KKR & Co. (KKR) 29 Oct 192019 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to KKR's Third Quarter 2019 Earnings Conference Call.

During today’s presentation, all parties will be in a listen-only mode.

Following the management’s prepared remarks, the conference will be opened for questions. [Operator Instructions] Also this call is being recorded.

I would now like to hand the call over to Craig Larson, Head of Investor Relations for KKR. ahead. go please Craig,

to us. quarter Welcome Thanks earnings for joining our Norma. XXXX third call. Thanks

I'm by usual Nuttall, As joined our and our Co-President Scott CFO; and Co-COO. the Bill Janetschek,

referring remind that call to are GAAP which press to in reconciled measures the is like We'd available which we'll be events for on on to to everyone the our release figures non-GAAP Investor Center the call these which factors guarantee future statements our to will do refer please filings forward-looking And or contain KKR.com. statements. so at cautionary section related SEC performance, not

and we've positioned posted I'm of that and the looking summary, In quarters we're previous like with that our to of on course supplementary going website to And fundamentals deck. be over X referring and pleased also how X we're forward. a begin call presentation our by the we'll Pages referencing

can the charts power Focusing to page. grow on the of side importantly, Page as earnings seen Most the X the continues firm the deck. left-hand be by of of nicely on the

AUM while is share. per adjusted book now billion, Our $XX.XX value $XXX is

As seeing in our power of the value. you book that through and we've we're know big compounding believers been power

ahead per years over year out alongside of last X%, year while value each indices. all compounded Over the of equity paying per dividends income share book the grew fixed book we've value and this. three well And last share XX%

fee fees private X, increase markets. LTM at modest in grown Looking blended to basis growth chart both asset markets management up the have to addition XX% in in public right-hand Page on on management due the steadily and year-over-year an top rate a

of on helped that performance billion $X.X realized nine over This carry months. our trailing carry balance generating XX earnings. after-tax $XXX terms despite figure million our year-to-date turn bode net increase It's has time balance worth XX% the well earnings strong noting And the carry the should in the in the increase realized sheet over unrealized distributable interest in in in unrealized distributable for months. investment over carried net drive and totaled

the equity-based Page financial Turning as include through of we distributable report operating results. within that expenses earnings charges do remember after-tax we well our some these within X as you additional our to on compensation you'll look deck, And our as detail please results. our as see

for DE million the on quarter basis. $X.XX per After-tax adjusted a in at came or share $XXX

and a Our margin compensation came our at earnings margin XX%. that level distributable healthy in was right operating XX% pretax

an the LTM for billion. earnings Fee-related quarter basis $XXX and on are million $X.X were

our we economics things investment progress three. investments; our there find evaluate five new will first monetize model to we for focused Bill capital; on I'll performance cover the that everything capture investments; update we more we're you our do. on; finally the are two As generate and performance; need and existing on use attractive to raise remaining

with start performance. the I'll Page be referencing investment of Let's X deck.

return This basis. MSCI total private the appreciated the appreciated with entirety over equity its in favorably the portfolio beginning So, to on X.X% that trailing months. XX World private equity, compares XX% a

at funds recent driven more see a XX% in vintages appreciating was you quite page. these we by equity these strong investing on saw least for Where flagship are that notable Asia performance private blended been performance have our our The was the two funds across years as III.

on the of well a And and energy XX% basis estate ahead on basis. benchmark pressured appreciated respectively X%, while environment our have alternative fund. appreciated blended Growth real performed infrastructure commodity Our XX% but an and benchmark. Energy declined and Income our flagship both credit LTM leverage and funds strategies X%

$XX in the last totaled months. XX capital billion, fundraising, inflows $X over to billion quarter Turning and the

estate, real impact had and successor first CLOs technology and European including credit. We number inflows leverage strategies close to our strategy, PE, well growth as strategies, and and the across credit credit of as the the held our

to dry XX of have over trailing months inflows contributed powder $XX at Capital billion quarter end.

when Importantly, their of at have they weighted either investment are fee-paying, we sight line commitments approximately around of future capital average management basis period, invested towards also providing that or in become a $XX XXX rate billion of direct fees. points,

with I'll to it And that, over turn Bill.

