches through the financial crisis, It's a pretty good indicator that self healing structures within CLL.
Is pretty resilient and so we're not surprised to see that resilience playing out.
Playing out now.
The other interesting thing is when you look at the the structure of the loan market today versus the structure of the loan market through the G.S.C.C. lows currently represent probably 65% plus of.
The loan by in the loan market, which is significantly higher than it was the last go around and.
Maybe not so obviously, that's actually created significant amount of stability.
Because you don't have frantic selling which is obviously muting some of the downward pressure on price.
And just creating overall price and and pricing stability in the market. So if you actually look at sea yellow exposure to the weakest loans in the loan market there underweight relative to the 35% non buyer, which is actually pretty good.
Indication to the credit discipline.
Hello managers themselves, but also kind of the imposed disciplined structure places on those buyers.
There is always and we've talked about this a risk that with continued downgrades that triple C. Baskets are triggered and no see tests are triggered and and.
It has some implications for the structures, but again, even in cases, where that happens the.
<unk> killed himself. So we're still you know quite constructive on close.
Obviously, the new wishing market has slowed a but for the embedded universe of seal those both as they see a low manager and as a buyer.
Rather than non rated trucks that other people see olos, where are we still see them is very resilient and very durable.
Excellent. Thank you for Mike and then I just wanted to ask about the insurance channel kind of separate and apart from you know any delays and what have you with Vone I'm just in terms of the level of activity in demand that you're seeing and kind of what you're able to do kind of pre closing on that trying.
These actions are kind of do a prebuild or what have you. Thank you very much.
Sure. Thanks, So yeah with regard to pony as we talked about on our last call. The closing has been delayed but we're still optimistic but it will happen in the near future. The good news is because of the structure of that transaction, we've been able to duty you're putting all the pre work on new products construction spending does.
You should engine ready to turn off we when we close that that transaction.
I think folks are also aware that when we talk about areas insurance solutions and a speed.
It's not just the organic distribution of the reflection business, but there.
There's a view that we also have an opportunity on the M&A front to grow through acquisition and.
And to build a reinsurance platform alongside the annuities platform. So even though the provisioning acquisition is delayed all work around building M&A and reinsurance pipelines actually been going.
Quite smoothly and has a lot the momentum so we're.
Happy with where that is.
And then secondly, as we've talked about before a wall of Onea is an important piece of the insurance strategy here at areas. The insurance strategy is multi pronged.
It's things like building up our idea.
Ah complex continuing to drive strategic partnerships with insurance companies around certain parts of our private credit business.
Continuing to distribute product to our insurance clients and those are all scaling.
And as well so I would say were as bullish as we've ever been about the insurance opportunity.
And I think we're executing well work we're.
Anxious to get our ammonia deal close, but its not preventing us from making progress and other business.
Great. Thank you for the detail much appreciated.
Okay. Thanks.
And the next question will come from can actually with RBC capital markets. Please go ahead.
Hi, good afternoon, and thanks for taking my question just one the following up on your prepared remarks, regardless of how portfolio realizations could be slow.
Just hoping that you could just further expand upon your comments and perhaps just talk about some of the key factors that that could be keeping the utilization. So despite the current equity markets. Thanks.
Sure I'll give you my view and then again you know matter degrees.
We're seeing activity pick up.
The challenge I think that you see in a regular way transaction flow, putting the public markets. Aside for a second is when you're dealing with either liquidity challenges or liquidity uncertainty or a lack of earnings visibility, it's just hard to clear.
Equity right the bid ask spread on equity is it can be pretty wide as people are trying to figure out what 22000 2021 2022 earnings are going to look like.
Then too which is benefiting us on the direct lending private credit side availability of debt capital to certain companies in certain assets is constrained in that channel.
Challenges valuations, so I don't want to give impression that we think that there is zero path towards realization I, just think that we need a little bit more visibility around earnings and liquidity positioning for certain companies to start to get back to a regular type of cadence around you know.
