Q3 2020 Affiliated Managers Group Inc Earnings Call
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[music].
Which could differ from our actual results materially.
Oh Gee Q3, 2020 earnings conference call at this time, all participants are in listen only mode.
<unk> bubble on the Investor Relations section of our website.
Since please press star zero on your telephone keypad.
And a reconciliation of any non-GAAP financial measures.
The patient.
Including any earnings guidance announced on.
It is being recorded its my pleasure to turn the call over.
This investor presentation to our website this morning.
Relations Ray Mg.
[noise], which investors.
Oh. Please go ahead.
Mr. Li for updated information.
And thank you for joining us today to discuss empties result.
One quarter.
First quarter of 2020.
Our president and Chief Executive Officer.
[laughter].
And Tom logic.
Find you that during this call we may make a number of forward looking statement.
Now over to Jay.
<unk>, which could differ from our actual results materially.
Thanks, Julie and good morning, everyone.
Okay. So to update these statements.
2020 has been an extraordinary year in many ways.
On the Investor Relations section of our website.
Significant impact it has had on our daily lives.
Ladies and a reconciliation of any non-GAAP financial measures.
Structural changes in the economy.
When asked on this call.
The bigger dramatic drawdown in recovering markets.
We posted an updated investor presentation to our website. This morning.
As a lasting impact for debt.
Stress to consult our site regularly for updated information.
Or asset managers. These events have brought about.
The company's results for the quarter, our Jay Horgen, President and Chief Executive Officer.
Okay long bull market with record high asset correlations to a period of increased.
On the call over to Jay.
Lower correlations and greater uncertainty.
Thanks, Julie and good morning, everyone.
2020 has been an extraordinary year in many ways.
Asset dispersion.
In addition to the significant impact it has had on our daily lives.
Enters to distinguish themselves.
Its prices has caused disruption.
Those outcomes for their clients.
Changes in the economy.
Including a dramatic drop down in recovery and markets.
In addition to the changing backdrop for active management.
Since.
It will have a lasting impact for decades.
The competitive landscape for investment management as a whole is occurring in real time.
Jerseys events have brought about a fundamentally different environment.
Asset managers are questioning the foundational elements.
It moved from a decade long bull market with record high asset correlation.
That.
In a period of increased market volatility lower correlations and greater uncertain.
As contrast, it approaches Evan.
Evidences the strategics confusion in the market.
Please.
Characterized by significant asset dispersion.
Savior.
And provides enhanced opportunity for the highest quality active managers to distinguish themselves.
Our industry has struggled to successfully execute these strategies before.
Vertical integration operational integration.
Sales to the changing backdrop for active management.
A meaningful shift.
In fact AG was founded 27 years ago during a similar period of.
[noise] occurring in real time.
Can be strategies.
And we have been.
Managers are questioning.
In summary.
Foundational elements.
Strategic exit.
Success.
Quick cycle.
And in some cases, they're making dramatic changes.
Sales periods with other industry participants may have lost sight of the key attributes necessary.
As a stark contrast, it approaches.
Active.
As evidenced as the strategics confusion in the marketplace.
Which will ultimately impact client behavior.
It was about.
Okay and outcome.
It's not scale.
It is about alignment with clients.
Sri has struggled to successfully execute these strategies before.
This is about entrepreneurial isn't.
Operational integration.
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And cultural integration.
Corporate structure and product proliferation.
In fact AG was founded 27 years ago during a similar period of competing and contrasting strategies.
Inevitably creates cultural costs.
That's in our approach.
Austin franchises onto.
Strategic execution across cycle.
[noise] clients to reevaluate their choice.
During those periods with other industry participants may have lost sight of the key attribute.
There is undoubtedly this disruption will lead to significant opportunities for those who have a successful strategy and remain focused on client outcome.
You see that investing is about skill.
Got scale.
We believe the highest quality franchises in the industry will benefit from.
General.
It doesn't.
Including especially AMG.
Entrepreneurial isn't.
The partner owned affiliate.
The nation.
Not corporate structure and product proliferation.
We expect to see a migration of both investment talent.
Human capital intensive industry like ours.
Hi managers that have the alignment and culture in EPS.
<unk> costs.
So generate excess returns.
Since franchises entrepreneurial talent.
Our active management.
Clients to reevaluate their choice.
It is our own firms.
And we believe that AMG is unique approach to investing with.
Lee this disruption will lead to significant opportunities.
Proven partnership model.
<unk> sales strategy and remain focused on client outcome.
We continue to do so.
We believe the highest quality franchises in the industry.
To grow through new partnerships with little or no integration risk.
I actually am G.
During the aspects of our affiliates.
They are owned affiliate.
As most attractive to clients independent firms singular cultures and investment autonomy.
We expect to see a migration of both investment talent and client assets to independent managers that have the alignment and culture necessary to generate excess returns.
Share of $3.27.
Our active management is best delivered through independent partner owned firms.
And we believe that AMG is unique approach to investing with.
Our business continues.
Despite these firms.
Through the cobot period.
Her proven partnership model.
Adjusted EBITDA growth.
<unk> has stood the test of time.
And we'll continue to do so.
Reflecting the diversity and stability of our model the quality of our affiliate.
<unk> unique business model enables us to grow through new partnerships with little or no integration risk while preserving the aspects of our affiliates businesses that are most attractive to client.
Quantitative strategies.
Firms singular cultures.
Distribute very little to our run rate EBITDA.
Excluding quantitative strategies.
Turning to the results for the quarter.
AMG reported economic.
He's been private market.
A $3.27.
Net income.
Adjusted EBITDA of 181 million.
Give equities and alternatives.
We are pleased with our results.
Performance.
And that our business continues to perform well through the cobot period, as we generated 12% adjusted EBITDA growth.
Non.
First as the prior quarter.
Star focused on investing for growth.
Our diversity and stability of our model.
Our opportunity set.
All three of our affiliate.
At both existing.
Folger to areas of secular growth.
Client outflows continued to be driven.
Please.
Most entirely by certain quantitative strategies.
Our seed capital program.
Yeah, very little to our run rate EBITDA.
Adults.
And the ongoing development of long term succession.
Cash flows were broadly stable.
And partners with future growth.
The ongoing growth in private markets and traditional and specialty fixed income.
Filled strategic partnership.
Differentiated active equities and alternatives.
EPS these relationships on behalf of our affiliate.
Performance.
Against the backdrop of the pandemic.
Recovered in recent months.
Action platform.