Private Thanks, was which in Public opportunities. Credit Deployment third $X Craig. from the quarter I'll billion, in new we to start largely need Markets thing this well, with do invest coming is our strategies.

billion by deployment addition first in months estate driven and across to up billion, over is In strategies. million investments to we Europe compared of $X nine the in $X.X XX% Markets Public $XXX private our the quarter, equity Year-to-date, the in Markets, invested real XXXX. Private U.S.

of Private nine up XXXX, $XX is year-over-year. the first X% Market billion, is deployment months Through

let's to the in Now turn activity quarter. monetization

As reported this sales. secondary update strategic monetization activity September, late by in was driven our in and transactions quarter both

exit just million had our $XXX had and at a in Health National multiple five PRA final interest of investment over We income in We quarter times the carried blended of our and this both quarter. cost. Vision, realized

$XX And and Markets from carry million we're with to $XX see million QX, beginning last in Public realized quarter.

to our model Finally, capture the well economics is firm. last the to greater thing investors, and use do we for need our

Capital In quarter totaled transaction $XX this Markets fees million.

quarter. over can that of million. that of quarter contributed markets we'll two in capital $XXX lift periodically, third had fee those the Now We have the year last transactions in

generated have size, quarter year-to-date While the transactions. this that And in third the transactions came XX year-to-date we is and of parties. XX% approximately quarter, from from this Fees this healthy. overall percentage fundamentals remained generated XX% outside revenue and over quarter were revenue of XX%. a little any across U.S., this didn't quarter was quite of

see Capital across to the So Markets diversification we're platform. continuing

stand have little are QX XXXX, here you XXXX. investment contribute on monetization activities should realized that closed let today. and we close, in a as Finally, color carried to give expected early $XXX interest signed me realized income, or million Transactions have and or been in

in And close million expect Of it's to only October. of $XXX end QX. that $XXX the million, we

fundamentals, a momentum the core categories. we're our power supplement, Turning in our five The to our seeing. we are you'll quite across of And is summary of model results. of with the pleased evident see page five the

I'll that, to And turn with it Scott. over

Thanks, everybody you call. joining for Bill. our And thank

Our I'm an quarter, is investor mature results discussed powerful quarter and I of straightforward, brief. track the records, so be more Last going base. combination expanding this to

As takes a to XX And scale. of to strategies reminder, years. start last our investment a launched in current the it XX decade achieve our XX experience, were in about

a have growth we So of lot ahead.

that remember, is we're also we've over to last businesses simultaneously capabilities. building it XX been But important the distribution investment new our building years, as

and But over net with distribution We growing way base and encouraging, still investor channels, been XXX years X,XXX investors a long high go. we an have opportunity all to have today. results market. to the from XX see to our insurance, worth ago, The to Institutional, retail expand

continue significant mature our to investment expand growth we new generate track our we records, see and ahead. As distribution performance, footprint, products, create

look have three this Please take a grown the to Page the There $XXX management XX% in put over see to of want years $X.X perspective. from supplement. about last I will million at you our six fees that billion.

years, $XX of significant Over organic number capital a distribution and This done young funds was with billion. three these first-time raised effort. a exceeded new

years. expect we next of look the This three strategies Now be shows the side chart. over to fund-raising where right-hand the at the

also $XX expect PE, our XX three vintage. have global we list billion But will their it there's market. and in see other PE, shows last Asia largest aggregate the in infrastructure strategy the funds, You over includes to to Americas which

by fundraising what's least our we believe three given, XX% grow market So our we the can ongoing to at efforts, distribution coming to fees management and plus continue if over cooperates environment next again the perform, we years.

questions. your that, to With happy take we're

[Operator Our first Alex you. of Sachs. Goldman Blostein comes Instructions] Thank from question

open. Your line is

Hey, morning, great. Good guys.

fact So, growth on over but the to on starting how investments the mentioned I guess management we about so much the are that given of fee growth incremental maybe X. the you Definitely margin next that three place? Scott encouraging XX% already should think last point on the hear in slide years, the

Thanks investment you're revenues. for we're been cooperates. right, as bringing Alex. if a at said teams be I in new the of the about that was we've coming lot for expecting, been I And investing the talking XX% of market the question, last ahead what we've To think and several years is least on clear,

to over time. period So that of there be leverage we positive operating expect would

will of somewhat. those net making in of variety the products we'd for initiatives even a distribution investments to other We and But expect firm, investments continue to including new the new increase further. be margin still building out operating

