GCM Grosvenor (GCMG) Q3 2025 Earnings Transcript

Motley Fool Transcribing11-06

Image source: The Motley Fool. DATEWednesday, Nov. 5, 2025 at 11 a.m. ETCALL PARTICIPANTSChairman and Chief Executive Officer — Michael SacksPresident — Jonathan LevinChief Financial Officer — Pamela...

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Email [email protected]TAKEAWAYSFee-Related Earnings -- Increased 18% year over year.Adjusted EBITDA -- Rose 16% year over year.Adjusted Net Income -- Expanded 18% year over year.Fee-Related Earnings Margin -- Achieved a fee-related earnings margin of 45%, representing a 350-basis-point increase from the fiscal third quarter ended Sept. 30, 2024.Total Assets Under Management -- Reached a record $87 billion at the end of the fiscal third quarter ended Sept. 30, 2025, up 9% year over year.Fee-Paying AUM -- Grew to $70 billion at the end of the fiscal third quarter ended Sept. 30, 2025, a 10% increase year over year.Contracted Not-Yet-Fee-Paying AUM -- Rose 17% year over year to $9.2 billion, presenting a base for organic growth as capital converts.Private Markets Management Fees -- Climbed 7% year over year.Absolute Return Strategies (ARS) Fundraising -- Raised $1.5 billion over the last twelve months, while ARS management fees grew 6% year over year.ARS Multi-Strategy Composite Return -- Delivered a 14.2% gross return over the past 12 months and posted a 3% return in the fiscal third quarter ended Sept. 30, 2025.Total Management Fees -- Totaled $101.4 million, up 7% year over year; fiscal fourth-quarter management fees are projected to be approximately $1 million higher than in the fiscal third quarter ended Sept. 30, 2025.Fee-Related Revenue -- Rose 9% year over year, including $2 million in transaction fees related to a credit collateralized fund obligation that will not recur next quarter.Fundraising -- Year-to-date capital raised reached $7.2 billion, surpassing the entire 2024 total, with $9.5 billion raised in the trailing twelve months, the highest on record.Infrastructure and Credit Segment Fundraising -- Accounted for nearly two-thirds of total capital raised in the trailing twelve months.Collateralized Fund Obligation -- Closed a $490 million deal, generating $2 million in one-time transaction fees and ongoing management fees beginning next quarter.Insurance Client Capital -- Represented approximately 14% of total capital raised in the last twelve months and 40% of capital raised in the fiscal third quarter ended Sept. 30, 2025, largely from the credit secondaries transaction.Gross Unrealized Carried Interest -- Hit an all-time high of $941 million, up $32 million, or 4%, from the end of the fiscal second quarter ended June 30, 2025, with about 50% attributable to the firm.Carried Interest Realizations -- Exceeded $24 million, marking a two-year high for quarterly realized carry.Unrealized Performance Fees -- The ARS segment holds approximately $33 million in unrealized performance fees at quarter-end.Dividend -- Increased to $0.12 per share, reflecting consistent free cash flow generation.Share Buyback Authorization -- $86 million remained as of quarter-end.Expense Management -- Compensation and benefits for fee-related earnings stood at just over $37 million and are expected to decline slightly next quarter; non-GAAP general and administrative expenses dropped to $20 million but are expected to return to higher levels next quarter.Strategic Initiatives -- Launched multiple fund products, including an inaugural real estate fund (REV), held a first close for a private equity secondaries fund (GSF four), and are preparing additional launches such as CIS four and a private equity product for individual investors.Distribution Joint Venture -- Grove Lane has delivered approximately 40 new contributing RIA relationships year to date and is driving growth in the infrastructure interval fund, with flows increasing each week.SUMMARYGCM Grosvenor (GCMG +0.30%) delivered record assets under management and posted double-digit year-over-year growth in fee-related earnings, adjusted EBITDA, and adjusted net income, accompanied by an expanded fee-related earnings margin (non-GAAP) of 45% and robust fundraising momentum. The fiscal third quarter ended Sept. 30, 2025, saw the closing of a $490 million collateralized fund obligation in private credit. This produced both a one-time transaction fee and a new source of recurring management fee income. Carried interest realizations reached a two-year high, while the pipeline for new fund launches and distribution in the individual investor channel was broadened through new products and the growth of Grove Lane. Management communicated specific 2028 targets for fee-related earnings (more than $280 million) and adjusted net income per share (over $1.20), raised the quarterly dividend, and reiterated a disciplined approach to expense management and capital return.Chairman Sacks stated, \"We have a high degree of confidence that we can compound value for shareholders over the long term.