Ares Management Corporation (ARES) Earnings Call Transcript & Summary

Good morning, and thank you, everyone, for joining. I'm Adam Beatty, I cover the alternative asset managers here at UBS. Today, we're very pleased to have representatives from Ares Management joining us this morning. With us are Mike Arougheti, CEO and Co-Founder of the firm; and Mike McFerran, CFO. Thank you very much, guys, for joining. I hope you and your families are well.

They are. Thank you. I hope the same for you.

Thank you.

So I want to get started just by -- I mean, you reported earnings recently, but I wanted to touch base around the pandemic. And specifically, initially seen that the pandemic would benefit larger, more established firms like yours by maybe imposing some financial stress or other barriers to smaller firms and specialists. Is that your expectation for a longer-term impact? And what have you observed so far?

Sure. Look, we actually have a pretty long-held view that crises tend to accelerate already-in-place trends and that's true for a lot of businesses, ours included. And so were we having this conversation together in Chicago, not on the backs of a health and economic crisis, I think we would still be talking about the [ alternative assets ] industry's move to scale and the benefits of scale vis-à-vis developing sourcing networks and information advantages and capital access and consolidation trends. So that was already happening, and then -- we've talked about that before. I think in the midst of the health and economic crisis, that trend is accelerating, and it's accelerating for the reasons that you articulated. Larger firms are having easier access to capital. I think they have a broader and more flexible product set that allows them to take advantage of the market opportunity that's in front of them. They have more people and access to information. And so I do expect that the large will get larger on the other side of the crisis. And I think that will be both organic and inorganic. Meaning a lot of the smaller managers to the extent that they are not distressed to the point of having to get consolidated out or sold are probably less active. And so I think the larger platforms will outpace them organically. And then as we've seen in past crises, there will be acquisitions to be made. As a reminder, if you think about the history of Ares coming out of the financial crisis, we were able to acquire a number of both public and private managers as we continue to scale the business.

Yes. Absolutely. No -- I mean, and you have talked about consolidation among LPs before. And so I guess, taking your -- apart from the pandemic view, do you see that continuing to happen even in newer channels, like wealth management?

I do. Yes. So that trend, it's actually -- it's extended in the wealth management channel, particularly high net worth and private bank, family office is very, very active right now. Most of the institutional investors that we have relationships, where they're looking for products that can invest into the volatile market. So that will be things like our special opportunities fund, distressed credit, distressed-for-control private equity, opportunistic real estate. Similarly, we've seen the private banks and the high net worth platforms pivot aggressively to a similar stance, where they're looking for product to get their clients into the market. And so that's been a very productive channel for us. I would expect that to continue. Again, the brand presence in that channel is important, as important as it is in the institutional channel. And so I think as folks like us continue to put good product into the wealth management channel and deliver good performance, that's going to continue to scale.

Yes. I mean you've talked about the retail channel, and wealth, I guess, is within that, and the way that Ares gets accessed through some non-traded vehicles, recently, the joint venture in Australia, even saying that -- yes, fixed annuity products in a way are way for alternative managers to access the retail or, I guess, individual market. What other areas do you see as promising over the next couple of years?

From a retail perspective?

Yes.

Yes. So we talk about trends, and we've talked about consolidation, both of managers and LP capital. We've also historically talked about a broad trend towards the retailization of alternatives. And I believe that we are still in the early days of that as we see demand from the individual investor increasing, as we as managers learn better how to manage those types of vehicles and deliver products through different types of structures. But I think most importantly, the regulatory framework is improving for us as well. And so probably not lost on folks when the DOL comes out and says that it's acceptable to put private equity into defined contribution plans, that is a potential sea change in terms of how people are accessing this market and what it means for folks like us. So I would expect that to continue. And again, if we are responsible [indiscernible] I'd expect that to continue. So I think, broadly speaking, not to skirt your question, specifically, pretty much everything that we do, over time, I think, can be accessed by a retail investor through various listed and unlisted structures, and I would expect eventually to see that happen.

Now, makes sense, I want to turn a little bit to deployment and also kind of a catch-up on the pandemic angle. With regard to stress and rescue capital investing, it seemed like there was a flurry of activity, a flurry of optimism at the outset. How do you square that with sort of the government intervention and kind of kicking the can a little bit? Do you think that, that could actually prolong the onset and development of a distressed environment as the economy gradually absorbs the impact of disruption?

