Q4 2021 Onex Corp Earnings Call
Welcome to <unk> fourth quarter, and full year 2021 conference call and webcast.
During the presentation, all participants will be in listen only mode.
Afterwards, we will conduct a question and answer session with prequalified analysts.
At that time, if you have a question. Please press star one on your telephone keypad.
If any time during the conference you need to reach the operator. Please press Star then zero.
As a reminder, this conference is being recorded.
I will now turn the conference over to Jill harmonica, managing director shareholder Relations and communications at Onyx. Please go ahead.
Thank you good morning, everyone and thanks for joining US we're broadcasting this call on our web site hosting the call today are Gerry Schwartz, our founder and CEO .
Block Onyx as president and head of <unk> partners, and Chris Galvin, Our Chief Financial Officer.
Earlier. This morning, we issued our fourth quarter and full year 2021 press release, MD&A and consolidated financial statements, which are available on the shareholders section of our website and have also been filed on SEDAR. Our supplemental information package is also available on our website.
As a reminder, all references to dollar amounts on this call are in U S. Unless otherwise stated I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward looking statements contained in today's presentation and remarks.
With that I'll now turn the call over to Jerry.
Thanks Jill.
Morning, everybody and thanks for joining us today.
Next months March 35 years, it's hard to believe since our IPO on the Toronto stock exchange.
When I look back on it.
At a time it was.
At that point in time, there is nobody knew what private there was not even a phrase private equity and nobody knew what the letters LBO stood tour. So most of the Roadshow is spent just explaining to people what an LBO was what kinds of things we did.
It was really interesting because the.
The.
Underwriters had initially thought they would raise $75 million of pure common stock for us.
In the end.
<unk> closed.
And they closed on $246 million.
I think was the largest equity offering at that point in time.
Anyhow, Thats 35 years ago, and in our prospectus that document for that offering.
Described yourselves.
Entrepreneurial investment company.
With a well defined acquisition philosophy.
Seeking value creation opportunities and always keeping a strong focus on alignment and relationships.
I'm really proud of the company we've built.
And our ability to stay true to our core values.
They quite differently, we offer multiple investing strategies to a global base of investors, including institutional and high net worth clients.
So I look back on this particular past year 2021.
<unk> was a good year for Onyx, we invested wisely.
We continued to strengthen our team and we grew our fee generating assets.
This momentum helped deliver solid financial performance.
Bobby and Chris will provide more detail shortly about the financial performance, but I'd like to touch on.
On some of the highlights of the year.
Our investing capital per share.
Sometimes referred to as.
<unk> net asset value per share.
Increased by 24%, which.
Which is the highest annual increase in our history.
In private equity it was an active year for both realizations at around three and a quarter billion.
And deployments at around $3 billion.
Our portfolio of companies grew organically and.
Through our value creation levers.
And Onyx credit we've continued to strengthen that platform.
Last year, we integrated on X Falcon, which we've owned for a little over a year now.
And.
Happily so.
And also merge our credit and Gluskin Sheff investment teams.
We now offer investors pretty full spectrum of private credit public.
Public credit and public equity investing opportunities.
Was there a wealth management platform.
Strong client interest for our private strategies persist.
At year end, our wealth management clients had more than $1 3 billion.
Allocated to these private strategies.
Earlier this year, we announced our new head of Gluskin Sheff I'm very happy to tell you Dave.
Dave Kelly.
To us from the long career at charter Dominion Bank, who.
Who brings valuable operational expertise to this business.
Looking ahead.
We're excited by the opportunities to grow and expand.
Laid out our strategic plan at Investor Day.
And we think we're well positioned to achieve our long term goals.
We have a strong foundation.
Terrific bench of talent with Onyx.
<unk> culture is driving collaboration across our organization as.
As we leverage our expertise and relationships.
As always.
We remain focused on continuing to generate good returns for all our stakeholders.
And with that I'll now.
Now I'll turn it over to Bobby for more on the quarter Bobby.
Thank you Jerry and good morning, everyone.
Earlier today, we reported segment net earnings per share for Q4 of $3 65.
And net earnings per share of $2 45.
Segment net earnings per share for the year were $18 42, and net earnings per share for $15 76.
We made good progress in 2021.
We feel confident as we look ahead to the remainder of 2022.
We've expanded our capabilities and reach.
And now have a clear plan for growth.