\"President Levin confirmed, \"infrastructure and credit together accounted for nearly two-thirds of our capital raised in the last twelve months,\" emphasizing market demand in those segments.Chief Financial Officer Bentley emphasized capital discipline by noting, \"we had $86 million remaining in our share buyback authorization at quarter-end.\"Leadership outlined clear strategic goals, including doubling 2023 fee-related earnings by 2028 and targeting adjusted net income per share above $1.20 by 2028.INDUSTRY GLOSSARYFee-Related Earnings (FRE): Operating profit from recurring management and advisory fees, excluding performance-based incentive fees, used to evaluate core business profitability at alternative asset managers.Absolute Return Strategies (ARS): Investment approaches aiming to deliver positive returns regardless of market direction, typically through multi-strategy or hedge fund-style products.Collateralized Fund Obligation (CFO): A structured finance vehicle backed by a pool of private market fund interests, which issues securities linked to the cash flows and returns from underlying funds.Carried Interest (\"carry\"): The share of profits from investment funds allocated to the manager as an incentive for performance, commonly realized upon portfolio exits and typically subject to performance hurdles.Interval Fund: A type of closed-end fund periodically offering to repurchase shares from investors, providing less liquidity than mutual funds but facilitating access to less-liquid asset classes.RIA: Registered Investment Adviser, a firm or individual qualified to offer personalized financial advice to clients and subject to SEC or state registration.Full Conference Call TranscriptStacie Selinger: Good morning, and welcome to GCM Grosvenor's Third Quarter 2025 Earnings Call. Today, I'm joined by GCM Grosvenor's Chairman and Chief Executive Officer, Michael Sacks, President, Jonathan Levin, and Chief Financial Officer, Pamela Bentley. Before we discuss this quarter's 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-Ks, our other filings with the Securities and Exchange Commission, and our earnings release, all of which can be found on the public shareholders section of our website. 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. 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. We are pleased to report another strong quarter for GCM Grosvenor, led by strong investment performance, strong fundraising, and financial results that exceeded expectations. For the quarter, our fee-related earnings, adjusted EBITDA, and adjusted net income were up 18%, 16%, and 18%, respectively, as compared to 2024, and the results are similarly favorable on a year-to-date comparison. We're also seeing strong momentum sequentially with third-quarter fee-related earnings and adjusted net income growth of 13% and 16% over 2025. Our fee-related earnings margin for the quarter was 45%, which is approximately 350 basis points higher than it was in the third quarter of last year.We ended the quarter with a record $87 billion of assets under management, a 9% increase compared to the end of 2024. Investment performance remained solid across each of our business verticals. Absolute Return Strategies has delivered particularly strong performance to clients, with our multi-strategy composite generating a 14.2% gross rate of return over the last twelve months. In addition to the strong ARS performance, we also enjoyed year-over-year portfolio appreciation across each of our private market strategies. Looking ahead, our teams remain focused on investing client capital and deploying our $12 billion of dry powder. On the capital formation side, our positive fundraising momentum continues.Year to date, we raised $7.2 billion, higher than our total fundraising for the full year of 2024. Over the last twelve months, we've raised $9.5 billion, the highest trailing twelve-month fundraising period on record for Grosvenor. Infrastructure and credit led our growth during that period. Jonathan will cover fundraising drivers and pipeline shortly, but I do want to note that in the quarter, we closed on a $490 million collateralized fund obligation that will be invested in private credit secondaries. Beyond the management fees that we will receive from this vehicle going forward, we generated $2 million of transaction fees that were recognized in the third quarter.Importantly, in general, activity levels are high, and our pipeline remains quite full. Our gross unrealized carried interest balance stands at an all-time high of $941 million, up $32 million or 4% from the end of the second quarter, with approximately 50% of that belonging to the firm. During the quarter, we realized more than $24 million in carried interest, which is the highest level of quarterly realized carried interest we've seen over the last two years. While carry realizations are clearly trending in the right direction, and we're optimistic about 2026, it's worth noting that typically the third quarter carry realizations are seasonably the highest of any given calendar quarter.A few weeks ago, we hosted our 