Q1 2024 Artisan Partners Asset Management Inc Earnings Call
Operator: Good afternoon, everyone, and welcome to the Artisan Partners first quarter 2024 conference. All participants will be in a listen-only mode. Should you need assistance, please send an all-conference specialist by pressing star and zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and 1 on the telephone keypad. To withdraw your question, you may press star and 2. We do also ask that you please limit yourselves to... the two, your questions to two in order to allow time for other questions.
Good afternoon, everyone and welcome to the artisan partners first quarter 2024 conference call.
All participants will be in a listen only mode should you need assistance take another conference specialist by pressing the start by pressing star and zero on your telephone keypad.
After todays presentation, there will be an opportunity to ask questions.
Can I ask a question you May press star and one using a telephone keypad withdraw. Your question you May press Star two.
You also asked me please limit yourselves to.
But to your questions to two in order to allow time for other questions.
Operator: Please note this event is being recorded. I'd now like to turn the floor over to Artisan Partners Asset Management. You may begin.
This event is being recorded.
Speaker Change: Now I'd like to turn the floor over to artisan partners asset management you may begin.
Speaker Change: Welcome to the artisan partners asset management.
Unknown Executive: Welcome to the Artisan Partners Asset Management Business Update and Earnings Call. Today's call will include remarks from Eric Colson, CEO; Jason Gottlieb, President; and C.J. Daley, CFO.
Speaker Change: Uh huh.
Speaker Change: Today's call will include a remark.
Speaker Change: Eric.
Speaker Change: Yeah.
Speaker Change: Shortly after that P J Haley CFO.
Unknown Executive: Following these remarks, we will open the line for questions. Our latest results and investor presentations are available in the Investor Relations section of our website. Before we begin today, I would like to remind you that comments made during today's call, including responses to questions, may include forward-looking statements, which are subject to known and unknown risks and uncertainties, including but not limited to the factors set forth in our earnings release and detailed in our SEC filings.
Speaker Change: These remarks, well open the line.
Our latest results and Investor presentation are available on the Investor Relations section.
Speaker Change: Yeah.
Speaker Change: Before we begin today I would like to remind you that comments made during today's call including responses to questions may include.
Speaker Change: Okay.
Speaker Change: These are subject to known and unknown.
Speaker Change: But yeah, that's correct.
Speaker Change: And that was I guess, you after or in our earnings release and detailed.
Speaker Change: Hi.
Unknown Executive: These risks and uncertainties may cause actual results to differ materially from those disclosed in the statement, and we assume no obligation to update or revise any of these statements following the presentation. In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release and the supplemental materials, which can be found on our investor relations website. Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any artisan investment product or a recommendation for any investment.
Speaker Change: These risks and uncertainties may cause actual results to differ materially from there as well.
Speaker Change: In the statement.
Speaker Change: Yeah no obligations.
Speaker Change: Bye.
Speaker Change: Statement following.
Speaker Change: Yeah.
Speaker Change: In addition, some of our remarks today.
Speaker Change: The non-GAAP financial measures.
Speaker Change: Finally reconciliation that here.
Speaker Change: Comparable GAAP measure the earnings release.
Speaker Change: Well medical material.
Speaker Change: Can be found on our Investor Relations website.
Speaker Change: Also please note that nothing on this call constitutes an offer or solicitation to purchase interest.
Speaker Change: And he artisanal from Boston.
Speaker Change: A recommendation for any of us.
Eric Richard Colson: Thank you, and thank you everyone for joining the call or reading the transcript. We constantly come back to who we are. We are a high-value-added investment firm designed for talent to thrive in a thoughtful growth environment. This is who we have always been. It is our DNA and our competitive edge. We fear clear labels. A term like traditional manager has never accurately described who we are and what we do.
Speaker Change: And with that I'll turn it over to Eric Colson CEO.
Eric Richard Colson: Thank you and thank you everyone for joining the call or reading the transcript.
We constantly come back to who we are.
Eric Richard Colson: We're a high value added investment firm designed for palace drive thoughtful growth environment.
Speaker Change: This is who we have always been there.
Our DNA and our editors edge.
Speaker Change: We steered clear of narrow label.
Speaker Change: Term life traditional master.
Speaker Change: Accurately describe who we are and what we do.
Eric Richard Colson: We have always taken a broader view. Our focus has always been on high-value-added investments managed by exceptional talent. In our earliest years, with great talent, we entered the marketplace in non-core, high dispersion areas like small cap and big cap equities, international growth, and value in that. These were and remain areas where exceptional talent can generate differentiated results. When we entered 60 Income in 2014, we started with high yield, another inefficient space where talented portfolio management can add value and manage risk. We have expanded our fixed income capabilities with additional high-value-added strategies, including long-short credit, emerging market debt, and global macro.
Speaker Change: We are always taking a broader view.
Speaker Change: Our focus has always been on high value added investment managed by exceptional talent.
Speaker Change: And our earliest years with great talent, we entered the marketplace and noncore dispersion areas like small cap.
Yes, absolutely.
Speaker Change: International growth and value in that.
Speaker Change: These were and remain areas, where exceptional talent to generate differentiated results.
Speaker Change: When we entered two.
Speaker Change: 2014.
Speaker Change: Starting with high yield and other inefficiencies, where talented portfolio managers can add value and manage risk.
Speaker Change: We have expanded our fixed income capabilities with additional high value added strategy, including long short credit emerging market debt global macro.
Eric Richard Colson: We have demonstrated time and again our ability to deliver across different talent, generation, asset classes, geographies, and client types. By building and maintaining a home designed specifically for investment talent, we are able to generate alpha for clients, develop durable investment franchises, and produce quality outcomes for shareholders. Turning to slide two.
Speaker Change: We have demonstrated time and again, our ability to deliver across different talent generation asset classes geographies and client types.
Speaker Change: Building and maintaining a home.
Speaker Change: For investment talent.
Speaker Change: We're able to generate alpha for clients.
Speaker Change: Durable.
Speaker Change: Sizes.
Speaker Change: Produce quality outcomes for shareholders.
Speaker Change: Turning to slide two.
Eric Richard Colson: In my 2023 annual letter, I described the characteristics that we believe define an ideal home for investment talent. It all starts with our investment-first culture. This culture originates from the belief system of our investment talent, who must have a passionate conviction in their investment philosophy and a willingness to execute through thick and thin over long periods of time. This waterfall of passion, philosophy, process, execution, and alignment flows into business operations and distribution, which we build and manage for our investment talent and investment capabilities, not the other way around.
Speaker Change: 2023, and no matter how it is.
Speaker Change: The characteristics that we believe to find an ideal home for investment talent.
It all starts with our investment first culture.
Speaker Change: This culture originates from our belief system of our investment talent.
