Ares Management Corporation ($ARES)

Everybody, thank you. Thank you for joining us. It's my pleasure to welcome Ares Management. Blair Jacobson is with us here today, Co-President of Ares and previously Co-Head of Ares' European Credit business. Ares, of course, as many of you know, is a leading global alternative asset manager with deep expertise in credit, but also in many other asset classes, including secondaries, real assets and private equity. Thank you for being here. I think this is your fourth time at this conference?

It is.

So really appreciate your support and great to spend some time with you here in Europe.

Good to be here in Zurich with you, Alex. Thanks.

Great. So I wanted to start with a question around developments in private credit, not surprisingly. I feel like over the last couple of months, I think some of the hysteria around the product have subsided just a bit. And obviously, we've learned a lot more around the institutional dynamics versus retail dynamics in the marketplace. So hoping maybe you could start there. And now that the market has come down to some degree, we'll see what the next few months look like. But spend a little bit of time just walking through how institutional appetite has evolved towards private credit and to direct lending in particular. Any distinctions you're able to make between either geographies and LPs and how institutional clients are navigating the current backdrop?

So I think you're starting at the right place because for a firm like ours, despite all the news, wealth is 10% of what we do. We are really an institutional firm. So you're starting with the right focus area. And for us, we're coming off the backs of 2 record fundraising years. We had a really strong first quarter as well. And I think what that tells us is that institutions around the world view private credit and direct lending as a core long-term holding. And in fact, what we're seeing today is renewed interest because we've said publicly, we believe this is a really attractive investment environment. We're seeing spreads widen because of volatility, because of some of the trends in wealth and retail. And institutions see this, too. They think this is going to be a very, very strong vintage year. And we see this in our own fundraisings. We announced early this year, our closing at the hard cap of our third special situations fund. We're in the market now with an asset-backed fund. Mike gave some good updates there. You'll hear more about it soon. We've pulled forward the raise for U.S. direct lending strategy. Again, the institutional market, we think, is quite solid. And it's also broad based to your question about air pockets, whether you are a corporate pension plan, state plan, public plan, sovereign wealth, insurance, the need for alternatives and credit, we think, is growing. We had a little bit of an air pocket in the Middle East starting in Q1 with the war. That's more of a timing delay, we think. We saw this a year ago as well with the tariff regimes. Again, that's -- it's coming back. But overall, the institutional demand for what we do is quite strong.

Great. Let's double-click into kind of a subvertical within now, which is U.S. direct lending business. It's a large one for you guys, and it's still probably the one that the market is most anxious about in terms of both credit performance, but also kind of the outlook for growth. As you mentioned, you're in the market with the next vintage senior direct lending fund in the U.S. There's a bit of a unique structure to this one relative to what we've seen in the past with the launch of an evergreen sleeve in addition to the closed-end fund. So talk to us a little bit about, is it just a coincidence that this is the structure that's evolving now on the back of some of the concerns towards the asset class? What prompted you guys to do this? And maybe just for the audience, explain what that actually even looks like?

So I'd say, without diving too much into the fund itself, as you know, we're sense about speaking about that. I guess, I'd frame the discussion by saying, we think it's our job as investment managers to give our clients as many access points into what we do as possible. So when I started European direct lending at Ares, it is about 15 years ago, there was like one access point. Now we offer levered, unlevered, 4 different currencies. So always trying to think how can we make it more attractive or easier for clients to access what we do. So going to the topic that you mentioned, within our asset-backed fund 1 or 2 funds ago, we created an evergreen option. And what that means is for institutions, which tend to have drawdown funds that draw down and repay, some of them want exposure for longer. They want yield for longer. They don't want to have to re-underwrite the manager every 3 years. By the way, many still do. So when we think about the new strategy, what we've said is we just want to make an additional option available because that will be attractive. And again, our view is that broadens the appeal for this asset class and opportunity in the U.S.

Got you. So maybe expands the LP base opportunity set a little bit and just kind of get a different wrapper to kind of co-invest alongside of the main fund.