Three star focused on investing for growth.
Harm to our existing affiliate.
Securing on our opportunity set.
At a time when most boutique.
Yeah.
We have been unable to fully engage outside their home markets.
Our affiliates have leveraged AMG is local sales teams.
AMG distribution capabilities.
Declines in price.
Capital program.
Turning to new investments.
Team lift outs.
The strength of our existing proprietary relationship.
Term succession plans to align the next generation of partners with future growth.
Throughout the cold period.
We are seeing increasing levels of engaged.
Oh, you to build strategic partnerships that leverage the collective strength.
Focus on partnering with outstanding independent boutique.
Please.
Sales of strong secular growth in client demand, including private markets.
That's the backdrop of the pandemic.
Lets turn it is.
Our global distribution platform.
As.
Has been even more valuable to our existing affiliate.
Solutions.
At a time when most boutique.
Do you differentiate.
Able to fully engage outside their home markets.
Different of supportive partnership.
Cibers AMG local sales teams.
Good quality independent firms.
And their client.
Yes.
In some prospects.
Particularly in light of a shift.
New investments.
Defense Gate.
Given the strength of our existing proprietary relationships.
Offering to existing and prospective.
Prospective affiliates.
The flexible.
Its active throughout the cold period.
For us to meet the evolving objectives of independent firm.
HM.
And as they grow their businesses over time.
Our prospecting efforts are focused on partnering with outstanding independent boutiques in areas of strong.
Core element.
Of our value proposition.
Including private markets.
Very capital to affiliates.
Its alternatives.
It's in their growth initiatives.
So equities.
As well as access the proven end market distribution.
Cushion.
And capabilities to extend our affiliates client reach.
He is differentiated approach and our three decade long track record.
Shorten.
[noise] of support a partnership.
It strongly resonates with the highest quality independent firms and their client.
Looking ahead.
And particularly in light of a shift.
Let me confident in our growth strategy.
And anticipate opportunities arising from.
Shifting to existing and prospective affiliates.
Uncertainty.
Just a couple.
Referral changes in our industry.
In the us to meet the evolving objective independent firms.
Through this environment.
EPS grow their businesses over time.
Particularly when executed by independent partner owned firms.
In addition to succession planning is a core element of our value proposition.
So in AMG is approach to investing in these firms.
Two affiliates.
Singly differential.
It's both initiatives.
As well as access to proven end market distribution.
For us is enhance.
[noise] bes to extend our affiliates client reach.
And further enable.
Our strong corporate culture.
Sufficiently important.
Hi, Omar.
Do investment process.
Next season and.
And a partnership orientation.
Looking ahead.
That I will turn it over to Tom.
We are highly confident in our growth strategy.
And anticipate opportunities arising from.
Ongoing economic uncertainty.
On through 2020.
The changes in our industry.
And in some of our affiliates and the strength of our partnership model is clearly visible.
Yeah.
Sales in both the rebound in our quarterly earnings.
The partner own firms.
Solutions for future growth.
Some more important than ever.
Over the past three quarters, we took advantage of market conditions.
[noise] firms.
To continue to enhance our balance sheet extend duration and improve liquidity.
Skewed on the opportunities before us is enhanced.
Equal position.
Some flexibility.
Cash flow generation.
The cable by our strong corporate culture.
And long term shareholder value.
Third of entrepreneurial isn't.
Our growth strategy.
Partnership orientation.
King affiliates and through new investments.
With that I will turn it over to Tom.
Lets turn significant excess capital to our shareholders.
Thank you Jay and good morning, everyone.
And beginning with flows.
We entered the fourth quarter of 2020.
Reported net client cash outflows of $14 billion in the third quarter.
Hi, Good model is clearly visible.
Yeah for quarters.
Both the rebound in our quarterly earnings.
Were driven by certain quantitative strategies that contribute less than 5% of EBITDA.
We took advantage of market conditions to continue to enhance our balance sheet.
The impact of challenge.
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Our stated strategy.
Quidel.
And then go through our customary flow discussion by asset class excluding Kwan.
Generation.
Beauty areas.
In play Mg to create long term shareholder value.
Thanks.
By executing on our growth strategy.
Outflows in these quantitative strategies totaled 12.
9 billion.
Suppose to return significant excess capital to our shareholders.
And alternatives.
$2.3 billion in global equities.
Yeah.
And 4.3 billion.
Net client cash outflows of $14 billion in the third quarter.
Similar to prior quarters.
Oh jeez.
90% of those outflows were driven by search and quantitative strategies.
This man for private markets and specialty fixed income strategies.
On a run rate basis.
By outflows in active equities.
Provide a breakdown of the impact of challenged quantitative strategies.
Excluding certain quantitative strategies.
Slow discussion by asset class excluding Kwan.
These net inflows of 2.8 billion.
Generate the vast majority of our earnings.
In trends at our private markets affiliates.
Outflows in these quantitative strategies totaled 12.9 billion.
Non bearing.
Including 6.3 billion within liquid alternatives.
There is significant dry powder.
<unk> billion in global equities.
Across numerous strategies.
<unk> billion in us equities.
And opportunities in today's environment.
East.
Looking forward.
These strategies.
First group of private markets affiliates.
Okay remains well positioned.
Yes.
Strong demand for private markets and specialty fixed income strategies.
And.
Offset by outflows in active equities.
Using in these businesses going forward.
Because by asset class and excluding certain quantitative strategies.
Or liquid alternatives category this quarter.
We reported net inflows of 2.8 billion.
Net flows.
Driven by continued strong demand trends at our private markets affiliates.
Our near and long term track records.
The success, we've seen at Pantheon Baring.
So we are seeing client interest.
Hi, Matt.
Resulted in significant dry powder dry powder for deployment.
Cross numerous strategies.
To look to add new products and new affiliates.
Today's environment.
It's an attractive market segments.
Going forward, our diverse group of private markets affiliates.
Until equities.
Positioned.
Adjusted net outflows of.
I'm client demand and secular growth trends.
1.1 billion.
Hi, Good strong fund raising in these businesses going forward.
Rebalancing and current demand headwinds in value oriented strategies.
This category this quarter.
These scenarios, where we see a convergence.
Responding inflows.
And relative value of fixed income strategies.
Performance, we are seeing inflows.
Near and long term track records.
Trucks go.
Low yields.
10-K in global and Asia focused strategy.
Hi, Matic and sustainable investments.
For investment performance.
So the focus strategies.
<unk> equity strategy.