2025 Investor Day, and we were thrilled to welcome investors and analysts to hear directly from the leaders who drive our business every day. The goal of the day was to provide a comprehensive look at GCM Grosvenor, who we are, how we've evolved, and where we're going. Our team, led by Stacie Selinger and August Klatt, did a great job putting that day together. The deck and video are available on our website, and I think they're helpful in understanding the company. That said, I do want to highlight a few of the key themes we covered.First, we made clear that GCM Grosvenor is central to the alternatives ecosystem, bringing more than five decades of innovation, execution, growth, and relationships to bear across private equity, infrastructure, credit, real estate, and absolute return strategies. Second, we showed that our investment platform is broad, built for performance, and importantly, highly scalable. Across the firm, we have the capacity to deploy multiples of our current capital base using our existing investment engine. That scalability, combined with a rigorous and repeatable investment process, has produced attractive risk-adjusted returns for clients in each of our verticals. Third, our growth outlook is compelling across each of our investment strategies.Each of our verticals, from credit to infrastructure to real estate, to private equity and absolute return, has a path to substantial AUM growth over the next five years. We highlighted the fact that our team's execution over the last five years has translated into earnings growth, with fee-related earnings having grown more than 90% since 2020. Importantly, we spoke about our path to double 2023 fee-related earnings to more than $280 million by 2028, and to drive 2028 adjusted net income per share to more than $1.20 per share. We also announced an increase in our quarterly dividends to $0.12 per share, reflecting continued confidence in our growth trajectory and our strong free cash flow generation.Finally, the day underscored what truly differentiates GCM Grosvenor: our client-first culture that is rooted in teamwork and alignment and is a key competitive advantage delivering high re-up rates and significant growth. We hope that for anyone who participated or subsequently dove into the materials, it is clear that we are well-positioned strategically, financially, and culturally, with multiple growth engines, a scalable operating model, and a clear line of sight to meaningfully higher earnings and cash flow in the years ahead. We have a high degree of confidence that we can compound value for shareholders over the long term. And with that, I'll turn the call over to Jonathan. Thank you.Jonathan Levin: As Michael noted, I will focus my remarks this quarter on our strong fundraising results and healthy pipeline. We covered this during the Investor Day, but the beauty of our business is the many ways we have to win with all types of clients. Our business diversification in terms of geography, asset type, client type, and implementation style is reflected in the diversification of our fundraising results. Looking at the record fundraising over the last twelve months, there's a few things I'd call out. First, infrastructure and credit together accounted for nearly two-thirds of our capital raised. These strategies are where we're seeing the highest demand in the market.In infrastructure, we benefit from the market tailwinds generally in our broad platform that offers various strategies and numerous vehicles to meet the unique needs of investors. In credit, our success is rooted in helping investors access the markets that they don't necessarily have the ability to access on their own, which means strategies outside of traditional direct lending and investment implementation styles outside of regular way fund investments. Our direct-oriented strategies in both infrastructure and credit are driving a significant percentage of our growth. Second, absolute return strategies generated $1.5 billion in fundraising over the last twelve months. As Michael shared, the pipeline here is the best it's been in years on the heels of very strong investment performance.While we aren't changing our flat net flows budgeting assumption, the backdrop for ARS is increasingly encouraging, and we believe we can compound AUM growth through strong performance. Finally, insurance clients accounted for approximately 14% of capital raised over the last twelve months, and 40% of Q3 capital raised, driven by the almost $500 million collateralized fund obligation that will be invested in private credit secondaries. Looking ahead to our pipeline, I want to emphasize the strength and predictability of our separate account business. We are perpetually in the market raising separate accounts, from existing investors through re-ups and from new investors.If we do our job well, taking care of our existing clients, re-ups, and cross-selling into new strategies, are our best sources of new capital. As is usually the case, we're also in the market with several specialized funds. We held