Q4 2020 Sculptor Capital Management Inc Earnings Call
Good morning, everyone and welcome to sculptor Capital's fourth quarter and full year 2020 earnings call.
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I will now read the following remarks on behalf of the company.
Today's call contains forward looking statements many of which are inherently uncertain and outside of the company's control and actual results may differ possibly materially from those indicated and these forward looking statements.
Please refer to the company's most recent SEC filings for a description of the risk factors that could affect its financial results at the businesses and other matters related to these statements and.
The company does not undertake any obligation to publicly update any forward looking statements.
During the call the company will be referring to economic income distributable earnings and other financial measures that are not prepared in accordance with the U S. GAAP.
Information about and reconciliations of these non-GAAP measures to the most direct comparable GAAP measures are available and the company's earnings release, which is posted on its website.
And those statements made during this call should be construed as an offer to purchase shares of the company or an interest and any of its funds or any other entities.
The company's earnings press release for the this morning also included and earnings presentation.
And the presenters will be referring to this report during the call.
If you have joined to the conference call and I would like to follow along and you can find the presentation on the Investor Relations page of sculptor Dot com at the Q4 linked earnings release.
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I will now hand, the call over to Robert Shafer.
Chief Executive Officer at sculptor capital. Thank you Sir Please go ahead.
Thanks, Todd and good morning, everyone.
Joining me on the call today is David Ritchie, our new Chief Financial Officer.
Happy to welcome David to the sculptor team during this exciting time at FERC.
Early this morning, we reported fourth quarter 2020, GAAP net income of $216 million or $9 50 per basic and $5.
0.05 cents.
Fully diluted class a share.
Distributable earnings were $342 million or $6.08 per fully diluted share and adjustable distributable earnings were $343 million or $6.10 per fully diluted share.
We declared a dividend of $2.35 per class a share day.
But we'll get into the details of our results a little later.
Our fourth quarter results are a culmination of the hard work and dedication of the entire organization.
Against the challenging 2020 back drop the.
The focus was reflected and our strong investment performance.
And our client base and improvement and our corporate balance sheet.
Let me first turn to performance.
Despite weakness in October market sentiment shifted rapidly and the aftermath of the election hope and global equity markets close and record levels with the MSCI World Index climbing 12, 5% during the fourth quarter.
The by the victory coupled with the lack of a clear Democratic majority followed shortly thereafter by a host of better than expected and vaccine trial results propelled risked assets to new highs heading into year end.
Sculptor Master Fund returned six 3% net for the fourth quarter, bringing 2020 year to date net performance to 19, 5%.
Our strongest net return from the fund and over a decade.
This compares favorably with the MSCI World Index, which was up 14, 1% over the same period.
Fundamental equities was the largest positive contributor to performance during the quarter.
Our expertise and fundamental investing coupled with dynamic capital allocation with central to our ability to navigate the ever changing market backdrop during 2020.
Our credit strategies generated positive returns during the quarter as credit assets experienced one of the best backdrops for sustained gains and years.
With headline risks exciting we witnessed more cyclically sensitive companies with complicated stories performed strongly which ultimately helped drive gains and our large cross the stripping positions.
Moreover, many high quality spread based investments and corporate and structured credit further retrace their drawdowns.
And those situations that of reach their target levels. We have continued to harvest gains as we now pivot to source opportunities elsewhere.
Lastly, our convertible and derivative arbitrage strategy generated gains across the diverse range of positions as the strategy benefited from continued improvements and valuations flow.
<unk> and healthy new issuance.
Our global opportunistic credit fund sculptor of credit opportunities Fund returned $6, 4% net for the fourth quarter of 2020 and was down one 5% for the full year.
At the height of the crisis, we deployed approximately $800 million of capital into new opportunities, which helped drive a 23, 1% net return for the fund from April 1st through year end.
This illustrates our ability to adapt quickly to a rapidly changing situation and deliver value to our clients.
Performance in the quarter stemmed from both structured and corporate credit where continued strength and risk assets helped deliver strong returns.
Their positive performance was book, both broad based and spread based investments, where we added exposure. During this crisis and addition to a resurgence of amongst our largest process driven holdings.
Similar to our multi strategy funds with many high quality spread product investments and corporate and structured credit retracing. Their drawdowns, we've continued the harvesting gains and reducing exposure by monetizing positions that reached target levels.
Across our opportunistic real estate credit and equity funds, we continue to deploy capital and generate strong returns with our third opportunistic fund generating and 18, 3% annualized net return through December 31.
