Q4 2024 StepStone Group LP Earnings Call
Okay.
Thank you for standing by and welcome to steps down groups fiscal fourth quarter 'twenty to 'twenty four earnings conference call.
At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.
To ask a question during the session you will need to press star one one on your telephone to remove yourself from the queue. You May press star one again.
I would now like to hand, the call over to Seth Weiss head of Investor Relations. Please go ahead.
Thank you and good afternoon, joining me on today's call are Scott Hart, Chief Executive Officer, Jason Lang, President and co Chief Operating Officer, Mike Mccabe head of strategy and David Clark Chief Financial Officer during.
Speaker Change: During our prepared remarks, we will be referring to a presentation, which is available on our investor relations website at shareholders that steps down group dotcom.
Before we begin I'd like to remind everyone that this conference call as well as the presentation contains certain forward looking statements regarding the company's expected operating and financial performance for future periods.
Forward looking statements reflect management's current plans estimates and expectations and are inherently uncertain and are subject to various risks uncertainties and assumptions.
Actual results for future periods may differ materially from those expressed or implied by these forward looking statements due to changes in circumstances or a number of risks or other factors that are described in the risk factors section stepson's periodic filings.
These forward looking statements are made only as of today and except as required we undertake no obligation to update or revise any of them.
Speaker Change: Today's presentation contains references to non-GAAP financial measures reckon.
Reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, our presentation and our filings with the SEC.
Turning to our financial results for the fourth quarter of fiscal 2024.
Speaker Change: With slide three we reported GAAP net income of $82.5 million gap.
GAAP net income attributable to stop some group incorporated was $38 million or <unk> 48 per share.
Moving to slide five we generated fee related earnings of $59 million up 35% from the prior year quarter, and we generated an FRE margin of 33%.
The quarter reflected retroactive fees, primarily from an interim closing step stones private equity Secondaries fund.
Retroactive fees contributed $5 $4 million to revenue, which compares to retroactive fees of zero point $5 million in the fourth quarter of fiscal 2023.
Speaker Change: Finally, we earned $37 $7 million and adjusted net income for the quarter or <unk> 33 per share.
This is up from $27.1 million or 24 cents per share in the fourth fiscal quarter of last year, driven primarily by higher fee related earnings.
I'll now hand, the call over to Scott.
Thanks Beth.
Scott: Finished our fiscal year on a high note earnings fundraising and fee, earning asset growth accelerated in the back half of the year generating strong results and setting us up for continued success.
Scott: As we enter our new fiscal year capstone is facing a much better market environment compared to the backdrop from 12 months ago.
That time declines in public asset prices and cyclically low levels of investment realizations put pressure on some of our clients near term appetite for private market commitments.
Scott: Express caution for more difficult fundraising conditions, but we characterize the impact is largely timing related our investment performance was solid and underlying demand for our solutions remain strong.
At that time, they were simply less urgency for our Lps to commit capital.
This led to extended re up discussions for our managed accounts and longer fundraising cycles for our commingled funds.
Even against that backdrop, we delivered strong financial performance in fiscal 2024, and solid growth in our key performance indicators, which underscores the resilience of our business.
Fast forward to today, the sentiment has shifted markedly.
Speaker Change: Markets are at or near all time highs and despite a higher for longer interest rate environment expectations are that M&A activity return to more normal levels.
Improved sentiment is already translating to our results.
Fiscal fourth quarter, we generated gross new commitments of $6 billion matching the very strong fund raising results from our third quarter.
We raised nearly 4 billion in managed accounts and we raised over $2 billion in commingled funds.
Included in that figure are over $600 million in private wealth subscriptions, which is far and away our best quarter in the private wealth channel.
The continued acceleration in private wealth is broad based with record subscriptions for each individual product and record gross inflows in both the U S and abroad.
As a reminder, we currently have three private wealth funds and market as prime spring constructor with the collective net asset value of $3 $4 billion and we anticipate executing the first close of our private wealth credit product critics this coming quarter.
Speaker Change: For the full year, we raised $18 $6 billion of new AUM commitments across the firm, which is a strong result for any year, perhaps as encouraging as the strong nominal level of fundraising is the progression of those inflows we doubled our pace of fundraising in the second half of the year and we see strong momentum continuing.
The pipeline and manage accounts remains very strong for both new and existing clients and we have several large commingled funds in the market across our asset classes.