I do. It's interesting. You highlighted. March and April, we were very, very busy, I'd say first week in April in the liquid markets. And the government and the Fed have largely taken that opportunity away from us. So if we were a firm that only bought distressed securities, we would not be very busy right now. But what you have to appreciate is if you look at the markets that are benefiting from the stimulus, it's not the middle market. And if you look at where we focus our attention, it's on middle-market companies. And in that part of the market, whether it's corporate or other finance companies, they are absolutely not accessing capital the way that the investment-grade folks are accessing it. Obviously, the high-yield market is at record tights, record issuance. But even if you look at the composition of that market, the number of $500 million and below issuers in that market is in the single digits at this point. So the complexion of that market has changed as well. So you kind of have to look beyond what the public markets are doing into the real economy and the private markets. And there, there's a significant amount of illiquidity. And that's where we're finding a lot of things to keep us busy. To your point about prolonging, I think the challenge you have is when you have people piling into the public markets, both debt and equity, at all-time tights and all-time high valuations against the backdrop of an uneven economic recovery that it prolongs, but also it creates new pockets of distress [indiscernible], right, for all the people who are being supported synthetically right now, and that's something you need to keep an eye on.

Right. Exactly, no, we also cover the advisory boutiques, and we've been asking them about restructuring. And they -- some of them have noted that a lot of the capital raising and what have you has been debt. And if you have a business model that's marginal at the outset, right, and you add on debt, even if that's required for liquidity or what have you in the short term, that doesn't fix it.

Exactly, and it's true for companies, it's true for federal government, and it's true for municipalities. So debt and -- well, obviously, we're a large credit shop, but debt long term is deflationary. So it has short-term stimulating effect. But long term, I believe that it can be deflationary when we went into this with a fair amount of leverage in the system, and obviously, those numbers are increasing by the day.

You mentioned sort of long term, and we're talking about debt and what have you. What are the long-term trends that your firm and others have written about is nonbank funding and the sort of evolution of that and, I guess, the share gains in that over the years. Is there a risk of weaker underwriting -- just broadly, never mind areas, but just broadly in that space, particularly as yields are kind of low, just in the pursuit of higher yields or growth, how do you view that risk sort of industry-wide?

I think everyone likes to talk about that, but no -- I don't know if any nonbank lender, at least in the corporate side that's gone bankrupt. And I know of 150 banks that have probably declared bankruptcy over the last 2 cycles. So the saving grace, if you will, of the industry is it operates with a lot of transparency and with low leverage. And so I can't say that every nonbank lender, whether they're lending to corporates or real estate assets or asset-backed portfolios is going to perform well. But from a structural standpoint in terms of is there a systemic risk in that market, I think that the answer is no. The other thing I would also mention is, obviously, the people who own that risk, own it knowingly, willingly, again, with a lot of transparency and visibility into the asset level risk that they're taking. So unlike a bank where you have depositors and concerns about the [indiscernible] there's a pause, it's -- we're managing money largely on behalf of large sophisticated pension funds, insurance companies, sovereign wealth funds that look at the excess return available to them in nonbank markets as more than compensating them for whatever the increase in risk would be.

Do you expect that trend to continue? Do you expect nonbank lending to continue to grow?

I do. And you can -- it's so interesting because we're getting the question the opposite. But if you look at bank behavior now, you could again get lulled into believing that bank balance sheets are growing and that banks are active because of all of the activity in the capital markets. The trading side of the house is very active. The capital market side of the house is very active. But if you look at bank balance sheets, loan books are shrinking, new credit is actually not being extended, and they've taken a pretty conservative posture, at least in the first half of the year vis-à-vis the extension of new credit. So my experience has been with each cycle, the banks are kind of getting less -- less risk-taking. They take less risk, right? They're -- whether it's through regulatory constraint or just the fact that they need to continue to simplify their business, my experience has been coming out of crises, banks shed noncore businesses, simplify their business models. And it's those noncore businesses that then grow up to be the nonbank opportunities. And so I think that, that would -- I'd expect that to happen and this go around as well.

Excellent. Good. I wanted to shift over to kind of fundraising, again, away from the pandemic, but just more of the underlying trend. I mean it's -- the fundraising at Ares has been great so far this year. And maybe it is a pandemic question, but have the distressed opportunities or other things pulled in new LPs for you? Do you feel as though there's -- I mean I know Ares doesn't want to repeat business. But do you feel as though there's kind of a new awareness for another segment?