That's Great. and And for Craig. Bill helpful. then my follow-up

numbers the guys then Or you utilization provided? monetization million $XXX realized that Looking XXXX, and will into include any on does XQ in top arrangement on sort set activity of you that and that guys highlighted income at loan be $XXX margin have the from in carry million Fiserv of any and up? of the early you

expected Alex portion Fiserv only $XXX this a XX, out million Embedded fourth when is one total Bill. that's of is an mind dividend the the in But of quarter. some Hey, monetization count. in I keep in of

strategic And that Trainline. close when importantly, and Korea. QX that's two But is have and at more completed have in between million you have in about both and so that in of XXXX already secondaries signed Japan now which SoftwareONE to were and $XXX been sales think already been U.S. we are that the several and expected

a opportunity from of monetization point view. So a lot of

noted a think year. this our been getting price. yet merger its I Fiserv shareholders. question stock to our Fiserv's from reflected understand because still appreciate clear just people just we've from upside of don't caused To the have we And And Alex, First materially and the the the is from opportunity that Fiserv Data merger think the Yes. be think Scott standpoint, Fiserv, that beginning question is on and this bit has we increase to market in stock

in investors, we put on there's modest remaining. some quite could those to shares keep your we think to capital so but margin because point, we And back return bit our a a so did the place loan, upside

sense. perfect makes Great. Thanks guys. Yes,

comes our KBW. And Lee of question Thank from Robert you. next

Your line is open.

guys. morning, Thanks Thanks. questions. my for Good Great. taking

Hey, Rob.

So updated base update the kind LP kind But maybe where know have is on and the far invested see maybe in you of of some you're in and following – you've platforms? success had getting us the numbers. you maybe on of investors so past. about I trying this the and Just fundraising, kind kind talked of Scott to multiple you've up can now

we think the Sure. continue I Look to Rob question. for progress. thanks good make just

tends a cross-sell know as one bit now investor base when that we're expanding time. the client, per product over meaningfully is your investors. in you're On a products X,XXX about So X.X happen but at to you average,

of even average products. X.X So, investors for still are But only more than the a have just top you one to that we XX, product. sense our give XX% the today in opportunity,

also but that amount think the statistic. expand we a of investor that to there's base, cross-sell only further, So not also but significant opportunity --

We've the also as also from in institutionally. opportunity we And and the insurance. net market there's and gone to those billion since high there $XX We've in see from opportunity XXXX significantly opportunity insurance retail There's gone billion worth more since in to There's opportunity I we ahead. market. areas where billion $XX said think prepared are XXXX. the billion $X $X remarks, from

are still those So you, some long lot short, see but we story upside. for a stats of

changes we be rate bit of maybe of the Should for a you've assets kind several follow-up in that accelerate a like I a thinking rate, have know some if sheet, a the more it's assets tax you're forecast maybe modeling and bit But looks maybe down Bill, it tax path normalized tax faster? a bunch utilized And tax -- low the pretty balance at question. this to the realizing pretty But hard look a it of to quarters. I come little that quarter-to-quarter. of assets last was Great.

going up the that's and be the high case. we way the in on the that Hey, we lot and what one where tax was Rob. time Federal each from level period to said to That's the quarter. are its good a question to had five-year of be based rate to going corporate six-year But we that way originally XX% walk upon single-digit spend all was a over thought

and actually up. monetization are might could have a asset tax extent point up it's and and go two we rate years accelerating we However the that tax in it that -- to then you very one your see point to good we're that and using

last effective could So that's tax was quarter you that XX%. rate our see why

different host only actually This quarter it whole X%. of a was for reasons

us out, and have probably make about quarter. Again, every but you I've But or as try teens information in on to would the stick probably with incredibly to this that model we'll the number still much as it's low for said next call, just probably hard year update again, sure something I every we'll two. that

question. taking Thanks Great. Thanks, for Bill. my

Thanks, Rob.

you. Thank

with Katz from next comes question Our Citi. Bill

Your line open. is

question. taking Hey, good morning. for my Thanks

is you provide on be First Herbert in one quarter, I strong for the very just know performance would could -- this Ben and is Bill.

