GCM Grosvenor Q4 2025 GCM Grosvenor Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 GCM Grosvenor Inc Earnings Call
Operator: Good day and welcome to the GCM Grosvenor Q4 & FY 2025 Results webcast. Later, we will conduct a Q&A session. If you are interested in asking a question, please ensure you dial in using the numbers you have been provided for this call and press *1 on your keypad to join the queue. If anyone should require operator assistance, please press *0 on your telephone. As a reminder, this call will be recorded. I would now like to hand the call over to Stacie Selinger, Head of Investor Relations. You may begin.
Speaker #3: If you are interested in asking a question, please ensure you dial in using the numbers you have been provided for this call and press *1 on your keypad to join the queue.
Speaker #3: Operator assistance: Please press * then 0 on your telephone if anyone should require it. As a reminder, this call will be recorded. I would now like to hand the call over to Stacie Selinger, Head of Investor Relations. You may begin.
Stacie Selinger: Thank you. Good morning and welcome to GCM Grosvenor's Q4 & FY earnings call. Today, I am joined by GCM Grosvenor's Chairman and Chief Executive Officer Michael Sacks, President John Levin, and Chief Financial Officer Pam Bentley.
Speaker #2: Thank you. Good morning and welcome to GCM Grosvenor's 4th Quarter and Full Year call. 2025 earnings Today I am joined by GCM Grosvenor's Chairman and Chief Executive Officer Michael Sacks, President John Levin, and Chief Financial Officer Pam Bentley.
Speaker #2: Before we discuss our results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements.
Stacie Selinger: Before we discuss our results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. This includes statements regarding our current expectations for the business, our financial performance, and projections. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties, and other important factors that may cause our actual results to differ materially from those indicated by the forward-looking statements on this call. Please refer to the factors in the Risk Factors section of our 10-K, our other filings with the Securities and Exchange Commission, and our earnings release, all of which can be found on the Public Shareholder section of our website. We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business.
Stacie Selinger: Before we discuss our results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. This includes statements regarding our current expectations for the business, our financial performance, and projections. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties, and other important factors that may cause our actual results to differ materially from those indicated by the forward-looking statements on this call. Please refer to the factors in the Risk Factors section of our 10-K, our other filings with the Securities and Exchange Commission, and our earnings release, all of which can be found on the Public Shareholder section of our website. We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business.
Speaker #2: This includes statements regarding our current expectations for the business, our financial performance, and projections. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties, and other important factors that may cause our actual results to differ materially from those indicated by the forward-looking statements on this call.
Speaker #2: Please refer to the factors and the risk factor section of our 10-K, our other filings with the securities and exchange commission, and our earnings release, all of which can be found on the public shareholder section of our website.
Speaker #2: We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of non-GAAP measures to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are on our website.
Stacie Selinger: A reconciliation of non-GAAP measures to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are on our website. Thank you again for joining us, and with that, I'll turn the call over to Michael to discuss our results. Thank you, Stacie. 2025 was a great year for GCM Grosvenor. Most importantly, we drove value for clients as our investment results, the cornerstone of our value proposition, were strong across the board. Absolute Return Strategies performance was excellent, with our Multi-Strategy Composite generating a 15% gross rate of return in 2025. Infrastructure, our fastest growing strategy of late, returned approximately 11% for the year. All of our other verticals in aggregate were positive and competitive as well. We think the investment opportunity set remains strong, and we're pleased to have approximately $12 billion of dry powder.
Stacie Selinger: A reconciliation of non-GAAP measures to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are on our website. Thank you again for joining us, and with that, I'll turn the call over to Michael to discuss our results.
Speaker #2: Thank you again for joining us, and with that, I'll turn the call over to Michael to discuss our results.
Michael Sacks: Thank you, Stacie. 2025 was a great year for GCM Grosvenor. Most importantly, we drove value for clients as our investment results, the cornerstone of our value proposition, were strong across the board. Absolute Return Strategies performance was excellent, with our Multi-Strategy Composite generating a 15% gross rate of return in 2025. Infrastructure, our fastest growing strategy of late, returned approximately 11% for the year. All of our other verticals in aggregate were positive and competitive as well. We think the investment opportunity set remains strong, and we're pleased to have approximately $12 billion of dry powder.
Speaker #3: Thank you, Stacie. 2025 was a great year for GCM Grosvenor. Most importantly, we drove value for clients as our investment results, the cornerstone of our value proposition, were strong across the board.
Speaker #3: Absolute return strategies, performance was excellent with our multi-strategy composite generating a 15% gross rate of return in 2025. Infrastructure, our fastest growing strategy of late, returned approximately 11% for the year.
Speaker #3: All of our other verticals and aggregate were positive and competitive as well. We think the investment opportunity set remains strong and we're pleased to have approximately $12 billion of dry powder.
Speaker #3: From a capital formation perspective, 2025 was the best fundraising year in the history of the firm. We raised $10.7 billion of total capital with approximately $3.5 billion of that coming in the fourth quarter, both records.
Stacie Selinger: From a capital formation perspective, 2025 was the best fundraising year in the history of the firm. We raised $10.7 billion of total capital, with approximately $3.5 billion of that coming in the fourth quarter, both records. John will go into more detail, but our fundraising was broad-based, with all of our verticals, including ARS, having positive flows and all investor channels and geographies contributing. Our pipeline of activity is very strong entering 2026, which bodes well for fundraising this year. 2025 financial results were similarly strong. Our fee-related earnings, adjusted EBITDA, and adjusted net income were up 11%, 15%, and 18% respectively when compared to 2024. Our fee-related earnings margin for the year was 44%, which is 200 basis points higher than our margin in 2024. We continue to enjoy significant margin improvement since coming public, and we believe we still have positive operating leverage.
Michael Sacks: From a capital formation perspective, 2025 was the best fundraising year in the history of the firm. We raised $10.7 billion of total capital, with approximately $3.5 billion of that coming in the fourth quarter, both records. John will go into more detail, but our fundraising was broad-based, with all of our verticals, including ARS, having positive flows and all investor channels and geographies contributing. Our pipeline of activity is very strong entering 2026, which bodes well for fundraising this year. 2025 financial results were similarly strong. Our fee-related earnings, adjusted EBITDA, and adjusted net income were up 11%, 15%, and 18% respectively when compared to 2024. Our fee-related earnings margin for the year was 44%, which is 200 basis points higher than our margin in 2024. We continue to enjoy significant margin improvement since coming public, and we believe we still have positive operating leverage.
Speaker #3: John will go into more detail, but our fundraising was broad-based with all of our verticals, including ARS, having positive flows, and all investor channels and geographies contributing.
Speaker #3: Our pipeline of activity is very strong entering 2026, which bodes well for fundraising this year. 2025 financial results were similarly strong. Our fee-related earnings adjusted EBITDA and adjusted net income were up 11%, 15%, and 18% respectively, when compared to 2024.
Speaker #3: Our fee-related earnings margin for the year was 44%, which is 200 basis points higher than our margin in 2024. We continue to enjoy significant margin improvement since coming public, and we believe we still have positive operating leverage.
Speaker #3: Our adjusted EBITDA and adjusted net income were aided by the $68 million of performance fees generated from our ARS business. In that regard, 2025 represented the fourth time in the last six years that we have generated more than $50 million in annual performance fees from ARS.
Stacie Selinger: Our adjusted EBITDA and adjusted net income were aided by the $68 million of performance fees generated from our ARS business. In that regard, 2025 represented the fourth time in the last six years that we have generated more than $50 million in annual performance fees from ARS. While carried interest realizations were light for the fourth quarter, our earnings power from carried interest continued to increase at a rapid pace. Our gross unrealized carried interest balance stands at an all-time high of $949 million, up $113 million or 14% from the end of 2024, with approximately 50% or $478 million of that belonging to the firm. Based on a number of real-time positive developments, we believe we will see another increase in this balance when we close our books at the end of Q1.
Michael Sacks: Our adjusted EBITDA and adjusted net income were aided by the $68 million of performance fees generated from our ARS business. In that regard, 2025 represented the fourth time in the last six years that we have generated more than $50 million in annual performance fees from ARS. While carried interest realizations were light for the fourth quarter, our earnings power from carried interest continued to increase at a rapid pace. Our gross unrealized carried interest balance stands at an all-time high of $949 million, up $113 million or 14% from the end of 2024, with approximately 50% or $478 million of that belonging to the firm. Based on a number of real-time positive developments, we believe we will see another increase in this balance when we close our books at the end of Q1.
Speaker #3: While carried interest realizations were light for the fourth quarter, our earnings power from carried interest continued to increase at a rapid pace. Our gross unrealized carried interest balance stands at an all-time high of $949 million, up 113 million or 14% from the end of 2024, with approximately 50% or 478 million of that belonging to the firm.
Speaker #3: Based on a number of real-time positive developments, we believe we will see another increase in this balance when we close our books at the end of Q1.
Speaker #3: We ended '25 with $91 billion of assets under management, a 14% increase compared to the end of '24, and a new high watermark for the firm.
Stacie Selinger: We ended 2025 with $91 billion of assets under management, a 14% increase compared to the end of 2024, and a new high watermark for the firm. Fee-paying AUM increased 12% year-over-year to $72 billion, and contracted not yet fee-paying AUM increased 27% year-over-year to $10 billion. Our contracted not yet fee-paying AUM is an important leading indicator of future revenue growth, with real embedded FRR growth in that number. Finally, 2025 marked meaningful progress towards several of our key strategic objectives, particularly in regard to the individual investor channel, where AUM increased 18% year-over-year. In 2025, we launched Grove Lane Partners, our new wealth management distribution joint venture. We launched our infrastructure interval fund, which is now raising money every day, and we recently filed registration documents for a registered private equity fund, which Grove Lane will support.