Speaker Change: Passionate conviction.
Speaker Change: Philosophy.
Speaker Change: Thanks.
Speaker Change: Over a long periods of time.
Speaker Change: This waterfall with passion philosophy process execution alignment flows into the business operation and distribution, which.
Speaker Change: Which we build and manage for our investment talent.
Speaker Change: Okay.
Speaker Change: The other way around.
Speaker Change: At artisan partners every single person prioritizes investments.
Eric Richard Colson: At Artisan Partners, every single person prioritizes investment, from the Board of Directors to our newest associates and across all functional areas of the firm. Everything is focused on and flows from investment. We attract and retain great talent; that talent generates results for clients, and revenues grow over time. We generate successful outcomes for our associates and shareholders. At Artisan, each investment team operates autonomously with respect to its investment philosophy, process, people, research, and decision making.
Speaker Change: The board of directors to our newest associates and across all functional areas of the firm.
Speaker Change: Everything is focused on flows from investments we.
Speaker Change: We attract and retain great talent.
Speaker Change: That talent generates results for client.
Speaker Change: Revenues grow overtime.
Speaker Change: We generate successful outcomes for our associates and shareholders.
Speaker Change: At artist that each investment team operated honestly with respect to its philosophy process people research and decision making.
Eric Richard Colson: We complement investment team economies with extensive resources and support customized to fit each team. We believe that the artisan combination of investment autonomy, resources, and support is unique in the industry and a competitive advantage. This is what attracted Brian Krug to join Artisan Partners in 2013 and partner with us to establish Artisan Credit. On April 1st, the credit team's high-income strategy had its 10th anniversary, joining 10 other artists and strategies with track records of more than 10 years. I've asked Jason to spend a few minutes on the credit team's platform, and most importantly, the team's future.
Speaker Change: We complement investment team economy.
Speaker Change: The resources that support.
Speaker Change: Yeah.
Speaker Change: We believe that the artisan combination of industrial economy resources and support is unique in the industry.
Speaker Change: Additive advantage as.
Speaker Change: What attracted Brian crude joined artisan partners in 2013.
Speaker Change: Partner with us to establish the artisan credits.
Speaker Change: On April 1st credit seems high income strategy.
Speaker Change: Anniversary, joining another artisan strategies with track records up more than 10 years.
Speaker Change: I'd ask Jason to spend a few minutes on the credit team platform and most importantly, the future.
Jason: Thank you Eric.
Jason A. Gottlieb: The development of the artisan credit team over the last 10 years is a testament to two things. First, Brian Krug is an investor, leader, and entrepreneur.
Jason: Development of the artist and credit teams for the last 10 years is a testament to a few things.
Jason: First Brian Kruger with an investor leader and entrepreneur and second the quality and relevance of the artisan partners operating and business model across asset classes.
Jason A. Gottlieb: And second, the quality and relevance of the Artisan Partners operating and business model across asset classes. It bears repeating that when Brian joined Artisan in 2013, the firm had no prior experience in supporting and distributing a fixed income investment strategy. Brian joined Artisan because he believes in the power of the autonomous investment team model and our investment-first culture. Prior to joining Artisan, Brian was already a successful investor and leader.
Jason: It bears repeating that Brian joined artisan in 2013, the firm had no prior experience supporting industry meetings.
Jason: That's the strategy.
Brian joined artisan partners because he believes in the power of the autonomous investment team model and how our investments first culture.
Jason: Prior to joining artisan Franklin already a successful investor in here.
Jason A. Gottlieb: But he was willing to step away from what he had already achieved for the freedom to build an investment franchise designed specifically for him. He wanted control over investment capacity, and he wanted his ideas implemented in strategies that he managed.
Jason: He was willing to step away from what he had already achieved for the freedom to build an investment franchise designed specifically for.
Jason: Do you want to control our investment capacity.
Jason: His ideas implemented strategies to manage.
Jason: Over the last decade, we have partnered with Brian methodically build a team a track record and a franchise.
Jason A. Gottlieb: Over the last decade, we have partnered with Bryan to methodically build a team, a track record, and a franchise. Since inception, the high income strategy has generated average annual returns of 6.18% after fees, which is nearly 42% more return on average per year for 10 years compared to the passive index. Over that period, the Artisan High Income Fund was ranked number two out of 135 funds in the Morningstar High Yield Bond category.
Jason: Since inception, the high income strategy has generated average annual returns of six 8% accuracy, which is nearly 42% more return on average per year for 10 years compared to the passive index.
Jason: Over that period, the artisan high income fund is ranked number two out of 135 funds in the Morningstar.
Jason: Morningstar high yield bond category.
Jason A. Gottlieb: Starting from scratch without any pre-existing fixed income business, we have raised a cumulative $9.2 billion of net inflows into the high income strategy, including $1.5 billion in 2023 and $866 million in the first quarter of 2024. Since its inception, the Artisan High Income Fund ranks number two in net flows out of 138 funds in the Morningstar High Yields category.
Jason: Starting from scratch without any pre existing fixed income business, we have raised cumulative nine $2 billion of net inflows.
Jason: The high income strategy.
Jason: $1 5 billion in 2023 and $866 million in the first quarter of 2024.
Jason: From its inception, the artisan high income fund ranks number two in net flows of 130 in the Morningstar category.
Jason A. Gottlieb: Critically, though, Orion and the credit team have expanded beyond IoT. They've been building out an array of capabilities, strategies, and vectors for future growth. In 2017, the credit team launched one of Artisan's first alternative strategies, credit opportunities. Using a broader array of securities, long and short positions, and greater flexibility across the credit and liquidity spectrum, credit opportunities has generated an average annual return of 10.24% after fees since inception. We believe the credit opportunity strategy has generated comparable to better returns and private lending with greater liquidity and transparency.
Jason: Critically though Brian in your credit team have expanded beyond <unk>.
Jason: <unk> been building out an array of capabilities and strategies and factors for future growth.
Jason: 17, crediting launched one of our first alternative strategies credit opportunities.
Jason: Using a broader array of securities long and short positions in greater flexibility across our credit and liquidity spectrum credit opportunity has generated an average annual return.
Jason: 4% after the.
Jason: Sachin.
We believe the credit opportunity strategy has generated comparable return in private lending with greater liquidity and transparency.
Jason: In January 2020 to their credit team launched the floating rate strategy, which provides clients with access to the cheap long demonstrated skill in the leveraged loan market along with a portfolio consisting largely of floating rate loans, resulting in minimal duration risk.
