Q3 2022 StepStone Group Inc Earnings Call
[music].
Greetings and welcome to the step stone.
Fiscal third quarter 2022 earnings conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your lineup in the question queue. You May Press Star two if you would like to remove your question from the queue.
Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded it is now my pleasure to introduce your host Seth Weiss head of Investor Relations. Thank you Sir you may begin.
Thank you and good afternoon, everyone. Joining me on the call today are Scott Hart, Chief Executive Officer, Jason Mann, President and co Chief Operating Officer, Mike Mccabe head of strategy, and Johnny Randall Chief Financial Officer.
During our prepared remarks, we will be referring to a presentation, which is available on our investor Relations website at shareholders got steps down group dotcom.
Before we begin I'd like to remind everyone that this conference call as well as the presentation contains certain forward looking statements regarding the company's expected operating and financial performance for future periods.
Forward looking statements reflect management's current plans estimates and expectations and are inherently uncertain and are subject to various risks uncertainties and assumptions.
Actual results for future periods may differ materially from those expressed or implied by these forward looking statements due to a number of risks or other factors that are described in the risk factors section Stepson's. Most recent 10-K.
Turning to our financial results on slide three third quarter of fiscal 2022.
We reported GAAP net income of $126 $3 million for the quarter ended December 31 2021.
GAAP net income attributable stepped on group incorporated was $48 $3 million we.
We generated fee related earnings of $36 $8 million.
Adjusted net income of $48 $6 million and adjusted net income per share of <unk> 42 cents.
The quarter reflected retroactive fees, resulting from the final closing.
Jones tactical growth funds III and additional closings of our private equity co investment fund that contributed $1 $2 million to revenue and $1 $1 million to fee related earnings and pre tax adjusted net income.
There were no material retroactive fees in the prior year's quarter.
I'd now like to turn the call over to Scott Jones, Chief Executive Officer, Scott Hart.
Thank you Seth and good afternoon, everyone. We delivered our strongest quarter to date on both an absolute and per share basis, We reported record results for fee related earnings and adjusted net income while growing our total assets under advisement and management to nearly $550 billion.
Our private market solutions continue to demonstrate their value and what has been a turbulent period for public markets marked by recent volatility in stock prices, a more inflationary environment and a rising interest rate outlook.
Our breadth and scale across all four of the private market asset classes provides the full spectrum of tools to allow our clients to thrive in every environment.
Instruct balanced and customized portfolios that deliver attractive results for our clients, including consistent alpha generation from private equity.
Bowyer to growth in the innovation economy through venture capital income and yield enhancement from private debt and natural inflation protection embedded in real estate and infrastructure.
Furthermore, our business model is prime for steady growth in durable operating results that can withstand the peaks and valleys of cyclical economic patterns.
We have deliberately invested in asset classes strategies and geographies that are benefiting from secular tailwind or the long term nature of our client relationships and the diversity of our asset classes and geographic footprint provides stability to our fee related earnings.
Turning to our results on slide five we generated $48 $6 million and adjusted net income for the quarter or <unk> 42 per share up 50% from the prior fiscal year's third quarter on a per share basis.
We generated fee related earnings of $36 $8 million up 65% from the prior year quarter as we produced strong organic growth and benefited from the Green Spring acquisition.
Accounting for the increase in our share count we grew fee related earnings per share by 41%.
This was our first full quarter with Green spring the integration process is progressing well and early results are coming in ahead of expectations being.
The impact to our clients has been seamless and we are seeing positive interest from both legacy steps down and Green spring L. PS and exploring the added breadth of steps stem solutions.
We produced another strong quarter of asset growth, finishing the quarter with $127 billion of assets under management and $71 billion of fee, earning AUM, excluding acquired assets, we've organically grown fee, earning AUM by 28% over the last 12 months with balanced growth across both asset class and structure.
I'll now turn the call over to Mike Mccabe speak about our asset growth in fee related revenue growth in more detail.
Great. Thanks, Scott I'm, turning to slide seven we generated nearly $16 billion of gross AUM inflows in the last 12 months with about 4 billion coming from our commingled funds and roughly 12 billion in separately managed accounts.
Slide eight shows our fee, earning AUM by structure and asset class.
For the quarter, we grew fee, earning assets by $4 $5 billion with balanced growth across commercial solutions.