our first close of our private equity secondaries fund, GSF four. We also held the first close of our inaugural real estate fund, REV, which now allows us to offer a real estate investment strategy in specialized fund form, expanding our addressable market for that strategy. One particularly interesting note on REV is that one of the primary anchor investors in the first close is an RIA.We're also preparing to launch the fourth vintage of our diversified infrastructure fund, Critical Infrastructure Strategies for CIS four, which will hold its first close in the coming months. We're also successfully executing on our growth plans for the individual investor channel. Our distribution joint venture, Grove Lane, is rapidly ramping up with new hires and has already sourced dozens of new relationships for the firm year to date, around 40 of which have already contributed to an investment product. Flows for the infrastructure interval fund are increasing week over week, and the traction is very encouraging for what we believe is a highly differentiated product in the market and a significant opportunity for us over the long term.We're also preparing to launch a fund for private equity assets in the coming months, which will follow a similar model to CGIS, and we believe also has differentiated positioning given its expected high diversification and middle market focus on co-investments. So the punch line here is that we have a clear strategic plan, and now it's a matter of executing well. Something we talk about a lot with the team is the importance of relentlessly focusing on execution for our clients, as investors, and as business owners. And with that, I'll turn it over to Pam.Pamela Bentley: Thanks, Jonathan. We are pleased with our third-quarter results, which Michael highlighted, and I will cover in more detail. Given our strong fundraising and investment performance this quarter, assets under management grew to $87 billion, and fee-paying AUM grew to $70 billion, a 9% and 10% increase year over year, respectively. Our contracted not-yet-fee-paying AUM grew 17% year over year to $9.2 billion, providing a foundation for continued organic growth as that capital converts to fee-paying AUM over the next few years. Private markets management fees year to date and for the quarter grew 10% and 7% year over year, respectively, from a combination of solid fundraising and conversion of contracted not-yet-fee-paying AUM.Absolute Return Strategies continued its strong investment and business performance. ARS management fees for the quarter grew 6% year over year. Our multi-strategy composite returns were a strong 3% in the third quarter, putting year-to-date growth performance above 9%. Total management fees for the quarter were $101.4 million, an increase of 7% year over year. We expect total management fees for the fourth quarter to be approximately $1 million higher than the third quarter. Our year-over-year fee-related revenue in the third quarter grew 9%, driven by strong business performance. As Michael noted, this quarter's FRR included $2 million of transaction fees related to the credit collateralized fund obligation. This will not be recurring next quarter.That said, we do expect to launch additional structured solutions in the future. 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. 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 third-quarter FRE compensation and benefits remain stable at just over $37 million. We expect slightly lower levels of FRE compensation in the fourth quarter. Non-GAAP general, administrative, and other expenses declined from last quarter to $20 million.We expect non-GAAP general, administrative expenses in the fourth quarter to return to the levels we saw in the first and second quarters this year. Pulling together these factors, our fee-related earnings for the quarter grew 18% year over year, and our third-quarter FRE margin expanded to 45%. Turning to incentive fees, our gross unrealized carried interest balance increased to an all-time high of over $940 million, and this quarter, we realized $25 million of total incentive fees, including $1 million of performance fees and more than $24 million in carried interest. Given our strong ARS investment performance year to date, we have approximately $33 million in unrealized performance fees as of quarter-end.In addition, the improving realization levels are encouraging as we head into 2026. Our financial position is strong, and our decision to raise our already healthy quarterly dividend to $0.12 per share reflects our consistent and growing cash flow generation. In addition, as of quarter-end, we had $86 million remaining in our share buyback authorization. That said, our primary focus remains on strategically investing for long-term growth, and we remain confident in our goals to double our '23 FRE by 2028 and more than double our adjusted net income per share over the same time period. Thank you again for joining us, and we're now happy to take your questions.Operator: Thank you. If you would like to signal with