Jason A. Gottlieb: In January 2022, the credit team launched the Floating Rate Strategy, which provides clients with access to the team's long-demonstrated skill in the leveraged loan market, along with a portfolio consisting largely of floating rate loans, resulting in minimal duration. And just last year, we closed $130 million of commitments to the Artisan Dislocation Opportunities Fund. The Dislocation Fund will allow the credit team to put new capital to work quickly and efficiently in both public and private securities if and when the credit markets dislocate. The team has a successful record of navigating periods of market stress. For the COVID drawdown and recovery period from March 31st, 2020 through March 31st, 2021, credit opportunities generated a 50.16 return net of fees.
Jason: And just last year, we closed $130 million of commitment to the artist and dislocation opportunities fund.
Jason: The dislocation fund will allow the credit team to put new capital more quickly and efficiently both public and private securities if and when the credit markets dislocate.
Jason: The team has a successful record navigating periods of market stress.
Jason: Covid drawdown and recovery period from March 31, 2020 through March 31, 2021 credit opportunities generated 51 six return we can.
Jason A. Gottlieb: We congratulate Brian and the credit team for establishing a credit platform with broad degrees of freedom and capability. As Eric said in our earnings release, we believe that great talent transcends narrow categories. Looking ahead, we believe the credit team is just getting started. We are diversifying the high income strategy business with institutional and non-US capital. Of the nearly $2.4 billion in AUM we have raised in the strategy over the last five quarters, 20% is from institutional separately managed accounts, and 17% is from non-U.S. investors.
Jason: Gratulate, Brian in the credit team for establishing our credit platform to broaden degrees of freedom capability.
Jason: As Eric said in our earnings release, we believe that great count trends and neuro categories.
Jason: Looking ahead, we believe the credit team is just getting started.
Jason: We are diversifying the high income strategy.
Jason: Institutional and non U S capital.
Jason: Nearly $2 4 billion and we have raised in the strategy over the last five quarters, 20% is from institutional separately managed accounts and 17% from non U S investors.
Jason: We are particularly focused on growing our credit teams alternatives capabilities strategies.
Jason A. Gottlieb: We are particularly focused on growing the credit team's alternative capabilities, strategies, and business. Credit Opportunities has an impressive nearly seven-year track record, taking advantage of broad opportunity sets, the ability to short, the COVID dislocation, and the ability to hold less liquid positions. Market dispersion in the triple C space is ripe for credit selection.
Jason: Yeah.
Jason: Credit opportunity has an impressive nearly seven year track record taking advantage of a broad opportunity set.
Jason: Sure the Covid dislocation and the ability to hold my breath with physicians.
Jason: Mark and dispersion in the Triple T space is ripe for credit selection and the structure of credit opportunities, it's Brian more flexibility to invest in smaller less liquid issuance is another area, where more potential for absolute return at all.
Jason A. Gottlieb: And the structure of credit opportunities gives Brian more flexibility to invest in smaller and less liquid issuances, another area where there is more potential for absolute return and output. As Eric has previously discussed, we have picked up the pace and volume of marketing credit opportunities and certain other alternative strategies. We are seeing progress in terms of more and higher-quality engagement with prospects and clients. We still have a lot of work to do in order to better market alternative strategies, but we are seeing signs that our investments are paying off.
Jason: As Eric as previously discussed we have picked up the pace and volume of marketing credit opportunities and certain other alternative strategies.
Jason: We are seeing progress in terms of more and higher quality engagement with prospects and clients.
We still have a lot of work to do in order to better market alternative strategies, but we are seeing signs that our investments are paying off.
Jason A. Gottlieb: We are extremely excited to continue to develop the credit franchise over the next few years. Turning to slide four, as Eric mentioned earlier, on April 1st, the high-income strategy became our 11th strategy with a track record of 10 years or more. We have five strategies with track records of over 20 years. The average tenure of the portfolio managers on these 11 strategies is 21 years. Furthermore, seven of these strategies continue to be managed by their founding portfolio managers.
Jason: We are extremely excited to continue to develop the credit franchise over the next decade.
Jason: Turning to slide four as Eric mentioned earlier on April 1st a high income strategy became our 11th strategy with a track record of 10 years or more.
Jason: We got five strategies with track records over 20 years.
The average tenure of the portfolio managers on these 11 strategies is 21 years.
Jason: Seven of these strategies continue to be managed by their founding portfolio to match.
Jason: These facts point can be attractiveness of our business model, our talent focus and our investments first culture.
Jason A. Gottlieb: These facts point to the effectiveness of our business model, our talent focus, and our investment-first culture. There is a wide spectrum of individuals, teams, strategies, asset classes, and time periods represented on this slide. However, there are, though, common themes.
Jason: The wide spectrum of individual.
Jason: Strategy asset classes and time periods represented on this slide there.
Jason: There are though common themes.
Jason A. Gottlieb: Outstanding and stable leadership over long periods, compelling absolute returns that we believe have generally met or exceeded client return expectations, significant alpha generation via differentiated investment philosophies, and profit. These KPIs over long periods are the metrics we care about the most. They indicate that we are attracting and retaining great talent, maintaining and evolving our investment platform, and compounding wealth for clients over long periods. Including our first fixed income strategy on this list, launched from scratch 10 years ago, gives us tremendous confidence that our platform can deliver across even broader ranges of asset classes and geographies going forward.
Jason: Outstanding and stable leadership over long periods.
Jason: Impelling absolute return that we believe have generally met or exceeded client return expectations.
Jason: And if he can alpha generation, you're differentiated investment philosophies and processes.
Jason: These kpis over long periods are the metrics that we care about the most.
Jason: They indicate that we are attracting and retaining great talent and maintaining and evolving our investment platform and compounding wealth clients over a long periods.
Jason: Including our first fixed income strategy on this one.
Jason: Born from scratch 10 years ago gives us tremendous confidence that our platform can to deliver an even broader range of asset classes and geographies going forward.
Speaker Change: Thank you James.
Eric Richard Colson: Thank you, Jason. Congratulations to Brian Krug and the credit team. The credit team is reminiscent of other successful outcomes we have had at Artisan Partners. Our growth team, founded in 1997 with a single strategy focused on us mid-cap growth, now invests globally and across market cap through four strategies launched over a span of 22 years that collectively manage over $41 billion. Our international value and global value teams manage over $70 billion in the aggregate, and we were born out of a team founded in 2002 with a strategy focused on non-U.S. value equity. Our global equity team manages over $14 billion and served as the launching pad for our 11th autonomous investment team, the international small mid team, which manages over $7 billion.
James: Congratulations, but Brian crude and their credit team.
James: The credit team is reminiscent of.
James: Other successful outcome, we have added or some partners.
Our growth team founded in 1997.
Ingalls strategy focus on U S mid cap growth equity now globally and across market cap.
James: Through four strategies, while I'm still very span of 22 years.
James: Flexibly manage over 41 billion.