It's difficult to say because we have such broad reach. I would say probably at the margin, it's pulled more people on to the platform. Ares has a very long-standing reputation as a downmarket investor. And if you look at our performance in our fund vehicles as well as at the corporate level, we've consistently outperformed through downturns and volatile markets. So I think the brand is known for that. And so if someone is in the market looking for ways to capitalize on distress, they're likely going to find their way to us. But as we talked about on our earnings call, we've had a prolific first 6 months of fundraising, and we would expect that to continue. So we raised about $15.7 billion, $16 billion in the first half of the year. We acquired close to $3 billion through our CLO Manager acquisition, and we reiterated on the call that we would expect those numbers to continue at a similar pace. And so a lot of that is a result of the depth of the relationships that we have. And to your point, the percentage of repeat business, a lot of it is this consolidation trend of folks like us taking disproportionate share of wallet. And I think that trend has accelerated in the pandemic. Because it's very hard for an institutional investor to underwrite from an investment and operational due diligence standpoint a new manager or a new strategy. So again, I think that we're seeing probably more flow from existings who are looking to fill their allocations, but not spending time with new managers and new strategies. So yes, I think at the margin, but it's not as though. We thought that we would be on this pace pre-COVID. We're happy that the pace is there, but the mix is probably a little bit different just given people's appetite for distress or not.

I want to ask do you -- I mean partly to the broader cycle of sort of recycling capital through your LPs who stick with Ares over the years. I mean do you think that this is pulled forward any demand on the part of LPs? And how do you feel more broadly about returning capital in that cycle of re-upping in funds?

I don't think it's pulled forward, like I said, I think they've reallocated. So the virtuous cycle in our business is we get a new investor on to the platform in a fund. So pick your fund, they come into our fourth European direct lending fund, and they commit $100 million to that fund. They learn the business. They get to see a consistent approach to investing across the different parts of the platform, and then maybe they make a $100 million investment into a U.S. direct lending fund. So there's this horizontal cross-selling across the platform. And if you look at the growth of the AUM, there's been meaningful growth in the number of people that are invested in more than 1 fund and more than 1 strategy. But then when they come to the re-up, to your point, in that, if they were $100 million, there are probably going to be $125 million to $150 million in the next fund. And so you're scaling them vertically as well. And so you've got this kind of embedded organic growth engine once somebody comes on to the platform. So you can see that in the way that the fundraising numbers typically come out where 50%, 60% of investors in any given period of time are actually new to the platform. But 75% plus of the capital is actually coming from existing investors, right? So they're scaling up over time, but the existings tend to commit larger incremental dollars over time. And again, back to my point about the consolidation trend, I would expect that to continue, if not accelerate.

Excellent. I want to shift over, and maybe this is a little more for Mike McFerran. But just in terms of the FRE outlook. And I want to ask you, Mike, about the dynamic that you've illustrated in the past in terms of expenses leading fundraising a little bit. So you're putting some dollars into the fundraising process. And then as you come out of that and the funds are raised and fees are activated, the margins sort of naturally expands. Would it suggest to me, and correct me if I'm wrong, but is that there is a bit of a cycle to it so that after a big fundraising year, maybe like this one, the margin will naturally expand. But then as you go into -- as you start the early part of another fundraising cycle, that might pressure the margin again. So it kind of has this undulation over a long-term upward trend. Am I thinking about it the right way? Or what's the right way to think about it?

Yes, I think -- and I'd say you think about it the wrong way.

Yes. No I think of...

The way I think of it is, when we talk about the expenses lead the revenue, it's not per se this an out-of-pocket cost to raise money. It's not as if we're spending a big advertising budget and to get the revenue. And then for the next campaign, there's another advertising budget. Rather, it's -- if you think about Ares, we're always invested in widening our capabilities. That's our capital raising capabilities, the IR teams interact with the LPs and other investors, it's the investment teams that are [indiscernible]. It's our portfolio management and risk functions. It's our non-investment functions of county, lines, et cetera. So when you think about us raising a fund, we have to have all that well in place and continuing to grow as the firm grows. So we talk about it. It's not as if we're going to raise the money, and then if we -- we're going to add to the investment team after the money is raised, then we're going to add another accountant to help count it and refine the portfolio after the money is invested. All of that's happening in advance. So we continue to build for growth in advance of the revenue. And then the cycle you see us having and that's why you've seen this linear growth of in our long term, is we raise the capital. Most of the money we raised, we get paid on invested. So then that starts by move -- our AUM goes up, the capitals and AUM, but it's not yet earning fees. And then every day, as we're putting dollars to work, management fees tick up, the margin ticks up a little bit with it because as the expenses of the [indiscernible] and most probably, as we continue to grow, we're capturing more and more benefits to scale. Thus, yes, you have some -- you have scale inherent in our business model.