Transaction flow, but to the public company side as you mentioned in that that's where I do think that will have an opportunity.
And the exact IPO is a perfect example of that.
Particularly for the non cobot type.
Companies is like being one of them making.
Building products.
We saw a huge investor demand really attractive valuation and then you don't accelerate the valuation post IPO. So I think that the public markets will continue to be constructive.
For realizations I don't know, Matt you want to.
And any color on top and I'm sure sure Yeah from a private equity perspective, I would say you know really Mike is saying is spot on especially July you know that bid ask you know there's been people trying to figure out on the private side, you know can we get to deal.
I do think theres a bit of a rate of change in the market meeting a bit of warming and the market, where you didn't week by week right. Now people are becoming more up <unk> optimistic and narrowing that spread such that if you saw that continue.
I do think post labor day, you could see a pick up.
In new transactions and then you know for us potentially realization. So I think that has been true.
Stays the same is July I think that's they will be true, but there is some optimism I think on the tradition inside that.
Buyers and sellers are going to get together, a little bit more often.
That would include some of our you know portfolio companies, you know that might be ready for realization you know the back half of this year. If the environment you know continues to improve.
Great very helpful and just one follow up by if I may wonder if I could just get your latest thoughts on.
F R E growth a in the near term given that there's a lot of factors at play here between the fund raising as well as the ongoing capital deployments. Thanks.
Hey, guys like.
I'll just reiterate that I think our numbers there are expressing thats. If you look at the year over year growth, but.
No. The last couple of quarters, we've highlighted that we believe between capital we've already raised.
Point you too.
They you I'm, not yet, earning fees, where there's a significant amount of we'll call just natural revenue growth built into the capital we have today just from deployment.
That combined with the continued margin expansion or seen and then Mike obviously talked in detail in the prepared remarks about the meaningful amount of capital raise and we're all we're having.
All of that combined.
We feel like really lends itself to.
Just reiterating the expectation that we have high conviction, we'll be able to continue to grow AFE, Ari, 15% or better does not putting magic behind the 15% of kind of a round number but you. When you again when you looked at our Q1 growth year over year, our second quarter growth year over year first half the year growth year over year.
We're obviously running ahead of that and I expect we will continue to do so.
Great very helpful. Thanks, again hopefully.
Thank you.
Our next question will come from Chris Harris with Wells Fargo. Please go ahead [noise].
Yeah follow up for Mike Mcferran on expenses.
Mike You mentioned DNA with little light.
And the second quarter due to travel related restrictions.
Assuming those restrictions remain in place is this a decent.
Run rate for DNA spend or.
Is there some spending that's going to pick up in the second half a year, which would potentially drive the number up.
Okay. Yeah, DNA is gonna be have a little bit of moving around and wait a little bit of travel obviously, we're saving money because you know a fraction of what a wise.
Yeah, My Best guess would probably I would expect to be seen gionee run between your.
41 40.
40 to 41 million.
All else being equal it has to do you guys, Mike mentioned with all the capital raising going on there's obviously some expenses we incurred with that.
Pace at which we can Oh do other things, yes, we do spend obviously a better while we're saving a lot in travel we do leaning in on the other aspects of das with supporting our employees of technology and other services I.
I think kind of like a 40 million expectation 40 41 semester.
Hey, Mike I'd, just add maybe just in just a quick over simplification, but I think it's important is obviously, where we're spending on things like travel or entertainment or conferences all of those things tend to come against incremental fund raising incremental deployment. So I would even say anything.
Mikes target would probably come with corollary increase in revenue and would still continue to be accretive to the.
You know development of that far enough hurry margin.
Yeah I agree the.
Okay. It it travel comes back a higher number than 40 to 41.
Yeah, I still think we're going to be able to run the business and I expect to affect DNA to kind of run rate when travels back to be in the low fortys.
Got you all right.
Sure.
Our next question will come from Michael Sypris with Morgan Stanley. Please go ahead.