James: Our international value and global value manage over $70 billion in the aggregate and were born out of 18 founded in 2002.
James: A strategy focused on non U S value at.
James: Our global equity team manages over $14 billion.
James: Served as a launching pad for our 11th.
James: Small mid team, which manages over 7 billion.
James: Building, an enduring investment franchises takes time.
Eric Richard Colson: Building enduring investment franchises takes time. It's a multi-decade process that requires a solid foundation of people, process, culture, and results. When those characteristics have come together, we have established durable, long-term, highly profitable businesses. Because our models and philosophy are geared towards talent and high-value-added investing in general, as opposed to any one type of individual or investment strategy, they've been able to methodically add investment talent, teams, asset classes, and strategies over time. Having added fixed income 10 years ago and our first alternative strategy seven years ago, in many respects, Artisan Partners as a firm is just getting started.
James: Decade process that requires a solid foundation of people process culture and results.
When those characteristics that come together, we have established a durable long term highly profitable businesses.
James: Because of our model and philosophy are geared towards talent and high value added investing and Jeff.
James: Any one type of individual we're investing strategy, we have been able to methodically add investment talent team asset classes and strategies over time.
James: Fixed income 10 years ago, and our first alternative strategies seven years ago in many respects artisan partners as a firm is just getting started.
Eric Richard Colson: We continue to align our distribution model with the progress we are making in broadening degrees of freedom for our investment talent and adding alternative strategies. While our business model has endured the test of time across asset classes. The evolving industry landscape has required us to evolve from being bought to selling a broader array of investment capacity. Patience and determination have served us well versus cutting corners and forcing out. As Jason said today, we have tremendous conviction in our ability to apply our model and philosophy to an even broader set of opportunities. We look forward to executing on those opportunities and continuing to perform for our clients. Our talent and our shareholders.
James: Continuing to align our distribution model with the progress we are making in broadening degrees of freedom for our investment talent.
James: D and alternative strategies.
James: While our business model has endured.
James: Time across asset classes.
James: Industry landscape as required us to evolve from being bought to selling a broader array of investment capacity.
And determination that served us well.
James: Cutting corners, and 14 outcomes as Jason said today, we'd have tremendous conviction in our ability to apply our model and philosophy to an even broader set of opportunities.
James: We look forward to executing on those opportunities.
James: We perform for our clients.
James: Our talent and our shareholders I will now turn it over to C. J to discuss our recent financial results.
Charles James Daley: An overview of financial results begins on slide seven. Asset Funding Management ended the March quarter at $160 billion, up 7% from the last quarter and up 16% from the March 2023 quarter. Investment returns contributed $10.8 billion to our AUM and core, and approximately 1.4 billion of those returns were in excess of benchmark. Net client cash outflows during the quarter were just over $500 million; net outflows and our equity strategies were partially offset by net inflows.
C. J: Thanks, Eric.
C. J: An overview of financial results begins on slide seven.
C. J: That's under management ended the March quarter at 160 billion, 7% from the last quarter.
C. J: 16% from the March 2023 quarter.
C. J: Investment returns contributed $10 8 billion for you over the quarter.
C. J: One 4 billion of those returns were in excess of benchmark returns.
C. J: Net client cash outflows during the quarter were just over 500 million.
C. J: Net outflows in our equity strategies were partially offset by net inflows in our fixed income.
Charles James Daley: partially offset by net influence in our
C. J: And alternative strategies.
Charles James Daley: For the quarter, the annualized organic outflow rate was 1%, an improvement from 3% in 2023. Average AUM for the quarter was up 10% sequentially and up 14% compared to the March 2023 quarter. Our complete gap and adjusted results are presented in our earnings room.
C. J: For the quarter annualized organic that floating rate was 1%.
C. J: Group at four 3% in 2023.
C. J: Average annualized for the quarter was up 10% sequentially and up <unk>.
C. J: 14% compared to the March 2023 quarter.
C. J: Our complete GAAP and adjusted results are presented in our earnings release.
Charles James Daley: Revenues in the quarter increased 6% compared to the previous quarter, but the increase was less than the increase in average AUM due to a decrease in performance fees recognized relative to the fourth quarter of 2023 and one less day in the March quarter. Compared to the March 2023 quarter, revenues were up 13% on higher average AUM. Our average recurring period for the quarter was 69 basis points, consistent with last quarter. The fee rate is down slightly from the March 2023 quarter, largely due to strategy mix and the tiered billing structure within many of our investment management agreements with clients. We're in a fee rate decline as assets under management grow.
C. J: Revenues in the quarter increased 6% compared to last quarter.
C. J: The increase was less than the increase in average due to a decrease in performance fees recognized relative to the fourth quarter of 2023.
C. J: One less day in the March quarter.
C. J: Compared to the March 2023 quarter revenues were up 13% on higher average AUR.
C. J: Our average recurring fee rate for the quarter was 69 basis points.
C. J: In the past quarter.
C. J: The fee rate is down slightly from the March 2023 quarter, largely due to strategy mix and the tiered structure within many of our investment management agreements with clients where in the fee rate decline as assets under management grew up.
Charles James Daley: We expect the recurring free rate to remain consistent for the last few quarters at 69 days. Adjusted operating expenses for the quarter increased 8% sequentially, primarily due to a $7 million increase in expenses that are front-loaded in the first quarter of each year.
C. J: We expect the retiring three rates remain consistent with the last few quarters at 69 basis points.
C. J: Adjusted operating expenses for the quarter increased 8% sequentially, primarily due to a $7 million increase in expenses.
Our frontloaded in the first quarter of each year.
Charles James Daley: Those include 401k matching contributions, health care costs, employer payroll taxes, and director compensation. Your return instead of compensation also increased in the quarter in line with higher revenue. During the quarter, we continue to invest in talent for our annual long-term incentive award. Over 85% of the awards were granted to investment professionals to align our key talent with clients and shareholders.
C. J: Those include four one K matching contributions health care costs employer payroll taxes and director compensation.
C. J: Short term incentive compensation also increased in the quarter in line with higher revenue.
During the quarter, we continued to believe that talent for our annual long term incentive award.
Speaker Change: All right. So in other words were granted two investment professionals to align our T talent with clients and shareholders.
Charles James Daley: The 2024 award consisted of $38 million of cash-based franchise capital awards and $21 million of restricted stock awards. Generally, 50% of the award is prorated over five years and the remaining 50% that's on or 18 months after a qualified retirement. A majority of the 2024 awards includes a new traditional retirement acceleration feature. This new provision eliminates the five-year time vesting requirement when CERTA recipients have a qualified retirement after having met an age plus years of service threshold of 70.
Speaker Change: The 2024 award consisted of $38 million of cash based franchise capital was $21 million restricted stock awards.