Right. Some elements don't have to be [indiscernible]

No, [indiscernible] bill, rent cost and all that don't go up every time you raise money. So that scale translates to what you've seen is this nice margin growth. If you look back, first quarter of '19, we had 30% margin. I think in the fourth quarter was 32%. This last quarter, we showed over 34%. We reiterate our expectation for at least 34% this year, and we'll break into a 35% run rate during the course of this year. And if you look at our AUM not yet earning fees, $25 billion, there's a lot of growth. In front of all the capital raise we're doing today, there's a lot of revenue growth [indiscernible], but for which so many of the expenses are tied. So we get asked the question a lot. What I would want to have? Margins are important, and I think they're important indicator of business efficiency and scalability. But ultimately, what's most important to us is growth in FRE and growth of the dividend that accompanies FRE. Because if you look at Ares, and we've highlighted this in the past, I don't have the -- don't have a specific number for by firm because people don't disclose it. I think we invest continuously meaningful portion of our FRE back into long-term growth of the platform. And that's why you can see us consistently grow at a pace we do. Because today, we're not planting the seeds for next quarter. We're planting the seeds for Ares 2024 and Ares 2025. And the themes that are really coming to fruition today are seeds that we planted 3 years ago. And that's, I think, really a key to our business is that long-term horizon and continuously investing for the future growth.

One quick overlay, Mike, that I would just add, too, in terms of the reason why you don't see undulations in margin is, when we raise these funds, where we're making big investments, they're not like they're tactical trades, where we say, let's stand up a business that's not in and of itself scalable. So if you look at the history of our flagship funds, they themselves are growing with each new vintage. And so if you take SOF, which is our opportunistic fund that we just raised, we probably hired 18 people ahead of that fundraise, put $2 billion fund in the market, closed on a $3.5 billion hard cap with good performance. I can't promise, but it would be likely that fund -- the next fund would be $4 billion, $5 billion, $6 billion. And so by the time you get to that next vintage, even if you're incurring new expenses on new strategies, the ones that we are launching now are in and of themselves going to grow pretty significantly.

I think what Mike -- the example Mike gave, I think, is a perfect example of how the model works. We built out this 18-person best-in-class team but didn't come with a dollar of revenue. Now it was complementary for our existing teams and added to our overall expertise and investment capabilities. And so it's complementary in a lot of ways, but it was margin distractive at first. But to my point, we just -- we went out with the $2 billion fund. Because last quarter, we just finished the fund at $3.5 million, so almost 2x target. And that's an inaugural fund. If you look at our history, sound performance, subsequent fund should grow. And while we will continue to invest in that team, so much of the big cost has already been borne.

I like that. Mike picked up on my undulation word, so I'm going to use your margin distractive phrase. 1 quick follow-up on this. In terms -- because you guys have been so active strategically. And I want to ask a little more about that a little later. But just in terms of cost and margin, how much does that drive? How much was kind of already there? And what kinds of -- kind of expense -- investing might it drive?

On the M&A front or on the...

Yes, the M&A or the JVs or what have you.

Yes, let me -- I'm going to ask Mike to start by just talking about some of the things that we're doing to create economies of scale in our non-investment function because I think that's an important backdrop to understand why these acquisitions are accretive, not just from a revenue standpoint, but from an operating standpoint, now I can overlay some of the ways that we think about M&A.

