Q1 2021 GCM Grosvenor Inc Earnings Call
Okay.
Good day, and thank you for standing by and welcome to the GCM Grosvenor first quarter earnings webcast. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you need to press star one on your telephone. Please be advised that this conference is being run.
I would now like to turn the conference over to your Speaker day, Stacy Sellinger head of Investor Relations. Please go ahead.
Thank you good morning, and welcome to GCM Grosvenor, It's first quarter 2021 earnings call today.
And I'm joined by GCM, Grosvenor, Chairman and Chief Executive Officer, Michael Saks, President, John Levin, and Chief Financial Officer, Pam badly.
Before we discuss this quarters results. A reminder, that all statements made on this call that do not relate to matters of historical fact should be considered forward looking statements.
Include statements regarding our current expectations for the business and our financial performance.
These statements are neither promises nor guarantees stay and.
Involve known and unknown risks uncertainties and other important factors that may cause our actual results performance or achievements to be materially different from any future results and.
Factors discussed and the risk factors section of our 10-K filed with the SEC on May 10, 2021, and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward looking statements on this call.
We'll also refer to non-GAAP measures that we view as important and assessing the performance of our business a reconciliation of non-GAAP metrics to the nearest GAAP metric can be found in our earnings presentation and earnings supplement both of which are available and the public shareholders section of our website.
And also reference our August 2020 merger presentation, which is again available on our website.
Some brief housekeeping before we begin our call as you know based on ICC Staff's guidance issued on April 12, 2021 regarding debt accounting treatment of certain warrants on may 10th we filed our 2020 form 10-K a.
Also expect file a post effective amendment to our form S. One shelf registration statement next week and will seek effectiveness as soon as the FCC staff gives us the go ahead.
And as you know this restatement was in no way unique to GCM Grosvenor the guidance issued by the FCC staff impacted numerous companies with warrants containing certain characteristics and resulted and many similar restatements importantly, while the liability treatment of the warrants will result, and sudden volatility and GAAP earnings.
Our cash flow and key non-GAAP metrics, such as fee related revenue fee related earnings adjusted EBITDA and adjusted net income will not be impacted Pam will discuss this in more detail later on the call.
Our goal is to continually improve how we communicate with our shareholders and that spirit. We look forward to your feedback and we will endeavor to continually improve in this regard.
Thank you again for joining us and with that I'll turn the call over to Michael.
Thank you Stacy and thank you to all of you who are listening to this call.
First quarter of 2021 was a strong quarter, leaving us on track to achieve the 12% to 15% full year 2021 over 2020 fee related revenue growth and the 15% to 20% fee related earnings growth.
We highlighted on our last earnings call.
On slide four of our earnings presentation, you can see we enjoyed continued momentum across the business and the first quarter of 2021.
And I am pleased to report before the first quarter of 2021, we raised a total of $2 $5 billion is the environment for alternative investment strategies remain robust.
Looking forward activity levels remain high and our pipeline continues to be encouraging.
As of March 31, 2021, our fee paying assets under management stood at $53 billion and increase of 12% compared to March 31, 2020, and an increase of 3% compared to December 31 2020.
Our contracted not yet fee paying AUM stood at seven 5 billion cash as of March 31, 2021, and increase of 38% as compared to the same time, one year ago, and an increase of 6% as compared to December 31 2000.
'twenty.
Our contracted not yet paying AUM.
Now represents embedded incremental annual management fees of $36 million and increase of 33% from the $27 million at the end of the first quarter of 2020, and a 6% increase from the prior quarter.
Moving to slide five.
First quarter, we experienced net inflows of $205 million in our absolute return strategies vertical marking a continuation of the improvement in the fund flows environment for that strategy.
While pleased with this result, we continue to maintain our base case of flat flows for absolute return strategies for the full year 2020 one.
It is worth noting that our fee rates across the firm and each of our verticals were stable and any changes and fee level were largely a result of the mix of fund raising by vertical and weather funds flows related to primary and secondary co investment.
Or direct investment activities.
Solid fund raising for specialized funds and for secondary co invest and direct investment activities provide support for our current fee levels and opportunity going forward.
During the first quarter, approximately 73% of our fundraising came from existing clients with 27% coming from new clients a return to a more normal split inside of our typical 50% to 80%.
New funds from existing clients.
This was expected as we move further away from the onset of the COVID-19 pandemic.
