Q1 2024 BrightSphere Investment Group Inc Earnings Call
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the BrightSphere Investment Group earnings conference call and webcast for the first quarter of 2024. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question and answer session. To be added to the queue, please press the star followed by one at any time during the call. If you need to reach an operator, please press the star followed by zero.
Ladies and gentlemen, thank you for standing by welcome to the Bright sphere investment Group earnings Conference call and webcast for the first quarter 2024.
Operator: During the call all participants will be in a listen only mode. After the presentation. We will conduct a question and answer session to be added to the queue. Please press the star followed by one at any time during the call if you need to reach an operator.
Operator: <unk> Breakfast Star followed by zero. Please note that this call is being recorded today Thursday may 2nd 'twenty 'twenty four at 11 o'clock a M eastern time.
Operator: Please note that this call is being recorded today, Thursday, May 2nd, 2024 at 11 a.m. Eastern time. I would now like to turn the meeting over to Melody Huang, SVP, Director of Finance and Investor Relations. Please go ahead, Melody.
Melody Huang: I'd now like to turn the meeting over to melody Wall S. V. P director of Finance and Investor Relations. Please go ahead melody.
Melody Huang: Good morning, and welcome to BrightSphere's conference call to discuss our results for the first quarter ended March 31st, 2024. Before we get started, please know that we may make forward-looking statements about our business and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. Additional information regarding these risks and uncertainties appears in our FEC filings, including the Form 8K filed today containing the earnings release and our 2023 Form 10K.
Melody Huang: Good morning, and welcome to break first conference call to discuss our results for the first quarter ended March 31st 2024.
Melody Huang: Before we get started.
Melody Huang: Please note that we may make forward looking statements about our business and financial performance.
Melody Huang: Each forward looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected.
Melody Huang: Additional information regarding this risk and uncertainties appears in our SEC filings.
Melody Huang: Clothing, the form 8-K filed today containing our earnings release, and our 2023 Form 10-K.
Melody Huang: Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update them as a result of new information or future events. We may also reference certain non-GAAP financial measures; information about any non-GAAP measures referenced, including the reconciliation of those measures to gap measures, can be found on our website, along with the slides that we will use as part of today's discussion.
Melody Huang: Any forward looking statements that we make on this call are based on assumptions as of today.
Melody Huang: And we undertake no obligation to update them as a result of new information or future events.
Melody Huang: We may also reference certain non-GAAP financial measures information about any non-GAAP measures referenced including a reconciliation of those measures to GAAP measures.
Melody Huang: Can be found on our website.
Melody Huang: Along with the slides that we'll use as part of today's discussion.
Melody Huang: Finally, nothing herein shall be deemed to be an offer or solicitation to buy any investment product. Suren Rana, our President and Chief Executive Officer, will lead the call. And now, I'm pleased to turn the call over to Suresh.
Melody Huang: Finally, nothing herein shall be deemed to be an offer or solicitation to buy any investment products.
Suresh: So it doesn't render our president and Chief Executive Officer will lead the call.
Suresh: Now I'm pleased to turn the call over to Sir.
Suresh: Thank you Valerie good morning, everyone.
Suren S. Rana: Thank you, Melody. Good morning, everyone, and thanks for joining us today. As usual, I'll cover some of the main highlights on slide five of the deck in my initial remarks, and then we can jump to Q&A. For the first quarter of 2024, the reported E&I per share was 44 cents, compared to $0.28 in the first quarter of 2023 and 77 cents in the fourth quarter of 2020. The 57% increase in E&I per share compared to the year-ago quarter is primarily driven by increasing management fee revenue due to higher AUM from the market appreciation that we saw over the last 12 months. Our U.S. assets are now 110 billion, six and a half percent higher than what we had at the end of 2023.
Suresh: Thanks for joining us today.
Suren S. Rana: Our EPS also benefited from the share buyback that we started in December 2020, and we have now bought back approximately 10% of our outstanding shares. Our E&I increase versus a year ago quarter was 48% compared to the 57% increase in EPS that I mentioned earlier. However, compared to the fourth quarter of 2023, ENI and EPS are lower. And that decline was driven by seasonality and timing of performance fees, as the majority of our performance fee is typically earned in the fourth quarter.