Our focus this year across all platforms.
We are growing our fee generating assets under management.
In total we expect them to grow by more than 15% by the end of 2022.
Our private equity portfolio performed well in Q4.
<unk> the benefit of strong diversification.
Onyx has returned from private equity investments was 5% in the quarter.
32% for the year.
And our next partners well.
Just beginning to fund raise for <unk>.
And we're looking forward to a first close in late Q2 or early Q3.
Despite a relatively crowded fund raising environment.
Our goal is to increase the amount of fee generating AUM relative to the amount we raised products partners five.
We also recently announced two new investments in <unk> five.
Rez and analytic partners.
We still have capacity to invest in our current pipeline and expectations lineup well, what's the timing for <unk>.
<unk> primary objective is to finish the job of fully investing on cat four.
Last week, we announced our latest partnership with <unk>.
A global leader and mindful movement.
The Columbia is now 77% invested and we expect to be fundraising for <unk> later this year.
On X credit you're seeing good momentum across the strategies.
Last quarter I told you that we were close to our short term fund raising goal of $500 million.
Our onyx structured credit strategy.
We now expect to exceed that goal with a final close late in Q1.
There will be additional opportunities to add AUM throughout the year via separately managed account for this strategy.
For Omics capital solution strategy, considering recent team changes, we've established more modest expectations for the size of the first fund.
We're seeing continued interest from investors, especially given the recent market volatility.
Which is a positive for this product.
Early returns are ahead of target and the pipeline continues to be robust.
And Onyx Falcon.
We raised over $240 million of fee generating AUM last year for our direct lending strategy through gluskin sheff.
And are now marketing this strategy to institutional investors.
Our Onyx Falcon mezzanine lending strategy has begun fundraising for the seventh vintage.
With an overall fund target of $1 5 billion.
And as anticipating its first close in Q2.
The unexpired continue it's been a great addition to Onyx credit and LP interest in their strategies remained strong.
In Q4, we closed CLO 22, CLO 23, and completed the reset and upsize of CLO 10.
Taking a combined $1 1 billion and fee generating AUM.
Last month, we also priced euro five our first new European CLO since 2020.
Raising $400 million euros.
It was a successful return to market for our European team that we've invested in and repositioned over the last year.
Market volatility has weighed on CLO formation in Q1 and issuance could remain lower in the face of the geopolitical tension.
However, rising rates should continue to be a tailwind as investors rotate into floating rate assets.
If the credit markets are relatively constructive for the remainder of the year.
We would still expect to achieve our $2 billion annual CLO net issuance target.
Turning now to Gluskin sheff.
We were pleased to welcome Dave Kelly to the team last month.
Dave's experienced building strong operational functions.
It comes at the right time in Glasgow evolution.
From day, one David has been focused on leveraging one on X to drive further growth.
This includes continuing to broaden access for gluskin clients to Onyx private strategies, including those that were fund raising for this year.
Operationally, Dave will be focused on digital capabilities, and increasing automation, allowing the business to better scale as it grows.
It's early days, but under Dave's leadership, I expect to see a sharpening of our client value proposition, including more opportunities to leverage the Onyx brand.
Product offerings.
Finally to update you on ESG.
In December we published our responsible investment policy to our website.
Last month, we committed to the ESG data conversion project and initiative backed by more than 100 Global GPS Mlps.
The group's aim is to standardize ESG metrics.
Create comparative reporting for the private market.
Recognizing the benefit of increased standardization for all stakeholders, including shareholders. You can expect to see more of these partnerships from us in the future.
Reiterating what I said at the start of my remarks.
We're confident in our strategy and plan to execute and we continue to see great value and Onyx as an investment.
This will be an important year for us and demonstrating our ability to grow fee generating AUM.
Leading to increased fee related earnings as outlined at our Investor day.
As you heard earlier, we have several strategies that will be fund raising this year.
We also continue to explore other opportunities to add to our fee generating AUM capabilities.
We look forward to providing updates on our progress throughout the year.
I'll now turn things over to Chris.
Thanks, Bobby and good morning, everyone.
We had a good quarter, adding $3 65 segment earnings per share to cap off a very strong 2021, and which on X generated $18 and 42 of segment earnings per share.
This performance translated into a record 24% growth and invest in capital per share Jerry noted.
These results were driven by the performance of our private equity investments.