Of note after the end of the quarter, we closed on an additional $800 million in our venture capital Secondaries Fund, which takes the fund size to approximately $3 $3 billion or 25% bigger than our previous venture Secondaries fund we.
We anticipate a small final close of this fund in the coming weeks.
Moving to slide eight last year, we hosted our first investor day and set goals to at least double our fee related earnings over the next five years.
And our FRE margins to the mid Thirty's wed.
We'd like to take a moment to measure our progress since Investor day.
While the path to those targets may not be linear we believe we are off to a very strong start despite what was a difficult backdrop when we articulated these goals.
Last year, we have grown our fee, earning AUM by 10%, we've grown fee related earnings by over 20% and we've expanded our FRE margins by over 100 basis points.
Speaker Change: Shortly we've also grown our unemployed fearing capital are you back to more than $22 billion.
Our highest level ever driven in large part, but at $12 billion of gross AUM additions over the last six months.
Included in the March 31, <unk> balance our commitments from our venture capital Secondaries Fund.
Maybe to just find after the end of the quarter, which will result in an approximate $3 $3 billion addition to our fee, earning AUM in our first fiscal quarter.
Additionally, we are optimistic about our prospect for continued growth in the coming fiscal year, given the pipeline of managed account re ups our expectation for ongoing Commingled fund raises and continued progress on the private wealth channel.
Furthermore, we broadened our fund platform, we can do the introduction of new commingled funds, including our infrastructure co investments bond and our infrastructure Secondaries fund and with the launch of new private wealth funds, including structure and credits.
Strategically as discussed last quarter, we entered into an agreement to buy in the Noncontrolling interest of our infrastructure private debt and real estate businesses over the coming years.
The volumes will lead to a simpler ownership model and are being executed on an accretive basis.
The first exchange is effective as of April <unk> with an anticipated closing by the end of June.
We also executed on the sale of Green Spring back office solutions that fund administration entity that form part of our acquisition of Green Spring and we believe this will result in net savings and improved efficiency.
All of this gives us a clear line of sight for even stronger growth in our operating earnings and Kpis in fiscal 2025.
I will turn the call over to Mike, who will speak to our growth in the quarter and our plans for upcoming dividend distributions.
Thanks Scott.
Mike: Turning to slide nine we generated over $18 billion of gross inflows during the last 12 months.
Over $11 billion coming from our separately managed accounts and over 7 billion coming from our commingled funds.
In the fourth quarter, our Commingled fund additions included $350 million in our PE Secondaries fund and approximately $900 million in our venture capital secondary Sun.
Our PE Secondaries fund has now raised over $3 billion.
Which is well above the level of the prior vintage and as Scott mentioned, our venture capital Secondaries Fund has closed on approximately $3 3 billion.
Which includes more than $800 million raised after the end of the fiscal year.
Slide 10 shows our fee, earning AUM by structure and asset class.
For the quarter, we grew fee, earning assets by $4 $4 billion.
Split evenly between managed accounts and coming of funds.
This quarter's fee, earning AUM growth benefited from $900 million of capital that came off the holiday in our real estate Secondaries fund.
We continue to increase our unemployed fee, earning capital. This represents funds that are contractually committed but not yet earning fees.
Our youth expat, Alex now sits at a record $22 $6 billion.
The combination of our fee, earning AUM as in fact is the best representation of our future earnings power and now stands at over $116 billion up 5% sequentially and up 15% year over year.
Slide 11 shows the evolution of our management and advisory fees.
We generated a blended management fee rate of 59 basis points for this fiscal year higher than the 54 basis points from the prior year as we benefited from a higher fee rate from our private wealth offerings as well as retroactive fees.
We generated $5 nine per share in management advisory fees over the last 12 months, representing an annual growth rate of 21% since fiscal year 2019.
Now before handing the call to David I'm pleased to announce that the board of directors declared a supplemental cash dividend of <unk> 15 per share. This.
This is on top of our normal 21 cents per share quarterly cash dividend.
As a reminder, we initiated a supplemental dividend last year, which we intend to pay out annually each June subject to board approval.
A supplemental dividend allows steps, though to take advantage of our capital efficient business model and maximise distributions to our shareholders in a transparent manner.
We plan to grow our base dividend generally in line with fee related earnings while our supplemental dividend will be driven by net realized performance fees subject to any discretionary capital uses.
Since the supplemental dividend is largely a function of performance fees. This year's dividend likely represents a cyclical low.