Co mingled funds contributed about $2 billion, driven primarily by interim closings of our private equity co investment fund and our venture secondary Sun.
Co mingled funds will continue to be a significant part of our growth engine. As the addition of the Green spring platform expands our menu of fund offerings in the highly sought after but access constrained venture capital and growth equity sectors.
We've included additional details on our fund families in the appendix of our earnings presentation that is a new disclosure.
Separately managed accounts contributed the remaining $2 $7 billion of this quarter's fee, earning asset growth driven by a combination of re ups and new client wins as well as the successful deployment of fee paying capital across asset classes and strategies.
Scott mentioned, the breath of our diversified offerings as a significant competitive advantage, which was particularly evident this quarter across real assets.
Real estate and infrastructure off a portfolio diversification income and inflation protection and are seeing the benefit from increased client demand.
We expect a positive backdrop for real assets, specifically and multi asset class solutions more broadly to continue for the foreseeable future.
Looking over the last 12 months and excluding the impact from acquisitions, we have organically grown fee, earning assets by over $13 billion or by 28%.
This is clearly an exceptional period of growth. It is consistent with the organic CAGR of 30% over the last four years.
Being able to maintain our growth rate in fee, earning AUM, while at the same time monetizing investments for our clients as a point of pride for the entire organization.
We continue to grow our evergreen products see prime our private markets fun for credit investors.
As of February 1st we have grown seed prime to $390 million and net asset value a strong ramp ups since introducing the product less than a year and a half ago, and we are making progress across all distribution channels.
Our unemployed fee, earning capital stands at over $17 billion. This is down slightly quarter over quarter, given the strong deployment across asset classes, but remains near our all time peak and provides visibility into growth driven by capital that has already been committed.
Our unemployed balance also gives us considerable dry powder to tactically capitalize on market dislocations.
Slide nine shows the evolution of our management and advisory fees, where we are generating greater than $3 30 per share in revenues over the last 12 months.
Representing a CAGR of 25% since fiscal year 2018.
We generated a blended management fee rate of 52 basis points, which is stable compared to the last three years.
Now before turning the call over to Jonny I'd like to take a moment to speak about expenses and long term operating leverage.
We remain disciplined in managing our spending while also steadily investing for growth. This.
This approach has served us very well over our 15 year history, and we will continue to prioritize growth in what we view as a multi decade opportunity for expansion within the private markets examples.
Examples of just a few areas in which we have invested include.
The build out of a deep and experienced real estate infrastructure private debt and venture capital teams to complement our original private equity capabilities.
Our broad geographic footprint with investment professionals operating in local markets, where we invest and serve.
The creation of nearly 30 person dedicated retail team.
And the development of proprietary technology that enables our clients and investment teams to optimize their investment decisions by accessing private market data through user friendly SaaS based software, we pride ourselves on the technology stack that is state of the art.
While many incumbent financial services peers are spending significant sums of money to update their systems. We have built an infrastructure that is modern efficient and flexible creating a strong foundation that will serve both our company and our clients well into the future.
Recognizing the durability and scalability of our platform, we remain committed to investing in our platform well ahead of growth.
While this may result in a trade off with margins in the near term each of these areas is scalable and creates an environment for operating leverage over the longer term.
Now I'd like to turn the call over to CF to our CFO Jonny Randall.
Thank you Mike I'd like to turn your attention to slide 11 to touch on a few of our financial highlights.
We are reporting strong organic topline and bottom line growth and we benefited from a full quarter of the Green spring acquisition.
We generated record results for management and advisory fees adjusted revenues fee related earnings adjusted net income and Eni per share.
Our FRE margin for the quarter was 35% up 300 basis points year over year, we benefited from retroactive fees in the quarter, which contributed 70 basis points to the FRE margin.
We also benefited from variations related to year end bonus accruals that favorably impacted this quarter's compensation expense and margin.
As Mike mentioned, we see a significant pathway for continued growth and we will invest appropriately to pursue that growth.
The near term.
He means increases in compensation expense as we grow the team and fill open positions.
Additionally, we expect a higher level of T. N E. As we move through the coming year G&A expense, while trending higher still remains at levels below what we would consider normal.
We continue to view of near term FRE margin of about 30% is a reasonable expectation with some variability quarter to quarter based on the timing of expenses and the cadence of large commingled fund closings.