For the first quarter, we saw our fee related revenue increased by 7% as compared to the same period last year and increased by 4% compared to the fourth quarter.
Drilling down a bit or private markets management fees grew by 11% and 5% over the last year and quarter respectively.
You can see this on page 13 of our earnings presentation.
Based on contracts that we have already one and 2021 and our base case assumptions regarding the timing of the turn on fees from our contracted not yet fee paying assets under management and distributions to clients. We believe that today, we have private markets fee related.
Revenue growth.
For any additional fund raising of at least 9% for the full year 2021.
Those without saying that we have more than one half of the year remaining and we'll continue to raise private market funds.
For the quarter, our absolute return strategies management fees were up modestly over the prior year and quarter with gains of 2% and 3% respectively.
You can see this on page 13 of our earnings presentation.
We continue to believe that the market perception of the absolute return strategies vertical and its attendant market valuation are conservative.
If you look at slide six you see that our fee related earnings increased by 43% over the same period a year ago as.
As expected and mentioned on our last call our fee related earnings were down compared to the fourth quarter of 2020 due significantly for the timing of certain expenses that Pam will elaborate on.
It is worth noting that our fee related earnings margin increased to 30% from 23% over the last year and that we expect continued margin improvement as we move through the rest of 2021.
And the first quarter, we enjoyed an increase in incentive fees over the first quarter of 2020.
Because the majority of our annual performance fees do not personalized until December 31 comparisons of incentive fees between the first and fourth quarters are not relevant.
We are pleased to report that as of March 31. In addition to the realized first quarter incentive fees, there were more than $18 million of embedded unrealized annual performance fees that are eligible to be realized in 2021.
For the quarter, we saw growth and the firm's investments of 15% from the prior quarter and and the firm's share of unrealized carry at net asset value of 36%, bringing these numbers to $92 million and 181 million respectively.
These numbers represent the totality of the firm's share of investments and unrealized carried interest and net asset value before deducting the mosaic related non controlling interest.
It is our intention to exercise our call option and acquire the mosaic related non controlling interest prior to the end of this calendar year.
We believe that the exercise of that call option will be accretive to the firm.
And the earnings presentation contains information on mosaic on page 32.
We continue to feel good about our investment activities in terms of recent performance and about the investment opportunity set.
We remain confident and our ability to add value to our clients portfolios across verticals.
We also continue to feel good about having gone public late last year and continue to believe that will help us deliver to all of our constituents.
It's worth mentioning that we believe we meet the criteria to be added to the Russell 2000 and index. This June.
Finally, we have made and continue to make investments and our team related to our public company status and also in particular as John will discuss have invested and intend to continue to invest in our business development team, which we expect will produce a good return on investment and.
And with that I'll turn the call over to GCM broken our president and John Levin John.
Thank you Michael.
Michael touched on the continued growth and the earnings power of the business day.
Our momentum is a function of the environment generally in combination with our platforms unique ability to offer investment solutions across the entirety of the alternative spectrum.
Breadth and depth of our client value proposition enhances our ability to grow and evolve with our existing partners and begin relationships with new investors.
Turning to slide seven we continue to benefit from our strong fundraising backdrop.
Private markets in particular.
We also benefit from our strength and customized separate accounts given the market's continued interest and heavily tailored programs.
Of the $2 $5 billion of capital raised and the first quarter of 2021 more than 80% of their capital was for customized separate accounts and 75% was for private markets strategies.
More than 50 clients contributed capital of which approximately one quarter, where new clients.
Michael already mentioned the positive net flows and absolute return strategies for the first quarter, which is a function of the more positive investor sentiment toward the strategy given the strong recent risk adjusted returns.
Regarding specialized funds, we are currently raising or anticipate raising capital across six specialized funds and.
2021, we are and the market with four of those funds first our advanced fund, which is focused on investing in and alongside and minority and women owned managers.
Second our secondaries fund our GSS three.
Third our diversified infrastructure fund or Cif III.
And finally, our multi asset class direct investment fund or Max III.
All four funds, we'll be raising capital through the end of 2021 and.
And all of these four funds only the advance fund will have its final close this year, which will be at the end of the year.
We also expect all four funds to have multiple closings throughout the year and.
As a result catch up management fees should increase total management fees and the back half of the year in particular.
We believe this dynamic will persist into 2022.
Our existing clients continue to be a significant source of fundraising and this quarter more than 70% of capital raised was from existing clients and.
More than 95% of our top 25 clients have added capital and the past three years.