We are finding attractive opportunities in both of our real estate credit and equity strategies, taking advantage of recent dislocations and public real estate markets as well as liquidity driven sellers and the private markets.
Despite the volatility across the real estate and capital markets and 2020, we continue to be very active and both new investments as well as providing liquidity to our investors.
Across our real estate platform and 2020, we deployed approximately $700 million of capital into new investments and distributed nearly half of $1 billion back to our investors.
Our clo's contingency and improvement across almost all tests and metrics and the fourth quarter.
The improvement was driven by strong performance and targeted investments made during Q2 and Q3 as well as continued improving underlying fundamentals across our existing portfolios.
The recovery of fundamentals and loan price. He says also led to refinancings and increased sponsor and M&A activity, we were where we are finding select opportunities to deploy fresh capital.
We expect to see continued improvement and subordinate management fee payments as we move into this year.
Turning to 2021, we witnessed significant volatility and the equity markets amidst a series of well documented events with.
We've weathered the situation with the Master fund down, 0.8% net and January and sculptor credit opportunities fund up to 3% net.
We believe that our ability to navigate such episodes and protect capital and challenging market conditions is another testament to our dynamic multi strategy approach.
We continue to believe that the current investment landscape presents a robust opportunity set from multi strategy credit and real estate investing.
Turning to flows.
As you can see on page seven as of December 31, our assets under management were $36 8 billion with net inflows and the fourth quarter of $274 million per.
Performance related appreciation of $1 1 billion and distributions and other reductions of $562 million.
As of February 1st our assets under management were $36 4 billion, which was driven by an estimated $175 million of performance related depreciation.
$140 million of net outflows and 55 million of distributions, including Paydowns, and our CLO to investors and certain funds and January.
Turning to page eight multi.
Multi strategy funds had assets of $10 5 billion as of December 31, which included $648 million of performance related appreciation and 92 million of net outflows and the fourth quarter.
Opportunistic credit at $6 3 billion of assets as of December 31.
Which included $338 million of performance related appreciation at 89 million of net outflows and the fourth quarter.
And 2020, we saw over $1 billion of gross inflows across multi strategy and opportunistic credit funds almost double the amount we saw in 2019 and the most since 2015.
We believe the value proposition of our multi strategy funds is apparent to our investors.
Real estate had total assets under management of $4 3 billion as of December 31st the decrease in the quarter was driven by $506 million of distributions and other reductions, which primarily related to the step downs from committed to invested capital upon the exploration of the investment period of our real estate credit fund.
These reductions were partially offset by $107 million of net inflows.
Institutional credit strategies, and total assets of $15 7 billion as of December 31 was $348 million of net inflows and $107 million of performance related appreciation and the fourth quarter.
The CLO issuance environment continues to normalize from the fourth quarter.
As we enter 2021 of the CLO market continues to show signs of slowing and we expect to see increased refinancing activity. After the rally and CLO liability spreads and the fourth quarter, along with continued activity and new issue CLO.
Last month, we priced a $308 million CLO deal and will consider refinancings of existing deals and establishing new CLO warehouses as market conditions improve.
We also see continued a continued rebound and aircraft ABS markets driven by overall tightening in spreads across credit sectors and hope for a rebound and air travel and the latter part of this year as vaccinations continue to rollout with that let me turn the call over to David to go through the financials.
Thanks, Rob and good morning, everyone as Rob mentioned at the start of the call and as you can see on page nine we reported fourth quarter 2020, and distributable earnings of $342 million and full year, just can be low earnings of 279 million adjusted distributable earnings were $343 million for the fourth quarter and.
$406 million for the full year 2020 of.
Additionally, we declared a cash dividend of $2 35 per class a share.
Revenues were 600 million for the fourth quarter of one.
124% from the fourth quarter of 2019.
For the full year 2020 revenues were $876 million up 52 per cent from 2019.
Management fees were $70 million and the fourth quarter up 11% from the previous quarter and up 16% from the fourth quarter of 2019 due to increased <unk> and recovery of deferred tllp's.
Management fees were $250 million and 2025% higher than 2019 the.
The year over year increase and management fees was driven primarily by real estate fund for which held its final close and the second quarter of 2020, and higher average fee paying assets and certain of our open ended credit funds, partially offset by CLO the deferrals.
And as Rob mentioned, we expect to see continued recovery and our CLO and the first quarter.
As of today only one of our CLO remains in full deferral, which is the significant recovery from the deferrals. We are seeing early on and the pandemic.