Suren S. Rana: As usual I'll cover some of the main highlights on slide five of the deck and my initial remarks, and then we can jump to Q&A.
Suren S. Rana: For the first quarter of 2024.
Suren S. Rana: Ported eni per share of 44.
Suren S. Rana: Compared to 28 and the <unk>.
Suren S. Rana: First quarter of 2023.
Suren S. Rana: And 77 in the fourth quarter of 2020 suites.
Suren S. Rana: The 57% increase in Eni per share.
Suren S. Rana: Prior to the year ago quarter.
Suren S. Rana: Merrily driven by increase in management fee revenue.
Suren S. Rana: Higher AUR from the market appreciation, but we saw over the last 12 months.
Speaker Change: How are you right now other than $10 billion.
Suren S. Rana: 5% higher than what we had at the end of 2023.
Suren S. Rana: Our EPS also benefited from the share buyback that we started in December 'twenty, two and sweet.
Suren S. Rana: And we have now bought back approximately 10% of our outstanding shares.
Suren S. Rana: Our eni increased versus a year ago quarter.
Suren S. Rana: 48% compared to the 57% increase in EPS.
Suren S. Rana: And earlier.
Suren S. Rana: Compared to the fourth quarter and up 2023.
Suren S. Rana: And EPS are lower.
Suren S. Rana: And that decline was driven by seasonality and timing of performance fee as the majority of our performance fees typically earned in the fourth quarter.
Suren S. Rana: Akalian's investment performance remains strong. As of March 31, 2024, 83%, 91%, and 93% of Acadian strategies by revenue outperformed their respective benchmarks across three, five, and 10-year periods. Net client cash flow for the quarter was $0.4 billion, as outflows from managed volatility and some other strategies were offset by inflows in other areas. Our growth initiatives are continuing to progress on plan. Octavian's Equity Alternatives Platform, created in Q4 of 22, continues to build a strong track record of outperformance. Italian Systematic Credit Platform's first strategy, U.S. High Yield Strategy, that was ceded in November 2023, has also started building a good track record.
Suren S. Rana: Okay investment performance remains strong.
Suren S. Rana: As of March 31, 2024.
Suren S. Rana: 83%, 91% and 93% of our Canadian strategies by revenue.
Suren S. Rana: Outperformed their respective benchmarks across three five and 10 year periods.
Suren S. Rana: Net client cash flows for the quarter was <unk> 4 billion.
Suren S. Rana: As outflows from managed volatility and some other strategies were offset by inflows in other areas.
Suren S. Rana: Our growth initiatives are continuing to progress on plan.
Suren S. Rana: Our Canadian equity alternatives platform.
Suren S. Rana: In Q4 of 22 continues to build a strong track record of outperformance.
Speaker Change: Okay Tien systematic credit platforms first strategy how are you.
Suren S. Rana: You have a strategy.
Suren S. Rana: We'll see that in November 2023.
Suren S. Rana: <unk> also started building a good track record.
Suren S. Rana: And in April of 2024, we also seeded the credit platform's second strategy, the global high-yield strategy, with another $15 million of seed capital, and that strategy will now start to build a track record. Turning to capital management, we repurchased 3.5 million shares, approximately 9% of our outstanding shares, in the first quarter of 2024 for approximately $74 million. We had a cash balance of $102 million as of March
Suren S. Rana: And in April of 'twenty 'twenty four we also stated that credit platforms second strategy global high yield strategy with another $15 million of seed capital and that strategy will now start to build the track record.
Suren S. Rana: Turning to capital management, we repurchased three 5 million shares.
Suren S. Rana: 9% of our outstanding shares in the first quarter of 2024.
Suren S. Rana: Approximately $74 million.
Suren S. Rana: We had a cash balance of $108 million as of March 31, 24.