some portfolio update quarter-over-quarter of just Just and maybe metrics year-over-year. health company

the Ben, is Sure, Scott. it's line Yeah. it's been bottom I mean, consistent. pretty

revenue XX% quarters. about months in growth the area global that several in it's growth. been EBITDA portfolio So And last about XX% last XX and the PE for the

Thank thinking are the on year-to-date? policy will substantial you be Great. in just how dividend cash of you. then And just follow-up light of fixed currently a sheet build pretty and kind the balance about

No, we the to to a important level is we topic the we've the historically see towards we should think dividend so flexibility always firm But an a that as fourth have preserve to upward disposition quarter said, and at want this capital we over That repurchases. about moment. on news us, the back It's compounding, bias call. invest to going time. addressed retaining dividend to in share through be remember

line punch the stay tuned So to is next quarter.

for Thanks the question. Great. taking

Thank you.

Thank you.

next Credit Suisse. comes Craig with Siegenthaler Our question from

Your open. line is

morning, everyone. Good Thanks.

morning. Good

private out raise in your So real update infrastructure strategy business to broaden Asia buyout the just and expected us Asia, first outside the the can of fund, on, estate? upcoming Asia you on including debt

Scott. Sure. It's

So thanks for the question.

priority a that equity Asia the we're was expanding this platform summary big track. outside our private for of right, and on You're year the is firm

with launched We an estate, Asia technology focus. we're and also well real as infrastructure, to in efforts going be an launching have growth across effort credit

on businesses footprint new leveraging we four the focused Asia, think have. I already So

that, ground see you'll on us able we're the people leveraging offices but the add eight to do So we have to the team the be in region. in

against CFO base for I'm how quarter? a in the allocated and question in the FRE just investment expense much on was non-comp comp income math. here wondering the And Bill Thanks. just quarter,

we've using. that Craig, methodology Hey, it's the been same

operating over and the you the backing allocated percentage expenses take stock-based the If is fee our income out earnings. then and fee-related comp total that amount income is, to you take whatever

a how that's You that number. to you take number and fee get income, fee-related earnings minus the

nothing's So this quarter. changed

Got Bill. Thanks, it.

Thank you.

of Mike America Lynch. Our next Merrill from comes question Bank of Carrier

open. Your line is

investment thanks or overall morning your ex you performance Good for energy questions. first, the board, strong How the the it taking Maybe the and pointed just some is of performance trade have the out. impacted across concerns in look public demand the has? in the Or that Asia impacted? been like private some strategy, doesn't given strategies because not markets have of it the it more has increased some of

subject at Thanks domestic to something Craig. look Yes, when and consumption are question. the closely is the Mike, made its looked for focused really I and whims in think, on have you'd be negotiations. we've expect we've investments this we very China the tended and as that again -- to of not trade at very

I exposure on those. private of is And there think what's on costs, So opportunities single-digit as of in the relates equity think, opportunities. front I when as right. us going it a across we look range you're be -- the overall investment is low resulting that the portfolio coin, both on well to from as that trade the There can from flip to side revenues,

have on So, if the companies that I was is is trying decided of one opportunities, overall the point there think, to the that's exit ways that same find and portfolio time, pursue to the one are pretty region. we're -- small impact to

as All helpful. a And follow-up. right. just That's then,

You guys growth the mentioned some area. of the in equity fundraising

that issues Just that's more some in of the like fundraising going growth the like some been private relative to the investment it's recent space. out opportunities there like curious, whether traction, marks are with or of IPO how

been within a the are And thoughts on experience relates I sense can seen. there question, as the positive the Again, healthcare for And pleasant as there of on couple you growth I table those. But again two both on at we've There's our the statistics a a to -- is think, very date, the overall. it of think, funds the that's think to the fundraising certainly that. of get performance by it's Growth. on that LPs. as looking well first TMT I IPO market returns so TMT fund question aspects look, a Look, answer we're very

the market windows be times going when to is IPO and always others. feels of market and they're has market First, it than look, more been that accessible

current really dynamics, the remembering don't overall, that, So out all feel of that ordinary.