questions, please press 1 on your touch-tone 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. Again, that is 1 if you would like to signal with questions. And our first question will come from Ken Worthington with JPMorgan.Ken Worthington: Great. Thank you for taking the question. I guess I'll try two. First, on the CFO raise, you mentioned the $2 million of fees upfront. Are there ongoing fees for that product as well, or is it the way it's structured? You know, the fees just come in at that upfront chunk. And then are these CFOs something you might regularly come back to market with more regularly? Or is what we saw really a one-off this quarter?Michael Sacks: So thanks for the questions, Ken. It's Michael. The CFO is absolutely a regular recurring management fee with some carry building over time, you know, pool of capital. So it's a $490 million raise, and we'll earn an annual management fee on that. And, hopefully, we'll earn some carry on that as well. In addition to the normal fees that would accompany, you know, a $500 million raise, there was an upfront fee, and we specifically mentioned it so that when you saw it on the financials, you knew what it was, and you knew that it was not recurring. But we will start next quarter to enjoy, you know, management fees from that pool of capital.They will be recurring.Ken Worthington: Okay. Great. And then just on ARS, you know, you mentioned it. We see a better turnaround in the business, good returns. We saw better flows to start the year. It's been sort of quiet since. And we're going into what I think is typically the seasonally weak fourth quarter when we see, you know, bigger redemptions. So I guess the question is, if things are going well and things feel good, you know, why isn't this yet being seen in the net flows picture? And I guess how is 4Q shaping up given it's seasonally a weaker quarter but the environment feels better and you're doing better? Like, how do we, you know, sort of add those up?Michael Sacks: John, maybe, you know, you can talk a bit more about the pipeline, but what I would say, Ken, and we talked about this at Investor Day, there is no question that the interest level is higher and the opportunities for us to drive flows are higher, and that's just the fact. So I don't know, John, how much retail we're, you know, we're not gonna make news, but go ahead.Jonathan Levin: Yeah. I would just step back and say, you know, we've obviously held to the convention from a budgeting, forecasting, and guidance standpoint. We've had, frankly, since we went public five years ago, and we've been wrong about that in both directions, but kind of not really wrong about that in the aggregate. So, you know, if you look at the earnings presentation, for example, where we go through the flows picture and the supplemental information, you can look at nine months in 2024. You can look at the nine months year to date today. You can see how that's been an improving picture.You know, if you look at year-to-date absolute return strategies through the first nine months, when you look at contributions versus withdrawals, distributions are a little bit of an anomaly because those are sometimes self-liquidating vehicles. It's, you know, slightly net positive. I think that the trend in the attitude and the environment because of performance, because of investor interest, all of that is better. I don't know that I would, as Michael said, I don't know that we're changing our Q4 picture. I don't think that there's much. It might be an accident. History. I don't think there's much seasonally that you should actually look into a ton around the ARS business.Before the vehicles that have liquidity quarterly, that could be any quarter's activity. But I would say that you heard it, as Michael said, live at the Investor Day. David Richter, who runs that business, is feeling very good about things. And Michael, Pam, and I are also feeling good about things, but also waiting to see that picture change before we change how we talk about the forecasting and the guidance around the business.Ken Worthington: Okay. Great. Thank you very much.Operator: And our next question will come from Bill Katz with TD Cowen.Bill Katz: Thank you very much for taking the questions this morning. Good morning, everybody. Just maybe, Michael, just unpack a couple of things on the realization outlook. Forgive me for not knowing this already, but why is the third quarter seasonally so strong? And then as you look into next year, where do you see the greatest opportunity for those realizations? If I look at your disclosure, which is terrific, so thank you for that. A lot of it sits in funds 2017 forward. So one of the themes we're hearing from some of your peers is, like, there's still some vintage and aging and seasoning that need to go on along the way.So I'm trying to triangulate between the very strong realization commentary and what might actually flow through the P&L as we look out to next year or so. Thank you.Michael Sacks: Yeah. So I think the fact that the carry or the, you