Suren S. Rana: During the first quarter of 2024, Acadian drew down on the revolving credit facility and ended the quarter with an outstanding amount of $73 million on that facility. As we've discussed in prior years, this revolving facility is at the operating level and is repaid from cash from operations at Acadian, not from our corporate cash balance. Acadian draws on the facility at the beginning of the year for first quarter seasonal needs, mainly to pay the prior year's annual bonus.
Suren S. Rana: During the first quarter of 2024, Acadian go down on the revolving credit facility.
Suren S. Rana: In the quarter with an outstanding amount of $73 million.
Suren S. Rana: That facility.
Suren S. Rana: As we have discussed in prior years. So that's the.
Suren S. Rana: Revolving facility is at the Canadian operating levels.
Suren S. Rana: And is repaid from cash from operations at Acadian.
Suren S. Rana: Not from our corporate cash balance.
Suren S. Rana: <unk> draws on that facility at the beginning of the year.
Suren S. Rana: First quarter seasonality.
Suren S. Rana: Mainly to pay prior year annual bonuses.
Suren S. Rana: The facility has been paid down fully by year end.
Suren S. Rana: The cash generated from the operations.
Suren S. Rana: We expect this year to be no different.
Suren S. Rana: And the facility is then paid down fully by year-end from the cash generated from the operation. We expect this year to be no different. I'd like to close my initial remarks by reiterating that we remain focused on maximizing shareholder value and will continue using our free cash flow to support organic growth and to buy back our shares. I'll now turn the call back to the operator, and I'm happy to answer questions at this time.
Suren S. Rana: I'd like to close my initial remarks with reiterating that we remained focused on maximizing shareholder value.
Suren S. Rana: And we will continue using our free cash flow to support organic growth.
Suren S. Rana: And to buyback our shares.
Suren S. Rana: I'll now turn the call back to the operator.
Speaker Change: Happy to answer questions at this point.
Operator: The questioner should lift their phone receiver and press star followed by the number 1 on their telephone keypad. To cancel a question, please press star 1 again. Please hold for a brief moment while we compile the Q&A roster. Your first question comes from the line of Glenn Skor from Evercore. Please go ahead. The question is from Glenn Skor.
Suren S. Rana: This question should lift their phone receiver and press star followed by the number one on the telephone keypad.
Operator: Cancel a question. Please press star one again, please hold for a brief moment, while we compile the Q&A roster.
Glenn Skor: Your first question comes from the line of Glenn score from Evercore. Please go ahead.
Glenn Skor: The question from Glenn score.
Operator: Your line is now open.
Glenn Skor: Your line is now open.
Operator: Operator, perhaps we could move to the next question and then circle back. Your next question comes from the line of Michael Cyprys. Please go ahead.
Speaker Change: Operator, perhaps a good move to the next question circle back.
Operator: What woodland later your next question comes from the line of Michael Cyprus. Please go ahead.
Michael J. Cyprys: Just curious, any additional color you can give on cash usage and how we should think about it in the year ahead? What's the minimum level of cash that you feel like you can run with? And also, how should we think about the use of excess capital?
Michael J. Cyprys: Just curious any additional color you can give on cash usage and how we should think about it in the year ahead.
Michael J. Cyprys: What's the minimum level of cash that you feel like you can run with and also how should we think about use of excess capital. Thanks.
Michael J. Cyprys: Thanks.
Suren S. Rana: Yeah, thank you. Like I said, we have about 100, a little more than 100 million currently at the end of March. And we are mostly pretty close to done with the 100 million authorization we had previously. We have about 15 million left on the authorization. So I guess it'd be okay.
Michael J. Cyprys: Yeah. Thank you hi, guys.
Suren S. Rana: We have about 100 that is more than 100 million currently at the end of March.
Suren S. Rana: And we are mostly almost pretty close to done with 100 million authorization, we had previously.
Suren S. Rana: We have about $15 million left on the authorization.
Suren S. Rana: So I guess it would be just.
Suren S. Rana: Go through the $100 million. Yeah, we think about $25 million of operating cash that we'd like to keep as a minimum. There's the $15 million left on the buyback, so that's 40. I mentioned earlier that we seeded $15 million for our second strategy on our credit platform for the global high-yield strategy. So that's another $15 million that's... $55 million. So I think we're left with about $40 million or so from a use perspective.