Our PE portfolio was up 5% in the quarter and 32% for the year outpacing a very strong year for the public markets.
On X P returns continued to be broad based in the quarter with solid returns across our private company portfolio and continued post IPO appreciation for RFG.
The.
Kris and power schools trading price muted overall Q4 results.
However, we haven't sold a share Repower school and expect to enjoy strong returns as hard deep and his team continue to execute on their strategy and grow the business.
You can see the broad based value creation from our portfolio. When you look at the returns by vertical.
Strong growth across financial services, industrials, and consumer and retail more than offset very small net losses and services and health care in Q4.
On a full year basis, we saw double digit returns across all verticals and remain well diversified going into 2022.
Our PE portfolio made up of 38 separate investments.
The largest of which accounts for less than 6% of Onyx is investing capital.
Credit investing also contributed to segment earnings.
On excess credit investments returned 3% in Q4 capping off a very strong year in which they delivered a 20% return.
Credit returns in the quarter and year were driven by CLO investments that returned 28% over the course of 2021.
Although we are happy with the returns from our CLO investments as you know, we're working to reduce the capital intensity of our CLO platform.
I shared this chart last quarter and as you can see we continue to make progress increasing our CLO platform's return on capital.
Recent progress includes sales of $40 million of CLO equity in Q4.
And the pricing of Euro CLO five with on X holding only 5% of the equity tranche.
The CLO platform is a great. Early example of progress toward our goal of improving the ratio of fee generating AUM to onyx capital across our platforms.
An important step in expanding on excess capacity to generate fee related earnings.
While our CLO platform as quickly pivoting.
Progress in private equity, where funds have 10, plus year wise and successor funds get raised every four or so years.
Will happen over the long term and in step functions.
Stepping back and looking at the investment segment as a whole Onyx generated segment earnings per share of $2 90 in Q4 and $14 22 in the year.
Driving investing capital per share to $90 75.
Or based on the year end exchange rate just over Canadian $115 per share.
And we entered 2022 well positioned.
Liver growth going forward with about 84% of on X as investing capital at work.
After adjusting for recently announced investments.
And thats after a year in which on X received almost half a billion dollars.
Net distributions from the PE portfolio.
With $1 3 billion of realizations meaningfully outpacing a very active year in which $840 million of Onyx Corporation capital was invested in new opportunities.
Before opening it up to Q&A I'll spend a few minutes on our growing asset management segment.
As you can see from the table on X generated $67 million of asset management segment earnings in the quarter and $384 million for the year.
Carried interest has been the primary driver of the year over year increases in asset management segment earnings.
You might remember from last year's Q4 call I spoke about carry as a meaningful potential contributor has opened four began to accrue carry and move through the catch up phase of the waterfall.
That thesis has played out in 2021 with <unk> four in full carry at year end.
Turning to on X credit <unk>.
<unk> contribution in Q4.
Also benefited from Carey with about $18 million being accrued.
Although our focus is on ex credit continues to be growing fee generating AUM and restoring management team margins.
Platforms $14 billion of carry paying capital is a meaningful asset that should not be overlooked.
Before I wrap up.
Pivot to fee related earnings and distributable earnings.
Kpis, we introduced at Investor Day.
As I have explained a couple of times over the last handful of months.
Onyx as 2021, FRE loss stems from the high proportion of non fee paying Onyx Corporation capital.
Managing the <unk> platform and.
And significant Opex investments, we've made at Onyx credit to support the launch of new fee generating strategies.
Okay.
Looking forward, we expect growth in FRE to come gradually and consistently <unk> credit.
As it grows its topline and restores profit margins.
With improvements in private equities contribution coming in step functions.
The fund raising cycle, and then possibly new product launches.
Growth in fee generating AUM will be a leading indicator over the next 12 to 18 months as it relates to our progress in building on excess capacity to generate FRE.
Finally, this slide details on excess distributable earnings which includes both carry and investment gains on a realized or a cash basis.
On X is strong distributable earnings of $135 million in the quarter and over $700 million for the year.
Provide a solid foundation and support for our growth plans.
Next quarter, we will transition to FRE and distributable earnings as the primary measures of the asset management segment.
Allowing shareholders should track progress against the 2026 targets, we provided at Investor day.
And more easily compare on X to industry peers.
With a very successful 2021 behind us we've turned to the very important year already underway.
With fundraising efforts ramping up for both platforms and.