And sign when think, I that investors can are back, our pushing functioning healthy from market. standpoint a a of be

clear shut. be to point, second not the is window think, I IPO the

end IPO of $XXX well the X% in its we The million. stock week was sizable IPO. up of oversubscribed first the priced European That It portfolio ours. the IPO, So trading. approximately book traded of at was company SoftwareONE, raised last day and a a

investors So the the at moment, window but may selective be shut. is again more not

this we're the there then portfolio, add not and firm the about flavor to future DE. outlook the to growth just able to we're often framework ultimately for monetizations the whether really when relates be overall, underlying related and the and asked bit little market, a generate if the And IPO to Mike coverage in think question I is the but of going future to

And factor an not market. Remember, well significance the holdings standpoint, the stock as whole. here public a actually as we're of the from IPO. typically It's what's that performance as in isn't the a selling bigger IPO

XX% publics performance are from So, of Year-to-date, that up the about strong. whole. standpoint, been very the as so PE XX%, a has publics are portfolio the

just performance is to quite when up statistic holding always a XX%. actually Now your over helped broad. going But clear, to be is like that largest is be

First take math, if still to XX% you are out the up So XX. publics that of Data/Fiserv nine

has performance been good. again So overall quite

positive. thing only to of There we a Australian to the market is the from -- pushback I means extrapolate the less on global To see extent, a fun that. that But market difficult is IPO Mike and add would it's be point, public IPOs. seen some it I would probably couple Craig's company. we have thing only that, wouldn't do a The add I is it's a Yes.

And so across that there's opportunities means, more the firm. for us investment

Thanks lot. right. a All

And from Thank question Schorr Evercore. our comes next of you. Glenn

open. is line Your

be It there. to might related question. Hello Mike's

you Henry are about their that interest recession be in if interesting are to rates at like valuation. 'XX, it macro going help a or you slowdown something 'XX, a 'XX-like the to outlook If your McVey, of or you for great whether underscoring creation look point credit equity at comments something tipping team, not formally his a the low look be

long-winded does a the into deployment that's And question follow-ups do So and to your lead-up I'll capital factor of separate. activity. how that capital both my markets

Thanks, Glenn. McVey. now Thanks great what here's watching okay, think see to basically say you, and U.S. tell Europe I for services in we're giving the we're I'd a to and data Consumer extent. will industrial closely. Henry I'd a recession seeing. the nod great we -- the but we an look

expecting are recession. we U.S. the clear, believe normal a whatever's be really starting coming industrial rolling a of Europe. be right But and we're with to recession a we now, to So more sector a seeing of of kind bit

different Asia a is story. of bit a

out we all of see opportunity of do this. So coming

there's the as your it, But on what to market, invest is there's volatility we seeing think how in about we the -- into more as dispersion to more in about market. deployment, question we're think

market see So a and to extent some have/have-not economy. a have/have-not continue we to

And is market we're a spending time result is the so that, companies. as undervaluing where of where

punished any is complexity finding outlook So market change the punished, is quite is overall we're and skittish. in

so see. is private. themselves of the level result noncore a we as seeing five-foot that That's from going at make we're to interesting global want to where assets. companies what interest companies simpler, continue more selling the they're operate, trend so, there's There's we that And

we of is And Our normal we continues into think that strategy buy works recession what that's cycle, far happened to last to think, and this as go be part complexity going of the we be than more the time. simplicity. which strategy a sell

Very clear. Thanks.

relationship the you you while of When -- next you of rates talked products. them earlier about your going number and it being you the over quick current or is improve your management the raising statistics LP a to follow-up. XX-plus numbers some over base, the penetration about, those on to Just new change capital brand look -- have mentioned I'm three the how and strategies sell function to curious years? rolled new that

three we Like lot in in thinking the the be years additional penetration raise $XX other all years, billion words and rate given a semi-steady last three efforts? should the strategies more you that's markets the money over next

I right-hand the Well, at upper over last next the big I the did of mentioned three. way have in that think look you Slide three not on if we we X the the years market three will the in side it's funds right-hand

would So, I that's the thing say. first

And So, all three more $XX-plus else equal, the the on bottom strategies the have side, well. a right-hand years we right expect you'd that on you're last bias as number. billion than positive there's have

if equal, to So, I think cooperates. for that would expect what we're three is to market you exceed else next all saying the the we years number

management team KKR and calls calling with our products specialists that actually supplemented deeper an marketing in mature investor think our from I the And to fund about on terms have they're approach in all relationship continue go relationship management, part bag by of relationships actually a your strategy. any product that is help can where that we and then of an individual their is on standpoint question broaden. that

to And be KKR in so you stats don't up have people increase we're to able that be because we client. set think one our successful five cross-sell

need You the then to to deliver of the and build one rest trust firm.