Suren S. Rana: Go through the 100 million, yet, we think about 25 million of operating cash.
Suren S. Rana: I'd like to keep the minimum.
Suren S. Rana: The $15 million left.
Suren S. Rana: On the buybacks so that's 40.
Suren S. Rana: I mentioned earlier that we eat at $15 million.
Suren S. Rana: Our second strategy on the.
Suren S. Rana: On a credit platform for the global high yield strategy.
Suren S. Rana: That's another 15 million.
Suren S. Rana: 55 million. So I think we've got we're left with about $40 million or so from a used perspective then.
Suren S. Rana: And we'll look to buybacks. We also would love to see some more products on the systematic credit platform, which we would target in the fourth quarter to feed our investment grade. But will also generate more cash in the interim, and we'll try to recycle some existing SEDAs as well. So in general, I guess those are the round numbers, and we add more cash, but it will be used for buybacks and seeding purposes.
Suren S. Rana: Well look we'll love to buybacks, we also would love to seed.
Suren S. Rana: Some more products on the systematic credit platform.
Suren S. Rana: We would target.
Suren S. Rana: Fourth quarter to feed our investment grade strap.
Suren S. Rana: Strategies, both to the U S and global strategies.
Suren S. Rana: But it will also generate more cash in the interim and what we've tried to recycle some existing theater as well.
Suren S. Rana: So in general I guess now that those are the round numbers and we add more fashion, but it will be used for buybacks and seeding purposes.
Michael J. Cyprys: Great, thanks so much. And maybe as a follow-up, just curious about your thoughts on pursuing something more programmatic in terms of buybacks rather than opportunistic. Thanks.
Speaker Change: Great. Thanks, so much and maybe as a follow up just curious your thoughts on pursuing something more programmatic in terms of buybacks rather than opportunistic.
Suren S. Rana: Yeah, currently, we are leaning in favor of opportunistic, the reason being that it gives us more flexibility in the timing of seeding as well as benefits from the movements in the market. And there's not a large amount now that would necessitate anything programmatic, so we feel comfortable with the opportunistic approach.
Speaker Change: Yeah. Thank you yeah currently we are.
Suren S. Rana: Leaning in favor of opportunistic.
Suren S. Rana: The reason being that gives us more flexibility in the timing.
Suren S. Rana: Seating as well.
Suren S. Rana: And then also to benefit from the.
Suren S. Rana: The movement in the market and it is not a lot it's not a large amount now.
Suren S. Rana: That would necessitate anything programmatic.
Suren S. Rana: We feel comfortable with the opportunistic approach for now.
Speaker Change: Great. Thanks, so much.
Operator: Your next question comes from the line of John Dunn from Evercore. Please go ahead. Thank you.
Speaker Change: Your next question comes from the line of John John Dunn from Evercore. Please go ahead.
John Joseph Dunn: Thank you. Could you maybe talk about some of the other strategic areas that are inflowing that are blunting the outflows from ManageVal? And then separately, what type of environment do we need to get to where we could see less of a drag from ManageVal?
John Joseph Dunn: Thank you could you maybe talk about some of the other strategic areas that are inflows net or Glen thing the outflows outflows from managed well and then separately.
John Joseph Dunn: What type of environment do we need to get to where we could see less of a drag from manage about.
Speaker Change: Yes, Thanks John.
Suren S. Rana: Thank you, John. We are seeing good sales across most of our strategies outside of the managed wall. And I would say there's a little bit of a slope. [inaudible] strategies and different types of niche strategies, such as small cap strategies. We're also seeing demand for variants of strategies, such as extension strategies, where we go a little bit long and short, 130-30 strategies. And we have enhanced versions where they go close to the benchmark with a smaller tracking error.
John Joseph Dunn: We are seeing a good sales across most of our strategies outside of managed vol.
Suren S. Rana: And I would say there's a.
Suren S. Rana: Little bit of a slow.
Suren S. Rana: Slow down on the emerging market strategy as well.