Yes. I think that's -- I think where Mike was going was, we continuously invest in building out our capabilities. And because of our size and the breadth of our non-investment, our middle office, our operations, the depth of our compliance, legal, accounting, risk and all that, when we make acquisitions, I think, while you may have some integration costs, which is natural and expected, I would generally expect acquisitions to be, at worst, margin neutral to us and usually margin accretive because there should be synergies and costs and being able to overlay -- again, Mike explained a lot of the operating functions of an acquisition with our own capabilities. And because we've achieved scale and made meaningful investments there, and we achieved a lot of those benefits of scale, we can frankly transport that into things we buy. A couple of base -- in simple term, we've put a lot of time and money in systems in recent years. That's really given us a ton of scale. And while everyone says technology gives you scale, I think the history of our industry was it was under -- probably underappreciated until recent years. I think Ares has been in the forefront of that. Second, we launched -- we built out an office in Mumbai a year ago. We just had its 1-year anniversary last week that Mike and I were excited about. And we were able through this, because of the critical mass of stuff we have been done overseas, actually to consolidate a bunch of work that have been done by third-party partners of ours, read all of that work internally. And not only are we [indiscernible] because of the critical mass of this work, not that we're actually able to do it cheaper and experience a margin expansion from it, we're actually getting better outcomes as while you're paying third parties and their diligence, they don't have the same alignment of interest as your employees who have careers with you.

There's inevitably some [indiscernible] some friction, yes.

Correct. Because you're paying a third-party and the employees there doesn't have -- they don't work for Ares. They have less vested interest. So we were able to upgrade talent, improve outcomes, tie people into long-term career tracks with us, set alignment of interest for them and save money doing that. So that's a model that we're going to keep growing, but it's really been exciting for us. And it gives a lot of -- and that's, by the way, a center of excellence that Ares has, that through acquisitions, we can then leverage for things we [indiscernible].

Yes, Adam, the -- unlike in the traditional space, and you said you cover traditionals and brokerage, the M&A is not a cost side play for us. We're growing our top line, as you've seen, 15% to 25-plus percent a year. And so the challenges that other business models face around using M&A to drive operating efficiency is not a leading catalyst for us to make acquisitions. To Mike's point, we have found, because of either the lack of sophistication or the duplication of resources, when we are making acquisitions, they tend to be margin accretive on an operating basis. But then most of what we want to buy are things where we see real revenue synergy, where we can go in and accelerate growth of a capability that we don't have or a product set that we don't have through our distribution. And so inherent in the investment thesis for making these acquisitions is revenue synergy, which drops down a significant margin. The other thing I'd highlight, there are certain acquisitions that we make, some small, some not so small. But as an example, we just acquired a fairly small CLO manager called Crestline Denali. As I mentioned earlier, it came with $3 billion of AUM. We don't have to add a single person, a single new system, a single new process in order to bring that on board. And so in tuck-in acquisitions like that, the marginal contribution is -- it's pretty close to 100% in certain cases. And so obviously, where we can do transactions like that, we're going to keep doing those.

Excellent. I want to get away from -- we talk about mergers mainly in the context of the cost side, although you just touched on revenue synergies, I think that's important. I also want to ask about JVs and partnerships, which not specifically acquisitions. But specifically, your partnership with SMBC, which strikes me, it's interesting, it's fairly broad. Distribution in Japan, leverage finance in the U.S. and Asia and participation in developing some new businesses with Ares along with some capital, it's not -- it wasn't necessarily an obvious choice, at least not to me, as a partner. So I wanted to ask you, first of all, what were the key factors that made SMBC particularly suitable for our partnership with Ares?