And the continued execution of our growth strategies at Onyx credit.
On excess capacity to generate FRE is poised to expand materially in 2022.
With that we'll be happy to take questions.
As a reminder, if you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
To withdraw your question, Chris empty <unk> to our first question comes from the line of.
Scott Chan with Canaccord Genuity.
Good morning.
Question actually going back to your last comment on slide 26.
I think getting back to additional distributable earnings.
The realized gain on investment line that gets added back.
Martin.
Is that mainly private equity monetization for the year budget.
<unk> involved in that number.
Thanks for clarification on that.
Yes.
There likely is some credit in that number Scott I don't think it would be all that material. This year, we did have gains.
As we sold down our CLO portfolio, but the bigger driver of the biggest driver is private equity.
And it's a good opportunity just to remind people.
That in distributable earnings those gains are.
Realized gains cash gains and so in the case for example of the sale of the <unk> stock in 2021 gain that goes into that line is proceeds versus original cost.
So if you think about it.
Tie directly to our mark to market income that would have seen that gain come into income over many years. It's a different measure that's common in the industry, that's a cash basis.
Now calculation.
And the same thing on carried interest right it's realized.
In the quarter so.
Yeah, that's correct for this purpose as well carried interest is realized it's actually cash received which again is just a little bit out of sync with how we report it for financial statement purposes, but another interesting way to look at it I think.
Okay, just wanted to clarify that and then.
I guess you.
Can you kind of touched about touched on it in terms of higher rates.
If any floating rate products.
In general we think of bonding.
Mrs.
And the prospect of accelerated at higher rates on both sides of the border globally.
Can you maybe talk at a high level.
Where you may see headwinds that may be opportunities over time.
If I think about the private equity would be like impacting the financing or DCF valuations, but just kind of curious to see your thoughts.
As the rate environment has really shifted.
Intra quarter.
Yes, Hi, this is Bob so clearly higher interest rates and a higher cost of capital.
A negative impact on the private equity business almost by definition.
It does depend on how the business businesses do and how higher rates might lead to different growth rates for the underlying businesses, but a higher cost of borrowers typically on the margin a negative for the <unk> business.
On the credit side, given how much of our current credit business and that mix is floating rate. It's.
It's not as obvious that it will be a net negative.
We do have some exposure to high yield and other things, but those products tend to be pretty short duration, but the CLO business and structured credit, which are which are floating rate.
We expect that to maybe be a net positive over time. So it will vary varies a bit depending on the product.
And.
Maybe just lastly, just on the costs you talked about the pro forma cash being 16% versus 20% at year end.
From recent investments.
I'm just curious to see maybe your visibility over the next few quarters.
In terms of cash deployment and.
Maybe more interestingly just in terms of F N b.
Just what your share prices and where the discount is right now.
Yes, so again I don't think.
We should look out more than a couple of quarters, but just looking at on the pay side of things the pipeline versus.
Potential sale processes, I think we're probably net sellers over over the next couple of quarters just based upon current activity. So I would expect the cash balance in the credit markets cooperate.
To be going up based upon those things, but based on those factors over the next few quarters.
Okay. That's helpful. Thank you very much.
Okay.
Our next question comes from Nik Priebe with CIBC capital markets.
Okay. Thanks, good morning.
Just wanted to start with a question on one of your portfolio companies.
I was wondering if you could give us an update on the performance of ASM global.
That's what I would think of with a bit of a longer recovery tail I'm. Just wondering how that business has been managing from an earnings liquidity and balance sheet point of view.
Yes so.
Obviously ASM was one of our four portfolio companies it'll P that sort of had a direct hit vis vis COVID-19 .
But when we look at when we look at where the business now I'll just start with as you know we're seeing for 2022.
We're budgeting to be above the 2019 earnings level, so but the.
Activity around stadiums and arenas and other things like that is really really picked up over the last little while so that the business is really beginning to operate what I would call normally we never had high leverage going into that business, where we're only levered two times. So there was never any hint of a liquidity problem in that business and that remains true today.
Sure.
So pretty good like where that business just now we feel good about it.
Okay that's interesting.
And then what are the goals that you've pointed out over the past couple of years.
What are your ambitions has been to deemphasize participation in competitive bidding processes from deal sourcing perspective.
You've announced a handful of new transactions here over the past six months or so can you give us a sense of how many of those maybe it would have been.