John: Given that those markets are the index itself hasn't done very well in recent years compared to the U S market.
Suren S. Rana: But we saw good sales in our global equity strategy.
Suren S. Rana: <unk> non U S strategies.
Suren S. Rana: And different types of niche strategies, such as small cap.
Suren S. Rana: Strategies.
Suren S. Rana: We're also seeing demand from.
Suren S. Rana: Our variance of strategy such as the extension strategies, where we.
Suren S. Rana: Now ill go a little bit long and short 130 30 strategies.
Suren S. Rana: And we have enhanced versions.
Suren S. Rana: Where they.
Suren S. Rana: They go close to the benchmark with a smaller trucking out of them.
Suren S. Rana: And then there's some ESG as well. So it's a pretty good cross-section of strategies where we see sales and where we see pipeline building up. And then we are seeing the outflows from managed volatility and a little slowdown in emerging markets. I guess an answer to the last part of your question on the environment.
Suren S. Rana: And then there are some ESG as well so it's pretty a pretty pretty good cross section of strategies, where we see sales and while we see pipeline building up.
Suren S. Rana: And then we are seeing the outflows from managed vol.
Suren S. Rana: And a little slowdown in emerging markets I guess, an environment to the last part of your question.
Suren S. Rana: On the environment managed vol does well when Oh.
Suren S. Rana: Managed vol does well when... When beta is not running up too much, I guess when there's more of a fair risk-return environment, and it does well over longer periods, in the sense that Academic studies and statistics will tell you that over a longer period, 10-year, 15-year period, low beta securities do just as well as high beta, if not better. And that generally holds out to be true. But in the interim, whenever there's a risk in the environment, beta, of course, gets rewarded.
Suren S. Rana: One beta is not running up to a much I guess when there is more of a fair risk return.
Suren S. Rana: And Warren mens and it does well over longer periods.
Suren S. Rana: And the things that.
Suren S. Rana: The academic studies and statistics are Italians that over a longer period 10 year 15 year period.
Suren S. Rana: Now the low beta securities do just as well as high beta if not better.
Suren S. Rana: That generally hold ought to be true.
Suren S. Rana: But in the interim and whenever.
Suren S. Rana: There is a risk on environment.
Suren S. Rana: Beta of course gets rewarded.
Suren S. Rana: So I guess in more of a risk-off environment or a more regular environment over a longer period, those strategies do well. But we haven't had that for a while. For the last several years, maybe almost 10 years now, it's been a beta-rewarding market. So that's not been an ideal environment for managed wealth.
Speaker Change: So I guess.
Suren S. Rana: More of a risk off environment or more regular environment over a longer period, those strategies do well, but we haven't had that in a while over last several years, maybe almost 10 years now.
Suren S. Rana: It's been a bit a rewarding market.
Suren S. Rana: So that's not been an ideal environment for Matt as well.
John Joseph Dunn: Got it. And then could you give us kind of a characterization of the institutional pipeline, you know, where things are in it, as far as early or late, and then anything chunky on the institutional side, you have a line of sight that might be redeeming in the next couple quarters? You had a...
Speaker Change: Got it and then could you give us kind of a characterization of the institutional pipeline.
John Joseph Dunn: Yes.
John Joseph Dunn: Where things are in it as far as earlier late and then anything chunky in the institutional side you have line of sight that might be redeeming in the next couple of quarters.
Suren S. Rana: Yeah, the pipeline is good. It's in line with what I described, that it's a good cross section that we like to see across different types of strategies, you know, manage while being notably absent. Emerging markets is less than we would like. The investment performance is stellar, and Emerging Markets, but client interest is a little bit less right now because for several years the emerging market index has lagged. The U.S., in particular, but also developed markets in the West.
Speaker Change: Yeah. The pipeline is good it's in line of what I described that a good cross section that wed like to see across different types of strategy.
Suren S. Rana: You don't know.
Suren S. Rana: Managed vol being notably absent.
Suren S. Rana: Emerging markets is less than what we would like the investment performance and the stellar.