A significant endorsement of our value proposition and the strength of our relationships.
We've intentionally structured our business model to evolve and grow with our clients oftentimes relationships moving to new strategies. We currently work with more than 45% of our top clients across multiple verticals.
From 36% just six months ago.
We also believe there is significant white space and opportunity to attract capital from new clients and new channels.
Therefore, this year, you will see us invest and our business development team to drive client connectivity and certain regions and certain channels that are historically underrepresented and our business.
To this point, we recently announced that we will establish a new office in Toronto with two new hires we believe we have significant opportunity for incremental growth in Canada and and.
We're excited by our new efforts there.
With regards to investment activity.
We are very active and continue to see compelling investment opportunities across every area of the business.
And the first quarter, we invested approximately $3 4 billion of capital across more than 100 investors, making this a very active period.
The power of our sourcing engine, which draws from every area of the alternatives universe and a highly open architecture fashion contributes to our competitive edge.
Importantly, we're generating competitive performance across each of the verticals.
And absolute return strategies are trailing 12 months performance was 21, 5% net as of March 31.
Within private market strategies, we saw 25% increase and unrealized carry from.
From year end to March 31, which speaks to the significant appreciation and our investments during that period.
One particular highlight within the business was the performance of the products managed by our strategic investments group, which is the team that leverages the sourcing of our full platform to make direct and co investments.
The combined IRR of our multi asset class funds, which are closed and private market style funds increased from 20% to 29% and the first quarter.
Our special opportunities fund, which is a more liquid open and vehicle has a year to date return through March 31, 2018% and the funds returned over the last 12 months and 65%.
As Michael noted earlier, we remain excited about the investment opportunity set generally and our ability to generate attractive performance for our clients.
Now I will turn the call over to Pam to address our financial performance in more detail.
Thanks, John before we get into our performance this quarter I want to briefly address the SEC statement on warrant accounting and its impact on our GAAP fourth quarter results and the amended 10-K that was filed earlier this week.
As a result of the SEC statement, we determined based on the tender features of our warrants they should be classified as liabilities and mark to market each reporting period.
Based on the change and our warrant fair value from the time of the public offering through the end of December.
We recorded a non operating expense of $13 million and the fourth quarter.
Fair value of the warrant and subsequently declined and the first quarter.
Resulting in a more than offsetting $14 million of non operating income.
These changes did not impact our non-GAAP financial measures or cash position and they will not be impacted going forward.
Turning to our performance and the quarter.
I'll begin on slide eight.
As Michael noted we are very pleased to see the investments. We've made in recent years continue to come to fruition and benefit our assets under management and financial performance.
On a year over year basis, our fee related earnings adjusted EBITDA and adjusted net income all increased illustrating the continued positive momentum of our business.
Fee paying assets under management grew 12% over the prior year and grew 3% from the fourth quarter, which pretends solid growth for the second quarter.
And blood level deeper fee paying assets under management and management and grew for both private markets and absolute return strategies. We also saw stable average day rates across the business this quarter and expect this stability to continue.
This quarter, our catch up management fees related to our specialized fund fundraising included in our fee related revenue were $1 $5 million, which is approximately $1 million higher than last quarter.
And we continue to raise our specialized funds, we will see ongoing catch up management fees and expect them to be higher in the third and fourth quarters and continue into next year.
Regarding incentive fees as Michael noted, we received $6 million annual performance fees and the quarter related primarily to a specific program crystallizes. It feeds on March day first of ETR.
As you saw last quarter, the vast majority of our annual performance fees crystallize in the fourth quarter and other than a few accounts, we expect that to continue to be the case.
Turning to our operating expenses as we have previously discussed.
Creased and line with our expectations and mentioned on our fourth quarter call that some of our compensation related costs are seasonal in nature.
During the first quarter, the combined impact of timing of our bonus payments payroll taxes and flow and K contributions drove $2 $5 million of higher expenses over the fourth quarter.
<unk> was relatively stable and the first quarter, we expect head count and compensation to increase throughout the year as we continue to invest and public company related personnel and make strategic investments and certain business development professionals.
And also mentioned on last quarter's call in March we granted $4 8 million restricted stock units related to our public offering.
This transaction related grant, sorry, 2 million shares vest and March with the remaining $2 8 billion share is scheduled to vest over the next few years.
This resulted in $27 million of GAAP compensation expense relating to the restricted stock units and the first quarter.
Our general and administrative expenses and.