Can you to look to add new products and new affiliates.
Currently 80% of AUM outperforming benchmarks on a five year basis.
Moving to fundamental equities.
The dispersion between growth and value indices today.
<unk> billion in global equities.
Quickly.
The $1.1 billion in us equities.
Extreme dislocation.
Driven by client rebalancing.
[noise] pattern going forward.
And headwinds in value oriented strategies.
Particularly given that more than half of our AUM and value strategies.
And demand for active.
Such as Yacktman, Tweedy Browne and River road.
Seeing inflows.
Creating top quartile performer.
Spectroscope and GW in Kay.
In multi asset and fixed income.
Strategies.
Generated nearly $1 billion net inflows in the quarter.
Formats across our fundamental equity strategies.
Our fixed income products.
Very strong.
Q and K.
Approximately 80% of AUM outperforming benchmarks on a five year basis.
Steady recurring growth.
Seeing record levels of dispersion between growth and value indices today.
Historically.
Both tools.
You mean reversion has followed periods of extreme dislocation.
181 million.
Similar pattern going forward.
In performance fees.
And for future growth.
This is 12% year over year.
More than half of our AUM and value strategy.
Sure.
Cross managers, such as Yacktman, Tweedy Browne and River Road.
And incremental income from affiliate equity repurchases.
Finally in multi asset and fixed income.
[music].
We generated nearly 1 billion of net inflows in the quarter.
Stating the disconnect.
Continued positive momentum in fixed income products.
And the limited earnings impact of Quants close.
This area of our business continues to deliver steady.
52 million.
And remains well positioned for the future.
In terms of approximately $16 million.
Turning to financials.
With prior strategic repositioning event.
Adjusted EBITDA of $181 million, which included $4 million of performance fees.
Per share of $3.27.
Here.
Okay reflect the additional impact of share repurchase activity.
Yeah.
EBITDA benefited from lower expenses.
Cities.
As an incremental income from affiliate equity repurchases.
Quarter to be in the range of 200 to 230 million.
Adjusted EBITDA grew 12%.
In our market blend.
I think the disconnect between the underlying earnings power of the business.
In performance fee range.
Earnings impact of Quants flows.
Yes.
Our share of interest expense was $24 million for the third quarter.
Benefited from onetime tax items of approximately 16 million.
<unk> million.
Primarily associated with prior strategic repositioning events.
[music].
I will add to our cash position.
Willing interest depreciation was $3 million in the third quarter.
Earnings per share of $3.27.
For the fourth quarter.
The additional impact of share repurchase activity.
Recorded amortization and impairments was $59 million for the third quarter.
Yes.
So in the fourth quarter.
Adjusted EBITDA in the fourth quarter to be in the range of 200 to 230 million.
Our GAAP and cash tax rates.
[noise] levels, reflecting our market blend.
<unk> percent respectively.
<unk> percent as of Friday.
Leaks rate being lower in the third quarter.
A 20 to 50 million.
Yes, the tax benefits related to prior strategic repositioning initiatives.
<unk> million for the third quarter.
For modeling purposes.
Quarter interest expense to be approximately 27 million.
This is only 25%.
Third debt issuance in September.
Lastly, in the fourth quarter.
Controlling interest depreciation was $3 million in the third quarter.
Impacted by strategic repositioning and were $27 million in the third quarter.
And we expect intangible related deferred taxes to be approximately $5 million in the fourth quarter.
Yeah.
In the fourth quarter, we expect this line item to be approximately $50 million.
Okay and included the Mark to market impact on GP and seed capital investment.
Pretty 1% and 5% respectively.
Willing purposes.
Our cash tax rate being lower in the third quarter.
Excluding any mark to market impact.
Her spend if its related to prior strategic repositioning initiatives.
Average share count for the third quarter was 46.5 million.
Specked, our GAAP and cash tax rates.
And to be approximately 45.
Percent.
4 million.
1%, respectively in the fourth quarter.
And finally, turning to the balance sheet and capital allocation.
For taxes were impacted by strategic repositioning and were $27 million in the third quarter.
I think advantage of the historically attractive financing environment.
Only $5 million in the fourth quarter.
Sure by building additional liquidity and flexibility.
<unk> items were negative 5 million.
Our debt.
And included the Mark to market impact on GP and seed capital investments.
Institutional bond offering earlier this year.
For modeling purposes.
The third quarter, we issued $275 million of 40 years.
The market impact.
Retail hybrid securities at a 4.75% coupon rate.
Share count for the third quarter was $46.5 million.
We expect share count to be approximately 45.4 million.
And financial flexibility create a meaningful advantage as we execute on our forward opportunity set while also returning excess cash to our shareholders.
It to position the company for growth.
This quarter.
Yeah, we repurchased approximately $85 million of shares.
[music].
The environment.
We expect to repurchase a minimum of $100 million in the fourth quarter.
And flexibility.
Forward prospects for new investments.
You bet.
Our current conditions.
Following our $350 million 10 year institutional bond offering earlier this year.
Pulling capital.
During the third quarter, we issued $275 million a 40 year.
Hi, Mark.
Nick Junior retail hybrid securities.
And new investment prospects.
Percent coupon rate.
Accelerating growth at an existing affiliate.
They are.
Adding resources to support our centralized services.
In free cash flow and financial flexibility.
As we remain focused on capitalizing on our core differentiators.
Set.
Is the competitive advantages.
I think excess cash to our shareholders.
As for energy to drive long term earnings growth and shareholder value creation.
<unk> million of shares and expect to repurchase a minimum of $100 million in the fourth quarter subject to forward prospects for new investments.
In finance.
It conditions.
We ask that you please limit yourself.
And highly selective and disciplined in our approach to deploying capital.
Hi task a question.
I think all investment decisions are under a common framework.
A couple from me.
Yes, setting a new investment prospect.
Good question.
Celebrating growth at an existing affiliates.
Well great question.
Adding resources to support our centralized services.
As for repurchasing shares.
Pick up your handset.
We remain focused on capitalizing on our core differentiators.
Before one and we do have.
Okay and then just.
Let me.
As we execute against our strategy.
Some return to.
Long term earnings growth and shareholder value creation.
From Alex Blostein from Goldman Sachs. Your line is now live.
Since.
Great. Good morning, guys. Thanks for the question.
Question and answer session.
Brown, just the buyback dynamic obviously, we saw you guys increase a little bit of repurchase in the third quarter and the guidance for Q4 were 100 feels a lot obviously higher than than I think what we're looking for.