Hey, good morning, Thanks for taking the question just to do you think about a product levels profitability US just hoping you talk all about your approach to product strategy level profitability. How do you approach and think about that what strategies do you think will be though.
Makes sense because contribution helping improve the over a profitability over the next couple of years imagine the special sits UMB fund will be very meaningful this year and into next year, which other strategies come to mind, and and which ones in your view would probably have to wait a couple more years for more scaling.
[laughter] again simple question, but not a simple answer just given the breadth of a number of funds and strategies on the platform.
As you would probably expect for to launch any new product. We go through a pretty exhaustive strategic and operational review of the of the product.
In terms of assessing investor demand or thinking about the operational complexity of the product.
Cost to raise at the cost to run it and then obviously the long term business plan around around the products and what that means for the development of that Ferrari and ultimately shareholder value The management company and that's a very rigorous process and not every idea gets through that filter I actually think that's a big part of the evolution of the industry.
There you learn as you as you make sure that not all at U.N. is good at U.S. and you have to focus on scalable profitable eight.
So you are seeing that this is like special opportunities and alternative credit where we've gone out against a business plan hired 15 to 20 people over a multiyear period incur that expense with a very high levels conviction around that business plan. So you did highlight two recent initiatives that you should expect to see.
Some pretty dramatic Martin scaling because we've already incurred expense.
The higher the team put the process in place raise the capital, but those funds pay on invested I think you should expect given the upcoming.
Fund raise in our European direct lending business as we talked about in our prepared remarks, even though that business already runs at a pretty healthy mature margin that just given the scale.
That.
Fund that you'll see some margin expansion.
As well a real estate as we've talked about historically is actually running.
At the lowest business line.
At for re margin, but is growing its fr re margin.
Quicker than other parts of the business. So we are beginning to see the band its benefits of scale roll through is we're getting through this most recent fund raise.
Cycle with our.
Stop funded our value add funds. So I think you'll you'll continue to see margin scaling there, but we still have some scaling to do to get to that the types of margins that we enjoy the yeah, the mature credit mature p. businesses.
Right.
All that.
I was exactly I sense that hopefully at SSG will will run it at a more mature margin just given the size of that business relative to its capital base as well.
Great. Thank you for that and maybe just a quick follow up question apologies if I interrupted you the sound quality I'm not that great up my line given the storms, but just on strategic partnerships.
You had mentioned a it's another growing part of the from maybe you could just update us on some of the initiatives there maybe how much capital you have in these strategic partnerships, how that's trending when initiatives you have in place and how do you think about scaling those strategic partnerships over time imagine those are highly customized offering what are you doing about and how do you think about scaling that.
[laughter] two strategic partnerships I'd say take take many forms and just want to clarify we have certain strategic partnerships that are more.
Partnerships around a specific part of the business with a capital provider or a strategic LP. So good example that would be the SDLP unitranche joint venture that we have within a RCC.
We then have a strategic partnerships, which are the spoke and customized relationships with some of the larger institutional LP is around portions of our business and that has been a big growth area for us. So when you look at managed accounts as a percentage of our at U.S. and you'll see.
That's a pretty healthy number those.
Our slower to develop in terms of the sales cycle, because it's not like a commingled fund where are you launch a product set at the data room.
Do you or transactional Mark close.
It's much more consultative, it's much more collaborative ER and the whole process is geared towards trying to be a solutions provider for larger clients. The good news is as we continue to broaden out the products that.
We have a much more robust offering to meet the needs of the clients and so we are seeing an acceleration in the number of conversations that we have with with our Lps.
Another thing that we've had to do a as we staffed up around that opportunity is we've built out a client strategy and solutions team. That's focused on the entirety of the client experience front to back and it's there where we're working on all of the risk analytics and portfolio modeling to help.
Drive the collaboration around what those those relationships could look like so.
No I can't be too specific but it could be someone gives us capital to invest in a global direct lending mandate or it could be that someone is I want you to.
Tactically take advantage of distressed opportunities that you see in these specific industries and it really runs the gamut.