Over the long term, we continue to expect our margins to migrate to the mid thirties, as we balance profitability with sustainable growth.
Gross realized performance fees were $66 6 million for the quarter, our highest period ever reflecting a continued elevated level of realization activity driven by a positive market environment for exits and strong underlying investment performance slide 24 in the appendix provides quarterly and last 12 month performance see trends.
Slide 12 illustrates our continued strong growth rates across all key revenue measures.
Grown overall adjusted revenue per share by 64% in the first three quarters of the fiscal year and by 34% compounded annual growth rate over the longer term.
Revenue growth is driven by consistent growth in fee, earning assets and has been bolstered by the recent period of very strong realized performance fees.
Shifting to our profitability on slide 13, we've grown fiscal year to date fee related earnings per share by 17%.
A reminder, we earned an unusually high level of retroactive fees in fiscal 2021 for fiscal 2022 year to date growth comes against a high comparison.
Looking over the longer term, we have achieved a CAGR of 48% and fee related earnings per share since our fiscal 2018 period, we've grown our adjusted net income per share by 98% for the year to date period by 46% over the longer term, reflecting both continued increases in FRE and a period of strong realized net performance.
Geez.
Moving to the balance sheet on slide 14, gross accrued carry continues to increase driven by strong underlying investment performance ending the quarter at over $1 3 billion.
It is up 11% from the prior quarter and up 112% over the last 12 months, despite a high level of realizations.
On the bottom chart, our own investment portfolio ended the quarter at $99 million up 9% from the prior quarter and up 56% over the same quarter in the prior year, reflecting both market appreciation and net contributions.
Unfunded commitments to these programs were $73 million as of quarter end.
We manage a large pool of over 51 billion of performance fee eligible capital capital is widely diversified across multiple vintage years and approximately 150 programs.
As of December 31st.
58% of our unrealized carry was tied to programs with vintages of 2016 or earlier, which means that these programs are largely out of their investment periods and have entered harvest smoke cig.
61% of this unrealized carry are sourced from vehicles with deal by deal waterfalls.
Realized carry maybe payable at the time of investment exit.
Lastly, a quick note on our leverage with 65 million outstanding on our revolver after reducing the balance by $50 million over the course of the quarter.
This is a relatively small amount of debt considering our earnings and cash generation.
Credit gives us flexibility on top of our significant normal cash flow to support growth initiatives, including future GP commitments.
We anticipate maintaining a modest level of debt going forward and would expect some variability in the outstanding balance period to period.
This concludes our prepared remarks, I'll now turn it back over to the operator to open the line for any questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue you may have.
Press Star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the sarkies one moment. Please while we poll for questions.
Thank you. Our first question is from Ken Worthington with J P. Morgan. Please proceed with your question.
Hi, good afternoon, and I guess happy new year, if we can still say that.
For for Scott and Mike as we start the new calendar year I was hoping you could reflect on management's top goals for growing the business in calendar 2022 and to the extent that you're focusing more resources and one element or aspect of the business versus another what are you most excited about.
For steps down when thinking about the growth.
Growth outlook ahead.
Sure. Thanks, Thanks, Ken for the question and in a belated happy new year to you as well are there I think look as.
As we look ahead to 'twenty two.
And in fiscal 'twenty three four for us.
But to some extent it is business as usual and I think if I think back to the first six quarters out of the gate that we've had as a public company one of the things that I think it really highlights the strength and the diversity of the platform is that each quarter. It's been a different part of the business driving our outperformance starting initially with the final closing of our real estate.
State co mingled fund followed by a couple of quarters of strength, specifically in the private equity and private debt asset classes at more recently, if you look at it at the last couple of quarters real strength from.
From the infrastructure side of the business both in terms of rehab activity on the separate account side as well as deployment and finally private equity co mingled funds and so there's a variety of different factors driving our growth and success.
We've really set up a platform to capitalize on our continued growth opportunities that lie ahead of us as we look ahead to two to the to the new year here clearly to focus on our co mingled funds will continue to be quite important you would've seen in our new disclosure and outline of of some of our historic.
Commingled funds as well as those that are in market between our private equity co investment private equity secondaries and a number of venture funds associated with the Green Spring acquisition and so that is clearly a high priority in the year ahead.
Re ups will and and and and continue to be a a a high priority for us and have a number of vehicles that as investment activity has picked up over the last 12 months have been pulled closer to a two dose rehab decisions and so that will clearly be a high priority as we look to continue growing with our.