Private lead negotiated versus a formal auction process or maybe how the pipeline looks from that perspective as well.
Yes, like what I think.
What about overall for <unk> five we've had.
The majority of the acquisitions in that fund either be proprietary or.
There's only two people really looking at the processing.
In most cases, we were the preferred partner of management.
So I actually think our change of go to market and help <unk>, we have been and how much deep knowledge, we have about those businesses that were.
We're pursuing is really resonating with the management teams, particularly founder owned businesses.
We've had really good success.
Over the last couple of years buying founder owned businesses.
And then appreciating the value.
The expertise we bring.
Vis vis how deep how deeply.
Somatic we're being.
So I actually think we've made really good progress on that front in the last couple of years.
Okay very good I think my other questions have been answered so that's it for me. Thank you.
Thank you.
Our next question comes from Geoff Kwan with RBC capital markets.
Okay.
Hi, Good morning, I apologize I missed the beginning part of the call. So I apologize if it's.
<unk> already been addressed.
And with everything kind of going on in Russia, and Ukraine is there any.
Direct exposures that you would have within your portfolio.
No nothing.
What I would say it would be meaningful Jeff care stream and wire go in Brea have have revenues pretty meeting.
Pretty meaningful revenues.
And Russia, and the Ukraine, but overall for all the revenues all of our portfolio companies the numbers sort of in the $30 million range.
Okay.
And then.
Okay.
I know you're limited in terms of what you can talk about from the fundraising perspective, but just wondering if you had any early discussions.
With Lps.
Given you've got net the fundraising year ahead, and if youre able to talk about the nature of those conversations.
How they may have gone.
No we're really.
For <unk> like we are literally just been getting like we haven't really been out.
Formally.
Yes.
Very many Lps, but look Jeff it's a crowded fundraising market.
A lot of people a lot of GPS are coming back to market quickly and they are coming back to market.
Seeking larger funds.
Given that private equity in particular, putting the credit side of the business.
Aside for a second.
Perform so well.
Several of many institutions have their private equity allocations, they're sort of full so I think this fund raising for Ob and likely for uncapped will be longer than fund raising has been four for prior funds GOP level, where typically in an out of market and sort of five to six months I would.
See that this fund raise taking a bit longer than that.
Yes, maybe just picking up on that point, Bobby Geoff just to I think Bobby referenced in his remarks and expectation of growing fee generating AUM more than 15%. This year I think it's relevant to note that in our plans more than half of the op six capital gets raised in 2023.
2022 growth number.
Probably less than half of <unk>.
Okay.
And then just my last question somewhat similar but but just more conceptual thing.
Strong performance in your P funds.
You've got greater focus on your core verticals and we have seen the recent kind of stronger pace of new deal announcements.
Are you comfortable doing maybe bigger deals than you've done in the past and with that.
It tends to result in maybe thinking about.
Bigger fund raises than you've done relative to prior vintages.
So I think we've always done larger deals Jeff relative to the size of our fund.
We've done several deals where the equity check has been more than $1 billion seven.
$7 billion fund and we've used co invest which our Lps and Onyx Corp. Obviously.
Like for us to be able to to be able to deploy those types of deals in terms of larger fund sizes like.
We're always going to try to raise larger funds, but we've never sort of trying to do like a big step function change in fund size.
Rather.
Reyes.
A dollar amount where the investment teams on capital P. Arent feeling overleaf pressure to get the money to work. If there is a period of time within the five year deployment period, where it is.
A tougher time to deploy capital so I would rather go back to market quick more quickly again larger funds, but just not step function larger funds.
I think thats, just a more prudent way to go into the investment business.
Okay.
And that I.
I really fully support what Bob is you are saying.
I think I think.
I don't personally I don't think it's terribly wise to constantly be raising larger funds.
You really got to concentrate on what the quality of what you put into the fund.
Okay. Thanks for that and then maybe one just going back to.
Bobby I think your response about the five to six months.
When you kind of say that would be something more like talking like closer to two.
At year sort of thing or maybe slightly less than that be what youre thinking in terms of that timeframe or would it potentially be longer than that.
It's tough to pinpoint it Jeff.
Had a couple of Lps.
Know that we're going to come to market this year and say the calendar. So crowded in 'twenty two could you. Please allocate us from the beginning of 'twenty three so I think we'll wait to see how that dynamic plays out but I certainly see.