The incentive income was 528 million and the fourth quarter of 160 per cent compared to the fourth quarter of 2019 incentive income was $617 million for the full year 2020, 92% higher than 2019, the higher incentive income was driven by our multi strategy funds performance and 2020.
As well as the crystallization of accrued unrecognized incentive and the customized credit platform.
As seen on page 10 in 2020, we generated an additional $78 million of accrued unrecognized incentives due to our strong fund performance.
Recognize $206 million of incentive from our longer dated assets in 2020, including from a portion of the incentive generated this year, reducing our accrued unrecognized incentive balance to 128 million as of December 31st the.
The main driver of you the impact was from our customized credit platform.
Now turning to our operating expenses.
For the fourth quarter 2020, total expenses were 254 million, bringing full year total expenses to $570 million up 30% from 2019 with the increase driven primarily from legal settlements and provisions and related legal fees.
Total adjusted expenses, which excluded these items were 253 million for the fourth quarter and $444 million for the full year 2020 up 12% from 2019 with bonus expense driving the increase in light of higher incentive income from strong fund performance.
And the fourth quarter, 2020 compensation and benefits expense with $227 million, bringing our full year compensation and benefit expense to 350 million up 15% from 2019.
The driver of this increase with our bonus expense, which was 212 million for the fourth quarter, bringing full year 2000, 20 billion and extend to 276 million of 23% from 2019.
The year over year increase was driven by higher incentive income from strong fund performance.
As a reminder, we pay bonuses largely based on current year performance, which is not necessarily when we realize the related incentive income.
For example, the majority of the compensation related to the incentive crystallized from our multiyear customized credit platform with paid out over prior years as performance is being generated even though we didn't recognize the cumulative accrued incentives until 2020.
As a result bonus expense as a percentage of incentive will vary year to year.
As usual, we will accrue a minimum level of annual bonus throughout 2021, we expect that to be $75 million to $85 million.
Salaries and benefits were $15 million for the fourth quarter down 18% from the previous quarter, mainly due to the capitalization of certain internal costs related to our software implementation.
Salaries and benefits were $74 million for the full year 2028 per cent from 2019, primarily from lower head count as we continued our focus on streamlining operations and proactively managing our fixed expenses.
We expect full year, 2021, and salaries and benefits to be between 70 and $75 million.
And the fourth quarter and general and administrative expenses were 21 million, bringing full year G&A expenses to 204 million <unk>.
The adjusted G&A expenses, which exclude legal settlements and provisions related legal fees and recalculated costs were $20 million for the quarter, bringing the full year to $78 million down 4% from 2019, primarily due to lower professional services as well as the impact of travel restrictions and employees working from home.
We expect full year adjusted G&A to be between 75 and $80 million and 2021.
Interest expense for the full year 2020 were $17 million up 63 per cent from 2019 the.
The increase was driven by the interest accrual for our now retired debt securities and they began accruing interest on February one 2020 prior to that the debt securities did not accrue any interest.
We expect full year 2021 interest expense to be between 15 and $20 million.
Our guidance for the full year 2021 payable for taxes and tax receivable agreement is 20 to 25 per cent of economic income.
As a reminder, this estimate of subject to many variables.
Putting year and performance that won't be finalized until the fourth quarter of the year and therefore could vary materially from the estimates provided.
Now and update on the balance sheet, turning to page 11 as of year and total cash cash equivalents and long term treasuries were $288 million.
As previously announced in November we closed on a $320 million term loans and $25 million revolver. We used the proceeds of the term loan to capture of $62 million of discounts on the early prepayment of our then existing debt and preferred unit.
As of today, we of prepaid 175 million of the amount outstanding on the new term loan, leaving a balance of $145 million, which is due at maturity.
As a result of the prepayment we are no longer subject to the cash sweep of financial maintenance covenants other than the 20 billion minimum fee paying AUM covenant.
The $25 million revolver remains undrawn and available for working capital and general corporate purposes with that let me turn it back over to Rob.
Yes.
Thanks, David.
2020 was a pivotal year for the firm.
We achieved outstanding financial results and made significant progress on our strategic goals, putting the firm and a strong position going forward.
We're incredibly proud of our performance in 2020, the strongest and over a decade and our flagship multi strategy fund, we broadened our investor relationships raising over $1 billion of new capital and our multi strategy and opportunistic credit funds launched our largest ever opportunistic real estate fund with almost $2 6 billion.
And the commitments and settled the last of our legacy legal matters.
And with the refinancing and debt Paydowns, we strengthened our balance sheet, leaving us and the most stable and flexible capital structure since 2007.