When combined with our quarterly dividend Stepson's payouts would have yielded investors three 5% for the year using an average share price over the last 12 months.
We expect future supplemental dividends to increase as capital market activity normalizes, and net realized performance fees and crude.
We think this is compelling value for our company with a resilient earnings and strong growth profile and we would expect our total dividend distributions to grow over time.
I'll now turn the call over to David.
David: Thanks, Mike I'd like to turn your attention to slide 13 to speak to our financial highlights for the quarter, We earned management and advisory fees of $154 million up 16% from the prior year quarter. The increase was driven by growth in fee, earning AUM across commercial structures as well as a favorable impact from Reg.
So active fees and a higher blended fee rate.
Fee related earnings were $51 million for the quarter up 35% from a year ago.
We generated an FRE margin of 33% for the quarter of 460 basis points versus the prior year quarter.
Normalizing out retroactive fees core FRE margins expanded approximately 300 basis points.
Moving to expenses cash based compensation was $74 million.
Up 1% from last quarter and up 7% from the prior year.
The current period, we benefited from an adjustment to our cash bonus accrual in connection with the shift to our annual compensation cycle, which we have moved from a calendar year to align with our fiscal year.
This means that going forward merit increases will take effect on April one rather than January one.
We have already adjusted base salary levels for calendar 2024, but the seasonal increase in bonus accruals will take effect in the first fiscal quarter of 2025.
Quarter on quarter compensation tied to business development revenue sharing was down slightly as retroactive fees were slightly lower.
Equity based compensation expense grew to $1 $7 million from $1 $4 million in the prior quarter.
The increase reflects the layering of the third year's issuance of our shoe Awards in February 2024.
As a reminder, our RSV awards vest over four years. So you should expect to see a slight uptick in the first fiscal quarter of 2025 to approximately $2 3 million.
To account for a full quarter's worth of expense.
General and administrative expenses were $27 2 million up $2 $7 million from a year ago and up <unk> $4 million sequentially.
Gross realized performance fees were $24 million for the quarter.
From last year's $20 million level, but down from $33 million in the prior quarter, which benefited from positive seasonal incentive fees.
Net performance fees were $12 million after accounting for performance fee related compensation.
Our tax rate reflected in adjusted net income was 22, 3% for both the quarter and full fiscal year, we anticipate a similar 22, 3% tax rate for fiscal 2025.
Moving to slide 14 management and advisory fees per share grew 17% for the full year and by an annual growth rate of 21% over the long term period since fiscal 2019.
Gross realized performance fees for share were down 46% for the full year and up by an annual growth rate of 11% over the long term period adjusted revenue per share was up 3% for the full year as growth in management and advisory fees more than offset the decline in performance fees.
Over the long term period adjusted revenue per share is up by an annual growth rate of 20%.
Shifting to profitability on slide 15, we grew FRE per share by 21% for the full year. The increase was primarily driven by growth in management and advisory fees.
And over the longer term, we have generated an annual growth rate and FRE per share of 29%.
Full year NII per share is down 2% relative to the prior year driven by lower performance fees, but it has grown at an annual rate of 24% over the long term period.
As Scott mentioned, our first acquisition of the Noncontrolling interest of the infrastructure private debt and real estate businesses is taking place effective April one.
And is expected to close by the end of June.
We expect to issue $2 8 million shares plus use a small amount of cash in exchange for 10% of the sandy equity interest in each of these businesses that we do not already own.
As a reminder, we have hardwired these exchanges to be accretive to earnings. So the acquired earnings purchased at a discount to step stones price to earnings multiple should more than offset the impact and the issued shares.
Moving to the key items on the balance sheet on slide 16, net accrued carry finished the quarter at $635 million up 12% from last quarter, driven primarily by underlying fund valuation appreciation.
As a reminder, our accrued carry balance is reported on a one quarter lag.
Our own investment portfolio ended the quarter at $205 million unfunded commitments to our investment programs were $116 million as of quarter end.
As of March 31, we had over $75 billion of performance fee eligible capital, which is widely diversified across multiple vintage years and over 200 programs.
74% of our net unrealized carry is tied to programs with vintages of 2018 or earlier, which means that these programs are largely out of their investment periods and in harvest mode.
This amount, 56% is sourced from vehicles with deal by deal waterfalls, meaning realized carry may be payable at the time of investment exited.
This concludes our prepared remarks, I'll now turn it back over to the operator to open the line for any questions.
Okay.