And we're we're offering idea as to our clients, where we see value when they're coming to us or where they havent need and you hope that where we see value and where they haven't need.
But there's an intersection of.
Opportunity and that's kind of how we a high level think about driving that part of the business.
Great. Thank you very much.
Sure.
Our next question will come from Alex Blostein, well at Goldman Sachs. Please go ahead.
Hi, Good morning, Suzanne denim Jacoby going it's Alex Thanks for taking my questions just quickly on the credit management fees. It looks like air CCB spending even part one fees came down a little bit quarter over quarter can you just help us get a little bit of a look underneath the hood as to what's kind of going on there and how we should think about.
The outlook for fees generated from FCC going forward.
Sure, Mike [laughter] well that.
Yeah sure Yeah, I think between the base management fee and the part one fee the combined decline.
Quarter over quarter was about 5 million.
I think as you know.
It's going to be the management fees are a function of.
Gross assets today, RCC, so and that as far as awful transactional activity, which supports the part one.
Look I think you know and I'll defer to cap, but you know if you look historically at that fee. There's you know if the business continues to grow does or does that imply study is to it because the business. So big So you don't see a lot of volatility of that get albeit saying.
Come in about 5 million quarter over quarter I would highlight I think we've touched on this before that about 60% of the part ones paid out of comp. So the impact to FRB is smaller impact from back because our softening compensation benefit.
Yeah, I know there was also a nuance and <unk> covered offline if I don't do a good job articulating it but when we work to get the leverage I.
Available to Bdcs from one to one to two to one and we struck the management agreement.
Accepted a lower fee.
Above the one to one leverage so the fee steps down I believe from appointing a half on assets to 1% for all assets above.
A one to one leverage and ironically and I don't think that this was the original intent. So it's a little bit of a per version of that original contract intent to align interest with the shareholders as levered potentially lower ROI assets to drive our are we in growth and the dividend what happened in Q1 Q2, because it's an AD.
Bridged look back on assets because of the write down of the assets in the book in Q1.
You actually saw a leveraged go up.
The write down of NAV as opposed to be leveraging of the balance sheet through incremental debt and so as a result to mikes point, you had a little bit hit because the gross assets were lower and then you had a modest.
Hit because you triggered the 1% above the one to one leverage for asked that sit in the prior quarter were actually operating.
Below the one to one because of the NAV, so as NAV improves which it did this quarter and we expect it will continue to.
And as deployment continues and as Kipp talked about on the call yesterday, we have about $4 billion of available liquidity at a RCC, we'd expect to see the trajectory that fee continue.
As it was.
Okay. That's very helpful color and then just said we on Sumitomo can you maybe just walk us through what do you anticipate is it's kinda the economic benefits from this partnership and.
How we should think about kind of the contribution.
So you end the peeping am to management fees from from this partnership.
I can't I I'm not going to go into specifics on on the business plan, yet, but as we execute I think we'll come back and we'll be able to articulate the initiatives that we've executed on with them and you guys can see what the what the impact is.
We're still in the early days, but as we talked about when we announced the partnership we had been working through a pipeline of strategic opportunities.
To leverage their balance sheet, both an existing businesses and new businesses and we're executing well against that so we've had already a number of situations.
Where they've made large capital contributions to various portfolios and business launches that we think will be accretive either because we're launching businesses at the management me or because the providing creative and and efficient financing solutions into.
Some of our funds and some of our subsidiaries so stay tuned for that but as we continue to execute I think we're gonna have some pretty good examples to to share with all of you.
The second piece, which we talked about which will take a little bit more time was just thinking long term.
Typically about the distribution opportunity for alternative product in Japan.
I think is you know as we talked on prior calls now that we have SSG and we have a broader product set in the region to complement our U.S. and European offering I think that that distribution partnership potential has improved.
And then third we've talked a little bit just about a capital markets collaboration and when I used to work together given the size of their balance sheet in the size of our capital base and relationships to drive value that that also is.
I'm going to take some time, but I'm still optimistic so.