Suren S. Rana: In emerging markets, but the client interest is a little bit less right now.
Suren S. Rana: For several years the emerging market index has lagged.
Suren S. Rana: <unk> in particular, but also.
Suren S. Rana: Developed markets in the west.
Suren S. Rana: But otherwise, other than that, it's a pretty good cross-section and across stages as well, early stage, mid-stage, and later stages that are yet to be funded. But yeah, you said it right that on the outflow side, we have pressure from managed volatility, and there are always episodic things that happen with clients reallocating to other things. One thing that we've seen in the high-rate environment is a continued trend of de-risking, particularly by pension plans, where interest rates are now high enough that they can de-risk from equities and allocate more to fixed income.
Suren S. Rana: But otherwise other than that it's a it's a pretty good cross section.
Suren S. Rana: And across stages as well early stage mid stage and and one.
Suren S. Rana: Stages that are yet to be funded by <unk>.
Suren S. Rana: Instead, it right that there are on the on the outflow side the half pressure from managed volatility.
Suren S. Rana: And there are always episodic thing.
Suren S. Rana: That happened with clients reallocating two other things.
Suren S. Rana: One thing that we've seen with the high high rate environment is a continued trend.
Suren S. Rana: Derisking, particularly by pension plan.
Suren S. Rana: Where the interest rates now are high enough that that they can derisk from equity then and allocate more to fixed income.
Suren S. Rana: So those allocation decisions happen from time to time. [inaudible] over the next few quarters, but any given quarter, we might see more of these things happening coincidentally in one quarter where we may not come out flat. But these are the trends, and that's specifically why we're excited about our fixed income, the Systematic Credit Initiative, because then we can also be a beneficiary of the real estate trend that we see.
Suren S. Rana: So that those those allocation decisions happen from time to time.
Suren S. Rana: Where we're seeing that and people move from one strategies do the other from time to time.
Suren S. Rana: So it's a little bit hard to tell but I guess from a trend perspective, the derisking and allocation to fixed income.
Suren S. Rana: We see that more often so when you sort of look at all of that and that we expect to be.
Suren S. Rana: Probably flattish.
Suren S. Rana: Over next few quarters, but any given quarter, we may see.
Suren S. Rana: No more of these things happening coincidentally in one quarter right or we may not come out flat.
Suren S. Rana: But these are the trends that and Thats, specifically why we're excited about our fixed income that systematic credit initiative.
Suren S. Rana: Because then we can also be a beneficiary of the of the Derisking trend that we see.
Speaker Change: Thank you.
Suren S. Rana: Okay.
Operator: As a reminder, please press star 1 on your telephone keypad to ask a question. And the next question comes from the line of Kenneth Lee of RBC Capital Markets. Please go ahead.
Suren S. Rana: As a reminder, please press star one on your telephone keypad to ask a question and the next question comes from the line of Kenneth Lee of RBC Capital markets. Please go ahead.
Kenneth S. Lee: Hey, good morning. Thanks for taking my question. I wonder if you could share some thoughts around potential EBITDA generation going forward and perhaps provide any color around your expense outlook and whether you could see some benefit from operating leverage as markets potentially... Thanks.
Kenneth S. Lee: Hey, good morning, Thanks for taking my question.
Kenneth S. Lee: I Wonder if you could share some thoughts around potential EBITDA generation going forward.
Kenneth S. Lee: Perhaps provide any color around your expense outlook.
Kenneth S. Lee: Whether you could see some benefit from operating leverage as markets potentially continue to appreciate it. Thanks.
Suren S. Rana: Yeah, that's a good question. And if you look at essentially, this quarter versus the year-ago quarter, we saw the benefit of the operating level. [inaudible] But at the E&I level, E&I is up 48% versus a year ago, and then we... juiced it a little bit more with our buybacks. So then the EPS is up 57%.
Kenneth S. Lee: Hi, Ken.
Kenneth S. Lee: Yes.
Suren S. Rana: Good question and if you looked at it essentially.
Suren S. Rana: This quarter.
Suren S. Rana: Versus the year ago quarter, we saw we saw the benefit of the operating leverage.