Speaker Change: Generally 50% of the reward that's pro rata over five years and the remaining 50% that's on for 18 months after qualified retired.
Speaker Change: The majority of the 2024 award.
Speaker Change: Traditional retirement acceleration feature.
Speaker Change: There's no provision eliminates the five year time vesting requirements.
Speaker Change: Cynthia qualified retirement after having met and age plus years of service threshold as Jonathan.
Charles James Daley: All other vesting conditions, including career vesting service and notice periods and callback provisions, remain. From a financial statement perspective, the new feature results in front-loaded expense for awards granted to employees who already meet the age plus years of service requirements. The cumulative amount of expense recorded over the entire vesting period remains the same. However, this feature added $2 million to long-term incentive compensation expense for the quarter, including the impact of this acceleration feature.
Speaker Change: All other vascular conditions, including career about foodservice and notice periods and claw back provisions remain.
Speaker Change: From a financial statement perspective, you'd feature results Frontloaded expense for awards granted to employees, who already the age plus years of service required.
Speaker Change: The cumulative amount of expense recorded over the entire investing pretty remains the same.
Speaker Change: The feature added $2 million to long term incentive compensation expense for the quarter.
Speaker Change: Clothing, the impact of this acceleration future long term incentive compensation expense, excluding mark to market impact will be approximately $17 million to $18 million for each of the remaining quarters. This year.
Charles James Daley: Long-term incentive compensation expense, excluding mark-to-market impact, will be approximately $17 to $18 million for each of the remaining quarters this year. Adjusted operating income increased 2% sequentially and 17% compared to last year's March quarter. Adjusted Debt Income for Adjusted Share declined 3% compared to the previous quarter and increased 19% compared to the March 2023 quarter. In calculating our non-GAAP measures, non-operating income includes only interest expense and interest income.
Speaker Change: Adjusted operating income increased 2% sequentially and 17% compared to last year's March quarter.
Speaker Change: Adjusted net income per adjusted share declined 3% compared to last quarter and increased 19% compared to the March 2023 quarter.
Speaker Change: In calculating our non-GAAP measures non operating income includes only interest expense and interest income.
Charles James Daley: Although the income generated on our seed investment adds to shareholder economics, we fully exclude these investment gains from our adjusted results in order to provide transparency to our core business operations. Moreover, our balance sheet remains strong. We currently have about $155 million of seed capital invested in our investment products with significant amounts of realizable capacity. As those products begin to scale, we will redeem the feed capital deployed in our new products, otherwise reinvested in the business, or return it to shareholders. In addition, our $100 million resolving credit facility remains unused.
Although the income generated on our seed investments adds to shareholder economics with full excluding these investment gains from our adjusted results in order to provide transparency into our core business operations.
Our balance sheet remains strong.
Speaker Change: Currently have about 155 million of seed capital invested and are investing products significant amounts of realizable capacity.
Speaker Change: As those products begin to scale, we will redeem the seed capital deployed in our new products, otherwise reinvested in the business or returned to shareholders.
Speaker Change: In addition, our $100 million revolving credit facility remains unused.
Speaker Change: We continue to return capital to shareholders on a consistent and predictable basis through quarterly cash dividend payments at year end special dividend.
Charles James Daley: We continue to return capital to shareholders on a consistent and predictable basis through quarterly cash dividend payments and a year-end special dividend. Consistent with our dividend policy, our board of directors declared a quarterly dividend of $0.61 per share with respect to the March 2024 quarter, which represents approximately 80% of the cash generated in the quarter. Cash generated in the quarter was reduced by $6.8 million to net subtle vesting of employees' restricted stocks and boards during the quarter. The repurchase shares were retired, and the number of shares outstanding was reduced. That concludes my prepared remarks. I will now turn the call back to the operator.
Speaker Change: Consistent with our dividend policy, our board of directors declared a quarterly dividend of 61 cents per share with respect to the March 2024 quarter, which represents approximately 80%.
Speaker Change: Cash generated in the quarter.
Speaker Change: Cash generated in the quarter was reduced by the $6 8 million.
Speaker Change: The vesting of employee restricted stock awards during the quarter.
Speaker Change: We repurchased shares were retired and reduce the number of shares outstanding.
Speaker Change: That concludes my prepared remarks, I will now turn the call back to the operator.
Ladies and gentlemen at this time well begin the question and answer session. Once again to ask a question you May Press Star and then one using a touchtone telephone to withdraw your question you May Press Star two.
Operator: Ladies and gentlemen, at this time, we'll begin the question and answer session. Once again, to ask a question, you may press star and then one on the touchtone telephone. To withdraw your questions, you may press star and two. Once again, we do ask that you please limit your questions to two in order to allow time for all. Once again, that is the star and then one to join the question queue. And our first question today comes from Bill Katz from TD Cowen. Please go ahead with your question.
Once again, we do ask that you. Please limit your questions to two in order to allow time for all questions.
Speaker Change: But again that is star and then wanted to join the question queue.
Speaker Change: And our first question today comes from Bill Katz from T. D. Cowen. Please go ahead with your question.
William Raymond Katz: Very much thank you for the prepared comments.
William Raymond Katz: Eric just as you continue to sort of migrate your platform can you talk about some of the success.
William Raymond Katz: Thank you very much. Thank you for the prepared comments.
William Raymond Katz: Platforms and growth of the teams respectively. How are you thinking about that against some of the bigger opportunities are in the space I guess fixed income replacement largely investment grade non investment grade is it sort of fits with where we're at with Brian's team, but maybe things like real assets getting into infrastructure or.
Eric Richard Colson: Eric, just as you continue to sort of migrate your platform and talk about some of these success platforms and growth of the teams, respectively, how are you thinking about that against some of the bigger opportunities in the space? I guess fixed income replacement, largely investment grade and non-investment grade, as it sort of fits with Brian's team, but maybe things like real assets getting into infrastructure or real estate or maybe even retail democratization as a distribution channel. I'm wondering if you could sort of update your thinking with us on sort of how you sort of see that mapping going forward.
William Raymond Katz: Real estate where or.
William Raymond Katz: Maybe even retail democratization as a distribution channel I Wonder if you could sort of update your thinking with us on sort of how you sort of see that mapping going forward.
Speaker Change: Yeah, certainly yeah as you know Bill we spent a lot of time, just looking at long term asset allocation and where the markets are going.
Eric Richard Colson: Yeah, certainly. As you know, Bill, we spent a lot of time just looking at long-term asset allocation and where the markets are going. You've seen a big pickup in the alternative space, and we've seen quite a bit of activity in the fixed income space. And, you know, we're very happy with how we've built out the credit team with Brian Krug, as we've made comments on the call. We think that...