Increased by $2 million and the first quarter in line with our expectations and consistent with our fee related earnings calls.
As Michael mentioned, we are on track and our target fee related revenue growth of 12% to 15% and fee related earnings growth of 15% to 20% 2021 with our growth accelerating through the remainder of the year.
Continue to deploy capital and raise additional capital across the firm, including and our specialized funds.
As illustrated on slide 10.
And embedded revenue from annual incentive fees largely within our asset vertical.
And he has to increase and provide significant opportunity for future revenue and earnings growth.
The potential value from annual performance fees has nearly doubled over the last four years.
And is now about $41 million on a run rate basis.
Our carried interest position has also continued to grow and diversify over time.
We enjoy considerable carry dollars at work, which are not yet reflected and unrealized carry and will provide incentive fee earnings power for the future.
At quarter and had $491 million and unrealized carried interest which is a 29% increase over the first quarter of 2020.
As a reminder, our carried interest pool is unique and it's very high level of diversification.
Alright, unrealized carry and spread amongst 121 programs and dozens of contributing investments.
Today, the majority of aggregate unrealized carry has been contractually awarded to employees or transferred as a part of mosaic, which was an opportunistic transaction completed early last year, where most of our balance sheet investments and our rights to carried interest were transferred to a third party and exchange for cash.
As Michael discussed given the significant value and its rights to future carry and investments, we intend to exercise our option to repurchase mosaic by yearend.
Anticipate the repurchase will be accretive.
Turning to slide 14, our cash balance at quarter and was $156 million alongside the amendment and extension of our term loan and revolving credit facility and February we use proceeds from going public to pay down an additional $50 million of debt and in the process reduce our interest rate.
And as a result, our quarterly interest expense is expected to be closer to $3 million starting in the second quarter of this year compared to $4 5 million sellers and the first quarter.
We also generated over $20 million and cash from the exercise of $1 8 million warrants and the first quarter.
In summary, our strong performance demonstrates the culmination of our platform expansion efforts as well as an exciting and preview of our future growth.
Given industry tailwind, a robust fundraising pipeline and multiple avenues to grow our assets combined with our scalable platform. We are excited about the future momentum of the business.
We're now happy to take any questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
To withdraw your question press the pound key.
Our first question comes from Ken Worthington with Jpmorgan. Your line is open.
Hi, Good morning. This is Matt the trend on behalf of Ken.
The first question is just on the absolute returns business. So Grosvenor funds have been beating the hedge fund return and the fees in recent quarters and this quarter kind of left a little bit.
Hello, So just wondering how did the events of the first quarter like the mean stocks and even the impact of our chico's.
Impact the absolute returns business and then looking at the bigger picture, how is January and to what extent, where governor investments impacted by the beanstalk phenomenon.
Thank you for that.
It's Michael Saks.
Uh huh.
So we believe that whenever you have extreme volatility.
Do you have.
A lot of dispersion and the market.
And in a way that debt.
Benefits.
Our business it shows the value proposition of what we do.
And the benefits of running.
The comprehensive holistic portfolio, that's diversified with no one strategy manager market able to determine or unduly influence your results. So neither the MIM stocks.
Which we're certainly exciting for a little bit there in January or March and goes to in any way frankly were.
Terribly impactful to our performance, our and I think that the value of the approach.
Is actually reinforced from those activities.
And.
As we mentioned in our and our comments.
Demand.
And pipeline and interest levels are quite high and the entire absolute return space has seen a pretty significant.
Change in sentiment.
From from the third quarter of last year.
Thank you and.
And then just to move to expenses in terms of G&A.
The number is pretty clean this quarter and is this a good base to look at for expenses and coming quarters and then.
For core compensation costs, I think you already talked about this but.
We are expecting needs to.
Grow through the rest of this year and then into next year.
So.
Ill take a shot and then either Tam if you want to add.
And pleased but we budget carefully I like to think we budget conservatively and we manage.
Tightly with regard to our expenses and.
And our head count and our comp and I think that the expenses were in line with our expectations. They were.
Consistent with comments that we made on our last earnings call.
With regard to the seasonality of certain expenses and are consistent with the us achieving our are 15% to 20% F. R E.
Our goal this year, which we.
Our standing.
Standing by.
And Pam I don't know if theres anything to add.
Or not.
Samantha I understood. The second part of your question on is this an appropriate level, yes, we think that there's an appropriate level.