Stay tuned on it but I without getting into the details we've already made significant progress and they follow through pretty.
Pretty healthily with the capital commitments that we expected here in the first couple of months action.
Got it thank you very much.
Our last question will come from Robert Lee with KBW. Please go ahead [laughter].
Thanks, Mike.
Asking question on just related question on taxes, Susan dividend taxes. So.
If I remember correctly kind to try to set the dividend each year to kind of the.
There you think.
After tax that are you may be headed so I guess you know the first part of that you know.
And then last quarter kind of at the 40 cents and Doesnt seem like you're kind of quite at the 40 cents. The after tax that sorry, yet the fair to think that kind of how you're thinking about it developing towards the end of this year.
Then you wherever you kind of think.
As far he could finish the years kind of how you will.
Think about dividend next year.
Yeah, Rob I have pretty close I mean, if you recall has we've described this we.
Thoughtful use the work term packed because we didn't want to ever get caught up with.
Doing a fixed time period look back or look forward. So instead, our view is to peg.
The dividend growth to what we believe would be the expect to the after tax every grow. So obviously, the two variables, there's fiery growth and tax rates.
So that and and we should probably highlight we've yeah, we've been keeping our effective tax rate on fr quite low I know earlier, we're probably guided that would be something more in the 8% to 11% all I'd say for this quarter at the tax rate enough already was.
Just over 2.5%.
For the year feels like it's probably going to be sub five as my best guess today, but obviously this deferred variables that could impact that.
But I think as we look to.
Your dividend growth, it's going to be the trajectory of.
As we expect half are ready to grow and how we think about the after tax.
Next to that.
But again I wouldn't you highlighted the numbers for this quarter I think thats accurate because and if you saw this last year. If we were generating 40 cents. After tax safar, we two quarters than that I think we would have underway underground the dividend.
Because that's something I think it kind of such as throughout the year.
[music].
So.
We kind of what Tierpoint would I think if we would look out where we expected to grow next year and obviously our board to make the decision that we had an in Q1.
Great and then maybe the second part of that but that's the kind of attacks I missed what that's was has been running low seem that you know you made the unusually low this quarter.
What should we be you'd mentioned that 5% on F. Already I mean, how should we tend to move on kind of realized income and would it would.
Should we expect tend to normalize into next year.
You know as we've said in the past, it's obviously been heavily dependent on realizations.
So you know a meaningful dollars of realizations later in the year would object what pushed the rate I, probably say north we always income north of 10.
For the year, you know base our commentary in the call about here as we think about the environment today I kinda feel like it's gonna be probably still in that 9% to 12% range, probably a little close so I think a probably most likely will be tenish are under.
But I guess me a function of realization so tax it up with more realizations when you'll have a little bit higher effective tax rate, but not a bad thing.
Great. Thanks for taking my follow ups.
Yeah.
Sure. Thanks, Rob.
This concludes our question and answer session I would like to turn the conference back over to Michael ever Getty for any closing remarks. Please go ahead Sir.
Thanks, Operator, we don't have have any other than I want to reiterate that we hope that everybody stay safe and well and.
That's true for you and your Tonight I just want to thank everybody Aries.
For the incredible work I don't think anybody on this call west [laughter], whether its areas or elsewhere has has a fully appreciated what it would take to continue to drive our businesses forward a in their remote environment and when you look at these results and the amount of work that went into it I just wanted to make sure that we thank everybody again for us.
The hard work to continue to deliver these savannah. These types of outcomes. So I hope everybody.
Enjoys the end of summer and look forward to catching up on next quarter's call.
Ladies and gentlemen, this concludes our conference call for today, if you Miss any part of today's call and archive replay of this conference call will be available through September 2nd 2020 by dialing 87734 for 75 to nine and to international callers by dialing one.
For one to 317 0088 for all replays. Please reference conference number 1014, or five 530 and archive replay will also be available on the webcast link located on the home page of the Investor Resources section of our website, everyone have a great day.
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