Speaker Change: Seen a big pick up in the alternative space and we've seen quite a bit of activity and and the fixed income.
Speaker Change: And yeah, we were we're very happy with how we've built out the credit team with Brian Kruger is as we've made comments on the call we think that.
Speaker Change: The <unk> team on a balancing the non traditional fixed income and even with the global macro it gives a nice balance again with a high value added a longterm allocations for emerging markets debt, which we think.
Eric Richard Colson: The M-Sites team on balancing the non-traditional fixed income and even with the global macro gives a nice balance again with high value-added long-term allocations for emerging markets debt, which we think looks very, very strong in the next couple of years here, especially coming off of the big outflows in the last couple of years, which I think helps us enormously as we build towards our three-year track record. And as we look at other alternative allocations to real assets, infrastructure, and real estate, we see the allocations are very steady, a good allocation to core and core plus.
Speaker Change: Look very very strong in the next couple of years here, especially coming off of the big outflows.
Speaker Change: The last couple of years, which I think helps us enormously as we build towards our three year track record.
Speaker Change: And as we look at other alternative allocations to real assets infrastructure real estate, we'd see the allocations are very steady you look at the real estate market, where there's say.
Eric Richard Colson: And then you look into the value added and the opportunistic segments. It's very similar to how we entered other asset classes. So we continue to look at hard assets, real assets, real estate, and other alternative strategies. And with that, we're aligning some of our distribution to align with that. And we think that the proof case for the fixed income teams just demonstrates that we can broaden the firm more and more into different asset classes, as we've said over the years. We just have two really good proof statements now with the fixed income team.
Speaker Change: Good allocation to core and core plus and then you look into the value added and the opportunistic segments. Its very similar to how we entered other asset classes.
Speaker Change: So we continue to look at our hard assets real assets real estate and other alternative strategies.
Speaker Change: And with that we're aligning some of our distribution to marry with that and we think that the proof case of the fixed income teams just demonstrates that we can broaden the firm are more and more into different asset classes as way, but we've said over the years, we just have to really good proof statements now.
Speaker Change: But the fixed income teams.
Speaker Change: Great just a follow up as far as sort of staying the same Steve around flow opportunity are you spending a lot of time with us on credit and E M sites, which makes a ton of sense.
Eric Richard Colson: Great. Just a follow-up. I just want us to stay on the same theme around flow opportunity. You're spending a lot of time with us on credit and EM sites, which makes a ton of sense, uh... your performance inequities get a little bit bigger a little bit better all else being equal a quarter quarter but it's a big part of your uh... your platform today any sense of allocations in equities picking up uh... from here or is it still sort of a source of funds for other sectors uh... just everything else we're talking about is real estate uh... infrastructure etc thank you There's a couple of tippy points.
Speaker Change: The performance of that can we just get a little bit there's a little bit better all else being equal it quarter to quarter, but it's a big part of your your platform today any sense of allocations in equities picking up from here or is it still sort of a source of funds for other sectors I'm just.
Speaker Change: Everything else, we're talking about is real estate infrastructure et cetera. Thank you.
Speaker Change: There's a couple of tipping points in the in the equity one is.
Eric Richard Colson: There are a couple of tippy points in equity. One is, I think, high on a lot of people's allocations is emerging markets in aggregate. It's created some, uh... low relative return and absolute return, uh... to other equity categories. And there seems to be quite a bit of disruption in the allocation there, which we think brings money in motion. We like money in motion because then new opportunities arise, whether people get their emerging market allocation from, you know, direct exposure, as we've seen in the past, or to broader strategies, or incorporating it more and more into the global equity allocations and allowing teams to have higher emerging market exposures.
Speaker Change: I think high in a lot of People's allocation says emerging markets are in aggregate. It that's created some.
Low relative return an absolute return.
Speaker Change: The other equity categories, and there seems to be quite a bit of disruption in the allocation there which.
Speaker Change: We think bring some money in motion, we like money in motion because that new opportunities arise whether people will get their emerging market allocation from direct.
Speaker Change: Bose your as we've seen in the past or two broader.
Speaker Change: Strategies or incorporate in that more and more into the global equity allocations are allowing teams to have higher emerging market exposures and in all case that disruption.
Eric Richard Colson: And in all cases, that disruption creates money in motion and opportunity for us to compete with our high-quality products. And we clearly are seeing beyond the emerging markets into the value space. There's been quite a bit of movement into value equities, both global, international, and domestic across the board. And so I would say the emerging markets pipeline to value equities is showing some interesting inflection points.
Speaker Change: <unk> creates a money in motion an opportunity for us to compete at our with our high quality products and we clearly are seeing also beyond the emerging markets into the the value space.
Speaker Change: There's been quite a bit of movement into value equities, both the global international and domestic across the board and so I would say the emerging markets pipeline to the the value equity is is it's showing some interesting inflection points.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Alex <unk> from Goldman Sachs. Please go ahead with your question.
Alexander Blostein: Our next question comes from Alex Blostein from Goldman Sachs. Please go ahead with your question.
Speaker Change: Yeah.
Alexander Blostein: Hey, good afternoon, everybody. Thank you for the question as well. Maybe just to continue building on the fixed income discussion. Obviously, very nice progress in this business for you guys over the years, and I appreciate you, you know, re-highlighting that again. Can you talk about what the next five years in this business looks like since you guys launched together, you know, $11 billion in AUM or so over the last decade?
Alex: Hey, good afternoon, everybody. Thank you for the question as well maybe just to continue building on the fixed income discussion.
Alex: Obviously very nice progress in this business for you guys over the years and I. Appreciate you highlighting that again can you talk about what sort of the next five years in this business looks like you know since launching you guys gather you know $11 billion AUM was so over the last decade, how should we think about the path going forward and the sort of speed of inflows and maybe provide.
Alexander Blostein: How should we think about the path going forward and the sort of speed of inflows and maybe provide some details around what distribution platforms you guys are getting on now and how you are able to sort of build on this momentum?
Alex: Some details around what distribution platforms are you guys getting on now and how you are able to sort of build on this momentum.
Alex: Yeah.
Eric Richard Colson: Yeah, and on the fixed income side, it's You know, leveraging the success and brand of Brian Krug. Taking the high income strategy over the last 10 years has created an incredible proof statement for the institutional marketplace and the consultant.
Alex: On the fixed income side it's.
Alex: Leveraging the success in brand Oh, Brian Krug.
Alex: And.
Alex: Taking the high income strategy over the last 10 years has created an incredible proof statement out to the institutional marketplace and their consultants I think that really gives us two vectors off that one allowing us to.