Michael Sacks: We ended 2025 with $91 billion of assets under management, a 14% increase compared to the end of 2024, and a new high watermark for the firm. Fee-paying AUM increased 12% year-over-year to $72 billion, and contracted not yet fee-paying AUM increased 27% year-over-year to $10 billion. Our contracted not yet fee-paying AUM is an important leading indicator of future revenue growth, with real embedded FRR growth in that number. Finally, 2025 marked meaningful progress towards several of our key strategic objectives, particularly in regard to the individual investor channel, where AUM increased 18% year-over-year. In 2025, we launched Grove Lane Partners, our new wealth management distribution joint venture. We launched our infrastructure interval fund, which is now raising money every day, and we recently filed registration documents for a registered private equity fund, which Grove Lane will support.
Speaker #3: Fee-paying AUM increased 12% year over year, to $72 billion, and contracted not yet fee-paying AUM increased 27% year over year, to $10 billion. Our contracted not yet fee-paying AUM is an important leading indicator of future revenue growth with real embedded FRR growth in that number.
Speaker #3: Finally, 2025 marked meaningful progress towards several of our key strategic objectives, particularly in regard to the individual investor channel, where AUM increased 18% year over year.
Speaker #3: In 2025, we launched Grove Lane Partners, our new wealth management distribution joint venture. We launched our infrastructure interval fund, which is now raising money every day, and we recently filed registration documents for a registered private equity fund, which Grove Lane will support.
Speaker #3: While we always caution that new distribution markets take time to ramp up, we remain enthusiastic about the future of the wealth channel for our business.
Stacie Selinger: While we always caution that new distributions markets take time to ramp up, we remain enthusiastic about the future of the wealth channel for our business. Before turning the call over to John, I want to comment on the challenging market of the past couple of weeks. The consensus seems to be that the market stress has been driven by concerns of AI disruption and impact on equity and credit valuations with regard to SaaS businesses. While we probably prefer a somewhat less volatile environment, we are pretty sanguine with regard to the recent developments. First, diversification is the defining characteristic of our investment and portfolio management process. In the private equity, private credit, and ARS space, all of our verticals, actually, our typical portfolios include exposures to several hundred companies or assets on a look-through basis.
Michael Sacks: While we always caution that new distributions markets take time to ramp up, we remain enthusiastic about the future of the wealth channel for our business. Before turning the call over to John, I want to comment on the challenging market of the past couple of weeks. The consensus seems to be that the market stress has been driven by concerns of AI disruption and impact on equity and credit valuations with regard to SaaS businesses. While we probably prefer a somewhat less volatile environment, we are pretty sanguine with regard to the recent developments. First, diversification is the defining characteristic of our investment and portfolio management process. In the private equity, private credit, and ARS space, all of our verticals, actually, our typical portfolios include exposures to several hundred companies or assets on a look-through basis.
Speaker #3: Before turning the call over to John, I want to comment on the challenging market of the past couple of weeks. The consensus seems to be that the market stress has been driven by concerns of AI disruption and impact on equity and credit valuations, with regard to SaaS businesses.
Speaker #3: While we probably prefer a somewhat less volatile environment, we are pretty sanguine with regard to the recent developments. First, diversification is the defining characteristic of our investment and portfolio management process.
Speaker #3: In the private equity–private credit and ARS space—all of our verticals, actually—our typical portfolios include exposures to several hundred companies or assets on a look-through basis.
Speaker #3: Those positions are diversified across markets, industries, different asset class types, and geographies. And we have always believed this diversification is a core tenet and a significant part of the value we deliver to clients.
Stacie Selinger: Those positions are diversified across markets, industries, different asset class types, and geographies, and we have always believed this diversification is a core tenet and a significant part of the value we deliver to clients. Second, with regard to our SaaS exposure, we believe we have less exposure than peers and very limited exposure generally. SaaS exposure represents only 4% of our total AUM and less than 6% of our credit AUM. Third, our view generally is that not all SaaS businesses are the same, that SaaS businesses are not going away, and they also will benefit from AI. With regard to SaaS-related credit specifically, existing credit attachment points are generally protective with regard to impairment. Fourth, we believe last week's significant pullback was without differentiation across companies, which always provides opportunity.
Michael Sacks: Those positions are diversified across markets, industries, different asset class types, and geographies, and we have always believed this diversification is a core tenet and a significant part of the value we deliver to clients. Second, with regard to our SaaS exposure, we believe we have less exposure than peers and very limited exposure generally. SaaS exposure represents only 4% of our total AUM and less than 6% of our credit AUM. Third, our view generally is that not all SaaS businesses are the same, that SaaS businesses are not going away, and they also will benefit from AI. With regard to SaaS-related credit specifically, existing credit attachment points are generally protective with regard to impairment. Fourth, we believe last week's significant pullback was without differentiation across companies, which always provides opportunity.
Speaker #3: Second, with regard to our SaaS exposure, we believe we have less exposure than peers and very limited exposure generally. SaaS exposure represents only 4% of our total AUM and less than 6% of our credit AUM.
Speaker #3: Third, our view generally is that not all SaaS businesses are the same, that SaaS businesses are not going away, and they also will benefit from AI.
Speaker #3: With regard to SaaS-related credit specifically, existing credit attachment points are generally protective with regard to impairment. Fourth, we believe last week's significant pullback was without differentiation across companies, which always provides opportunity.
Speaker #3: Our absolute strategies portfolio had positive performance in January, and in general, this is the type of environment where ARS strategies often add value. Finally, we believe that across our platform, we have more exposure to the disruptors and the beneficiaries of disruption than we do to the businesses where disruption to business model or future prospects is of concern.
Stacie Selinger: Our absolute strategies portfolio had positive performance in January, and in general, this is the type of environment where ARS strategies often add value. Finally, we believe that across our platform, we have more exposure to the disruptors and the beneficiaries of disruption than we do to the businesses where disruption to business model or future prospects is of concern. Simply said, we have more net long opportunity from AI trends, including direct exposure to AI and to all the related AI beneficiaries, than we have to exposure to loss from those disrupted. Of course, our stock has not been immune to the recent market dislocation, and we ourselves are a good example of a proverbial baby being thrown out with the bathwater.
Michael Sacks: Our absolute strategies portfolio had positive performance in January, and in general, this is the type of environment where ARS strategies often add value. Finally, we believe that across our platform, we have more exposure to the disruptors and the beneficiaries of disruption than we do to the businesses where disruption to business model or future prospects is of concern. Simply said, we have more net long opportunity from AI trends, including direct exposure to AI and to all the related AI beneficiaries, than we have to exposure to loss from those disrupted. Of course, our stock has not been immune to the recent market dislocation, and we ourselves are a good example of a proverbial baby being thrown out with the bathwater.
Speaker #3: Simply said, we have more net long opportunity from AI trends including direct exposure to AI and to all the related AI beneficiaries than we have to exposure to loss from those disrupted.
Speaker #3: Of course, our stock has not been immune to the recent market dislocation, and we ourselves are a good example of the proverbial baby being thrown out with the bathwater.
Speaker #3: With our stock trading at a lower earnings multiple than the S&P 500 and that of our alternative investment peers, with solid growth prospects and with a current dividend yield of approximately 5%, we believe we represent good value today and that buying back stock represents an attractive use of capital.
Stacie Selinger: With our stock trading at a lower earnings multiple than the S&P 500 and that of our alternative investment peers, with solid growth prospects and with a current dividend yield of approximately 5%, we believe we represent good value today and that buying back stock represents an attractive use of capital. Consequently, we have increased our buyback authorization by $35 million, leaving us with $91 million to repurchase shares. Given our ample cash balance generated in part from strong cash flow generation and in part from the proceeds from warrants exercised in November, we can buy back stock, minimize dilution from stock-based compensation, and also repay $65 million of our term loan, which we are doing this week without prepayment penalty. In closing, 2025 was a very strong year.
Michael Sacks: With our stock trading at a lower earnings multiple than the S&P 500 and that of our alternative investment peers, with solid growth prospects and with a current dividend yield of approximately 5%, we believe we represent good value today and that buying back stock represents an attractive use of capital. Consequently, we have increased our buyback authorization by $35 million, leaving us with $91 million to repurchase shares. Given our ample cash balance generated in part from strong cash flow generation and in part from the proceeds from warrants exercised in November, we can buy back stock, minimize dilution from stock-based compensation, and also repay $65 million of our term loan, which we are doing this week without prepayment penalty. In closing, 2025 was a very strong year.
Speaker #3: Consequently, we have increased our buyback authorization by $35 million, leaving us with $91 million to repurchase shares. Given our ample cash balance, generated in part from strong cash flow generation and in part from the proceeds from warrants exercised in November, we can buy back stock, minimize dilution from stock-based compensation, and also repay $65 million of our term loan, which we are doing this week without prepayment penalty.
Speaker #3: In closing, 2025 was a very strong year, momentum remains strong, and we remain on track to achieve our goals to more than double our 23 FRE to over 280 million dollars and grow adjusted net income per share to more than $1.20 by 2028.
Stacie Selinger: Momentum remains strong, and we remain on track to achieve our goals to more than double our 2023 FRE to over $280 million and grow adjusted net income per share to more than $1.20 by 2028. And with that, I'll turn the call over to John. Thank you. As Michael noted, my remarks will focus on our strong fundraising results for the year 2025. Our $10.7 billion raised, in addition to being a firm record, is notable for its diversification across strategies, which is best illustrated on page 10 of our earnings presentation. Every investment strategy contributed meaningfully to our results this year, and all have sizable pipelines heading into 2026. But the numbers only capture part of the story. So to bring our fundraising to life, I'm going to take you through a few real examples of 2025 wins.
Michael Sacks: Momentum remains strong, and we remain on track to achieve our goals to more than double our 2023 FRE to over $280 million and grow adjusted net income per share to more than $1.20 by 2028. And with that, I'll turn the call over to John.