Yeah.
Maybe talk a little bit about the rationale for pickup in share repurchases and how you guys thinking about this maybe into 2000.
Add a confirmation tone will indicate your line is in the question.
I appreciate the question when I talk about kind of capital allocation overall in all incorporate your question as well.
So far what we do as you please limit yourselves to one question.
Well isn't important core strategic asset for AMG.
Today is coming from Alex Blostein.
And the opportunities in front of us were very clearly looking to be front footed.
Good morning, guys. Thanks for the question.
So Tom maybe the first one just around just the buyback dynamic obviously, we saw you guys increase a little bit of a purchase in the third quarter and the guidance for Q4 of a 100 feels a lot obviously higher than that I think what we're looking for.
Maybe talk a little bit about the rationale for pickup in share repurchases and how you guys are thinking about this maybe into 21.
It does.
You've seen over the last couple of quarters, we have been very active in the financing markets.
When I talk about kind of capital allocation overall in all incorporate your question as well.
Realty.
And those noted in our prepared remarks.
And in terms of kind of how we've been allocating our capital. This year, we have put a significant amount into growth.
We look at the landscape and the opportunities in front of US were very clearly looking to be front footed.
In terms of allocating capital towards growth opportunities, particularly toward new investments and investing in the growth of our affiliates.
Assessments and I think you're really seeing the impact of some of those investments in our results.
So decisions are running through a common framework to ensure that we're earning an appropriate risk adjusted return for our shareholders and making great long term decisions and that will include returning capital through repurchases.
It's a little thus far through the third quarter via both repurchases and dividends.
In the financing markets.
It's in our guidance for the fourth quarter gets you north of $300 million in terms of capital return for the full year.
Stability, all at very attractive pricing and in terms of kind of how we've been allocating our capital. This year, we have put a significant amount into growth.
Including our partnership become best earlier in the year, forming a strategic relationship with capital putting meaningful capital to work at our affiliates both in terms of equity purchases as well as in growth investments and I think you're really seeing the impact of some of those investments in our results with strong fund raising momentum at Qom Best and also meaningful earnings contribution from our end.
Mental affiliate investments.
We've been performing well.
Returned $220 million of capital, thus far through the third quarter via both repurchases and dividends and.
And incorporating our guidance for the fourth quarter gets you north of $300 million in terms of capital return for the full year I'd also point out based on that guidance level, we should take our share count down by about 8% this year and more than 20% over the last three years. So the uptick in the buyback relative to where we were earlier in the year.
So.
Given the lower.
Yeah.
It's Jay is prerecorded comments was the fact that.
Which is structured in a profit share not a revenue share.
The business, how we want the business position in the context of coated and in the context of our growth plan going forward things have really recovered the business has been performing well, we feel very comfortable with our balance sheet and our cash position and therefore, we felt comfortable returning some excess cash this quarter as well as guiding toward a slightly higher number for the fourth quarter.
You will note a couple of things one.
Thank you. Our next question today is coming from Craig Fuller from Credit Suisse. Your line is alive.
Today.
So the I think the.
Good morning, everyone.
Need cemetery.
Good morning.
For upside.
Earnings.
Lower.
Yeah Bose.
The contribution from your largest key on the affiliate.
Xie.
Which has gone up which is structured in a profit share not a revenue share.
[music].
I wanted to see how they are progressing.
Certain matters at.
Reducing their cost base.
At both John David and the rest of the senior.
EBITDA contribution tame GE go for.
Sure.
Yeah.
As majority holders.
Thanks, Craig.
Right.
And as you noted we are.
We.
Our party holder.
Okay.
Specifically about.
Philippe level.
We feel really good about the long term.
Thanks Juan.
From business.
You're right they are contributing a relatively small amount to our EBITDA today.
Still highly profitable.
I think the.
Several segments.
The asymmetry.
Lots of.
For upside.
And then.
[music].
Welcome.
Earnings.
And.
Okay and flows is there.
Energy capability.
You are.
Hey, Mark.
Are we.
In short they built a great.
We didn't about their business model, our business prospects, but most importantly.
Right.
Partners at at a QR Cliff, John David and the rest of the senior partners.
That is coming from Bill Katz.
Were fine.
Your line is now live.
As majority holders of that business and as you noted we are a minority holder of that business.
Given that alignment, we feel really good about the long term.
Look at the institutional pipeline.
I mentioned, the asymmetry is and.
Changing over the last three to six months.
The business is still highly profitable.
Thank you.
Several segments.
Our growing lots of.
You want to take.
And Tim in fixed income.
With that I'll.
Managed business.
As a follow.
Yes gene capability.
Bill I Hope you heard your whole question there, but your question about the institutional pipeline and where its standing today.
And the optimist.
Kind of think about client trends at a high level overall first I'd say in the immediate term.
This is coming from Bill Katz from Citigroup. Your line is now live.
In the wake of covert volatility.
Existing relationships continue to pay dividends, forming new relationships still a little bit more difficult, but the fact that we do have our global distribution folks on the ground in market has been a big advantage for us there.
Jim over the last three to six months.
Were seeing activity take place in the markets and we're kind of seeing both sides of that in different parts of our business.
Tom you want to take that.
Forward to the fourth quarter, we are continuing to focus on rebalancing and also just to make a quick retail point.
Tim there, but your question about the institutional pipeline and where its standing today, maybe if I just kind of think about client trends at a high level overall.
Big trends were watching just in terms of active management, the first being dispersion between growth in value.
Is in the wake of coated volatility.
We've seen the impact of that value drag over the last couple of years.
[music].
But also the spread between the best and worst performing managers and I think really when we think about our client conversations each of these dynamics.
Market, it's been a big advantage for us there.
Yeah.
Yeah.
You are seeing a variety of rebalancing activity take place in the markets and we're kind of seeing both sides of that in different parts of our business.
We believe strongly that these factors are setting up well to benefit independent boutiques.
On saying and also just to make a quick retail point. We're also closely watching how clients engage with respect to the election and the longer term outlook for taxes.
Fundamental equities in liquid alternatives.
As Vik trends were watching just in terms of active management, the first being dispersion between growth in value.
And so.
Certainly we've seen the impact of that value drag over the last couple of years.
But also the spread between the best and worst performing managers and I think really when we think about our client conversations each of these dynamics really speak to the value of active management.
Women and River road.
See more and more dispersion in markets.