so for private at a our first had was very dialogue XX And equity way pension I the plan probably with that we handful day focused. people think Glenn works a day to years, you and only if think a of

above within professionals, our a having it cetera. to et CIO of estate, opportunities. partnership think dialogue assets, now credit the same energy, you as if liquid relates credit, the that the to equity, alternative And potential that at team professionals, with will real real the infrastructure, have dialogue And credit expanded time,

works, when said is So, And I and naturally. can happen an think building cross-sell that that like there's it actually Scott aspect that something focus very that trust. as of

think I about that's think a I a give you and Glenn insurance And of hard ago $XX a that's point AUM four bias. bias as other billion. the the in positive well. it's to and in distribution this I number now on those $XX hopefully positive invest but billion thing the of kind continue numbers we Back Yes. to made to And is areas I years think to roughly retail

Thank you. Appreciate it.

Thank you.

you. question from And Autonomous. Thank our next comes of Patrick Davitt

Your open. line is

good are Hey, guys. How morning you?

how Hey, you doing? are

Terrific.

Good.

Just the pop to double-check incentive of include quarter the in $XXX would XQ in the expect million you fourth the normal kind -- normal markets fees? that pop in Public

No.

So What income. to include talking nothing fees. that does with carry not realized incentive balance at realized has is we're about fees all. and It sheet do incentive

Asia Awesome. specifics of you in as on performance into kind drove equity the such you maybe Thanks. big guess that. more driver that big flagship guess And walk think last highlighted private a from could LTM of what a then number you through quarter? I I being I some III move

the with to -- we're the trends Asia within whole portfolio. III I continues broad specifically. the really broad experience very think I across it relates number the But And it's that's positive as think one seeing LPs again that a and Asia Patrick as continues. performance be to

positions million about other the III. from in second Asia were mind or thinking quarter in you're when third of And strategic quarter about those pop come the that and talking big to in keep to earlier I either the the $XXX fourth first quarter, when Patrick, was going one to three quarter thing

point and little we from And what of actually better a a view so that's properly did the the them on valuation but had increase IRR of drove really those quarter-over-quarter. big in we've exits marked each

So, rolls come pretty that's to fair assume going if the you're again includes it's that when significantly that to XXXX, -- up XX% probably XQ off? showing

No.

Patrick from perspective was XX. So done we sales an of those as close is September IRR the that strategic that as in happening that valuation happens embedded what got was

you so saw of the uplift some in quarter. the in positions those actually And third

the quarter mark-to-market good said embedded amount, basis place will not fourth but it our being a take the and monetization valuation. first So all quarter. in That in is of on a

Okay. later. Thank I get that. I follow-up you. will

you. next question Stanley. Michael Cyprys Thank Morgan And comes with our from

Your line is open.

Thanks taking morning. for good question. Hey, the

as your multiples on the curious today on Just across purchase look we perspectives new price transactions industry.

think with a mix around little deals times little we which perhaps a on at EBITDA late risker bit where different terms some and But pre-crisis arguably XX above of purchase bit price seeing cycle. today. growth folks average, is profile new the we're site multiples, as were I are in

perspective the curious just industry your then hood for also the there on for that under looking So on and specifically. KKR

Yeah, then let or in. start may me Mike chime Scott Bill and there

I opportunity and think look one outside about And more of look to we you're public exactly more is what which the of valuation-related. continue to is talking see at the dislocation, equity of risk/reward deployment things interesting that's U.S. part is that better

returns So total S&P five years returns if last Pacific. Asia over than is that you look at the for more X times of MSCI the

value region. the greater seeing are overall we overall, so in And

most levels dollars of investment given times X.X what investments over that it again relates specifically. interesting seeing in approach you is a to U.S. U.S. Europe in the activity if again so together but actually as you're terms And invested it's with Asia look disciplined And are valuation pretty I think year-to-date of overall

to million $XXX invested just $X.X was the little a the more color in Markets only billion quarter this you Private And that we've U.S. on give in

more pipeline point majority U.S. yet is in the And certainly what's now side to component you so again right equity And the we're buy to amount Craig's is that the a into private transactions of in now that deploying U.S. deploying. on the the signed, but that on the we're are look of capital close a outside certainly capital when right

a around your bit I realizations comp just sheet. were off And XX% as higher the at latest just thinking Great. the in the a quarter that ratio. think quick follow-up question was Curious when maybe little the on around a balance time

in expect just fees you expecting given from here? XX% management over next the the trend would So three curious comp years you're to how ratio growth the