Speaker #3: And with that, I'll turn the call over to
Speaker #3: John.
Speaker #4: Thank
Jon Levin: Thank you. As Michael noted, my remarks will focus on our strong fundraising results for the year 2025. Our $10.7 billion raised, in addition to being a firm record, is notable for its diversification across strategies, which is best illustrated on page 10 of our earnings presentation. Every investment strategy contributed meaningfully to our results this year, and all have sizable pipelines heading into 2026. But the numbers only capture part of the story. So to bring our fundraising to life, I'm going to take you through a few real examples of 2025 wins.
Speaker #4: As Michael noted, my remarks will focus on our strong fundraising results for the year 2025. Our $10.7 billion raised, in addition to being a firm record, is notable for its diversification across strategies.
Speaker #4: Which is best illustrated on page 10 of our earnings presentation. Every investment strategy contributed meaningfully to our results this year. And all have sizable pipelines heading into 2026.
Speaker #4: But the numbers only capture part of the story. So to bring our fundraising to life, I'm going to take you through a few real examples of 2025 wins.
Speaker #4: First, as we've discussed in the past and at our investor day, evolving alongside our existing clients through cross-selling has been a key driver of our growth, generating approximately 20 to 25 percent of our fundraising in any given year.
Stacie Selinger: First, as we've discussed in the past and at our investor day, evolving alongside our existing clients through cross-selling has been a key driver of our growth, generating approximately 20 to 25% of our fundraising in any given year. One such client is a large public pension that has partnered with us for years on a multi-asset private markets program focused on smaller-cap opportunities in private equity and real estate. Through our ongoing dialogue, our client described that they had strong demand for what they called the missing middle of real estate, sitting between smaller and very large opportunities. We designed a new program specifically to address that gap. Importantly, the client also re-upped their original private equity and real estate programs, committing more than twice their initial allocation. It's a strong example of listening closely, adapting quickly, creating durable solutions, and growing alongside our clients.
Jon Levin: First, as we've discussed in the past and at our investor day, evolving alongside our existing clients through cross-selling has been a key driver of our growth, generating approximately 20 to 25% of our fundraising in any given year. One such client is a large public pension that has partnered with us for years on a multi-asset private markets program focused on smaller-cap opportunities in private equity and real estate. Through our ongoing dialogue, our client described that they had strong demand for what they called the missing middle of real estate, sitting between smaller and very large opportunities. We designed a new program specifically to address that gap. Importantly, the client also re-upped their original private equity and real estate programs, committing more than twice their initial allocation. It's a strong example of listening closely, adapting quickly, creating durable solutions, and growing alongside our clients.
Speaker #4: One such client is a large public pension that is partnered with us for years on a multi-asset private markets program focused on smaller-cap opportunities in private equity and real estate.
Speaker #4: Through our ongoing dialogue, our client described that they had strong demand for what they called the missing middle of real estate. Sitting between smaller, and very large opportunities.
Speaker #4: We designed a new program specifically to address that gap, importantly, the client also re-upped their original private equity and real estate programs committing more than twice their initial allocation.
Speaker #4: It's a strong example of listening closely, adapting quickly, creating durable solutions, and growing alongside our clients. To that point, our AUM with this particular client is four times what it was when they launched their first program with our firm.
Stacie Selinger: To that point, our AUM with this particular client is 4 times what it was when they launched their first program with our firm. A second example highlights similar expansion but in the absolute returns strategy space. In this case, we've worked with the client for almost 20 years, managing small and middle market programs across private equity, infrastructure, and real estate. As a result of this evolution, our AUM with this particular client is many, many multiples of what it was when they launched their first program with us almost 20 years ago. The programs we manage serve as an alpha generator by attacking less trafficked areas of the market, incorporating significant fee efficiency due to meaningful exposure to co-investments and direct investments.
Jon Levin: To that point, our AUM with this particular client is 4 times what it was when they launched their first program with our firm. A second example highlights similar expansion but in the absolute returns strategy space. In this case, we've worked with the client for almost 20 years, managing small and middle market programs across private equity, infrastructure, and real estate. As a result of this evolution, our AUM with this particular client is many, many multiples of what it was when they launched their first program with us almost 20 years ago. The programs we manage serve as an alpha generator by attacking less trafficked areas of the market, incorporating significant fee efficiency due to meaningful exposure to co-investments and direct investments.
Speaker #4: A second example highlights similar expansion, but in the absolute return strategies space. In this case, we've worked with the client for almost 20 years, managing small and middle market programs across private equity, infrastructure, and real estate.
Speaker #4: As a result of this evolution, our AUM with this particular client is many, many multiples of what it was when they launched their first program with us almost 20 years ago.
Speaker #4: The programs we manage serve as an alpha generator by attacking less-trafficked areas of the market incorporating significant fee efficiency due to meaningful exposure to co-investments and direct investments.
Speaker #4: In fact, in this particular relationship, we do everything from direct control investing to co-investing to fund investing across private equity, real estate, infrastructure, and absolute return strategies.
Stacie Selinger: In fact, in this particular relationship, we do everything from direct control investing to co-investing to fund investing across private equity, real estate, infrastructure, and absolute return strategies. The fund investing activity serves as a farm system of relationships that ultimately transition to the client directly. In 2025, we expanded that relationship by introducing ARS, making this one of the many programs that comprised the $1.9 billion of ARS fundraising in the year, the highest amount since 2021. Michael mentioned our growing success in the individual investor channel, and I'll highlight a key example of that momentum: strong demand for white-labeled solutions. We've long believed that the differentiation that's made us successful in the institutional market, serving as a customized separate account partner, would translate well in the individual investor channel, and we're seeing that thesis play out.
Jon Levin: In fact, in this particular relationship, we do everything from direct control investing to co-investing to fund investing across private equity, real estate, infrastructure, and absolute return strategies. The fund investing activity serves as a farm system of relationships that ultimately transition to the client directly. In 2025, we expanded that relationship by introducing ARS, making this one of the many programs that comprised the $1.9 billion of ARS fundraising in the year, the highest amount since 2021. Michael mentioned our growing success in the individual investor channel, and I'll highlight a key example of that momentum: strong demand for white-labeled solutions. We've long believed that the differentiation that's made us successful in the institutional market, serving as a customized separate account partner, would translate well in the individual investor channel, and we're seeing that thesis play out.
Speaker #4: The fund investing activity serves as a farm system of relationships that ultimately transition to the client directly. In 2025, we expanded that relationship by introducing ARS, making this one of the many programs that comprise the $1.9 billion of ARS fundraising in the year.
Speaker #4: The highest amount since 2021. Michael mentioned our growing success in the individual investor channel. And I'll highlight a key example of that momentum. Strong demand for white-labeled solutions.
Speaker #4: We've long believed that the differentiation that's made us successful in the institutional market—serving as a customized separate account partner—would translate well in the individual investor channel.
Speaker #4: And we're seeing that thesis play out. Over the past two years, we've raised almost a billion dollars across 11 white-label solutions in the wealth channel.
Stacie Selinger: Over the past 2 years, we've raised almost $1 billion across 11 white-labeled solutions in the wealth channel. We believe these customized solutions will be a meaningful contributor to our growth in this channel going forward alongside everything we're doing from a product standpoint. The last example is an Asia-based institution for whom we've managed an ARS program for more than 2 decades alongside providing broader advisory and value-added services. The client wanted to increase their exposure to Japan-focused ARS strategies, and despite having a large and sophisticated investment team, they sought our partnership to leverage our experience and capacity in that market. Leveraging the depth of our global ARS team and longstanding relationships with Japan-based managers, we designed a customized Japan-focused ARS program tailored specifically to the client's objectives. These examples represent only a snapshot of how we partner with clients over the past year.
Jon Levin: Over the past 2 years, we've raised almost $1 billion across 11 white-labeled solutions in the wealth channel. We believe these customized solutions will be a meaningful contributor to our growth in this channel going forward alongside everything we're doing from a product standpoint. The last example is an Asia-based institution for whom we've managed an ARS program for more than 2 decades alongside providing broader advisory and value-added services. The client wanted to increase their exposure to Japan-focused ARS strategies, and despite having a large and sophisticated investment team, they sought our partnership to leverage our experience and capacity in that market. Leveraging the depth of our global ARS team and longstanding relationships with Japan-based managers, we designed a customized Japan-focused ARS program tailored specifically to the client's objectives. These examples represent only a snapshot of how we partner with clients over the past year.
Speaker #4: We believe these customized solutions will be a meaningful contributor to our growth in this channel going forward, alongside everything we're doing from a product standpoint.
Speaker #4: The last example is an Asia-based institution for whom we've managed an ARS program for more than two decades. Alongside providing broader advisory and value-added services.
Speaker #4: The client wanted to increase their exposure to Japan-focused ARS strategies. And despite having a large and sophisticated investment team, they sought our partnership to leverage our experience and capacity in that market.
Speaker #4: Leveraging the depth of our global ARS team and longstanding relationships with Japan-based managers, we designed a customized Japan-focused ARS program tailored specifically to the client's objectives.
Speaker #4: These examples represent only a snapshot of how we partnered with clients over the past year. Collectively, they reflect the power of our platform, the strength of long-term relationships, and our ability to tailor solutions across client types and channels.
Stacie Selinger: Collectively, they reflect the power of our platform, the strength of long-term relationships, and our ability to tailor solutions across client types and channels. While each client relationship is unique, our success is driven by a common foundation: a broad, flexible platform that lets us adapt to market conditions, tailor creative solutions, and deliver across a wide spectrum of opportunities. With that, I'll turn it over to Pam. Thanks, John. Both our fundraising and investment performance led to strong asset growth in Q4 and the year. Private markets fee-paying AUM and management fees grew 10% and 6% year-over-year, respectively, from a combination of solid fundraising and conversion of contracted not yet fee-paying AUM. Growth in all of our various earnings drivers throughout the course of 2025 sets us up well for continuing momentum and earnings expansion.