Existing client base.
And finally, no no surprise that the retail opportunity continues to be one that we are quite quite focused on.
Okay, great. Thank you for that and then just maybe a bit more on green spring.
Now that you've been sort of an owner of the business you know and have probably a better feel than you did when you were buying it.
How are you progressing and thinking about growing their offering you know and in the coming year.
Sure No I mean, I think you're exactly right that you you certainly you know get to know the team even better than you could possibly throughout the due diligence process and we've been spending a tremendous amount of time with the Green spring team myself included having just come back from from Baltimore with our with the team there.
Look I think things are going well and some of that is anecdotal.
In terms of what we're hearing from the team and really so.
Some of what we anticipated would be the case during diligence now playing out real time, and whether that that is gaining access to investment opportunities or due diligence insights that would not have been possible previously, but now as part of a combined market leading platform are things that we are seeing day in and day out.
And part of that is driven by specific data points and you know there are only a limited number of data points. So far here a few months in but with the debenture focus secondaries fund recently, surpassing $2 billion as performing well and ahead of our expectations and and the timeline.
Around some of the other funds in market I think similarly outperforming from a timing standpoint here. So look I think it really is just trying to make sure that we are capitalizing on the combined strength of the platform here continuing to listen to our clients and what the needs of those clients might be as we think about what products.
Products or vehicles may be a you know may be of interest to them going forward.
Okay, great. Thank you very much.
Yeah.
Thank you. Our next question comes from Alex Blaustein with Goldman Sachs. Please proceed with your question.
Hey, good afternoon, guys. Thanks for taking the question as well you know first question, maybe a little bit more industry focused given the benefit you have looking in speaking with so many lps around the world I heard your comments loud and clear about appetite for real assets, obviously, given the inflationary outlook what about <unk>.
Private equity and given just a significant amount of deployment. The industry has seen over the last couple of years relative to maybe a slower pace of realizations. How are people think about tactically allocating to private equity as an asset class over the next 12 to 18 months.
Sure I will Alex I'll start others may want to jump in here as well.
One of the one of the biggest challenges are that we're hearing about from L. P that they think about Alex you know the private equity market is really just the pace at which managers have been returning to marketing. So when you talk about trying to tactically allocate to the asset class. The reality is many LP they've had their plates full just working through a re up pipeline.
With their existing managers and so it's really been a focus on how do we selectively re up with those managers, while also freeing up capital to allocate to other parts of the market. I think we are continuing to see no surprise, a tremendous amount of interest in the venture and growth space clearly secondary.
I've had a tremendously active year and in 2021, we expect some of that to continue into 'twenty 2022 here as well, but again, it's really working through you know, there's there's rehab pipelines given all the activity. The only other thing I would add is that you know given the recent volatility in the market I think the one.
Concern that had been on People's mind for an extended period of time has just been around valuations, but as we think about the amount of dry powder available or new commitments that are being made and you know what I think many hoped at with the recent decline in the public markets actually may create buying opportunities over time.
We would expect that takes some time as buyer and seller expectations need to come back into line here, but I'm looking at this as an opportunity.
Got it great helpful. And then a follow up question, Johnny probably for you around our FRE margin, so 30% near term FRE margin.
Obviously, you know meaningfully lower versus when you guys don't recently, but understanding the pace of investment et cetera.
How should we think about this over the next several quarters right is 30% the right number for kind of calendar 2022, and that's more of an investment year and beyond 'twenty. Two we should resume sort of a positive margin expansion trajectory.
Or this could be a multi year spend and then just a clarification within that 30% are you assuming any retrofits or retrofit would obviously help that 30% number.
Yeah. Thanks. Thanks for the question I think we think of retrofit he says sort of helping it. So we're kind of focusing on the core the core operation part of it and I think you know the the timing of when we might be a little bit above or below what kind of be driven more by those kind of episodic fund closings and and the timing of when we bring on some of the <unk>.
Missions or some of the people we're planning to bring on to target some of that growth. So yeah. So we kind of think about it is you know kind of around 30 is reasonable kind of expectation for the next few quarters and then you know if if fundraising on some of our commingled funds come earlier than you'll see a lift on that but I think the the <unk>.