Michael, is Scott Bill. this earlier. echo said what I'll

we you As and go up platforms that said, margin fees to we P&L we more at probably in early will where our especially R&D continue a we lot and part That those Asia. continue when XXXX, lot in you going to grow the look are see platforms extent of through continue raise of improvement. the the expand to management a as we capital as and XXXX being have the of

margin again So you in business XX% be was we is probably quarter operating the quarter I quarters. of would expansion. third to that see ratio couple that next and that grow certainly close comp our continue that be say to over to improvement But certainly should going will there the reported as

Thank you.

Thank you.

of Thank you. And Harris comes Chris Fargo. from Wells our next question

is open. Your line

Thanks, guys.

to coming funds be the fundraising when to you mean XX just could to over funds those start months, launched go potentially clarify expect or live? when flagship I the that For the does want

I Chris. in the a months to then going be all turned we'll they're to three on XX going those launch the of ultimately when is question So, be And in think, terms deployment coming of question.

it have ear. play And we'll the by so

XX will standpoint So in to fee-paying of terms you an knock months the models on. I depend your over XX think be next think when aspect the funds as from helpful then turned wood those should AUM again and months get on

on we the with expectation just clear expect dollars Chris, you be to we the opposed of them But fees turn terms as raised. I the to for management before to when incorporates are trajectory when shared in think,

revenue. hit they when it's So

not capital the And three that one get fees about the talking we're large turned on based those and capital. funds subtlety management upon invested flagship committed about

it. Got

upside the and realized the a you What just gave quick carry to drove on And income? investment the guidance on previously gross Okay. quarter. one

to week some that sent the release we which we week before was activity us ended time, having out quarter press the actually end, was a probably that unknown earlier. up we that Between

would take nothing but so news. And good as I that

you. Thank it. Got

Thank you.

Devin comes of Ryan question JMP next our Securities. And from you. Thank

Your line open. is

Great. Good everyone. morning

morning. Good

Good morning.

Hey, Devin.

investments follow-up a some on distribution making. on commentary of Just the you're the

some guess You you I side, the I and but effort. the alluded retail net high on referenced worth the of to spoke and on specifics to institutional investments guess

reading and I'm the So sounds like what haven't maybe expectations maybe just is there? some about yet. incremental exactly I what's initiatives it fundraising been I'm for curious, lines specifically that that just trying also that guess in think there's channel. new between to launched

Scott. it's Devin,

question. great So

the rates back is were in that a say, we've what insurance we're market significant even amount where there's you a I'd how $XX of So $XX we trillion in interest make have in channels One we trillion number doing. for level all of investors a of the channels world, and environment. growth if we with struggle this seeing negative higher or And to up to. money second, two in a seen referring to given are

the travel in negative very we to world. make the as hard of it's So and number is, more believe our talk alternatives a different world types to basic money order rate investors, to around need objectives. achieve of theme in we We a

velocity as So the has I'd in would and only increased industry the our a say say recent our at of an that this at of increase dynamic rates, a more this lot significant result back. I wind wind negative before back had we of dynamic. as

the last over way As course the really fees lot we for There's of that invest part focus early but which the five both historically. packaged regular earnest insurance on institutional structured the we a easier returns about in And or seeing to of began four years. in there's in. way in which insurance products a significant our talked that really it's we're companies that to are also products,

that alternatives a of portfolio in create portfolio. notes of figure using doing is overall of think to off interest structure that are think types the taking the the out by in So we're and we're to things space the insurance investor what doing that how investment-grade we broadening backdrop. a trying back about aided Those

to billion on just years people focused that this few four space. in the a billion is insurance firm So going with $XX our $X last in

global the for high we've point So there's been XX% tracking worth base, capital from that quarters statistic XX% give that the now the kind retail in last we year-to-date retail and about net their several we're the the significant of the XXXX from XX% regular think money in of excess stat we've years, of net raising retail and And a And increase and and structure. on steadily if has area increase up to and focus worth. is, the seen in market. last upside we high from we've go as over in raised several of space way and high insurance staffing that's net sense that worth is the the you the been

virtually cases could finding X then it up think it together we we several time, team investment on billion packaging format that from lot And -- the across here. billion team is and to again, selling which $X At There focus just think net see worth the a that strategies investor billion those a everything lot we're interest this of of years is in on different product incremental from side up that of That on and individual do small very $XX which incremental in size number of in what internally, of of we're staffing in you're with going the that page channel and go space. incremental high ago, have right-hand basically increase. the same we we a meaningfully types $XX retail four is to and the market.