Jon Levin: Collectively, they reflect the power of our platform, the strength of long-term relationships, and our ability to tailor solutions across client types and channels. While each client relationship is unique, our success is driven by a common foundation: a broad, flexible platform that lets us adapt to market conditions, tailor creative solutions, and deliver across a wide spectrum of opportunities. With that, I'll turn it over to Pam.
Speaker #4: While each client relationship is unique, our success is driven by a common foundation. A broad, flexible platform that lets us adapt to market conditions, tailor creative solutions, and deliver across a wide spectrum of opportunities.
Speaker #4: With that, I'll turn it over to Pam.
Pam Bentley: Thanks, John. Both our fundraising and investment performance led to strong asset growth in Q4 and the year. Private markets fee-paying AUM and management fees grew 10% and 6% year-over-year, respectively, from a combination of solid fundraising and conversion of contracted not yet fee-paying AUM. Growth in all of our various earnings drivers throughout the course of 2025 sets us up well for continuing momentum and earnings expansion.
Speaker #5: Thanks, John. Both our fundraising and investment performance led to strong asset growth in the fourth quarter and the year. Private markets fee-paying AUM and management fees grew 10 percent and 6 percent year-over-year, respectively, from a combination of solid fundraising and conversion of contracted not-yet-fee-paying AUM.
Speaker #5: Growth in all of our various earnings drivers throughout the course of '25 sets us up well for continuing momentum and earnings expansion. As usual, let me touch on key figures for the upcoming quarter.
Stacie Selinger: As usual, let me touch on key figures for the upcoming quarter. For Q1 2026, we expect private markets management fees to be relatively consistent with Q4. It's also important to note that given timing and fee structure of our specialized funds and market, we expect limited catch-up fees this year. As noted, Absolute Return Strategies had strong investment performance and capital formation, resulting in ARS fee-paying AUM and management fees growing 15% and 5% year-over-year, respectively. For Q1 2026, as a result of positive net flows and terrific investment performance, we expect ARS management fees to increase by approximately 5% from Q4. Turning to expenses, our compensation philosophy is centered on attracting and retaining top talent by aligning their interests with those of our clients and shareholders.
Pam Bentley: As usual, let me touch on key figures for the upcoming quarter. For Q1 2026, we expect private markets management fees to be relatively consistent with Q4. It's also important to note that given timing and fee structure of our specialized funds and market, we expect limited catch-up fees this year. As noted, Absolute Return Strategies had strong investment performance and capital formation, resulting in ARS fee-paying AUM and management fees growing 15% and 5% year-over-year, respectively. For Q1 2026, as a result of positive net flows and terrific investment performance, we expect ARS management fees to increase by approximately 5% from Q4. Turning to expenses, our compensation philosophy is centered on attracting and retaining top talent by aligning their interests with those of our clients and shareholders.
Speaker #5: For the first quarter of '26, we expect private markets management fees to be relatively consistent with the fourth quarter. It's also important to note that, given timing and fee structure of our specialized funds and market, we expect limited catch-up fees this year.
Speaker #5: As noted, absolute return strategies had strong investment performance and capital formation, resulting in ARS fee-paying AUM and management fees growing 15 percent and 5 percent year-over-year, respectively.
Speaker #5: For the first quarter of '26, as a result of positive net flows and terrific investment performance, we expect ARS management fees to increase by approximately 5 percent from the fourth quarter.
Speaker #5: Turning to expenses, our compensation philosophy is centered on attracting and retaining top talent by aligning their interests with those of our clients and shareholders.
Speaker #5: We do this through a combination of annual and long-term incentives, including FRE compensation, incentive fee-related compensation, and equity awards. We remain disciplined in managing expenses and our FRE compensation and benefits remain stable for the year at approximately $148 million or an average of $37 million per quarter.
Stacie Selinger: We do this through a combination of annual and long-term incentives, including FRE compensation, incentive-fee-related compensation, and equity awards. We remain disciplined in managing expenses, and our FRE compensation and benefits remain stable for the year at approximately $148 million or an average of $37 million per quarter. As a reminder, we typically see a seasonal uptick in compensation in the first quarter of the year, and we expect FRE compensation and benefits to be approximately $1 million higher in Q1 of 2026 versus Q1 of last year. Non-GAAP general administrative and other expenses were consistent in the fourth quarter at just over $20 million. We expect non-GAAP general administrative and other expenses in the first quarter of 2026 to be in line with or just slightly above the first quarter of 2025.
Pam Bentley: We do this through a combination of annual and long-term incentives, including FRE compensation, incentive-fee-related compensation, and equity awards. We remain disciplined in managing expenses, and our FRE compensation and benefits remain stable for the year at approximately $148 million or an average of $37 million per quarter. As a reminder, we typically see a seasonal uptick in compensation in the first quarter of the year, and we expect FRE compensation and benefits to be approximately $1 million higher in Q1 of 2026 versus Q1 of last year. Non-GAAP general administrative and other expenses were consistent in the fourth quarter at just over $20 million. We expect non-GAAP general administrative and other expenses in the first quarter of 2026 to be in line with or just slightly above the first quarter of 2025.
Speaker #5: As a reminder, we typically see a seasonal uptick in compensation in the first quarter of the year, and we expect FRE compensation and benefits to be approximately $1 million higher in Q1 of '26 versus Q1 of last year.
Speaker #5: Non-GAAP general administrative and other expenses were consistent in the fourth quarter at just over $20 million, we expect non-GAAP general administrative and other expenses in the first quarter of '26 to be in line with or just slightly above the first quarter of '25.
Speaker #5: Turning back to 2025, in addition to strong AUM metrics, it was a productive year on our financial drivers. I point you to pages 4 and 5 in the earnings presentation for a summary of the key metrics.
Stacie Selinger: Turning back to 2025, in addition to strong AUM metrics, it was a productive year on our financial drivers. I point you to pages 4 and 5 in the earnings presentation for a summary of the key metrics. Total fee-related revenue for the year was $416 million, an increase of 6% year-over-year. Our fee-related earnings grew 11% year-over-year, and our fee-related earnings margin expanded to 44% for the year. Adding our strong incentive fees, adjusted net income grew 18% year-over-year. During the fourth quarter, our outstanding warrants expired, with a portion exercised resulting in the issuance of approximately 10 million shares at the strike price of $11.50 per share, generating just over $110 million in proceeds. We also repurchased 2.8 million shares during the fourth quarter at an average price of $11.11 per share or a total of $31 million.
Pam Bentley: Turning back to 2025, in addition to strong AUM metrics, it was a productive year on our financial drivers. I point you to pages 4 and 5 in the earnings presentation for a summary of the key metrics. Total fee-related revenue for the year was $416 million, an increase of 6% year-over-year. Our fee-related earnings grew 11% year-over-year, and our fee-related earnings margin expanded to 44% for the year. Adding our strong incentive fees, adjusted net income grew 18% year-over-year. During the fourth quarter, our outstanding warrants expired, with a portion exercised resulting in the issuance of approximately 10 million shares at the strike price of $11.50 per share, generating just over $110 million in proceeds. We also repurchased 2.8 million shares during the fourth quarter at an average price of $11.11 per share or a total of $31 million.
Speaker #5: Total fee-related revenue for the year was $416 million, an increase of 6 percent year-over-year. Our fee-related earnings grew 11 percent year-over-year, and our fee-related earnings margin expanded to 44 percent for the year.
Speaker #5: Adding our strong incentive fees, adjusted net income grew 18 percent year-over-year. During the fourth quarter, our outstanding warrants expired with a portion exercised resulting in the issuance of approximately $10 million shares at the strike price of $11.50 per share, generating just over $110 million in proceeds.
Speaker #5: We also repurchased 2.8 million shares during the fourth quarter at an average price of $11.11 per share, or a total of $31 million. As of year-end, $56 million remained under the existing share repurchase authorization, and today we announce that our board has approved an additional $35 million for share buybacks.
Stacie Selinger: As of year-end, $56 million remained under the existing share repurchase authorization, and today we announce that our board has approved an additional $35 million for share buybacks. Additionally, we are prepaying $65 million of our term loan, reducing our leverage, and saving over $3 million per year in interest expense. While these actions enhance our financial flexibility and support shareholder returns, our primary focus remains on strategic investment for long-term growth. With strong fundraising, excellent ARS investment performance, steady FRR growth, margin expansion, and upside from incentive fees, we believe we have all the ingredients in place for a very strong 2026. Thank you again for joining us, and we're now happy to take your questions. Thank you. If you would like to signal with questions, please press star one on your touch-tone telephone.
Pam Bentley: As of year-end, $56 million remained under the existing share repurchase authorization, and today we announce that our board has approved an additional $35 million for share buybacks. Additionally, we are prepaying $65 million of our term loan, reducing our leverage, and saving over $3 million per year in interest expense. While these actions enhance our financial flexibility and support shareholder returns, our primary focus remains on strategic investment for long-term growth. With strong fundraising, excellent ARS investment performance, steady FRR growth, margin expansion, and upside from incentive fees, we believe we have all the ingredients in place for a very strong 2026. Thank you again for joining us, and we're now happy to take your questions.
Speaker #5: Additionally, we are prepaying $65 million of our term loan, reducing our leverage, and saving over $3 million per year in interest expense. While these actions enhance our financial flexibility and support shareholder returns, our primary focus remains on strategic investment for long-term growth.
Speaker #5: With strong fundraising, excellent ARS investment performance, steady FRR growth, margin expansion, and upside from incentive fees, we believe we have all the ingredients in place for a very strong 2026.