Investment skilled again is really coming to the forefront. So we do believe strongly that these factors are setting up well to benefit independent boutiques that are fully aligned with client interest and as I said in my prepared remarks.
In terms of client conversations and the setup for active with our overall performance.
Particularly in fundamental fundamental equities and liquid alternatives and I'll, just give you a little bit of color. There. So I think thats a lot of what our institutional clients are seeing today.
Its ease of our clients.
The global equity side.
Yes look I'll, just add I think Tom.
And if our fundamental equity strategies.
Overall, our outperforming on a five year basis, including really strong long term performance of businesses like Harding Loevner Genesis Veritas Yacktman and River Road.
In the us in particular.
And we're seeing that.
Over the course of the past several quarters, you've seen significant improvement on both the three and five year basis.
Versus where we were coming into the year.
Please.
So when you combine what we're seeing in terms of client conversations and the set up for active with our overall performance. In addition to the strong demand we have already been seeing in private markets specialty fixed income and semantic strategies, we do feel like we're very well positioned to meet the needs of our clients.
Its best delivered through independent.
Just to add I think Tom covered that very well.
Thats.
We see a time here, a new environment, where.
Dependent partner.
Asset.
Dispersion and increased volatility is.
Sounds.
Question.
The environment were active.
And Tim from Jefferies. Your line is now live.
In client portfolios and we are seeing that.
Good morning.
Pick up.
The questions on the new investment.
And.
Potential outlook and.
I believe that investors can afford.
A wave of consolidation.
To volatility.
The point around scale and things that you're not necessarily focused on but.
At near Zero.
And when do you think two smaller firms that are looking to.
So.
Find partners to help with areas like you can do in terms of.
No.
Centralized distribution and other things so.
Okay. Just on the fed is we believe active.
Are those between.
Ever.
Her industry consolidation in the new investment outlook that you guys have and how we should think about.
Our.
Potential upticks.
The solution provider for our independent.
And from their own firms.
Yes, Thanks, Dan good morning, and.
Thank you. Our next question today is coming from Dan Fannon from Jefferies. Your line is now live.
If I can take.
Thanks, Good morning.
Our question and address it both from a consolidator.
But look and.
And Paul is what does it mean.
He is going through a wave of consolidation that.
Your point around scale and things that you are not necessarily focused on but.
In general.
Does that trickle down do you think two smaller firms that are looking to.
Paint flatly that am Jean.
It is like you can do in terms of.
Thanks Lee pioneer.
You shouldn't and other things so.
We're investing in independent partner home.
Parallels between.
Okay.
Water industry consolidation in the new investment outlook that you guys have and how we should think about.
During that time, we've seen many M&A cycle.
In that activity.
Sales competing and contrasting strategies in our industry.
That's a lot there is a lot to your question and I'm going to see if I can.
We also see that.
Thank the entire question and address it both from a consolidation perspective as well as what does it mean.
Station.
The benefit AMG.
Buckle integration transaction.
Hey, guys, just a fair amount of my prepared remarks.
And can should be about enhance.
A few additional.
<unk> form.
<unk> expense.
Moving client outcome.
Station, but maybe first just.
Yeah.
State flatly that am Jean was.
Consolidation does that.
We pioneer a sustainable model.
Maybe.
Lessening an independent partner.
Okay.
Nearly three decades ago.
Brent.
And since then as you had you know you've been with US for most of that time, we've seen many M&A cycle.
[music].
Yes.
The large financial.
Competing and contracting strategies in our industry.
And clients.
But we have not debt deviated from our approach.
What I think most of you already know.
Oh, I see that these transactions happening around us.
Oh.
Arm.
That our so called consolidation transactions or vertical integration transaction.
These being the independent partners.
And any transaction should be about enhancing investment performance and improving client outcomes.
Don't reserve culture.
It's hard to see in our minds how costs.
Yes, absolutely we do.
Station does that.
Yeah, the growth prospects through our centralized services.
Beep.
Which have become even more valuable in this.
[music].
So over the period with end market.
View that we have which is we believe independent boutique.
Affiliates choose AMG.
An advantage.
We continue to choose AMG on the new and.
Two sons and delivering superior outcomes.
For for our model over consolidation.
Stating.
Think most of you already know.
But taking a turn here just to the new investment.
Time is first do no harm.
Be ahead of us.
And we don't want to do harm because we don't want to destroy what makes them special for clients.
The independent partner on firm.
The early stages of.
Our arrangements with them to maintain alignment preserve culture.
We have progress in our pipeline.
And lastly, we do.
And we are seeing conversations move.
Through our centralized services.
Move.
Which have become even more valuable in this.
Pad for years.
Associated with end market.
With us.
Usually for boutique affiliate.
Yes.
That's why our affiliates Tuesday AMG.
Position is enhanced.
We continue to choose AMG on the news.
It's all reasons one.
And Thats why clients prefer.
For time.
Our idle over consolidation.
And centralize resources that are additive to our affiliates.
Ill turn here just to the new investment.
In the conversations.
Opportunity ahead of us.
Yes, we are seeing much less competition.
Conversations.
On both a number of our competitors have actually left the market.
It.
The early stages of.
Of their forward strategy.
And fewer competitors however.
We have progress in our pipeline.
If an opportunity and better positions us to be a partner.
And move forward.
For those.
From.
The primary relationships that weve had for years.
So those partnerships with return characteristic.
Is that at the very exciting thing.
For our shareholders.
And we do think our competitive position is enhanced.
Under the structure to a favorable outcome.
Since one.
No. We're excited about this time.
Over time.
After the excellent and.
Centralized resources that are additive to our affiliates and they become an increasing.
I remember on the heels of the GFC.
Conns for new investments.
We had one of its most productive new investment period can anticipate.
As you know a number of our competitors have actually left the market.
Sorry.
Some are questioning foundational elements of their forward strategies and fewer.
Dead fast approach to investing and partner owned.
And so this gives us an opportunity and better positions us to be a partner.
They are well positioned to exit.
So those independent firms.
Strategy.
And we can also structure those partnerships with return characteristics.
Our next question today is coming from Robert Lee.
Excellent.
The BW your line is now live.
Great. Good morning, Thanks for taking my question.
Cited about this time.
Yes, so we.
Blunt and execution.
But he is doing a little bit how are you.
In front of us.
Obviously.
So as you remember on the heels of the GFC.
Hello.
Oh Gee had one of its most productive new investment periods in its history.
I mean, how do you.
We entered this new market environment.
I'll bring with their sometimes its.
They have different.