Eric Richard Colson: I think that really gives us two vectors off that one, allowing us to go deeper into the alternative space, what you've seen with credit opportunities, and as Jason mentioned, the dislocation fund. We see the future growth of that strategy, or that franchise, heavily balancing into alternatives when you look at it from a revenue standpoint. And then secondly, the floating rate funds into the wealth space. So after establishing that franchise, and now there's really an ability to leverage into the high net worth wealth space with alternatives, as well as into some of the broader opportunities, broker dealer platforms with a floating rate.
Alex: Go deeper into the alternative space.
Alex: What you're seeing with credit opportunities and as Jason mentioned, the dislocation fund.
Alex: We see that the future growth of that strategy are or that that franchise balancing a heavily into alternatives. When you look at it from a revenue standpoint, and then <unk>.
Alex: Currently the floating rate fund into the wealth space. So after establishing that franchise and now there is a really an ability to leverage into the high net worth wealth space with alternatives as well into some of the broad.
Or.
Alex: Broker dealer platforms with a floating rate. So we think we have a very strong flow opportunities with the credit franchise.
Eric Richard Colson: So we think we have very strong flow opportunities with the credit franchise. And if you look at that credit franchise and translate it to the M-Sites team, we see a bit more capacity in the emerging market debt, given the breadth of securities. Both the emerging market debt opportunities and the emerging market local opportunities provide more capacity in those strategies than what we see in the high yield or high income strategies, as well as give us very strong growth in the alternative space with the global unconstrained and in the global macro space for alternatives.
Alex: And if you look at that credit franchise and translate it to the M sites team.
Alex: We see a bit more capacity in the emerging market debt.
Alex: Given the breadth of securities are both the emerging market debt opportunities in the emerging market local opportunities provide.
Alex: More capacity in those strategies and then what we see in the high yield or high income strategy as well as it gives us a very strong growth into the alternative space with the global unconstrained and in the global macro space for alternatives and that franchise will help us heavily.
Eric Richard Colson: And that franchise will help us heavily in non-U.S. with higher allocations of emerging market debt, mainly in Europe and the Middle East. And in the U.S., it provides us a really good opportunity, again, into the alternative space in the wealth space with the global unconstrained. So really an amplified growth opportunity with both fixed income.
Alex: And non U S with a higher allocations of emerging market debt mainly out of.
Europe, and the middle East and in the U S. It provides us a really good opportunity again into the alternative space in the wealth space with the global unconstrained. So.
Alex: Really amplified growth opportunity with both fixed income teams.
Alexander Blostein: Got it. Thank you. That's helpful. CJ, I want to just kind of clean up a question for you. You know, you provided a little bit of guidance on part of the expense base, but maybe talk about expenses holistically as you sort of think about the rest of the year on both the comp and, more importantly, non-comp side of things.
Speaker Change: Got it. Thank you that's helpful. TG, one just kind of clean up question for you I know you provided a little bit of guidance on part of the expense base, but maybe talk about expenses Holistically as you sort of think about the rest of the year on both the comp and more importantly, non com side of things.
Charles James Daley: Yeah. You know, this quarter we obviously had our seasonal expenses, as we do every year. So expenses were a bit elevated because of that, as well as the addition of the retirement clause. So combined, you know, we had about $8 million more than we did the previous quarter in comp. And then non-comp had some seasonal expenses of about a million related to our annual fees for our directors. So, you know, moving forward, our comp rate was a little elevated this quarter.
Speaker Change: Yeah.
TG: This quarter, we obviously had our seasonal expenses as we do every year.
TG: So so expenses were a bit elevated because of that as well as the addition of the retirement clause so combined.
TG: About $8 million more than we did the previous quarter and comp and then non comp had some seasonal expenses of about a million are related to our annual fees for our directors.
TG: So you know moving forward our comp rate was a little elevated.
Charles James Daley: We think that, you know, that should normalize to around 53 percent. Depending on, you know, what our variable expenses do, it'll go down as revenues go up, and it'll increase slightly as revenues go down because of the variable nature of, you know, most of our expenses. You know, there's no real change from the guidance that we provided last quarter, other than, you know, the seasonal expenses and the addition of the retirement clause.
TG: This quarter, we think we think that you know that should normalize to around 53%.
TG: No depending on you know what our variable expenses are due.
TG: It'll go down as as revenues go up and it'll increase slightly as revenues.
TG: You know go down because of the variable nature of our you know.
TG: Most of our expenses.
TG:
TG: You know Theres no really changed from the guidance that we provided last quarter.
TG: Other than you know the the seasonal expenses and the addition of the retirement clause.
Speaker Change: Very well thank you.
Alexander Blostein: Very well, thank you.
Speaker Change: And our next question comes from John Dunn from Evercore ISI. Please go ahead with your question.
John Joseph Dunn: And our next question comes from John Dunn from Evercore ISI. Please go ahead with your question.
John Joseph Dunn: Thank you. Maybe could you just take us through some of the puts and takes on the institutional channel in one shot and then maybe over the next few quarters?
John Joseph Dunn: Thank you maybe could you just take us through some of the puts and takes in the institutional channel.
John Joseph Dunn: <unk> and <unk> and then maybe over the next few quarters.
John Joseph Dunn: Yeah, John Historic the institutional channel.
Eric Richard Colson: Yeah, John, it's Eric, the institutional channel. What's fairly strong in this, in the first quarter, we see that in the funding of the fixed income allocations and in the alternative space, we have good funding in global unconstrained. So, I believe the institutional channel, both U.S. and non-U.S., is picking up for us. We're having quite a bit of dialogue, as I mentioned, in the fixed income space, as well as there is some disruption occurring in the emerging markets equity space as well. So both have been positive, and I think the look forward is quite a bit of dialogue with institutional buyers.
John Joseph Dunn: Well, it's fairly strong in this in the first quarter Mi you you see that in the funding of the fixed income allocations and.
John Joseph Dunn: In the alternative space, we have a good fundings in global unconstrained. So.
John Joseph Dunn: I believe the institutional channel.
John Joseph Dunn: And so both U S and non U S are picking up for us.
Or we're having quite a bit of dialogue and as I mentioned in the fixed income as well as there is some disruption occurring in the emerging markets our.
John Joseph Dunn: Equity space as well.
John Joseph Dunn: So, but both have been positive.
John Joseph Dunn: And I think the.
John Joseph Dunn: Look forward is.
John Joseph Dunn: Quite a bit of dialogue and with our institutional buyers.
Eric Richard Colson: Got it. And then maybe just to go back to the kind of shift, the shift in distribution strategy from, you know, products being bought to being sold in the wealth management channel. Maybe you could just talk about some of the first of all, how you think your progress is coming along and maybe some of the proof points we could watch to see and maybe just some specific things that you're doing to kind of bring it to life. Mr. Lynch, John, we have a...