Speaker #5: Thank you again for joining us, and we're now happy to take your
Speaker #5: questions.
Operator: Thank you. If you would like to signal with questions, please press star one on your touch-tone telephone.
Speaker #1: Thank
Speaker #1: you. If you would like to signal with questions, please press star 1 on your touchstone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.
Stacie Selinger: If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one if you would like to signal with questions. The first question will come from Jeff Smith with William Blair. Hi, good morning. Could you discuss your capital allocation plans just with balance sheet cash up on the warrant exercise? And Pam, you'd mentioned you paid down some debt over the last week or two and our share buybacks. But what are your plans from here? Should we expect additional debt paydowns? Hey, thanks, Jeff. So it's Michael, and then Pam, jump in if I leave anything out here. But we've always talked about the fact that we're a capital-light business, and we've paid a healthy dividend and increased that dividend a number of times since coming public.
Operator: If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one if you would like to signal with questions. The first question will come from Jeff Smith with William Blair.
Speaker #1: Again, that is star 1. If you would like to signal with questions. The first question will come from Jeff Smith with William Blair.
Speaker #6: Hi, good morning. Could you discuss your capital allocation plans just with balance sheet cash up on the warrant exercise? And Pam, you'd mentioned you paid down some debt over the last week or two, and up share buybacks.
Jeff Schmitt: Hi, good morning. Could you discuss your capital allocation plans just with balance sheet cash up on the warrant exercise? And Pam, you'd mentioned you paid down some debt over the last week or two and our share buybacks. But what are your plans from here? Should we expect additional debt paydowns?
Speaker #6: But what are your plans from here? Should we expect additional debt
Michael Sacks: Hey, thanks, Jeff. So it's Michael, and then Pam, jump in if I leave anything out here. But we've always talked about the fact that we're a capital-light business, and we've paid a healthy dividend and increased that dividend a number of times since coming public.
Speaker #6: paydowns? Hey, thanks, Jeff.
Speaker #7: So it's Michael and then Pam jump in if I leave anything out here. But you know we've always talked about the fact that we're a capital light business.
Speaker #7: We've paid a healthy dividend and increased that dividend a number of times since coming public. And we've said numerous times we intend to sort of stay a capital-light business.
Stacie Selinger: We've said numerous times we intend to sort of stay capital-light business. So we did. You saw in the Q4, we bought back shares post-warrant exercise, and we are going to pay some debt down now. And I think that with the current authorized exercise and the debt paydown we announced this morning, that kind of puts us back in a pretty comfortable range. Obviously, we have a quite healthy dividend yield, not getting a ton of appreciation for that. So while we probably do have cash flow to be able to increase that dividend, it doesn't seem to get me rewarded, particularly by shareholders sort of focused on increasing that buyback. Okay. And then you continue to see really good operating leverage in the business. I think the fee-related margin was 44% for the year. It's up a lot over the last five years.
Michael Sacks: We've said numerous times we intend to sort of stay capital-light business. So we did. You saw in the Q4, we bought back shares post-warrant exercise, and we are going to pay some debt down now. And I think that with the current authorized exercise and the debt paydown we announced this morning, that kind of puts us back in a pretty comfortable range. Obviously, we have a quite healthy dividend yield, not getting a ton of appreciation for that. So while we probably do have cash flow to be able to increase that dividend, it doesn't seem to get me rewarded, particularly by shareholders sort of focused on increasing that buyback.
Speaker #7: So we did, you saw on the Q4, we bought back shares. Post warrant exercise, and we are going to pay some debt down now.
Speaker #7: And I think that with the current authorized exercise and the current debt paydown we announced this morning, that kind of puts us back in a pretty comfortable range.
Speaker #7: Obviously, we had a quite healthy dividend yield, not getting a ton of appreciation for that. So while we probably do have cash flow to be able to increase that dividend, it doesn't seem to get me rewarded particularly by shareholders who are sort of focused on increasing that buyback.
Jeff Schmitt: Okay. And then you continue to see really good operating leverage in the business. I think the fee-related margin was 44% for the year. It's up a lot over the last five years.
Speaker #6: Okay. And then you continue to see really good operating leverage in the business. I think the fee-related margin was 44% for the year. It's up a lot over the last five years.
Speaker #6: Can you continue to keep expense growth low as this business scales? Out through '28, which was sort of your medium-term outlook, can you continue to drive margin expansion over that period?
Stacie Selinger: Can you continue to keep expense growth low as this business scales out through 2028, which was sort of your medium-term outlook? Can you continue to drive margin expansion over that period? Thanks. We believe we can. And so we do think I think I mentioned it in my comments. We believe we have continued operating leverage, and we think that we can and will continue to drive FRE margin and overall margin through 2028. Okay. Thank you. Thank you. And the next question comes from Ken Worthington with J.P. Morgan. Hi, good morning, and thanks for taking the question. The absolute return business had a great quarter, had a really solid year. You've been highlighting for some time the expectation of flat flows.
Jeff Schmitt: Can you continue to keep expense growth low as this business scales out through 2028, which was sort of your medium-term outlook? Can you continue to drive margin expansion over that period? Thanks.
Speaker #6: Thanks.
Michael Sacks: We believe we can. And so we do think I think I mentioned it in my comments. We believe we have continued operating leverage, and we think that we can and will continue to drive FRE margin and overall margin through 2028.
Speaker #7: We believe we can. And so we do think I think I mentioned it in my comments, we believe we have continued operating leverage and we think that we can and will continue to drive FRE margin and overall margin through
Speaker #7: We believe we can. And so we do think I think I mentioned it in my comments, we believe we have continued operating leverage and we think that we can and will continue to drive FRE margin and overall margin through '28.
Jeff Schmitt: Okay. Thank you.
Speaker #6: Okay. Thank you.
Michael Sacks: Thank you.
Speaker #7: Thank you.
Operator: And the next question comes from Ken Worthington with J.P. Morgan.
Speaker #1: And the next question comes from Ken Worthington with JPMorgan.
Ken Worthington: Hi, good morning, and thanks for taking the question. The absolute return business had a great quarter, had a really solid year. You've been highlighting for some time the expectation of flat flows.
Speaker #8: Hi, good morning and thanks for taking the question. The upside return business had a great quarter, had a really solid year. You've been highlighting for some time the expectation of flat flows.
Speaker #8: How are you feeling about the business? And how do you feel returning to organic growth about that business sort of as we look to the future, given sort of the successes you've had in the past couple of years?
Stacie Selinger: How are you feeling about the business, and how do you feel about that business sort of returning to organic growth as we look to the future, given sort of the successes you've had in the past couple of years? Well, Ken, we're going to flash back to our investor day conversation when we were out in the call. We're not changing our budgeting, and we're not changing and making any proclamations on a call like this. As anybody who was at the investor day or watched that investor day recording knows, we definitely have people in the firm in that vertical that are more bullish on the vertical than we are budgeting, but we're not changing that budgeting at this time.
Ken Worthington: How are you feeling about the business, and how do you feel about that business sort of returning to organic growth as we look to the future, given sort of the successes you've had in the past couple of years?
Michael Sacks: Well, Ken, we're going to flash back to our investor day conversation when we were out in the call. We're not changing our budgeting, and we're not changing and making any proclamations on a call like this. As anybody who was at the investor day or watched that investor day recording knows, we definitely have people in the firm in that vertical that are more bullish on the vertical than we are budgeting, but we're not changing that budgeting at this time.
Speaker #6: Well, Ken, we're going to flash back to our investor day conversation when we were out in the hall. We're not changing. We're not changing our budgeting.
Speaker #6: And we're not changing and making any proclamations on a call like this. And as anybody who was at the investor day or watched that investor day recording knows, we definitely have people in the firm in that vertical that are more bullish on the vertical than we are budgeting.
Speaker #6: But we're not changing that budgeting at this time. And I should point out, Ken, that budgeting relates to flows, which obviously translates directly into management fees.
Stacie Selinger: And I should point out, Ken, that budgeting relates to flows, which obviously translates directly into management fees, but it also does relate to performance expectations and kind of what we sort of talk about as run rate performance fees at budget. And I did highlight that for the last six years, we've beaten the run rate at budget on the performance fee side as well. That was an elegant way of answering, so appreciate it. As we think about, I just want to dig into two. It's John. Sorry. Let me add one thing. I mean, I agree with everything Michael said. I do want to just make sure we make the important distinction because you framed the question in the context of organic growth.
Michael Sacks: And I should point out, Ken, that budgeting relates to flows, which obviously translates directly into management fees, but it also does relate to performance expectations and kind of what we sort of talk about as run rate performance fees at budget. And I did highlight that for the last six years, we've beaten the run rate at budget on the performance fee side as well.
Speaker #6: also does relate But it to performance expectations and kind of what we sort of talk about as run rate performance fees at budget. And I did highlight that for the last six years, we've beaten the run rate at budget on the performance fee
Speaker #6: side as well. That
Ken Worthington: That was an elegant way of answering, so appreciate it. As we think about, I just want to dig into two.
Speaker #8: was an elegant way of answering. So appreciate it. As we think about I just want
Speaker #8: to dig into. It's John.
Jon Levin: It's John. Sorry. Let me add one thing. I mean, I agree with everything Michael said. I do want to just make sure we make the important distinction because you framed the question in the context of organic growth.
Speaker #7: Sorry, let me add one thing. I mean, I agree with everything Michael said. I do want to just make sure we make the important distinction, because you framed the question in the context of organic growth.
Speaker #7: If Pam gave guidance for the first quarter of '26, and you might have been specifically referring to flows as opposed to just FRR, but that guidance for the first quarter of '26 does have embedded in it, obviously, FRR growth from that vertical in light of the success we've been having.