Suren S. Rana: As the market appreciated.
Suren S. Rana: Compared to the year ago quarter.
Suren S. Rana: AUM is up by about 12%.
Suren S. Rana: As a result, the management fee was up by about that much about 12, 13%.
Suren S. Rana: But on the.
Suren S. Rana: The Eni level, the Eni is up.
Suren S. Rana: 48% versus a year ago.
Suren S. Rana: And then we are.
Suren S. Rana: Joe stayed a little bit more with our buybacks, but then the EPS is up 57%. So that's primarily because of the benefit of the operating leverage.
Kenneth S. Lee: So that's primarily because of the benefit of operating leverage and Continued Expense Discipline. Going forward, as the markets continue to appreciate, we should see that benefit with revenue going up, and we're generally trying to be disciplined on expenses. Over the last few years, we have invested a lot. In making our infrastructure more scalable, we have some initiatives in outsourcing that provide us with more scalability without having to add a lot more to the cost.
Kenneth S. Lee: And continued expense disciplines.
Kenneth S. Lee: We sort of without doubt.
Kenneth S. Lee: Go forward against the market has continued to appreciate our wishes.
Kenneth S. Lee: We should see that benefit.
Kenneth S. Lee: With that revenue.
Kenneth S. Lee: Going up.
Kenneth S. Lee: And.
Kenneth S. Lee: And we're generally.
Kenneth S. Lee: Trying to hold dog being disciplined on the expenses over the last few years, we we invested a lot in.
Kenneth S. Lee: In making our infrastructure more scalable we had some initial deb done outsourcing.
Kenneth S. Lee: That provides us more scalability without having to.
Kenneth S. Lee: I had a lot more to the cost.
Kenneth S. Lee: We dealt with the pressures from inflation, particularly on data costs and IT costs, that should be abating now. And we've built on these new initiatives that are more or less at full run right now. So we see a much less increase in operating expenses going forward, being that we invested in scalability in the past few years. As the markets go up, we should see the benefit of operating leverage. Does that answer your question, John? Yes, it sure does. Very helpful people there.
Kenneth S. Lee: We dealt with the pressures from inflation, particularly on the data costs and it costs.
John: That should be abating down.
Speaker Change: We built up on these new initiatives that are more or less.
Speaker Change: At full run rate now.
Speaker Change: So we see a much less increase on the operating operating expenses going forward.
Kenneth S. Lee: Being that we invested in scalability in the past few years.
Kenneth S. Lee: The markets go up we should see the benefit of operating leverage.
Kenneth S. Lee: Does that answer your question Brian.
Kenneth S. Lee: Yep, it sure does. Very helpful there, and that's all I had. Thanks again.
Speaker Change: Yes, it sure does very helpful and Thats all I had thanks again.
Speaker Change: Thank you.
Operator: This concludes our question and answer session. I'd like to turn the conference call back over to Suren Rana. Thank you, Operator. Thank you, everyone, for joining us this morning. We look forward to... engaging with you in the coming months and quarters. Thanks for watching!
Kenneth S. Lee: This concludes our question and answer session I would like to turn the conference call back over to Suren Rana.
Suren S. Rana: Thank you, Operator. Thank you, everyone, for joining us this morning. We look forward to... engaging with you in the coming months and quarters.
Suren S. Rana: Thank you operator, thank you everyone for joining us this morning.
Suren S. Rana: Look forward to.
Suren S. Rana: Engaging with you in the coming.
Suren S. Rana: In the months and quarters.
Suren S. Rana: Yes.
Suren S. Rana: [music].
Suren S. Rana: Yeah.
Suren S. Rana: [music].
Suren S. Rana: Yes.
Suren S. Rana: Yes.
Suren S. Rana: Okay.
Suren S. Rana: Okay.
Suren S. Rana: [music].
Suren S. Rana: Okay.
Suren S. Rana: [music].
Speaker Change: Thank you.
Suren S. Rana: [music].
Operator: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
Operator: Yes.
Operator: Yeah.
Operator: Okay.
Operator: [music].