know, average distribution of the carry, if you will, has aged and it's in these 2017 plus buckets, is somewhat, you know, overwhelmingly a good thing for us. And let me just start with that. So I think it's a good thing for us. It's a good thing for us because when you have, you know, more recent vintages, these are, you know, you can, you have some carry that's got some value at a mark from 2008, but it hasn't exited yet. You're sort of skeptical about when it's gonna exit, etcetera. You know, you have carry in that 17 plus bucket that's kind of normal.That's supposed to be there, that's healthy, and that's good. You're confident that your marks are appropriate and conservative. And so that's, you know, very much kind of live carry. The other reason that's a good thing is we own more of that. And so we own a higher percentage of that 17, you know, bucket than we do the earlier buckets. And I think those are both good things for us. I don't think we have any, you know, ability to generalize about when that carry might be realized or when it might, you know, accelerate aggressively.I think our carry revenue experience is pretty much consistent with what you're seeing and what, you know, we're observing from a macro perspective across the industry. And we are so well diversified in our carry on so many different lines that just when those realizations pick up, and they have picked up, so as they continue to pick up, and they continue to accelerate, we will participate. But it's there's nothing like we can't look at, you know, one big deal that's going to generate carry and, you know, determine the outcome for a year.It's too diversified, which we think is a benefit for the stability and the strength of that carry, but it makes it, like, harder for us to point to timing. The last thing is the seasonality of the third quarter is related to when tax carry is paid in the industry in general. So, you know, a lot of the, you know, carry that you see in the third quarter for most of the sponsors you follow will include tax carry distributions that they're receiving that tend to take place in that quarter to a greater degree than they do the rest of the year.The carry from actual exits is much, I think, more random and spread throughout the year and doesn't necessarily have any predictable seasonality.Bill Katz: Okay. That's helpful. And maybe one for Pam. Thank you again for taking the questions today. Just as I think through next year, can you give us a sense of how we should think about both stock-based comp issuance as well as maybe the direction per share count despite the buyback? It did go up substantially quarter on quarter. Thank you.Pamela Bentley: Sure. Thanks, Bill, for the question. In terms of our stock-based compensation, expected to be at or, you know, at similar levels or slightly higher depending on the stock price at the time we grant any awards. Generally, as part of our year-end compensation cycle. But don't expect any unusual anomalies. What I would say on both share count and how we manage dilution there, we've, from stock-based compensation and from stock-based awards, we've enjoyed less than 3% dilution over the last five years cumulatively. So we're very actively managing dilution through both buybacks and settlement options to make sure that we're, you know, very diligent and careful around the share count.The other item, as you may recall, earlier this year, in the summer, we had issued about 2% dilution. We raised $50 million in proceeds from the strategic partner that invested in the business from a primary offering. So that was the other just less than 2% of dilution that you see in our numbers. We're going to continue to, you know, again, actively, we have $86 million remaining in our buyback. We're going to continue to actively manage dilution through the buyback program. And really don't see any significant changes in the near term.Bill Katz: Okay. Thank you.Operator: And once again, if you would like to signal with questions, please press 1 on your touch-tone telephone. Again, 1 if you would like to ask questions. And we'll go back to Bill Katz with TD Cowen.Bill Katz: Okay. Well, hit 1 again. So just, Jonathan, maybe one for you. You ticked off a fair amount of data on or just details on the retail business. I was trying to keep up with you. Could you maybe unpack a little bit of your disclosure? You mentioned that you're getting onto a number of additional distribution partnerships, I think, and that you've seen really nice growth week on week. Can you provide maybe just level set of where you are in terms of AUM and what products specifically you're in the market for? Just trying to make sure we have a full accounting of the opportunities in front of us.Jonathan Levin: Sure. So I think, let me just kind of start with level setting and some data, and some of the data, Bill, has not obviously changed materially from a couple of weeks ago when we had our Investor Day and had a few slides on this. Just in case you want to go back to it after the call. But it's about $4 billion of AUM