Initiatives.
You're fully help them.
The approach to investing and partner owned.
[music].
Fill it and with.
Hey.
Less competition around us.
There are there are ongoing.
On our new investment strategy.
Yeah.
Yes, I think it's a good question is very topical and I do.
Thank you. Our next question today is coming from Robert Lee from KBW. Your line is now live.
Great. Good morning, Thanks for taking my question.
Curious maybe so we.
Well is intensifying.
You see a little bit how you work your affiliates obviously.
On the investment in capital but.
Thats kind of becoming table Stakes I mean, how do you think we're way we can.
And sustainable investing will ultimately be.
Expenses those initiatives.
We help them.
Net or is it or are they pretty much.
Okay and on the revenue share are there ongoing.
Walk through.
Okay.
Yes, I think it's a good question is very topical and I do.
Doing.
[music].
With our affiliates.
Areas.
And.
Both.
Doing.
Okay.
Our investing activity, but maybe I'll first.
Demand for new and more inclusive ways.
This investment activity.
So is intensifying.
80% of AMG AUM is managed by affiliates and consider EPS.
We are focused on this segment.
Billy it's our UN tiara.
Existing affiliates and making new investments.
20% of our affiliates offered.
So that sustainable investing will ultimately be best done by active management and.
Thats done by.
ER responsible investing first.
Obviously the.
[music].
And our newest inclusive.
Three.
We both here and I'll maybe.
Buck through.
<unk> was three levels.
Value activity.
So what we're doing as a company.
None.
What we're doing.
As our newest.
Philippe.
Of our longstanding affiliates pantheon.
Through their investing activity, but maybe I'll first just start.
Go.
What they are doing through their investment activity.
[music].
80% of AMG AUM is managed by affiliates to consider SG.
Their investment process.
The liquid.
16 of our affiliates are UN TR eyes.
We've hired a dedicated global sustainable equity team lift out.
Affiliates offered dedicated.
In 2021.
Ladies.
And several of them are really well known.
Both.
They're responsible investing.
We'll energy infrastructure.
Okay.
Fund.
Newest inclusive capital.
And.
Now run by Jeff and his partners.
Moving Harding Loevner.
Sort of.
Our task Janice.
In a succession planning.
To sum on Trustco GW in K have all integrated.
And.
Facility into their investment.
One of our longstanding affiliates pantheon.
What is that.
For signatories of the UN tiara 12 years ago.
As won numerous awards for its.
AMG.
Yes.
We have already.
And it has a comprehensive SG policy across all of its investment activities and that's in the liquid.
And.
Yeah.
Responsible investing.
Artemus, just hired a dedicated global sustainable equity team lift out and will launch new strategies in 2021.
In the team lift outs, including the one I just mentioned that artemus.
There you go.
On the new investment side were looking for EPS GE managers.
Bond and is actively growing that.
Our pipeline.
Mission many of our other affiliates, including Harding Loevner.
Hi, David.
Our task Genesis.
And then lastly on our centralized capabilities at the center, we're enhancing strategy and product development through sharing perspectives across our entire affiliate group.
So is that.
Including direct feedback from our global distribution team and the broader industry relationship.
And we at AMC.
Shifting.
We have already substantial.
Easily at led.
So that's been an allocated capital and.
As a group.
In.
And lastly, just.
Uh huh.
Just touching on AMG.
Phil it's in a number of ways.
We've always been committed to best practices at AG.
Its products and we're also supporting the team lift outs, including the one I just mentioned that artemus.
Total we stepped up our focus.
Hi, we're looking for SG managers.
Missing.
Responsible investing managers.
Hi, Brent.
Fine does include a number of.
On corporate citizens in our local communities.
Through philanthropy and service.
Centralized capabilities at the center, we're enhancing strategy and product development through sharing perspective across our entire affiliate group.
On.
Including direct feedback from our global distribution team and the broader industry relationships that we have and we're facilitating these conversations and.
Your next question.
Entire affiliate.
In both from Deutsche Bank.
Jason.
Thank you ladies and ally.
The group.
Yes.
And then lastly, just.
Good morning folks.
Gmg corporate.
[music].
We've been committed to best practices at AG.
On the distribution side and the new sales side.
The talented human capital.
Discussing on that.
Jeff our focus.
Little bit lighter client cash inflows.
Smell footprint.
Yeah.
But I know you mentioned the performance has improved so maybe if.
Buckle communities.
Yeah.
Through philanthropy and service.
Refraction.
Might improve.
Site, but we are.
Right now, we do have a negative seasonality in the fourth quarters or maybe.
And.
Base.
Sales for new and more inclusive.
As we move into 21.
To what extent do you think you can improve.
Today is coming from Brian Bedell from Deutsche Bank.
Go through just.
This is ally.
Just initiatives and.
Hey, Thanks, good morning folks.
Our ESG products can.
To that I know you mentioned.
A little bit about the on the distribution side and the new sales side is.
Okay sitting on that.
Move to.
Little bit lighter client cash inflows in the third quarter than the second quarter, but I know you mentioned the performance has improved so maybe if you can give us a flavor of how that sales traction might improve.
Just with the question you asked upfront on gross close in terms of what we've seen in the quarter. I think you are going to have to look at gross flows from a couple of angles.
I mean to 21.
Sales for tactically.
To what extent do you think you can improve.
The in terms of.
New sales.
Really on the cost side.
Distribution is.
Not seeing a lot in the way of gross sales there at this point.
B, how ESG products can.
Time, where there is a little bit of third quarter seasonality as you get into the summer, but also still some co that impact.
Could you to that.
Heavy levels and while that's recovering certainly from an overall market perspective.
Thanks. Thanks.
Totally back to normal.
Tom start.
Most importantly, when we think about.
I'll see if I can.
Questions, whether its AMG distribution the distribution that exists.
Brian Let me start just with the question you asked upfront on gross flows in terms of what we've seen in the quarter I think you're going to have to look at gross flows from a couple of angles.
So really the way, we're thinking about the forward opportunity set.
Well to versus what we would expect to see in terms of.
Asset markets have kind of moved steadily up into the right.
Not seeing a lot in the way of gross sales there at this point said.
Second I think we're still in this period of time, where theres, a little bit of third quarter seasonality as you get into the summer, but also still some co that impact that impacting activity levels and while that's recovering certainly from an overall market perspective things aren't totally back to normal.
And just briefly to touch on.
Out.
Jeeze distribution.