<unk> is whats the challenge and then I think as we get kind of into the next round of fundraising on commingled funds is where we would think some.
Some of that expansion would come.
Great Alright, thanks very much.
Hmm.
Thank you. Our next question comes from Michael Cyprus with Morgan Stanley . Please proceed with your question.
Hey, good afternoon. Thanks for taking the question Scott wanted to come back to some of your comments earlier around investing in the platform for growth could you just maybe expand a little bit on you know how much are you planning to expand head count by over the next 12 months what are the top areas across the firm or you're adding head count and some of the top.
Initiatives, you could just maybe expand a bit on that there.
Sure Oh look I think Mike talked a little bit about where we've been investing during the prepared remarks and again to my earlier comments. Some of it is just continued business as usual as we continue to grow the asset class. Our teams as we can continue to expand our geographic footprint.
You've heard us say in past quarters that you have to say to some extent are seeing certainly the asset class evolve and in similar ways to what we've seen in the private equity market and whether that is the development of a or be more active secondary marketing and in in in asset classes like infrastructure or as we look to expand some of the sourcing.
Deployment opportunities in private at private debt outside of areas like traditional indirect direct lending we will continue to add to our each of our asset class teams I think more specifically you know you've heard us reference to 30 person at retail team clearly continues to be a continued area for for <unk>.
<unk> in head count.
And frankly continue to build out areas like our human resources team.
No no secret that it's been a competitive market for for talent. We are very focused on being able to continue to not only attract but retain and develop our talent over time and so we've made a number of important additions to our human resources team in in in recent months.
Great and just maybe a follow up question if I could on the the retail he prime product clearly some very exceptional investment performance. There can you just talk about some of the steps that you're taking to accelerate flows into the product I think you mentioned, a 30 person distribution team, where do you see the size of that team and in.
12 months to 24 months, maybe talk a little bit about the platforms. How many you're on today, how many more platforms do you expect to add you know whats that progress like from a distribution stand out and build.
I think Mike Jason here, where we're approved in over 100 platforms now between <unk> and some of the international platforms.
And a lot more are in diligence a number of preparing to launch in the coming days and weeks.
Including really great progress with some of the U S wires.
The the growth in the team size I think you'll see some continued growth as we.
Okay.
Mike I'm, sorry, I think we went on mute there for a second inadvertently.
So.
I'll just start over here, we were approved on over 100 platforms today across our as I B DS and a couple of international platforms.
A number of other platforms are preparing to launch in a number behind that or intelligence for later this year. So continued progress with additional wires sorry, it doesn't Laura it's IBD and then and then the wires as well.
In terms of the head count growth, we're going to be adding additional folks here in the U S. As we continue to build out our U S map, but also starting to pivot towards non U S. A team built on the Salesforce there.
Great. Thank you.
Thank you. Our final question comes from Adam Beatty with UBS. Please proceed with your question.
Hi, good afternoon, and thank you for taking the question firstly on the management fee rate I noticed that there's a bit of a mix shift toward a higher percentage of commingled funds I'm, assuming some of that has to do with green spring and year to date. It looks like you know it looks like your free fee rate.
It's fairly flat around 52 basis points I'm, assuming the offset there was some of those catch up fees that Johnny was talking about in fiscal 'twenty. One so maybe check my understanding on that but maybe more importantly, looking ahead given that that shift towards co mingled should we expect some fee rate accretion from here. Thank you.
Yeah, maybe I'll start there Adam this is Scott and Johnny can can jump in on the specific question that you referenced there, but as we look ahead here you are correct as specifically with the addition of the Green spring platform, which was much more heavily weighted towards co mingled funds you will see a bit.
Of of mixed shift that's starting to play out with one full quarter in the books here, but we'll continue to to work its way through the numbers going forward here. So as a reminder, given that mix of co mingled funds. The green screen platform had a higher overall fee rate than our 52 basis points, but within <unk>.
<unk> funds recall that.
They have strategies, including primaries, secondaries and co investments or directs whereas historically this step stone commingled products, we're really much more weighted towards our higher fee co invest in secondaries and in particular and so so yes, we will continue to see a shift towards commingled funds that ought to help the overall blended rate slightly.
But you may have also seen a slightly lower co mingled fee rate for this for this quarter, but with that Johnny anything else that you would add specific to Adam's question.
I think when you kind of season when you do look at that fiscal 'twenty. One period. There was some elevation in there.