Speaker Change: Got it and then maybe just to go back to the kind of shift shifting distribution strategy from you know product being brought to sold.
Speaker Change: In the wealth management channel could maybe you could just talk about some of the first of all how do you think your progress is coming along and maybe some of the proof points, we you'd watch to see maybe just some specific things that you're doing to kind of bring it to life.
Speaker Change: Yes, certainly John we have a a hybrid distribution model.
Eric Richard Colson: Yes, certainly, John. We have a hybrid distribution model, which means that we have dedicated distribution people inside of each of the autonomous investment teams, as well as distribution teams inside the central part of the firm that focus on the Wells Channel, Broker-Dealer Channel, and non-U.S., and these teams work together. And over the last couple of years, we've been pushing more emphasis on sales inside the central teams and a bit more of the servicing aspect into the autonomous investment teams, the dedicated distribution people in those teams.
Speaker Change: Which means that we have a dedicated distribution.
Speaker Change: People inside of each of the autonomous investment teams as well as our distribution teams inside the central part of the firm that focus on.
The wealth channel the broker dealer channel and non U S and these teams work together and over the last couple of years, we've been pushing more emphasis of sales inside the central teams and a bit more of a stub the servicing aspect.
Speaker Change: Into the autonomous investment teams the dedicated distribution people in those teams.
Eric Richard Colson: The activity has created more meetings and more opportunities. As a result, we see a higher volume and meeting rate across the organization, and we think that this adjustment will bear fruit going forward. And really, the logic behind the change was the number of strategies that we offer today versus a few years ago, as well as the complexity of the strategies required us to make this adjustment, and we're tracking the progress. And we still feel we're in the early to mid-innings of the transition, and I think it will be solidified in the next year.
Speaker Change: The activity has created a more meetings and more opportunities. So we see a higher volume and in meeting right across the organization and we think that this adjustment will will bear fruit going forward.
And really the logic behind that the change was the.
Speaker Change: The number of strategies that we offer today versus a few years ago as well as the complexity of the strategies.
Required us to make this adjustment and so where we're tracking the progress and still feel we're in the the.
Speaker Change: The early to mid innings of the transition and then Ah think it'll be solidified.
Speaker Change: And then next year.
John Joseph Dunn: And the final question today comes from Kenneth Lee from RBC Capital Markets. Please go ahead with your question.
Speaker Change: Thanks very much.
Speaker Change: And our final question today comes from Kenneth Lee from RBC Capital markets. Please go ahead with your question.
Kenneth S. Lee: Hey, thanks for taking my question. In terms of the new alternative credit strategies that you're introducing and have recently introduced, I wondered, in terms of demand and traction with new clients, is it going to be dependent upon the macro environment, the rate environment, or is that not really an important consideration at this point? Just wanted to get your thoughts around that. Thanks.
Kenneth S. Lee: Hey, Thanks for taking my question in terms of the new alternative credit strategies are that you're introducing in and have recently introduced.
Kenneth S. Lee: Wondering in terms of the demand and traction with new clients, it's going to be depend upon the macro environment the rate environment or is that not really a important consideration at this point just wanted to get your thoughts around that thanks.
Kenneth S. Lee: Hi, it's Jason I don't think it it requires much on on the macro side I think people always have a.
Jason A. Gottlieb: Hi, it's Jason. I don't think it requires much on the macro side. I think people always have an allocation that they're thinking about for unique and differentiated strategies when it comes to their alternative allocation. And so for us, it's more about just getting out and talking about the opportunity that we think presents itself. Several of our strategies are actually a little bit more in the all-weather category, thinking about glun, global unconstrained, where you tend to get an uncorrelated return to broader benchmarks. Moreover, you tend to get a low beta profile.
Jason: And allocation that they're thinking about two unique and differentiated strategies when it comes to their their false allocation and so for us it's more about just.
Jason: Just getting out and talking about the opportunity that we think presents itself.
Jason: Several of our strategies are are actually a little bit more in the all weather category thinking about Golan in global Unconstrained, where you know you you tend to get a.
Jason: And uncorrelated return to broader benchmarks, you tend to get a low beta profile.
Jason A. Gottlieb: So I think that's really responding. It's more about getting out and talking to clients about where it fits in a portfolio and how we think about it. And so we're pretty excited about the engagement on that front. But it goes back to some of the comments that Eric had made. It is about getting out and telling the story a little bit more.
Jason: So I think that's really resonating, it's more about getting out and talking to.
Jason: Clients about where it fits in our in our portfolio and how we think about it.
And so we're.
We're pretty excited about the the engagement on that front, but it you know it goes back to some of the comments that Eric made its it is about getting out telling the story a little bit more and you know it has been resonating with clients. There there's some strategies that have.
Jason A. Gottlieb: And it has been resonating with clients. There are some strategies that have, you know, a little bit more seasoning to occur before we think we'll see that big inflection thinking again about global unconstrained where, you know, we just passed our, I believe it's our two year anniversary. And as you know, people tend to look for three years.
Jason: You know a little bit more seasoning two to occur before we think we'll see that big inflection thinking again about global unconstrained Ware.
Jason: We just passed our I believe its our two year anniversary a and as you know as you know people tend to look for three years. So that that's a that's a big one.
Jason A. Gottlieb: So that that's a big one. You know, we're very, very excited about the dislocation strategy and the race that we had there. I think that's testament to Brian and his brand, and the uptake was quite strong. And you know, the credit opportunities strategy speaks for itself. I think people in general are very excited about credit, more broadly with where rates are today and where they appear to be in the future, at a higher level.
Jason: We're very very excited about the dislocation strategy and the raise that we have there I think that's a testament to Bryan his brand.
Jason: And the uptake was quite strong and you know the credit opportunity strategy speaks for itself I think people in general are very <unk>.
Jason: Cited about credit more broadly with where rates are today and it appears to be in the future.
Jason: At a higher level and you know, Brian being able to capture those dislocations on a more of a industrial our sectorial basis in something like credit opportunities is also quite compelling. So we feel like we're pretty well positioned across all three when it comes to the city of credit platform.
Jason A. Gottlieb: And, you know, Brian being able to capture those dislocations on a more of an industrial or sectoral basis through something like credit opportunities is also quite compelling. So we feel like we're pretty well positioned across all three when it comes to the credit platform.
Kenneth S. Lee: Great. Very helpful there. That's all I had. Thanks again.
Great very helpful. That's all I had thanks again.
Yes.
Speaker Change: And ladies and gentlemen, with that we will be concluding today's question and answer session as well as today's presentation. We thank everyone for joining you may now disconnect your lines.
Operator: And ladies and gentlemen, with that, we'll be concluding today's question and answer session as well as today's presentation. We thank everyone for joining us. You may now disconnect your line.
Speaker Change: Yeah.