Whether its AMG distribution the distribution that exist at our affiliate partners and.
And the overall dialogue that we're experiencing with clients.
Being a larger and larger competitive advantage for us.
Moving is really the way we are thinking about the forward opportunity set.
Over the past decade as risk asset markets have kind of moved steadily up into the right. It's been a more difficult environment for active management and I think we're really seeing that set up for the future change and Jay is touched on it in detail both in his prepared remarks in here in the Q and a.
Precisions with new investment prospects.
Dispersion returns and Alpha generation is much more front and center on client radar. We do think is creating a great opportunity and just briefly to touch on.
Hello.
Jeeze distribution.
Think affiliates as well as new prospects continue to view that as an extension of their resources in a real way that AMG can deliver scale.
For you that is increasingly being a larger and larger competitive advantage for us.
Both in terms of an environment like the coated environment, where it's very difficult for affiliates to get out of their home jurisdictions and actually be out in the field the value of having these existing relationships and having people in market has certainly been incredibly important to us.
And as we are having conversations with new investment prospects.
There is our presence.
At the change.
Domestic wealth market, where our presence in.
International and now domestic institutional markets as well.
Do you think both existing affiliates as well as new prospects continue to view that as an extension of their resources in a real way that AMG can deliver scale and a nuanced and differentiated way.
We continue as fund raising effort with.
I wanted to pick up on a few themes here. The first is just the one that Tom mentioned and I mentioned in my.
Chip raises.
We think that active management in this period.
Illiquid managers, just reminding you of those managers.
Volume of both.
Institutional and retail.
And we.
[music].
Active has been a hard sell in the lab.
Affiliate and taking advantage of our distribution, which.
It changed.
Share in their current fund, but also.
Playing out.
Yes.
As we.
We seek and over the next.
We've been able to be out with clients.
And years.
In sum, we're we're very.
Second thing I would like to say second theme is our illiquid managers continue to grow.
In 2019 of repositioning.
Yeah.
<unk>.
Add more of a continuous fund raising effort with.
We're adding resources, especially around.
Funds with separate accounts.
So we are coming into flagship raises and.
On retail fund raising.
And we have a lot of momentum in the illiquid managers, just reminding you of those managers being pantheon.
So I do think that within active illiquid.
On Asia.
With a very.
Comp thats being our newest.
Fund raising.
And taking advantage of.
Okay.
Our distribution, which we've got a lot of momentum.
Occurs.
They're in their current fund, but also in.
As an alternative.
In funds as we've now.
Very good.
Now able to be out with clients with Tom Best and we're.
And and we think.
Very.
Thanks.
Think about that.
Continuing to come their way in this.
We after a period of time in 2019 of repositioning.
Yes.
Okay.
In global distribution.
Today is coming from Mike.
Footed.
Hi, Mike.
Adding resources, especially around the liquid fund raising.
Good morning, Thanks for taking the question.
We are focused on retail fund raising.
Where activity in this space.
In partnership and.
For you like inflation and deal prices.
So I do think that within active illiquid.
As deals in.
It's a very.
Seeing as much change in sales the smaller boutiques.
Hey, Joel as we look.
Tend to look for.
Yeah.
But broadly those managers.
You know among among those new types managers.
Alternative.
[music].
Managers, who have very good performance.
The call.
Gaining.
I touched on it.
And we think that allocations will continue.
Buyer answer, but I'll be more specific.
Volatile.
Thank for independent partner owned firms, especially kind of mid mid size firms.
Question today is coming from Mike carrier from Bank.
A number of the multi boutique.
Left the market.
Some of the other traditional.
Okay.
Yeah.
On the M&A front.
More activity in the space is that putting more.
Like inflation and deal prices.
In or not.
I've been more differentiation on the types of deals and.
There is a spectrum.
Engine sales to smaller boutiques.
[music].
You tend to look for.
Say illiquid.
Because there's always been demand.
You know among among those types managers.
So the other category much less competitive.
Thanks.
And as I.
Okay.
I mentioned that gives us an opportunity.
Two.
Flea and.
With.
Prior answer, but I'll be more specific.
For both to our shareholders.
Independent partner on firms, especially kind of bid.
Our assumption around.
Firms.
But more than.
Seeing.
A few outcomes that.
A number of the multi boutiques have left the market.
[music].
At some of the other traditional.
The favorable to us.
[music].
Especially in.
Other public companies or have have.
In light.
Distracted.
Liquid alternative.
Focused on.
Ill equity manner.
[music].
Global equity May.
A spectrum.
Where.
The.
B.
The different asset classes, I would say illiquid still relatively competitive but mostly.
Has been in the past.
Like every other category much less competitive.
Last very few.
As I mentioned that gives us an opportunity.
Me too.
Proven partnership model.
With structures and return characteristics more favorable to our shareholders.
Idle.
And it gives us more flexibility to structure around.
From Patrick debit.
More than a few outcomes that.
Well.
Vishal to us so we do see this as.
Hi, guys good morning.
So alternatives and private credit it seems that particular appear to be a big focus for regulators now and I imagine that would only increase.
It is.
With a Democratic administration.
Sure is especially global equity managers.
Change, how you think about that as a target vertical and on the other side of the coin.
Dialogue being.
Earn starting to factor into your new affiliate conversations or something that could accelerate founders wanting to pull the trigger.
If you.
Alternatives to an AG.
Thanks, and good morning to you.
Okay.
I'm going to ask Tom to add here as it's a good question I think we do see the election.
Thank you. Our next question today is coming from Patrick debit from Autonomous research.
Certain at this.
Hi.
Yes.
Impacting.
Hi, guys good morning.
Alternatives and private credit it seems that particular appear to be a big focus for regulators now and I imagine that would only increase.
With a Democratic administration.
Well, it's viewed ourselves to be.
And then does that change how you think about that as a target vertical and on the other side of the coin.
Their partner.
Concern starting to factor into your new affiliate conversations or something that could accelerate founders wanting to pull the trigger.
Concentration in any one segment as it relates to.
Good morning to you.
Oh no alternatives.
I'm going to ask Tom to add here as it's a good question I think we do see the election.
Today.
And changes potentially changes.
Hi.
But.
At.
Certain at this.
At best.
So I think we obviously.
Thats impacting.
Hi, good Tory changes in.
Okay.
And we.
The action volume, but also.
Ball.
So the types of transactions you highlight two in particular.
All the best.
EPS managers at the highest quality managers.
Get ourselves to be.
People the best talent.
[music].