Stacie Selinger: If Pam gave guidance for Q1 2026, and you might have been specifically referring to flows as opposed to just FRR, but that guidance for Q1 2026 does have embedded in it, obviously, FRR growth from that vertical in light of the success we've been having. So I just want to make sure that when you follow back and look at that script, you catch that piece. Cool. Thank you. And just on two funds, maybe first Advance. How much has been raised thus far in the strategy, and how much time is left until that fund closes? And then CIS is back in the market. Just remind us how big the prior fund was. Sure. John, let me take Advance, and you just give the specific number on CIS. So Ken, we are in market for Advance.
Jon Levin: If Pam gave guidance for Q1 2026, and you might have been specifically referring to flows as opposed to just FRR, but that guidance for Q1 2026 does have embedded in it, obviously, FRR growth from that vertical in light of the success we've been having. So I just want to make sure that when you follow back and look at that script, you catch that piece.
Speaker #7: So I just want to make sure that when you follow back and look at those that script, you catch that piece.
Ken Worthington: Cool. Thank you. And just on two funds, maybe first Advance. How much has been raised thus far in the strategy, and how much time is left until that fund closes? And then CIS is back in the market. Just remind us how big the prior fund was.
Speaker #8: Cool, thank you. And just on two funds, maybe first Advance—how much has been raised thus far in the strategy, and how much time is left until that fund closes?
Speaker #8: And then CIS is back in the market. Just remind us how big the prior fund was.
Michael Sacks: Sure. John, let me take Advance, and you just give the specific number on CIS. So Ken, we are in market for Advance.
Speaker #7: Take Advance, and you just gave the specific number on CIS. So Ken, we are in market with, for Advance, we actually have the ability to extend the period to raise funds for Advance.
Stacie Selinger: We actually have the ability to extend the period to raise funds for Advance, and we have talked to our LPAC about doing that. And so we'll be continuing to try to raise money for Advance going forward the next several next quarter or so. Advance is, in my view, likely to come in smaller than the prior Advance. It'll be one of the few funds we've ever had where a successor is smaller than the predecessor. And as you know, Advance focuses on emerging managers, which is emerging and diverse managers. And there's been a lot of conversation about diversity and diversity, equity, inclusion over the course of the last year or so. And it's been a steeper slope for fundraise this time around. And I think that's just a fact. That's a fact we've been living with.
Michael Sacks: We actually have the ability to extend the period to raise funds for Advance, and we have talked to our LPAC about doing that. And so we'll be continuing to try to raise money for Advance going forward the next several next quarter or so. Advance is, in my view, likely to come in smaller than the prior Advance. It'll be one of the few funds we've ever had where a successor is smaller than the predecessor. And as you know, Advance focuses on emerging managers, which is emerging and diverse managers. And there's been a lot of conversation about diversity and diversity, equity, inclusion over the course of the last year or so. And it's been a steeper slope for fundraise this time around. And I think that's just a fact. That's a fact we've been living with.
Speaker #7: And we have talked to our LPAC about doing that. And so we'll be continuing to try to raise money for advance going forward the next several next quarter or so.
Speaker #7: Advance is, in my view, likely to come in smaller than the prior advance. It'll be one of the few funds we've ever had where a successor is smaller than the predecessor and, as you know, advance focuses on emerging managers.
Speaker #7: Which is emerging and diverse managers. And there's been a lot of conversation about diversity and diversity equity inclusion over the course of the last year or so.
Speaker #7: And it's been a steeper slope for fundraising this time around. And I think that's just a fact. That's a fact we've been living with.
Speaker #7: And when we have our final close, we don't announce the numbers along the way. But when we have our final close, it will be I think smaller than the prior fund.
Stacie Selinger: When we have our final close, we don't announce the numbers along the way, but when we have our final close, it will be, I think, smaller than the prior fund. I would say that given the size of the prior fund, it's not going to be all of our forecasts and everything incorporate the idea that it's going to be smaller. So we've understood that. We understand the landscape that that fund has been operating in for a while now, and that's baked into our guidance and our expectations. Okay. Thank you. And just CIS, the prior one. Yeah. It's about between; it's roughly $1 billion. There were some sidecar vehicles that invested alongside that fund. But for the CIS 3, plus or minus $1 billion were, as you said, now in market with critical infrastructure solutions for.
Michael Sacks: When we have our final close, we don't announce the numbers along the way, but when we have our final close, it will be, I think, smaller than the prior fund. I would say that given the size of the prior fund, it's not going to be all of our forecasts and everything incorporate the idea that it's going to be smaller. So we've understood that. We understand the landscape that that fund has been operating in for a while now, and that's baked into our guidance and our expectations.
Speaker #7: I would say that as given the size of the prior fund, it's not going to be all of our forecasts and everything incorporate the idea that it's going to be smaller.
Speaker #7: So we've understood that. We understand the landscape. We've been that that fund has been operating in for a while now. And that's baked into our guidance and our
Speaker #7: expectations. Okay.
Ken Worthington: Okay. Thank you. And just CIS, the prior one.
Speaker #8: Thank you. And just CIS, the prior one.
Jon Levin: Yeah. It's about between; it's roughly $1 billion. There were some sidecar vehicles that invested alongside that fund. But for the CIS 3, plus or minus $1 billion were, as you said, now in market with critical infrastructure solutions for.
Speaker #7: Yeah. It's about—it's roughly a billion dollars. There were some sidecar vehicles that invest alongside that fund. But for the CIS3, plus or minus $1 billion are, as you said, now in market with critical infrastructure solutions. And you know that we've talked a lot about the success we're having generally in the infrastructure space.
Stacie Selinger: You know that we've talked a lot about the success we're having generally in the infrastructure space. So when you look at the total capital formation for infrastructure vertical across separate accounts and various products, this is just a piece of it. But we feel as good about this piece as we do about the broader infrastructure strategy, which is obviously going quite well. Great. Thank you very much. And the next question will come from Bill Katz with TD Cowen. Great. Thank you very much for taking the questions. So John, you spent a lot of time talking about the depth and breadth of the Grosvenor sales dynamic for 2025. And I think between you and Michael sort of hinted at a pretty good 2026.
Jon Levin: You know that we've talked a lot about the success we're having generally in the infrastructure space. So when you look at the total capital formation for infrastructure vertical across separate accounts and various products, this is just a piece of it. But we feel as good about this piece as we do about the broader infrastructure strategy, which is obviously going quite well.
Speaker #7: And so when you look at the total capital formation for infrastructure vertical across separate accounts and various products, this is just a piece of it.
Speaker #7: But we feel as good about this piece as we do about the broader infrastructure strategy, which is obviously going quite
Speaker #7: well. Great.
Ken Worthington: Great. Thank you very much.
Speaker #8: Thank you very
Speaker #8: Thank you very much. And the next
Operator: And the next question will come from Bill Katz with TD Cowen.
Speaker #1: question will come from Bill Katz with TD Cowen.
Bill Katz: Great. Thank you very much for taking the questions. So John, you spent a lot of time talking about the depth and breadth of the Grosvenor sales dynamic for 2025. And I think between you and Michael sort of hinted at a pretty good 2026.
Speaker #8: Great. Thank you very much for taking the questions. So Johnny spent a lot of time talking about the depth and breadth of the gross sale dynamic for 2025.
Speaker #8: And I think between you and Michael sort of hinted at a pretty good '26. I was wondering if you could maybe unpack the drivers for 2026 and maybe break that down between specialized versus maybe the SMA side of the equation retail global wealth versus institutional and any other metric you think sort of salient for us as we sort of work through our math.
Stacie Selinger: I was wondering if you could maybe unpack the drivers for 2026 and maybe break that down between specialized versus maybe the SMA side of the equation, retail, global wealth versus institutional, and any other metric you think sort of salient for us as we sort of work through our math. Thank you. Sure. I don't know, Bill, if I broke it down, I would break it down much differently from what the flows formation and the makeup of that formation has been over the past couple of years with the relevant embedded trends in it.
Bill Katz: I was wondering if you could maybe unpack the drivers for 2026 and maybe break that down between specialized versus maybe the SMA side of the equation, retail, global wealth versus institutional, and any other metric you think sort of salient for us as we sort of work through our math. Thank you.
Speaker #8: Thank you.
Jon Levin: Sure. I don't know, Bill, if I broke it down, I would break it down much differently from what the flows formation and the makeup of that formation has been over the past couple of years with the relevant embedded trends in it.
Speaker #7: Sure. I don't know Bill if I broke it down. I would break it down much differently from what the flows formation and the makeup of that formation has been over the past couple of years with the relevant embedded trends in it.
Speaker #7: So, when you think about it being broad-based globally, when you think about it being broad-based across the channels, and when you think about it being highly diversified across many of our verticals, the mix between separate accounts and specialized funds is roughly the same mix as that's represented in our AUM at 70/30, with the underlying trends still being relevant to that infrastructure—strong.
Stacie Selinger: So when you think about it being broad-based globally, when you think about it being broad-based across the channels, and when you think about it being highly diversified across many of our verticals, the mix between separate accounts and specialized funds being roughly the same mix as that's represented in our AUM at 70/30, with the underlying trends still being relevant to that, infrastructure strong, and we're in market with a bunch of infrastructure stuff. And the individual investor market's growing faster than the institutional. We had individual investor AUM up close to 20%, which is larger than what our overall AUM growth was, continued growth from the capital from the insurance channel as compared to what it represents in AUM. So I don't think that I would call for something kind of markedly different in any reasonably long period of time that you would capture capital formation over.
Jon Levin: So when you think about it being broad-based globally, when you think about it being broad-based across the channels, and when you think about it being highly diversified across many of our verticals, the mix between separate accounts and specialized funds being roughly the same mix as that's represented in our AUM at 70/30, with the underlying trends still being relevant to that, infrastructure strong, and we're in market with a bunch of infrastructure stuff. And the individual investor market's growing faster than the institutional. We had individual investor AUM up close to 20%, which is larger than what our overall AUM growth was, continued growth from the capital from the insurance channel as compared to what it represents in AUM. So I don't think that I would call for something kind of markedly different in any reasonably long period of time that you would capture capital formation over.