Okay. above AUM longer that's yet of contributing Great I about we stands not and should on if cost, sure update quick paying how can I'm kind color. carry then missed Thanks. And give but think term? an the just then but that carried where trajectory not those your follow-up you it, assets interest to of a just interest. of us today

first in actually information Devin with the Hey, supplement We line was much where it pretty put the is That in Bill. it out in this the first quarter. is quarter. in

in news. So you. that see that number no an certainly update the we acceleration new we To extent will

to we've $X.X of months at shows or that next and I take that relative Joe an a billion under put of Bae the showed Yeah. billion up thing over slide give Day. carry, an our to The Investor Devin that that And would years. slide earning I $X that only trailing about more we XX five-ish and is kind potential. been And we or point to add go our believe summer we're carry for last at we opportunity did saw

think Actually, today than is we case. that were outlook we the still summer. last And so, we're more confident in that

event put and And per even up share and that book years. value XX at five earnings out broadly distributable total we for numbers years more

actually more that again, outlook at we confident in pretty conservative able thought the we're firm And time. date lays tell summer. today to with even assumptions for there that exceed were that in outlook I'd we that than what out there the last So we're you that being chart that at

was look eligible That's we reported on specifically start of the again in reference, the when approximately actually very interest quarter. just you that in $XXX a billion so carry. table, the billion carry $XXX $XX just first up billion, give receiving the about right to billion. the from page And got And at $XX investment first you take $XXX mandates a eligible now to number of we've was the quarter XX, billion

so, like raised, north is certainly number being number with I a there. certainly go upon still said more And capital performance based obviously that. little up that to we expect being of But, that

Okay. Terrific. color. appreciate it Thanks for I all the guys.

Thank you.

And Brian our question Bedell Bank. Thank next you. Deutsche comes of from

open. line is Your

Great. Thanks. morning, guys. Good

the follow-up maybe just most -- but of been asked, side. a on insurance Just my questions have

the Do up blocking on really of -- possible have that tackling dynamic the growth efforts in penetration that type that and a that some penetration? of could in is the of terms in Or strategic of expect sort for might there. and it you you be step the to years? more dramatically of insurance increase Just comment Scott thanks couple agreements next

the multiple across actually the across our different insurance as our a of And the statistics more where in the of relationships insurance cross-sell I'd use they're firm I would we Brian, are partnership the space. And category in whole scale. tackling. with use our us developed on both despite number than say now blocking -- relative base a of insurance better investing that products strategic of put pursuing in the the the We're definitely effort space, and in

So, think things doing of on we the time the And AUM done definitely some those. supplying also at that we with I strategic blocking looking is spend and tackling. front, quietly and it's have continue more firm to

happens, but expect on efforts front. Far as of blocking some predict And at some we're but think looking tackling to and the both strategic anything I too to bigger be early you able them if should well. and modest maybe moves

Okay.

that's that was includes a And clarification Okay, in XQ? just roughly the as then, is nearly the that XQ the it on Fiserv $XXX in then to level into XQ? same expected million the and be helpful. $XXX loan And million, margin and

paid distribution to the them. on Not to to will carry sheet capital our granular the LPs some realizations. well to going firm that specific other made as as offshoot to to in numbers And really than say very is comment that, on additional that there an balance to be being return more order

I'd over few say quarters. margin those loan numbers the include do on what we to next expect the

Okay. you? Great. right. Thank Great. All Did you. Yeah.

Thank you.

I'm comments. call Thank currently Craig to to further Mr. over showing you. the And questions. closing no I'd like Larson back turn for

Thank feel talk you, free call. next you follow-up directly to follow-ups, and you quarter. any joining Please for to we'll our Norma. Thank everybody of with course

thank for and gentlemen, participation. This conference. concludes you your today's Ladies

You now disconnect. may