We continue to focus on operational efficiencies and enhancing our scalable platform that will provide us with the operating leverage as we continue to grow our assets under management.
With Jimmy Levin, taking over as CEO and April combined with the broader leadership team most of whom have been working together for well over a decade I am confident that the right people are in place to lead sculptor towards the bright future.
With that let me turn the call back over to be operating and take some questions.
Thank you ladies and gentlemen, the floor is now open for question and if he would like to ask a question. Please press star one on your telephone keypad at this time, a confirmation tone will indicate your line is and the question queue. You may price start to term of your question from the queue.
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Our first question is coming from Gerry O'hara of Jefferies. Please go ahead.
Great. Thanks for taking my questions. This morning, perhaps all of them, we can start on fundraising and and if you could give maybe any sense of how conversations have been evolving with the kind of consultants gatekeepers and the like as the as it relates to the.
The forward outlook for 'twenty and 'twenty one.
Sure Jerry it's Rob I'll take this one.
Look I'd say in terms of the level of inquiry and activity. It is definitely the best buy of walks out it's been since I've been at the firm.
And I think the several reasons for that are first and foremost is been our returns, which I think have been exceptional and they've been consistent.
I think we can lead with that and I think and addition of that closing out all of our legacy issues, which as we all know is an impediment with many of the clients out there.
Has also opened up a lot of new conversations with us so whether youre looking at a.
Consultants, who are upgrading us and those conversations are becoming more robust whether its private banking platforms that are open to us and more conversations going on there of about potentially more openings as well.
And the institutional client base that we're seeing pretty much across the globe.
It gives me a lot of of encouragement now with that said and I've said this before the timing of these things is always tricky and.
And you know for some of these accounts and when they look at our firm, they're really re underwriting our firm and and I would say not just for clients who've never done business with us the clients that may have been business. Many many years ago still look at sculptor capital today and rightly. So are looking at a very different firm and that re underwriting process takes.
Some time Covid I would say also has not helped there.
With some of the newer clients, who in some cases like the face to face and billing so that's been a.
A bit of a drag so.
Yeah, what I would say is there is always going to be the occasional idiosyncratic outflow here and there given the nature of institutional clients.
But when I look at the level of activity and I look at our returns you know, particularly in an environment, that's not as toward the richest perhaps it once was and I think about the fact that the legacy issue of Roes are behind us and of the firm you know it was of much more stable place and it may have been a few years ago that gives me a lot of confidence so I guess my.
Answer to you would be.
And I'm optimistic and the long term very difficult to determine exactly when that's going to happen I wouldn't expect the absolute avalanche of money arrived at our door Tomorrow morning, but I think it's really a question of of when not if so I am I am confident we will be able to grow over the intermediate to long term.
Okay. That's that's helpful context.
I guess also if we can maybe touch on you know.
Delaware life, if there's any update you might be able to provide there with respect to the clinic.
Potential future opportunities, where the strategic or otherwise the partner with them the product.
That would also be helpful.
Sure Jerry well look, let's let's put context into the into the whole Delaware of life transaction I mean, what the Delaware of life transaction did for US is number one and it allowed us to capture over $60 million of discounts on the outstanding liabilities at the time.
In addition to that it allowed us to push out our amortization schedule, we're giving our balance sheet and much more flexibility and comfort going forward and remember this was at a time when you were sitting on Covid beginning to rise and we didn't have the vaccine news that we have today and you add and upcoming election. So it de risks the free.
Firm It gave us a much more flexible capital structure and it allowed us to capture discount. So there was a lot of logic.
To going forward with the financing I'd say in addition to that the fact that Delaware of life has a board seat and they are of warrant holder of lives of them.
With us so as we think about portfolio opportunities.
Of our financing opportunities I'd say, we have good dialogue with them and you know, we look forward to collaborating with them and the future.
Okay, great and what.
And more thanks for taking all my questions. This morning, if I could squeeze just one day.
And the CLO sub fees, you kind of mentioned and that will remain a headwind and <unk>, perhaps the question for Dan here.
But could you put maybe a finer and finer point on what we might be able to expect from from.
For <unk> and perhaps into the into this year as to as to the sub fees.
Sure I'm happy to take that one so the the hela cell piece of really started to normalize.
And none of it because as of today, we only have one CLO that is currently still and full deferral and we have for cielo that are and partial deferrals for the fourth quarter, we actually saw a net impact of the deferrals as a positive coupon of 3 million and we had a small amount of additional deferrals and Q4 of which was $1 8 million.