today, just in general from the individual investor channel. A pretty significant percentage of that has been capital that's been raised over the past several years.That capital that's been raised over the past several years, most of the past several years, has been for separately managed accounts for institutional 3(c)(7) kind of private closed-end funds, largely across the wirehouses. I think what we've highlighted at the Investor Day, what I tried to highlight on the call is if you look, and while it's not material yet to our economic profile, and as Michael has kind of gone to pains to mention on many calls in the past, like, this is the type of thing that we're super excited about is growing, but it will take time for it to really move our needle.But if you look over the more recent period of time, what's been exciting for us is the partnership with Grove Lane, which is meant to focus on RIAs, and that partnership is less than a year old. And we have picked up another probably three, four dozen RIA relationships over the past several couple of quarters, which in a long sales cycle business is tremendous momentum to us even if it's not huge dollars yet. We are still marketing separately managed accounts, which we think will be a competitive edge for us in the individual investor channel. We're still marketing, you know, kind of traditional closed-end, you know, private funds in that channel.And as you know, we also launched our infrastructure interval fund, which goes alongside the interval fund product or, I should say, registered product that we have in the absolute return strategy space. That's very early days, but it's raising money every day. And raising money through the RIA channels both from our partnership with our distribution partner as well as through Grove Lane. And then the other points that I think we mentioned in the certainly mentioned on the call or mentioned right now is that we expect to also follow on our infrastructure product something similar in the private equity space. And so I just think it's all good.It's all investing more of our time and resources and all just building towards kind of momentum and platform, such that we can take advantage of what we see as our role in that and the opportunity set in that ecosystem, which is to help individual investors build diversified portfolios across different cap sizes, across different implementation styles to complement what they're already doing in the mega cap space.Bill Katz: Thank you for taking the next question.Operator: And the next question will come from Tyler Mulier with William Blair.Tyler Mulier: The collateralized fund obligation raise from the private credit raise, it seems like the non-insurance raise would have been a little lighter, and there have been notable bankruptcies in the credit space. Just curious if you've seen any concerns from clients or changes in the landscape there in private credit. Thank you.Michael Sacks: The first couple of words, Tyler, that you said didn't come through, but I think you were saying, were you saying excluding the four eighty the yeah. Yeah. So I guess it's a couple of things. One is we're not seeing private credit slowing down, and we're not seeing that slowing down. There's all this, you know, talk about credit quality. There have been a couple of high-profile credit issues. I think those were all, you know, or the biggest ones were credit issues where it wasn't, you know, strictly direct origination private. There were plenty of traditional lenders in there, I think, as well. And that, you know, we're just not seeing those issues.So there's a lot of conversation there. But that the asset class is growing. The allocations are growing. They're gonna continue to grow. Gonna continue to be a fast-growing strategy for us. And I would just say that pretty much every strategy goes through cycles where people are questioning its future and questioning what's happening, and these are just very, you know, good solid ways to invest. Have been over very long periods of time through different cycles, and that's not changing in your in a kind of a major, I think, uptrend, upswing in allocations to private credit. There was a significant amount of capital that came from insurers inside that structured product.And so we are still seeing a productive insurance sector, and we believe that the insurance sector will also continue to be productive, you know, as we go forward.Tyler Mulier: That helpful?Michael Sacks: Yeah. Thank you.Operator: Thank you. And that does conclude the question and answer session. I will now turn the conference back over to you for any additional remarks.Pamela Bentley: Thank you. Thank you for joining us again today. We appreciate all of the time and the interest. If you have follow-up questions, please feel free to reach out to our team. If not, we look forward to speaking with you again next quarter. Thank you. Have a good day.Operator: That does conclude today's conference. We do thank you for your participation. 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