It's more of an opportunity.
And.
It is a challenge.
Firms.
Sure.
Our goal is not to have an outsized.
So we see changes being.
And.
And something that independent firms.
It's too.
Sales of their entrepreneurial.
<unk> credit and alternatives.
Most of their alignment.
In particular private credit we have a relatively small.
Our position in it today.
Q.
But we don't see that as being.
I see.
At.
And weve seen changes before and.
Obviously.
And that bodes well for our business.
The changes in markets and we have and we will continue to evolve.
Okay, which is.
Yes.
If you think about what.
Sparked.
A lot of the growth in private credit.
Ice quality managers.
Two of the last decade, it was a pretty dramatic regulatory shift in terms of.
As for tuning.
The way regulators thought about bank center origination off of bank balance sheets and.
With that.
It doesn't feel like there is a.
We see changes being.
So building on what Jay said, I think incremental regulation, whether it's in private credit or in any of the investment businesses that our affiliates.
Yeah.
Operate in.
You know to EPS.
Thank you.
We have the ability to be more agile in the face of those changes been been many larger more integrated firms that are much more entrenched. So I think obviously as part of our new investment process as part of our due diligence process. We are very focused on what the regulatory environment looks like today and what it can look like in the future.
Yeah.
On.
Could you go over the course of the last decade, it was a pretty dramatic regulatory shift in terms of.
The way regulators thought about banks and origination off of bank balance sheets and.
[music].
It doesn't feel like there is a big macro change like that that's out ahead of us So building on what Jay said.
That.
Incremental regulation, whether it's in private credit or in any of the investment businesses that our affiliates operate in.
As opportunity.
We have the ability to be more agile in the face of those changes. Then then many larger more integrated firms that are much more entrenched so I think.
Obviously as part of our new investment process as part of our due diligence process. We are very focused on what the regulatory environment looks like today and what it can look like in the future.
Generally youre.
Generally speaking our businesses and the types of businesses that we invested in the quality of those businesses are reasonably well positioned.
To evolve in the face of a regulatory change.
Okay and growth opportunity.
Yes.
Yes, I do think one one last thing I do think the election.
In itself.
Yes.
This is an event that.
Yes.
Well set us on a path.
I do think that.
Hi, everybody good morning.
I wanted to come back to the increase.
Good for us.
Yeah.
The share repurchase.
Yes.
Our pipeline and with and.
And Graham is definitely up.
The text of the margin environment that we're operating in.
For a bit of a positive new investment pipeline commentary. So maybe if you could just flesh that out and then.
I do we are.
A pipeline just.
And I know that wasn't directly or.
'cause impact your discussions at all.
Okay, and but we are looking at the election of the changes that come from an election, and the and the future periods as being.
Also.
A positive for our new investment pipeline.
[music].
Both opportunities.
Your question, Chris So.
I think really we try to look.
Today is coming from Chris Shutler from William Blair.
Oscar line.
In terms of thinking about the amount of capital that we have available.
I wanted to come back to the increase.
We're in.
Yep.
What we are able to do in terms of growth investments and then ultimately what excess capital we have to return to shareholders. So.
Contrary to the positive new investment pipeline commentary. So maybe if you could just flush that out and then.
And as well as.
My pipeline does.
Repurchase levels really in the first half of the first quarter before Cove it hit and.
And we talked a lot on our second quarter call.
For that question and I'll, maybe take the macro.
Servitude imprudent in the face of tremendous volatility.
And thanks for your question Chris So.
So our dividend in favour of share repurchases.
Digital quarter, but really across time in terms of thinking about the amount of capital that we have available.
Quality of our balance sheet.
The position that we're in.
Coverage in our business.
In terms of growth investments and then ultimately what excess capital we have to return to shareholders. So.
I think the combination of those things just makes us feel more comfortable that we can return a bit more excess capital.
The investment as well as.
Healthy share repurchase levels really in the first half of the first quarter before Cove it hit and.
And we talked a lot on our second quarter call about just being sort of thoughtful and conservative and prudent in the face of tremendous volatility.
Lack of growth opportunities, we put a significant amount of capital into growth already we anticipate putting a significant amount of capital into growth going forward.
Very attractive financing market too.
More of a level of confidence in our business and where we are today.
Significant recovery in our business.
At the one level, but also really in terms of strength in underlying EBITDA and cash flow generation and I think the combination of those things just makes us feel more comfortable that we can return a bit more excess capital.
You also.
You may have heard in my prepared remarks, we have had some positive tax outcomes from some of the strategic repositioning work that we've done which is further added to our cash balance. So I wouldn't view to comment at all as a comment on any lack of growth opportunities. We put a significant amount of capital into growth already we anticipate putting a significant amount of capital into growth going forward.
Which Jay will talk more about it but it was really just more of a level of confidence in our business and where we are today on our cash balance and on our overall balance sheet position.
Yeah.
Yes, and that is that is it really the point I, maybe I'll say flatly, Chris our new investment pipeline continues to be strong and we have made good progress.
The.
As.
Businesses performing.
Patients have returned to us.
Okay, that's strong.
Sorry, I'm excited about new investments.
Vesmen pipeline.
Yes.
You still can return capitalized.
In the near and medium and long term for us and I think we've done some things that will.
We appreciate it.
Near medium and long term.
I'd like to turn.
I would really make sure that we land that point with you that that that.
Okay.
There is no messaging here.
Thank you all again for joining us this morning.
Our business has performed better than we might have expected earlier in the year.
<unk> is ahead of us.
Both there with the recovery and the resilience of our affiliates.
Thanks.
We did take an opportunity.
And track record of.
The partnerships.
To build.
Certain hands, our competitive position.
No longer duration and more flexible balance sheet.
And.
And so we find ourselves with a.
Okay.
Our business is performing.
Or to speaking with you next quarter.
I think thats strong and even though we have a very active new investment pipeline.
Better than me.
And Bill can return capital as Weve.
Have a wonderful day, we thank you for your participation today.
Thank you we've reached end of our question and answer session I like to turn the floor back over to Jay for any further or closing comments.
Okay.
Thank you all again for joining us this morning, we.
We remain focused on the significant opportunities ahead of us.
And we will continue to leverage our core competitive strength and our nearly three decade long track record of successful partnerships.
To further enhance our competitive position.
And create shareholder value over time.
I hope everyone remain safe and healthy and we look forward to speaking with you next quarter.
Thank you.
Thank you that does conclude today's teleconference. You may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.
Mhm.