And that was offset by $4 million that we recognized in Q4 related to prior periods. So we are seeing.
That balance go down in terms of what continues to be deferred and we still have a balance of $5 6 million that we would expect to collect.
As all of those deal of care.
Okay. That's great. Thanks for taking my questions. This morning.
Thank you. Our next question is coming from Patrick Davitt of Autonomous Research. Please go ahead.
Hi, good morning, everyone.
So if we think about the timeline for really realizing the accrued carry balance I know you had talked about the vast majority of it before being realized and we saw the of and in the fourth quarter. So is the right way to think about it.
And kind of the $50 million of legacy balance kind of coming more immediately and then the $80 million of new accrual maybe spread over a longer term.
Are you still kind of thinking about that coming out quite quickly.
Sure I can take that so of the 80 million of new accrual this quarter.
$60 million of that was actually related to that the customized credit platform and that has that has a fully crystallized. This year. So of a portion of what we earned this year actually did crystallize within the year.
We have $128 million left outstanding.
And the vast majority of that is and our real estate business, which will which will accrue over time as as those funds.
Exit their investment periods, and the fact to return capital.
Great helpful.
And then another one on fundraising.
And maybe update us on.
Away from the Master fund kind of potential chunky products and the market, either and real estate credit and real estate equity credit the.
Credit platform anything you kind of see and the pipeline that day.
And that could add to the more closed inside of the business.
Yeah, I'll take that one day.
We can't comment on any specific fundraising forward basis, so I can't be specific about that.
And I'd say, if I were to sort of look across the platform I think we've got opportunity to grow pretty much and all the verticals starting with multi strat I mean, we've as I've said on many of these calls ive just been a strong believer that the ability to approach markets and invest anywhere and the capital structure pretty.
Much anywhere and the globe and having the flexibility to do that and a disciplined way to me was real competitive advantage. If you have real capability, there and I think we do and I think we've demonstrated that.
And I think as markets continue to do what they do and they become.
And somewhat more volatile times.
Given that and nimble approach that does protect capital is going to be a really good value proposition to our clients. So I believe that I believe that for a long time and I think that will ultimately bear fruit.
I think and the credit space again.
Comment on specific funds or raises but credit is a place that you know is always going to be.
Target rich and nature and I think if you think about.
This this COVID-19 crisis, it's created tremendous dispersion amongst companies.
In terms of capital requirements, and the and outcomes and so forth. So we.
We will see our opportunities there and I think if you. If you say if you saw what we did when the when the crisis hit we obviously deployed a lot of capital.
And we call it a lot of that retracement of things and the spread product area, but we also have lots of more complex process driven investments that are going out from time to time begin to bear fruit and we started to see that more and the fourth quarter and we're seeing that in 2021. So I think you know.
It's more idiosyncratic in nature, but there will always be opportunities there and in terms of real estate and obviously we've ended the investment period and Rec. One we've just closed the big private equity fund, but we have real momentum and our real estate vertical right now and I think.
A broadening very happy client franchise, there. So I do believe over time that that vertical will become bigger and more meaningful as part of the sculptor platform.
Thanks.
Yeah.
Thank you. Our next question is coming from Craig Siegenthaler of Credit Suisse. Please go ahead.
This is Sam on for Craig.
Now that you've raised your fourth of real estate fund what opportunities are you seeing it across segments and geographies.
Well.
Yes, and again I'll, let the.
As I said I can't comment on the specific.
Areas in particular, but what I would say is the first and you have to think about when you think about of real estate business is the fact that it's it's a little bit less conventional and then some of the other real estate businesses out there and the sense that we cast a very broad net and invest and many different asset classes. Many non traditional place.
And there's like gaming and places like marinas, and so forth so big.
Because of that wide net we generally.
Are going to see sort of a broader range of potential opportunities out there and I think that's worked out very well for us not only through the crisis, but.
But certainly over the history of.
Of our real estate business, but I'd say look where we're seeing opportunity is pretty much across the board, we're seeing everything from the public market opportunities.
The two given the dislocations that we've seen two things and the private markets, whether it's being a liquidity provider or taking advantage of certain situations where assets have needed to be disposed of and so forth as well as some of the more traditional places where we do equity investing so I think.
We're going to see things across the capital structure, there and we're going to see things across a very broad range of.
Of traditional and non traditional asset classes, where we've typically been very active.
Thank you and just and then quick follow up can you talk about the realization of trajectory for the third real estate opportunistic fund.
Yes.