As a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the queue. You May Press Star one one again, please standby, while we compile the Q&A roster.
Our first question comes from the line.
Buddhists Barclays.
Hey, this is Nick Benoit on the call for Ben today.
So I wanted to dig a little bit deeper into the private wealth platform as it includes peer to picked up nicely Q over Q, so maybe like dive into a bit more than mixture of growth or are you seeing inflows, primarily driven by increasing the distribution or a channel or are you seeing more strength in client re ups and client retention.
Hey, Nick Jason here, Thanks for the question.
In terms of the.
Flows it's been broad based across the different channels.
Reminder, we kind of think about this.
Four different buckets.
<unk> channel in the U S broker dealer channel in the U S. The wire houses in the U S and non U S wealth as a fourth pillar.
Flows across all four had been strong.
Flows across all three funds currently in market have been strong.
Redemption has been low across all the products.
And so we feel right now that everything is firing pretty well.
Got it.
One is to follow up for Scott.
And then in the prepared remarks, you seem very positive outlook for fundraising across both commingled SMA. So maybe I want to dive a little bit deeper into about the crossing all cross selling opportunities.
Between Lps, maybe where are you seeing the most conversions across funds and asset classes and maybe how are you kind of strategically thinking and whereas the investments being made in terms of putting more Lps and two more steps on funds.
Sure no. Thanks for the question and you certainly get the sense from our comments as well as our results that we've seen a recovery in the fund raising market, although I don't want to necessarily suggests that it is.
Universally strong fund raising market I think it's one that you would often hear us characterize as being bifurcated between sort of the haves and have nots, the haves, meaning if you've got a strategy a track record and a supportive LP base you can certainly get a successful fund raising.
David: Don if you don't have those things its still a challenging environment. Fortunately for us we do have many of those saying that well diversified platform.
David: Cross asset classes and strategies with our secondary strategies in particular.
David: You are making significant progress our private wealth strategy that you just heard from Jason making significant progress.
As we commented on as well in a separate account.
Speaker Change: Area, we continue to see a strong pipeline of both new and existing clients. If I look back over the last quarter or last year, it's probably been somewhere in the range of 20% to 25% of the AUM flows coming from new clients with the remainder coming from either re ups or expansion.
Speaker Change: Of client relationships, if I look at where some of that the activity has been concentrated from a geographic standpoint.
Speaker Change: It actually falls roughly in line with our current business mix call it 35% or so in North America with the remainder fairly balanced across the Middle East Europe, Asia, and Australia, and then from an asset class standpoint, if you look at the last the last quarter or the last 12 months.
Speaker Change: The separate account that real estate and private equity probably led the way, whereas if I look forward a bit I think we're seeing price quite a bit of activity across our private equity infrastructure and private credit asset classes. So I know a lot there in their response, but I think the good news is there is a meaningful amount of activity across all parts of the business today.
Speaker Change: Thank you.
Our next question.
Come from the lineup, Michael Cyprus of Morgan Stanley.
Hey, good afternoon. Thanks for taking the question I wanted to dig in on private wealth I was hoping maybe you could elaborate on how youre viewing the product pipeline looking out over the next couple of years I know you mentioned the credit product.
Wei and then more broadly if you could just maybe update us on the product placements for the three existing products in the market just in terms of how well distributed and placed on those products on the platforms and how you see that evolving as you look out over the next 12 months.
Jason: Thanks, Mike Jason here.
In terms of the product pipeline I don't think we are in a position to announce another product beyond the credits presently.
Mike Jason: I think the same principles that I talked about before will guide any future.
Product development as it relates to the retail channel and so thats going to be one where we believe that steps down has something to offer both because of our in house expertise.
And investment strategies, but also one where the multi manager model.
And so.
We score product families for now, but but certainly stay tuned and we'll continue to think about those areas, where it may make sense in the future.
In terms of.
The <unk>.
Distribution.
Indicate for the existing funds.
S. Prime is on two wires in the U S. Both allocating.
Now in addition to.
The IBD channel and.
Hi, Hi single hundreds numbers.
<unk>.
Mike Jason: Alright.
The non U S distribution is we're spending quite a bit of content.
Speaker Change: That syndicate now.
The U S and that we believe is relatively mature perhaps private and.
Speaker Change: As we look at spring on one wire.
Q2, probably about half the number of channels that we are aware that as prime.
Yes.
That's indicative of continued to get built out in the U S.
And.
And abroad, probably in parallel.
Speaker Change: Prime distribution.