Speaker #7: And we're in market with a bunch of infrastructure stuff. And the individual investor market's growing faster than the institutional. We had individual investor AUM up close to 20%, which is larger than what our overall AUM growth was.
Speaker #7: Continued growth from the capital from the insurance channel as compared to what it represents in AUM. So I don't think that I would call for something kind of markedly different in any period of reasonably long period of time that you would capture capital formation over.
Speaker #7: I would say that our expectation would be a continuation of the trends we're seeing, which is a very healthy environment for capital formation. And us benefiting from the diversification and breadth of the business and where we're making investments in particular to get behind the tailwinds that we're all collectively seeing in the
Stacie Selinger: I would say that our expectation would be a continuation of the trends we're seeing, which is a very healthy environment for capital formation and us benefiting from the diversification and breadth of the business, and where we're making investments in particular to get behind the tailwinds that we're all collectively seeing in the market. Bill and Michael, I don't think we said in the script, which we often do, so glad that you asked and happy to say it now, our pipeline we've talked in the past how we track pipeline, and we have near-term pipeline, a couple of categories of near-term pipeline, etc. After raising $10.5 billion through 31 December, our pipeline today is larger than it was a year ago. To John's point, it's completely diverse on channel, on jurisdiction, on geography, etc.
Jon Levin: I would say that our expectation would be a continuation of the trends we're seeing, which is a very healthy environment for capital formation and us benefiting from the diversification and breadth of the business, and where we're making investments in particular to get behind the tailwinds that we're all collectively seeing in the market.
Michael Sacks: Bill and Michael, I don't think we said in the script, which we often do, so glad that you asked and happy to say it now, our pipeline we've talked in the past how we track pipeline, and we have near-term pipeline, a couple of categories of near-term pipeline, etc. After raising $10.5 billion through 31 December, our pipeline today is larger than it was a year ago. To John's point, it's completely diverse on channel, on jurisdiction, on geography, etc.
Speaker #1: Bill and Michael, I don't think we said in the script which we often do, so glad that you asked and happy to say it now, our pipeline we've talked in the past how we track pipeline and we have near-term pipeline a couple of categories of near-term pipeline.
Speaker #1: Etc. After raising 10 and a half billion dollars through December 31st, our pipeline today is larger than it was a year ago. So just to and to John's point, and it's completely diverse on channel, on jurisdiction, on geography, etc.
Speaker #1: So that's I think we normally mention that and we didn't this time. I don't believe so. Thanks for asking.
Stacie Selinger: So I think we normally mention that, and we didn't this time, I don't believe. So thanks for asking. Okay. Thank you. And maybe a follow-up for Pam. It's a very two-part question. You've been able to really hold the line on expenses year on year, even as the business continues to scale. What is it that's driving the ability to sort of tamp down, particularly on the OpEx side and the comp side? And then as we look ahead, sort of unrelatedly, how are you guys thinking about the realization opportunity on the carry side of the equation, and which bucket do you think it comes from? Thank you. Appreciate the question, Bill. I think on the OpEx side, I would say, obviously, we're focused on continued expense management, but also just continued investment in scalability and technology.
Michael Sacks: So I think we normally mention that, and we didn't this time, I don't believe. So thanks for asking.
Bill Katz: Okay. Thank you. And maybe a follow-up for Pam. It's a very two-part question. You've been able to really hold the line on expenses year on year, even as the business continues to scale. What is it that's driving the ability to sort of tamp down, particularly on the OpEx side and the comp side? And then as we look ahead, sort of unrelatedly, how are you guys thinking about the realization opportunity on the carry side of the equation, and which bucket do you think it comes from? Thank you.
Speaker #8: Okay. Thank you. And maybe a follow-up for Pam. It's a very two-part question. You've been able to really hold the line on expenses year on year, even as the business continues to scale.
Speaker #8: What is it that's driving the ability to sort of tamp down, particularly on the OPEX side and the comp side? And then as we look ahead, sort of unrelatedly, how are you guys thinking about the realization opportunity on the carry side equation, and which bucket do you think it comes from?
Speaker #8: Thank you.
Pam Bentley: Appreciate the question, Bill. I think on the OpEx side, I would say, obviously, we're focused on continued expense management, but also just continued investment in scalability and technology.
Speaker #9: Appreciate the question, Bill. I think on the OPEX side, I would say obviously we're focused on continued expense management, but also just continued investment in scalability and technology.
Speaker #9: There's a lot of great efforts going on that are enabling us to achieve that scale and including AI and we spoke a little bit about that in Investor Day as well.
Stacie Selinger: There's a lot of great efforts going on that are enabling us to achieve that scale, including AI. We spoke a little bit about that at Investor Day as well. We are also, again, just disciplined in making sure we're still investing in the areas of the business where there's product growth, such as in the individual investor space. So we're investing where it makes sense, and we're holding the line and reducing expenses where we can through real investments in technology. I think, Bill, if you can remind me the second part of your question there. Yes, I'll take it, Pam. It was the carry question of where is it going to come from, and how good do we feel about it, and how do we characterize it.
Pam Bentley: There's a lot of great efforts going on that are enabling us to achieve that scale, including AI. We spoke a little bit about that at Investor Day as well. We are also, again, just disciplined in making sure we're still investing in the areas of the business where there's product growth, such as in the individual investor space. So we're investing where it makes sense, and we're holding the line and reducing expenses where we can through real investments in technology. I think, Bill, if you can remind me the second part of your question there.
Speaker #9: And we are also again just disciplined in making sure we're still investing in the areas of the business where there's product growth such as in the individual investor space.
Speaker #9: So, we're investing where it makes sense, and we're holding the line and reducing expenses where we can through, really, investments in technology. And I think—Bill, if you can remind me the second part of your question—
Speaker #9: there. Yes. I'll take it, Pam. It was the carry question of where is it going to come from and how good do we feel about it and what's our how do we characterize it?
Michael Sacks: Yes, I'll take it, Pam. It was the carry question of where is it going to come from, and how good do we feel about it, and how do we characterize it.
Speaker #9: And I think, Bill, that where I would start where I would start on that is I think the most important piece, and then I want to dig in a little is how we mostly think about it is it's not a it's not an if it's a when.
Stacie Selinger: And I think, Bill, that where I would start on that is, I think, the most important piece, and then I want to dig in a little, is how we mostly think about it is it's not an if. It's a when. And so when matters, time value, money matters, absolutely for sure. Sooner's better. That said, that asset is appreciating very rapidly. And I encourage everybody to listen to my comments in the script with regard to that asset, look at the appreciation over the year, last year, quarter over quarter. That asset's appreciating rapidly. And what, to me, is very encouraging about that asset, when you have a carry asset on your balance sheet, one of the things you worry about is sort of old carry.
Michael Sacks: And I think, Bill, that where I would start on that is, I think, the most important piece, and then I want to dig in a little, is how we mostly think about it is it's not an if. It's a when. And so when matters, time value, money matters, absolutely for sure. Sooner's better. That said, that asset is appreciating very rapidly. And I encourage everybody to listen to my comments in the script with regard to that asset, look at the appreciation over the year, last year, quarter over quarter. That asset's appreciating rapidly. And what, to me, is very encouraging about that asset, when you have a carry asset on your balance sheet, one of the things you worry about is sort of old carry.
Speaker #9: And so when matters, time value, money matters, absolutely for sure. Sooner is better. That said, that asset is appreciating very rapidly. And I encourage everybody to listen to my comments in the script with regard to that asset.
Speaker #9: Look at the appreciation. Over the year, last year, quarter over quarter, that asset's appreciating rapidly. And what, to me, is very encouraging about that asset, when you have a carry asset on your balance sheet, one of the things you worry about is sort of old carry.
Speaker #9: And as the old carry just kind of stale and sitting there and you're not going to really collect it, if you look at our collections, our old carry has come way, way, way, way down.
Stacie Selinger: Is the old carry just kind of stale and sitting there, and you're not going to really collect it? If you look at our collections, our old carry has come way, way, way, way down. We've collected most of it, so it's live. It has been a when, not, and if question. We have every confidence that that carry at 479 firm share now is a when, not, and if, and that number is going to go up, which we touched on. There is a ton of carry at work behind that that doesn't really appear anywhere, right, because it's just carry that's not yet in the money to be counted in carry at NAV. But it's working. We're deploying the capital, and we're creating the investment returns to turn that into carry at NAV.
Michael Sacks: Is the old carry just kind of stale and sitting there, and you're not going to really collect it? If you look at our collections, our old carry has come way, way, way, way down. We've collected most of it, so it's live. It has been a when, not, and if question. We have every confidence that that carry at 479 firm share now is a when, not, and if, and that number is going to go up, which we touched on. There is a ton of carry at work behind that that doesn't really appear anywhere, right, because it's just carry that's not yet in the money to be counted in carry at NAV. But it's working. We're deploying the capital, and we're creating the investment returns to turn that into carry at NAV.
Speaker #9: We've collected most of it. So it's live. It has been a when, not an if question. And we have every confidence that that carry at 479 firm share now is a when, not an if.
Speaker #9: And that number is going to go up, which we touched on. And there is a ton of carry at work behind that that doesn't really appear anywhere, right?
Speaker #9: Because it's just carry that's not yet in the money to be counted in carry at NAV. But it's working. We're deploying the capital, and we're creating the investment returns to turn that into carry at NAV.