And we could see this tick up modestly S F.
The pre COVID-19 related travel expenses.
Start to resume but we wouldn't expect that and fall. So so again as Michael said this is embedded in our 15% to 20% FRE growth.
And I guess, just lastly, I would just mention is our FRE margin from Q1 and 2022 this quarter the quarter, we're reporting on and now Q1, and 2021 grew nicely and as Pam mentioned, we're looking for continued.
Margin expansion through the remainder of the year and we do think and we've talked about in the past that we think we have some operating leverage and the business.
And so I think that.
It's all relevant as well.
Thank you for that and then just one more moving to private market assets. The distributions around 900 million were a bit elevated relative to prior quarters and years, just any color that you can share here and given the market conditions and your and your analysis do you have any color on the terms of the pace of.
And going forward and walking through to the end of the year.
I think we.
Actually touched on that.
On our fourth quarter earnings call.
We had a pause in activity, including deal activity last year due to COVID-19 and we anticipated that it would tick up and be more robust and we would see.
More transactions and therefore more distributions.
We.
And in and that is is what happened I think.
Activity levels remain robust and we believe there will be continued high.
High levels of activity throughout the remainder of the year and all of that is sort of in our.
And as what we've modeled and.
And you can see that in the and in the carry revenue and to some extent as well.
And so this is John I would just add debt and in general over cycles. There is a.
A strong correlation between the robust capital raising activity.
And being.
Being driven by.
Elevated distributions and return of capital to clients, So and Michael talked about it being embedded it's because the two are very much related so clients are receiving capital back sooner and larger because of our healthy exit environment that would typically speed up the cycle by which they would make new commitments and potentially larger <unk>.
And so there is a.
Healthy relationship between those two.
<unk> and metrics for the business.
Yeah.
Alright, Thank you for taking my questions.
Thank you. Our next question comes from Adam Klauber with William Blair. Your line is open.
Good morning, Thank you.
You have and a lot of success, obviously with this current round of new funds as you know, we think about the business longer term.
When we look at 'twenty two 'twenty three.
Is it likely you will see more specialized more secondary funds does seem to be.
Particularly successful just some general thoughts about whats that next net.
And next round of next tranche.
We will look like.
Thank you Adam.
Thank you for the question.
And of the funds that are in market now as John mentioned only the advance fund will have a final close at the end of the year. This year. So the three of those funds will stay and market, including secondaries into next year.
And we'll continue raising and then we have other specialized funds that.
From a.
Perspective of their cycles will come on.
And again.
And come into the market for the next fund so I think Pam also touched on the fact that we.
We see continued specialized and raising through the end of the year, we should catch up management fees for that we see that continuing on into next year, and it's kind of part of the firm them and.
The firm that will continue and be present in 'twenty, two and and 23.
Okay. Thanks.
And then beyond.
Okay, Okay, thanks, and as far as this quarter I mean, clearly two and a half billion raised and the quarter and you know very very strong quarter was there.
And anything unusual I guess hits or.
And that really made it that strong of a quarter or was it just amalgamation of a lot of the effort.
And that you've been talking about.
So John talked about the breakout between custom separate accounts and specialized funds.
<unk>.
We saw.
Flows and we see demand and we see pipeline across all of the verticals. So what was interesting and nice about the quarter was <unk>.
Every vertical pad grew and had net inflows and.
And the.
The interest levels and activity levels.
Across the entire firm or are.
Good.
Okay. So it sounds relatively diverse net net net some big onetime hits.
And I wouldn't say big onetime hits infrastructure took the most capital in.
But I don't know that it's like well. These are one time hits I think theres there are high levels of demand for infrastructure, and we see growth and infrastructure persisting for a while so.
It was all all of the verticals with infrastructure being the largest and I think it speaks more to levels of demand and activity levels than it does to any.
One time thing that we don't that we don't think we continue to see.
Okay, Great. Adam This is John and I would say not only was it diverse as Michael said by investment vertical but it also the source of the capital was diverse. So we saw it across geographies, we saw by different types of investors different investor types, and so it was pretty well rounded and kind of all.
Regards.
Okay. That's helpful and that was actually my next question I think.
If I heard correctly, you said, maybe 75% of the funds came from existing clients 25 from newer clients could you I guess give us some idea of the mix of those newer clients are those new categories or just some flavor for.
Whereas from the newer clients are interacting with.
Yeah, I think I would say that go ahead.