Sure I can take that we just exit in the investment period, and so you can expect realizations to occur over the next several years is as we are out of that investment period.
Thank you.
Thank you. Our next question is coming from William Katz of Citi. Please go ahead.
Okay. Thank you very much for taking the questions and and Rob Congratulations on turning the franchise around and good luck and your next endeavor and the David welcome to the group.
The question for you just on capital management policy from here and it looks like you paid down debt of the fast and we were certainly modeling.
But given the big the performance fee and the quarter. How do you think about sort of capital return from here dividend policy buyback for the deleveraging reinvestment and maybe because of the kick off Hey, how are you sort of think about that and maybe put that in the context of where you want and the distribution holiday versus the normalized payout ratio.
David why don't I start and you can you can chime in from here.
Obviously as you as you note, though we paid down a bunch of the debt right now and we're sitting you know from a balance sheet perspective, and the <unk>.
Positioning, we've sat and and years, obviously, given our cash and our assets on balance sheet vis vis what is the only $145 million of.
The of liabilities left and the balance sheet.
That being said I think first and foremost of our objective continues to be to strengthen that.
And that balance sheet and the reasons for that are several fold first of all.
And the stability and strength of the franchise in order to not only.
Weather different market environments and have the staying power.
To do so and a very comfortable way, which is sort of objective number one and also be able to play offense, where we see opportunities to potentially grow the business. So.
So I think some of strategic standpoint, you know.
It was all about Delevering before and we'll continue to look to do that and strengthen our balance sheet as I said I think beyond that.
Strengthening and are giving us the opportunity to play offense.
I'd say look we will obviously be opportunistic and considering you know the our dividend policy, considering optimizing our balance sheet across debt and equity.
So that we are and what we consider to be the most optimal place, but first and foremost.
It's about strength and stability.
But Dave I don't know, if you want to jump router and everything and.
Distribution and holiday question and so we we had of distribution holiday of them, where we had to earn and $600 million of distribution and holiday economic income. We have to date earned $378 million of that distribution holiday economic income. So we have 221 million of up to go.
Okay.
And just a follow up question, maybe a little more conceptual and just given everything that's going on and the the retail engagement dynamic and some of the short position is getting hit pretty difficult the.
How do you think about that as it relates to the multi strat portfolio is there any risk or opportunity as a result of some of these outsized move and obviously is much more illiquid names and I'm sure you're playing around and but nonetheless is there some kind of structural opportunity or impediment to the multi strat and looking ahead.
Yeah, I mean look first and foremost I'd say, obviously, we weathered.
The debt.
And that little mini storm.
Well you saw of returns for the month of January and obviously markets have recovered and.
Things are going fine.
For us typically we're not.
Layer and very illiquid crowded shorts, and just kind of a general rule. So.
I wouldn't have there's always you know specific situations, but I don't anticipate that being.
A major risk factor for us and as you know.
Away from just the alpha generation potential onshore and short positions you have just our general risk management approach to the portfolio and oftentimes, we are using indices and options and so forth to two.
The risk manage of.
And our exposure so I think both in terms of the the fact that we're we're oftentimes.
Managing risk through broader indices and op.
And markets and generally not very involved and very crowded illiquid shorts, I don't anticipate that being a major challenge for us going forward and.
Arguably it could be and opportunity you know, we'll see we'll see how it works out for some of the business models that are that are more challenged by that I suspect they'll generally and make the proper adjustments and be just fine, but I don't I don't see that being a major impediment for us.
Thank you.
Mhm.
Thank you at this time I would like to turn the floor back over to management for any additional or closing comments.
No I guess look I'll, just close I mean again, thanks, everyone for participating and it'll be my last call and and.
And again I'm very proud of of what we've been able to do here.
And as I said earlier just in terms of not just the financial result, but really kind of achieving.
Achieving a lot of the strategic things that we've all said of course to do and that's been.
And effort by pretty much everybody at the firm in terms of whether it's closing out some legacy issues getting back on the growth path and managing our expense base strengthening our balance sheet and really rebuilding our brand right now so I feel good about where the firm is.
And I feel very good about where it's going and I'm confident the Jimmy Levin, who will do a great job along with the management team is as you. All know that has worked together for many many years I think they are all of these these people are all ready to drive the business and the next level and I think they're gonna do of rich app, so with that I'll I guess I'll close the call. Thanks, everyone.
Ladies and gentlemen, thank you for your participation. This concludes today's event you may.
Disconnect your lines and log off the webcast at this time and have a wonderful day.
Yeah.
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