Sure. And it's a good example of the types of relationships that we are building daily and have historically had over the course of our evolution. Just by way of background, SMBC has been a strong partner of ours for over 15 years. And there's been a significant amount of history with them as a lending counterparty and a capital markets partner to us. And so I think we've built up a lot of trust over the years with each other, which obviously forms a basis of any partnership. Probably most significantly, historically, they were an early participant in our unitranche joint venture that we had which we had called SSLP, when we were partnered with GE and now it's called SDLP, now that we're partnered with AIG and others. And so I think they had a view that we could bring differentiated product and origination both to their balance sheet and to their clients, and they had seen that firsthand. So it's interesting. The timing is -- sometimes better if you're lucky than good. We started talking to them about broadening our relationship in early 2019. And at the highest levels of Ares and SMBC, we engaged a broad dialogue about where Ares saw strategic gaps and opportunities [indiscernible] we saw gaps and opportunities. And I don't want [indiscernible] them, but they have a view that they would like to grow outside of their home market and that they would like to leverage their SME focus into other geographies. And obviously, given our middle market networks, I think that we're a logical partner to help them do that. We, as you've seen through SSG and our relationship in Australia with Challenger, we have a view that long term, we need to be bigger in the pan-Asian region. And so identifying a partner of scale, both in terms of capital and reach in the region is -- fits squarely with our strategy. So we spent most of 2019 going through a long laundry list of potential areas of collaboration around, as you articulated, financing existing businesses, launching strategic joint ventures around new lending product, distribution. And we probably came up with 15 interesting ideas to work on together. And then our corporate strategy team and their corporate strategy team kind of winnowed it down to a handful of higher impact things. I think it was important to them and important to us as well that if we were going to be more strategically aligned around new business build that they had an equity stake in the company in order to align interests and see the bigger picture around value creation at areas opposed to just value creation in individual product or in individual market. And so they had committed to own 4.9% of Ares going into the pandemic. What I find remarkable is we closed our partnership with them, Mike McFerran, correct me if wrong, it was March 29, [ Saturday ], it was -- the actual bottom tick at the market, and they closed on a 30-day VWAP that had them paying close to 10% premium to the market price. And I think for us, obviously, the stock has come back, but the strength that, that gave us to navigate those early days, I think, was pretty significant. When you look at the company's liquidity position today, it's really quite remarkable. Also in terms of the dry powder that we have at the fund level, which is about $39 billion and the dry powder that we have on our corporate balance sheet is just close to $2 billion. And so that [indiscernible] and telling what you now. This game now, as I said, is a move to scale and liquidity. And SMBC has one of the largest balance sheets on the planet. And so the opportunity to have a deep strategic alignment with somebody that is of that scale and breadth, I think, is a pretty significant opportunity for us.

Excellent. No, I'm glad you touched on the idea of gaining scale in Asia because a number of your recent business initiatives, I guess, have been Pac Rim Far East. Do you have any concerns about sort of global tensions and political-type issues interfering with that or adding friction? Or is it more of, hey, this is a long-term trend and the short-term stuff will pass?

So it's funny because I'm smiling, we have weekly town halls at Ares, and that question was asked by one of our employees yesterday, specifically with regard to China. One of the reasons why we're so focused on building a team that is culturally aligned with us, that we trust in region is for that very purpose, right? So as a global asset manager with deep investor relationships in the region and with investor relationships outside of the region that want access, the only way that you can actually manage through that geopolitical volatility over cycles is to be in region and to be in those local markets, but to be in all of them. So if you look at what we have with the Ares-SSG partnership now, and where that can take us is, we have people on the ground in China. We have people on the ground in Hong Kong. We have people on the ground in Singapore, people on the ground in Australia, New Zealand, India. So there will be geopolitical tensions. I think that is kind of the new normal, and we should all expect that for the foreseeable future, that's going to create some risk, right? So we're going to have to be moving between markets and asset classes, but it's also going to create a hell of a lot of opportunity for people who are on the ground in those markets and know how to navigate them, both with local people, local capital access, local relationship network. So yes, it is definitely a risk, but actually, I would think that on the other side of the ledger, the opportunity set that's going to get created from that is going to be pretty spectacular, too.

You mentioned SSG, I think of that as sort of a product-focused deal, but maybe I'm not thinking broadly enough. Will that help with distribution and/or fundraising?

Well, it's very interesting. So the answer is yes. And I would say that they're product and capability led. They are -- they have 2 core products. One is a special sits capability and the other is more of a senior lending capability. But if you drill into their special sits track record and franchise as with most special situations firms, there's deep real estate infrastructure, specialty finance expertise that's in those funds. And so what looks like a product is actually a set of capabilities that I think will allow us to grow PE and real assets businesses in the Asia region off of some of their capabilities. They brought to us over 50 new investors. Now they look at our institutional investor roster, which is close to 1,000 institutional investors as a big revenue driver for them, but they did improve the relationship network that we have in the region by bringing about 50 new folks to the platform, which we'll now be able to develop a relationship with over time, as I said, and start cross-selling them new product.

Excellent. Well, thank you. It looks like we're basically out of time. So I just want to thank very much Mike Arougheti and Mike McFerran for being with us today, and appreciate your time and thoughtful answers.

No, we appreciate you inviting us. Thanks, and stay well.

Adam, thanks.

You too, bye-bye.