I was just going to say it would be a similar mix to the existing clients, but just new clients in those channels. So I don't I wouldn't drive particular conclusion around it's a certain type of client or a certain geography, that's new I think that in general the.
Ability to provide broad based solutions in different implementation sales across the different at all its verticals enables you to did you generate new client relationships and I personally wouldn't pull maybe like all of the different kind of at a particular theme around the types of clients I would say, it's just more of the diversified client base.
And that we have today.
If youre looking for a change.
Change and the market already.
The that the thing that you would go to obviously would be the change in the environment with regard to the absolute return strategies. So the private market strategies very broad as John said channel and geography, both existing and new and.
And if there is something that you said that you wanted to what what is the biggest evolution or change from six months ago, you would say the interest levels and flows and and.
And activity around absolute return, which is obviously much significantly improved.
Okay. Okay. Thanks.
And the more of the private market.
Given the type of funds, you're selling sorry, and so you're bringing in.
Should we expect the fee rate to be more level go up down and I guess, what's your what's your expectation on the private markets.
Our fee rates were stable and have been stable across.
The firm and as I mentioned and my comments the the driver of change and fees has not really been fee rate as much as is it primary and secondary is it coal or is it direct where for secondary co and direct fee levels generally are higher.
And it's been you have seen.
We have seen and I think the industry has seen.
Flow higher flows towards.
Secondary and co.
Which are our higher levels of fee for the solutions providers and so.
And that's constructive.
For average fee rates over time.
Okay, great and.
And as far as the margin again, and you know really really nice pop and the adjusted EBITDA margin and you've been talking about that for a little while so it's great to see that come through from a seasonal aspect.
Are there things, we should look for and the second or third quarter in particular that could.
Moving up or down the margin.
The big the biggest thing I think seasonally to make sure that we you know people.
People are aware of and focused on is the fact that when you're raising for specialized funds and there are.
Catch up management fees and you have multiple closings in a year there is a a slope or a tilt to.
The revenue recognition for that debt that debt.
Slopes up towards the back half of the year and we've talked about that before and want to make sure people are aware of that Pam noted that in her remarks and.
And that's probably the biggest I don't know if you would.
Think it's proper to say seasonality, but that's probably the biggest thing we everybody should be aware of.
Okay, well, thank you very much for all the answers.
Thank you.
Thank you as a reminder, if you would like to ask a question press. The Star then the one key on your Touchtone telephone.
Our next question comes from Peter <unk> with Morgan Stanley. Your line is open.
Hey, Thanks for taking my question I was just hoping you can elaborate on the mosaiq purchase and walking through the mechanics of how they will exercise that and then just the potential impact to the P&L. Thanks.
Thank you. Thank you Peter so.
We said and in our remarks that we do intend to acquire.
Exercise our call option on Mosaiq.
By the end of the year that is.
And we're comfortable saying and I've been talking to you about the right time to do that for a while.
We have numerous options with regard to SM.
Essentially.
There is some information on Mosaiq page 32 of the earnings presentation, it's and $88 million net purchase price with numerous options for funding.
The exercise of our call option it will be accretive.
It will be accretive when we do it and we will you know as we move now towards the end of the through the year and we with the with the commitment to call the exercise the option by year and we will look at the different <unk>.
Cost of capital and minute try and minimize that for the firm, but it's a very it's very comfortable for us to commit to that based on both the size of the investment and the accretive nature of the investments.
Thank you and just a follow up you spoke on increased investment and business development and specifically with the new Toronto Office, just hoping what opportunities you see in Canada.
We have.
Go ahead, and I would just say, it's similar to the opportunity set that we see and and geographies around the world. So we've talked in the past about areas, where we have a very strong presence, particularly in United States, and UK, and Switzerland and parts of Europe, very strong presence in Asia and in some other.
There are areas, where we feel like given the breadth and depth of our capabilities and the endorsement of those capabilities with institutional investors globally.
We should be able to similarly.
Service clients and the regions or the channels, where we're underrepresented.
And so I would say it's not.
Necessarily different from the.
And the.
Capabilities that we offer to clients and other parts of the world, but it's really just establishing.
A stronger presence there with with an office with two individuals to help.
<unk> from deep relationships with investors and the region.
Okay.
Thank you and I'm showing that that's all the questions. We have for today I'd like to turn the call back to management for any closing remarks.
Thank you all very much for joining the call for listening and we look forward to speaking with you again soon thank you very much.
Yeah.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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