Speaker #9: And there's a ton of that that we've generated in the last six years or so. And so we're hopeful that the same experience you've seen with our carry asset over public where the time period that we've been we've tripled three and a half X, whatever it is, the size of the asset while collecting a lot of cash, that not saying specific dollars, amounts, but that that same pattern is going to occur again on top of the 479.
Stacie Selinger: And there's a ton of that that we've generated in the last six years or so. And so we're hopeful that the same experience you've seen with our carry asset over the time period that we've been public, where we've tripled, 3.5x, whatever it is, the size of the asset while collecting a lot of cash, that, not saying specific dollar amounts, but that same pattern is going to occur again on top of the $479 million. We think that this, we think this is not; if you look at our carry asset today at $479 million, it's a big chunk of our total enterprise value relative to peers. It's worth noticing that.
Michael Sacks: And there's a ton of that that we've generated in the last six years or so. And so we're hopeful that the same experience you've seen with our carry asset over the time period that we've been public, where we've tripled, 3.5x, whatever it is, the size of the asset while collecting a lot of cash, that, not saying specific dollar amounts, but that same pattern is going to occur again on top of the $479 million. We think that this, we think this is not; if you look at our carry asset today at $479 million, it's a big chunk of our total enterprise value relative to peers. It's worth noticing that.
Speaker #9: That you think that this—we think this is not. Like, if you look at our carry asset today, at $479 million, it's a big chunk of our total enterprise value.
Speaker #9: Relative to peers. It's worth noticing that. And then you think about the dry powder that carry that we have behind that. And it's a very significant asset for Grosvenor that we sort of feel and it will start cash flowing to a higher degree just a question of when.
Stacie Selinger: And then you think about the dry powder, the carry that we have behind that, and it's a very significant asset for Grosvenor that we sort of feel and it will start cash flowing to a higher degree, just a question of when. And when we're done, when it does, we think it will be significantly appreciated. Okay. Thank you for taking all the questions. As a reminder, if you would like to signal with questions, please press star 1 again, star 1, if you would like to ask questions. And we'll take a question from Crispin Love with Piper Sandler. Thank you. Good morning, everyone. First, on the fundraising outlook broadly, very strong in 2025. Just curious on how you think about 2026, just given the momentum you have built up, at least it compares to 2025. You said pipeline is stronger than a year ago.
Michael Sacks: And then you think about the dry powder, the carry that we have behind that, and it's a very significant asset for Grosvenor that we sort of feel and it will start cash flowing to a higher degree, just a question of when. And when we're done, when it does, we think it will be significantly appreciated.
Speaker #9: And when we're done, when it does, we think it will be significantly appreciated.
Bill Katz: Okay. Thank you for taking all the questions.
Speaker #8: Okay. Thank you for taking all the questions.
Operator: As a reminder, if you would like to signal with questions, please press star 1 again, star 1, if you would like to ask questions. And we'll take a question from Crispin Love with Piper Sandler.
Speaker #1: As a reminder, if you would like to signal with questions, please press star one again. Star one if you would like to ask questions.
Speaker #1: And we'll take a question from Crispin Love with Piper Sandler.
Crispin Love: Thank you. Good morning, everyone. First, on the fundraising outlook broadly, very strong in 2025. Just curious on how you think about 2026, just given the momentum you have built up, at least it compares to 2025. You said pipeline is stronger than a year ago.
Speaker #10: Thank you, good morning, everyone. First, on the fundraising outlook broadly, very strong in '25. Just curious on how you're thinking about '26, just given the momentum you have built up, at least that compares to 2025.
Speaker #10: You said pipeline is mean that we should assume that you expect fundraising in '26 to exceed 2025? Or am I going a little bit too far there?
Stacie Selinger: Does that mean that we should assume that you expect fundraising in 2026 to exceed 2025, or am I going a little bit too far there? Our bottom-up granular build coming in from the business development team, and the investment teams lands at a number that would exceed last year. Given how good last year's fundraising was, given it was a firm record, given the sort of massive increase over 2024, we're not standing on the call today saying that 2026 fundraising will exceed 2025. But we've certainly got the pipeline to give 2025 a serious run for its money. And as I said, our teams think we should have a bigger year. But our base budget is in line with last year. And we'll keep updating that as we get through the year.
Crispin Love: Does that mean that we should assume that you expect fundraising in 2026 to exceed 2025, or am I going a little bit too far there?
Michael Sacks: Our bottom-up granular build coming in from the business development team, and the investment teams lands at a number that would exceed last year. Given how good last year's fundraising was, given it was a firm record, given the sort of massive increase over 2024, we're not standing on the call today saying that 2026 fundraising will exceed 2025. But we've certainly got the pipeline to give 2025 a serious run for its money. And as I said, our teams think we should have a bigger year. But our base budget is in line with last year. And we'll keep updating that as we get through the year.
Speaker #11: Our bottom-up, granular build coming in from the business development team and the investment teams lands at a number that would exceed last year. Given how good last year's fundraising was, given it was a firm record, given the sort of massive increase over 2024, we're not budgeting, we're not assuming that '26 fundraising will exceed '25.
Speaker #11: But we've certainly got the pipeline to give '25 a serious run for its money. And as I said, our teams think we should have a bigger year.
Speaker #11: But our base budget is in line with last year. And we'll keep updating that as we get through the go through the year. And when we're confident that we're going to exceed it, we'll announce
Stacie Selinger: When we're confident that we're going to exceed it, we'll announce that. Perfect. That makes a ton of sense. Then just Performance Fees, very strong in the quarter. But my question is a follow-up on the Carried Interest side. Was the softest for Carry in 2025? First, was that a surprise for you? I know Q3s are typically the strongest, so not a major surprise to see a little bit lower in Q4. But just curious on the absolute level for Q4. And I do appreciate the difficulty in forecasting these levels and how time can be a driver. It was lower than expected, than we expected. That said, Carry is not the easiest revenue stream for anyone to predict. And so particularly when your Carry is a quite it's a highly diversified Carry with lots of different waterfalls.
Michael Sacks: When we're confident that we're going to exceed it, we'll announce that.
Speaker #11: that. Perfect.
Crispin Love: Perfect. That makes a ton of sense. Then just Performance Fees, very strong in the quarter. But my question is a follow-up on the Carried Interest side. Was the softest for Carry in 2025? First, was that a surprise for you? I know Q3s are typically the strongest, so not a major surprise to see a little bit lower in Q4. But just curious on the absolute level for Q4. And I do appreciate the difficulty in forecasting these levels and how time can be a driver.
Speaker #10: That makes a ton of sense. And then just performance fees—very strong in the quarter. But my question is a follow-up on the carried interest side.
Speaker #10: Was the softest for carry in '25? First, was that a surprise for you? I know third quarters are typically the strongest, so not a major surprise to see a little bit lower in the fourth.
Speaker #10: But just curious on the absolute level for the fourth quarter, and I do appreciate the difficulty in forecasting these levels and how.
Speaker #10: I'm going to be a driver. It was
Michael Sacks: It was lower than expected, than we expected. That said, Carry is not the easiest revenue stream for anyone to predict. And so particularly when your Carry is a quite it's a highly diversified Carry with lots of different waterfalls.
Speaker #11: lower than expected than we expected. That said, carry is not the revenue the easiest revenue stream for anyone to predict. And so particularly when you're carry, is a quite is a highly diversified carry with lots of different waterfalls.
Speaker #11: It's not like work on one deal and generate carry. So it's the hardest revenue stream for us to predict. We would love it to the we would love the realizations to increase we've been looking for that to happen since kind of the slowdown in '22, '23.
Stacie Selinger: It's not like work on one deal and generate carries. It's the hardest revenue stream for us to predict. We would love the realizations to increase. We've been looking for that to happen since kind of the slowdown in 2022, 2023. We do see interesting more activity teed up everywhere, public market, private market. We are expecting increased revenues there. But that movement in the carry at NAV is super important because you don't know when you're getting that money, but you are going to get it. Tracking the asset matters a lot. That asset moved a bunch in Q4, even though we didn't collect a lot of cash. Great. Thank you, Michael. I appreciate you taking my questions. At this time, there are no further questions.
Michael Sacks: It's not like work on one deal and generate carries. It's the hardest revenue stream for us to predict. We would love the realizations to increase. We've been looking for that to happen since kind of the slowdown in 2022, 2023. We do see interesting more activity teed up everywhere, public market, private market. We are expecting increased revenues there. But that movement in the carry at NAV is super important because you don't know when you're getting that money, but you are going to get it. Tracking the asset matters a lot. That asset moved a bunch in Q4, even though we didn't collect a lot of cash.
Speaker #11: We do see interesting more activity teed up everywhere public market, private market, and so we are expecting some expecting increased revenues there. But that movement in the carry at NAV is super important.
Speaker #11: Because you don't know when you're getting that money, but you are going to get it. And so tracking the asset matters a lot. And we that asset moved a bunch in '24, even though we didn't collect a lot of cash.
Speaker #10: Great. Thank you, Michael. I appreciate you taking my questions.
Crispin Love: Great. Thank you, Michael. I appreciate you taking my questions.
Speaker #1: And at this time, there are no further questions.
Operator: At this time, there are no further questions.
Speaker #12: Thank you again to everyone for joining us today and taking the time. We appreciate the engagement and the questions. If there are follow-up questions, please feel free to reach out.
Stacie Selinger: Well, thank you again to everyone for joining us today and taking the time. We appreciate the engagement and the questions. If there are follow-up questions, please feel free to reach out. If not, we look forward to speaking with you next quarter and hope everybody has a wonderful day. Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.
Stacie Selinger: Well, thank you again to everyone for joining us today and taking the time. We appreciate the engagement and the questions. If there are follow-up questions, please feel free to reach out. If not, we look forward to speaking with you next quarter and hope everybody has a wonderful day.
Speaker #12: If not, we look forward to speaking with you next quarter. And hope everybody has a wonderful day.
Operator: Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.