Six fund Raisings.
Spilling into 2023, whether that's.
Q1, or Q2, I can't really tell you.
And so that was it.
Subsequent to that.
Yes, Im just going to say operationally and financially.
That's totally fine with us just to make the point.
The fund typically has a cap of investing no more than 20% of its capital in any one investment and so.
If you have large first and second closings. It still gives you plenty of capacity to put a normal size on ex investment in the fund.
And then also just to make the point that subsequent investors. In addition to coming into previous deals pro rata also pay fees back to the initiation data. The fund so from <unk> perspective, the timeline as Bobby said works out really well with where we stand today with dry powder and accommodating our clients with some <unk>.
2023 closings is very easy to do.
Okay that makes sense, but I mean, we could see possibly scale maybe.
Our first closing in 2022 are you talking about the first question and Ultrashort I anticipate a first closing in Q2.
Q3, maybe.
For <unk> right I understand that you have that first close you are.
We're ready to invest in the people that come in after that first close participate in those deals and Theres a theres a contractual way that happens in terms of what rate they have to pay given where those deals were bought but as soon as you have a first closure if youre in the business on that front.
Got it great. Thank you.
Okay.
As a reminder, if you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
Our last question appears to come from Graham Ryding with TD Securities.
Welcome to the coverage team Greg.
Hey, good morning.
Wasn't sure if my <unk>.
Question got into key Theyre not.
I'd like to just start with carried interest. So on slide 29, you gave some color there as you have in the past just around the potential from <unk> 5 million.
<unk> four I think it's in the range of $225 million to $685 million of carried interest potential.
But then you've also previously mentioned that you have.
Talk a little bit to $19 per share of carry potentially in your business, which equates to I think about $1 $7 billion.
So what is the what's the bridge there between what we're seeing in those two specific funds that are pretty key.
Degenerating carry interest in that in that larger $1 7 billion is that largely fixed income related or what are the pieces that would bring you to.
Two a larger carry potential of one 7 billion.
Yes, it would be.
Credit related Graham we have I think I cited the number in my comments, we have about $14 billion.
Fee carry paying or carry potential.
AUM within our credit business. In addition to essentially almost all of our AUM in private equity being carry paying so.
So that would be the bridge between the two.
To make the point credits carry.
It is a little bit different in private equity carry private equity carry will be.
Typically longer term hold and therefore, a higher MLC, but <unk>.
Credit carry will pay more often.
And we sort of get to reload more often just consult.
Fund light wides tend to be a bit shorter.
But hopefully we expect credit in the years to come to be a very significant contributor to our carry realizations. In addition to private equity.
Understood so that $14 billion, that's obviously beyond your CLO fee generating AUM. There is some other strategies in there while they are driving that.
That's right. It's in addition to our CLO as our CLO do bring with them a carry opportunity.
But there's also all of the additional capital we have including.
That some of which we acquired with Falcon and essentially all of our new strategies that we're raising.
<unk> four in the market today for credit how they carry opportunity associated with them.
Okay understood.
The related earnings.
Just trying to sort of track here.
The outlook there.
It sounds like fund raising on the private equity side it might fall into 2023.
To some extent.
What is your sort of expectation.
Forget for generating positive FRE is this more of a 2023 event.
Private equity fee step up or can you get to positive FRE this year.
Yes, I think I don't have a specific number to give you I think what I would tell you with that.
<unk> on the FRE lines, not going to be all that significant in 2022, what we'll want to be focusing on and we will give you. The information on that is is more of a run rate type analysis, particularly.
Particularly because with credit.
AUM you typically earn fees only on invested capital and so theres a lag between raising the capital is getting the funds formed and actually seeing the increase to the top line. So.
So I think 2023 will be a much bigger improvement in FRE in 2022.
I expect that at the end of 2022, when we're showing you a run rate analysis around FRE the improvement will be more meaningful.
Okay.
That's it for me thank you.
Thanks Ryan.
That concludes our question and answer session I will now turn the conference back to the company.
Thanks, operator.
Really appreciate everybody joining us today and we thank you Sir.
But for your continued support and we will look forward to many more opportunities to engage with you in the months ahead, and we look forward to hearing from you in being able to reach out to Ya. Thanks, everybody. Good afternoon.
This concludes today's conference call. Thank you for participating you may now disconnect.
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