Structure the infrastructure fund is not on a wire currently and it's on.
Probably half of the platforms are south of that maybe even a bit less than half of the ones that spring is on currently so.
It's just kind of following a pretty similar to station.
And if I look at.
I think more importantly than the number of platforms or which platforms. There on if I look at the.
Fund raising trajectory kind of going back to zero day on each of the funds.
Which is probably the way we think about it most often.
Each of spring and strikes.
Are equal or ahead to where as prime was at a similar point in time.
So we feel we feel good about that.
For sure.
Great. Thanks, and then just a follow up question on the FRE margin just curious how you're seeing the path here on the margin profile in fiscal 'twenty five compared to I think it was around 13% or so that you put up in fiscal 'twenty for just any sort of thoughts around any sort of intra quarter.
Intra year volatility and anything on the retroactive piece that we should be keeping in mind.
Over the next couple of quarters.
Yeah.
Sure. This is David so as you know in any given quarter youre going to see variability in our margins just due to retroactive fees and timing of expenses. So I would guide you to look at our full year margins rate, we feel pretty good about the trajectory of our margins and reaching the mid <unk>.
In the medium term.
For fiscal 2025, we would expect to see continued margin improvement.
Generally in line with what we saw in fiscal 2024.
Great and anything on the retro fees.
Okay.
And so retroactive fees as you know.
We do have continued fundraising.
Going on with their funds.
We have our PE Secondaries fund real estate Secondaries fund growth equity fund and infrastructure co investment fund Thats in fundraising today and as we have a subsequent closes you should expect to see retroactive fees.
Okay.
Great. Thank you.
Thank you.
Our next question.
It comes from the line of Kenneth Worthington of Jay.
P Morgan.
Hi, This is Alex Bernstein on for Ken. Thanks, So much for taking the question and congratulations on the strong results.
Speaker Change: As you mentioned the exchange transactions are.
Take takes effect for the first time this Jim I know you mentioned that they are expected to be accretive both when speaking now than when you first announced them are there any other details you could provide on the level of accretion. That's the first part of my question and sticking with the theme.
We noticed that you own 49% to 50% of most of these non P platforms now as you cross over that 50% control Mark do you expect any changes that you can or would enact to how these businesses operate and similarly at that point looking at the <unk>.
Speaker Change: Right trajectory noticed that obviously different growth rates for all of them notice that credit perhaps grew a bit slower than I would've thought relative to some of the other platforms just given the robust environment for credit appreciate that there was not a private wealth product for credits and now with one being in there I would expect some of that gets dealt with nationally.
Just curious as you're looking to the outlook for all three of them in terms of the growth do you expect to shift investment across the platforms now that you're going to be owning a control stake in all of them. Thank you.
Sure so.
Thanks for the question. The question is there I mean, maybe I'll take a crack at each of them, but as one of David or Mike to chime in if there is anything I missed that I just tried to address.
Really the three questions one around accretion to around flipping to be from 49% to greater than 50% ownership and then third on sort of the mix shift and the growth in private credit on the accretion there really isn't probably much more that we can add today.
We guided towards.
Speaker Change: Quite modest accretion, but because of the structure of the transaction buying at a discount to our prevailing multiple and with the true up.
If one of the asset classes, where to outperform or underperform it sort of locked in and the fact that these will be accretive transactions over over time and the more meaningful impact from an accretion standpoint.
You look at these exchanges on more of a cumulative basis over time, but any any individual exchange, including this first one will only be very modestly accretive.
Look in terms of going above 49% or about 50% ownership.
No real change in terms of how we would plan to operate the businesses here, we've been working very closely with each of our assay class teams and our leaders of those businesses for many years now and so we really think about this.
<unk>, maybe the lowest the lowest risk pipeline of accretive M&A opportunities that we could really think about pursuing here. We work closely with these teams each of the asset class hedge continues to serve on the executive committee for the broader steps down platform.
And it won't be until.
Later in the game as we move towards much more significant ownership.
That.
Much would potentially change, but again, we look at these businesses as having operating operating having operated successfully within steps down for many years now at this point.
Speaker Change: On the credit side, just in terms of some of the growth that we continue to see good activity across our SMA business.
And some of that kind of continues to be in the pipeline I kind of referenced the strong activity. We are seeing in each of private equity infrastructure and private credit today I'd say there are certain geographies in particular, where we are seeing strong interest areas like Asia and the middle East and we continue to make progress there and then obviously, Jason you spend a couple of minute.