From those retrofits and I think just as we kind of see the portfolio grow we don't anticipate it moving much from where it is but you know it can move quarter to quarter based on the timing of when new business comes on.
Great. Thank you for those nuances I appreciate that guys and then just I wanted to get your thoughts around kind of the environment that you're seeing right now specifically the G. P. Mandate you guys deal with and partner with and invest with you know we've had the pandemic you know some dislocation there.
Some point to sort of consolidation of <unk>.
Accounts, among Lps wanting to deal with kind of fewer providers and now we've got some market dislocation and you know in rate hikes on the horizon are there are you seeing any signs of you know kind of disturbance in the G. P communities that you deal with certain things that you're watching out for doing maybe a little bit additional due diligence.
Any color there would be helpful. Thank you.
Yeah, No I mean, I don't think any specific disturbance in the in the GP community again, if anything though I think one of the biggest trends. We've seen Adam is just again the pace at which managers have been coming back to market. It's clearly been a very active.
Period of time from a from a new investment standpoint in 2021, you know record year across a number of different.
Area and so it has resulted in a.
You know just a rapid ease or pace of fund raising but we may be seeing some shifts in where.
<unk> the interest of of Lp's lie in your again, we referenced in our real assets. During the prepared remarks as investors do get are being ready for a rising interest rate environment looking and looking for inflation protection. I think we are seeing some shifts in exactly where our efforts are being focused with.
In each of the asset classes, but again no no overall disturbance in terms of GP relationships, you know again, even the trend towards more consolidated at relationships like we would tell you that we continue to.
Approved even just in our private equity business are well over 100, New fund commitments per year. So there's just a tremendous amount of a number of our managers in the market specializing in a variety of different areas and frankly, that's one of the areas that our clients look to us to help them navigate.
Great that's positive thank you Scott.
Thank you. Our next question comes from Michael Cyprus with Morgan Stanley .
Hey, Thanks for taking the follow up I just wanted to ask about the dividend side you guys more than doubled the dividend I guess, just how do you think about what the right level of the dividend should be for steps down and how you think about setting that as a dividend a ratio or a percentage of of FRE should that be growing with the fee related.
Earnings over time, just any sort of thoughts around that and just as cash flow builds and how are we getting closer to the timeframe, where you might be able to buy in a bit more ownership of the subs.
Yeah.
Hi, Mike This is Mike Mckee and thanks for the question I think we are going to continue to look to our peer set for the payout ratio and we will continue to to peg our ratio to be in line with with our peer set in the industry. So I think you can continue to see us looking at the dividend as an opportunity to add value back to our shareholders.
Over time, as we increase our cash flows.
As to sort of capital allocation.
We used $50 million this quarter to pay down debt as Johnny mentioned in the revolver. We left a balance of about 65 million. So the goal here is to keep a flexible balance sheet and flexible capital structure to be opportunistic.
And as it relates to the integration of the subs and buying it at the NCI.
We're in regular dialogue with each team on this topic of integration and at the moment. There is nothing to report, but I think longer term as we've discussed in the past, but we see a fully integrated company then between May see some incremental steps in that direction, but at the moment are.
There's nothing to report, but we are we're very pleased with the balance sheet, its flexibility and our ability to work opportunistically as as and when opportunities arise.
Great and if I could just squeeze one last one in here just on M&A.
Clearly just executing the Greens spring transaction.
Are you kind of look ahead over the next 12 24 months you know do you.
Do you see the possibility for another transaction, where might M&A help fill some product or distribution gaps in our you know access some opportunities that you see.
Yeah. Thanks.
As evidenced by the successful acquisition and integration of our Green spring, Yeah, we do see M&A.
As an opportunistic way to accelerate our growth by augmenting something were currently doing whether its related to an asset class or something like distribution or perhaps a strategic location, but the key to success here is a cultural fit and the value proposition for our clients, but certainly we've demonstrated a track record and certainly a capability to attract.
A very interesting very accretive additions to our platform and will continue to be on the lookout for for such opportunities.
Yeah.
Great. Thank you.
Yeah.
Thank you there are no further questions at this time I would like to turn the floor back over to Scott Hart for any closing comments.
Great well as always we appreciate your time and your interest in the <unk> story, and we look forward to continue to continuing to update you on it as we are as we move ahead. Thank you.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.