Talking about the private wealth opportunity clearly theres been theres been much time and attention focused on that.
The preparations for the product launch there, which we think will be an important driver.
Going going forward here, so look in terms of how the mix of the asset class evolves over time, Thats, obviously is going to be a function of sort of the relative growth rates and I think the good news.
If you look at the history of steps down since we've been publicly traded there have been different asset classes driving the growth during different periods of time and as I referenced earlier coming off a period, where real estate is.
It's been a big contributor as is private equity.
As we look ahead <unk> seen good opportunities in areas like private credit and infrastructure as well.
Thanks, so much I appreciate it.
Thank you once again to ask a question. Please press star one one on your telephone again Thats Star one wanted to ask a question.
Our next question comes from the line of Adam Beatty.
Of UBS.
Alright, Thank you and good afternoon.
Wanted to dig into the separate account flows a little bit.
Obviously, a very strong quarter. So that's good I mean, it seems like maybe the trough there was a little bit more recent than in the commingled funds. So just given what you know now the discussions that youre, having and the outlook I was wondering how we might think about the trajectory of those flows for the next.
Next few quarters next fiscal year. Thank you.
Yes, I think so.
On the SMA flows.
And maybe I'll break it into sort of the gross AUM flows.
As well as the fee, earning AUM flows as well here, but starting with the gross AUM flows again. This most recent quarter was one that was driven by a combination of real estate and private equity in particular, there was a very healthy mix of.
And not only existing clients, but new SMA clients and if you think back to the Covid time period that was really one of the challenges with developing new separate accounts, when we think about 2025%.
AUM flows theyre coming from new clients, we think that is quite healthy and starts to feed the pipeline of clients that can then rehab or expand with us over over time as we look out across the next few quarters and again these things tend to be.
Somewhat episodic and can be a bit lumpy from quarter to quarter, but a very healthy pipeline of separate account opportunities with both new and existing clients across different strategies again, I would say they are concentrated at the moment in the private equity infrastructure and private credit space. When I look when I look forward and from a geographic standpoint looking forward.
Word.
A lot of activity across different to any particular non U S geography that at the moment.
I think about just to add onto that the fee, earning AUM flows. The one thing to add on is just deployment activity and you heard us talk about the $22 $6 billion of unemployed fee, earning capital of course, a portion of that is going to activate.
Our venture Secondaries fund has been has been activated.
We are seeing a slight pickup in new investment activity, which will help us continue to add to deploy that capital over the same sort of three to five year time period that we would continue to point to over over time here.
That's great. Thank you Scott you anticipated my question about deployment. So I'll just ask a little follow up would you expect obviously you know very strong good growth. There would you expect the sort of proportion of unemployed.
Fee AUM to kind of normalize as we look forward or would continue to kind of be a bigger portion. Thank you.
Yes look I think you've obviously seen over the roughly four years since we've been public that at times its increase at times It has decreased.
And so we would generally.
That over time, you would continue to see some modest growth in that in that number but the way that we think about it.
Is.
How successfully we can deploy that capital over again, a roughly three to five year time period. So when you look at the portion of the $22 6 billion and that needs to be deployed as opposed to activate it. It's in the $20 billion range and if you were to look at.
How much quarterly deployment, we've had of our <unk>.
Recently.
In this quarter for example, we had $2 2 billion.
<unk> deployment and activation about $900 million that was driven by the real estate fund activation. So leaves you with about $1 3 billion of <unk> deployment. If you annualize that number it's a bit over $5 billion from a run rate standpoint.
The fact that deal flow has been starting to recover but it is still somewhat depressed, but if you think about that over $5 billion of deployment in 2000 $20 billion of you.
We're still right in the range of a four year deployment period smack in the middle of the three to five years, we've historically talked about so that's how we kind of think about the health and the appropriate levels of unemployed fee, earning capital.
Makes perfect sense, thanks for the math there Scott appreciate it.
Thank you I would now like to turn the conference back to Scott Hart for closing remarks, Sir.
Well, great well. Thank you everyone for your time and attention as you've certainly heard us talk about over the last several quarters. We have felt like we were laying the groundwork work and setting ourselves up for strong growth. This year, we're excited to see much of that growth come through this quarter and the momentum.
<unk> here.
The fiscal 2025, so I appreciate.
Your time and attention and look forward to connecting again next quarter. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].
Okay.
[music].
Okay.