Yes, exactly. And what's really important to remember is that it's all part of the fund complex. Everything invests in the exact same loans. So from an administration perspective, it's not onerous for Ares at all.

Got it. Okay. Let's talk about credit quality. A topic of the day. Topic of the day, topic of the quarter, topic of the year. So we spent quite a bit of time in this. And from everything we could see in the sort of public domain when it comes to direct lending exposures reported by the BDCs. The non-accruals at the industry level are still fairly benign. They're rising a little bit. We're definitely starting to see a little bit more dispersion between different managers. But by and large, you're not really seeing significant declines in credit quality. The concern is, of course, is this is not today's problem. It's a, hey, businesses and software in particular, that could be disrupted on the back of AI is not something you're going to see today, but this could be a problem 3 years from now. So how do you guys approach that because you've done a lot of work within your own portfolios and maybe talk a little bit about some of the consulting engagements that you have done? And how do you think the industry deals with this kind of cliff in credit several years from now if and when it does occur?

So let's unpack that in 2 different ways. The first is just the broad comments around credit quality. We would agree with what you said. We get signals from thousands of companies in our portfolios around the world. And it's not a surprise. The macro environment is relatively benign. There's volatility and inflation concerns and oil prices and rates. But broadly speaking, the U.S. is growing 2% this year, Eurozone U.K., 0.5%, 1%. And what we've said publicly is that our portfolio companies underneath that are growing high single digits, low double digits, credit quality and the statistics that we monitor, whether it's leverage levels, interest coverage levels, loan-to-value levels are all trending the right way. And ultimately, the statistic you mentioned on accruals, which just to explain it, is a potential precursor to defaults and losses have not only they been stable, but they're below historical averages. So again, what we're seeing now in the portfolio is good. And that also frames with what we see in the broader markets. You're not seeing cracks in the loan market or the bond market. In fact, when banks have reported earnings, charge-off levels have been going down for consumer credit, for C&I, for credit cards. So again, all that's relatively consistent. But then the next part of your question, well, where are things moving, in particular, in sectors that are experiencing a bit more volatility like software and more concern. This came to the fore earlier this year when Anthropic released a couple of new cloud models that got the industry really, really bothered. But if we take a step back, we've been investing in software for 15 years, and obsolescence is always the most important question in any tech or software lending opportunity. So this has always been on our minds. So the narrative, however, has changed from the beginning of the year. Beginning of the year was SaaSpocalypse, AI eats software, all of these things. I think now the narrative is software is not one thing. And over time, there will be winners and some losers. But what we're not expecting to see is some system-wide meltdown in credit more broadly. And you're right, we did hire a third-party consulting firm to come in over our shoulders to investigate. We have about 180 software loans around the world. And the results that they came back with were confirmatory with what we already thought, which was over 85% of our companies, not only will face low risk, they may even benefit from AI developments, another 14% or so were sort of medium risk. And then on the higher risk, it's like 1%. It's less than a handful of companies. So for us, we think that, that's relatively boxed. The duration of these loans is another 2 or 3 years. So again, some things will resolve themselves relatively quickly. And how does that actually happen? We have said that we do not intend to amend and extend these loans. There's 60% equity coverage in these loans. So the sponsors have a lot of incentive to help generate additional value in those businesses and adapt. But if they don't or they don't want to, these businesses still generate a lot of cash. And in most of these loans, by the time of maturity, we've already gotten back 60% of our capital. So again, we think that those risks are relatively manageable and we will face a very small percentage of portfolios.

Got it. Okay. Let's bring this a little bit closer to the region. You guys are, I believe, the largest European direct lender. It's been obviously a business that's very near and dear to you. But talk to us a little bit about how the growth opportunities in European direct lending might differ from the U.S., which obviously has been much more of an established market, how the competitive dynamics, if at all, have shifted in the last year or so and just your broader prospects for European direct lending.

Yes, sure. So you're right. This is a business that's near and dear to my heart because I've helped build it for the last nearly 15 years, when it was relatively nascent. It was about $1 billion business for Ares today, it's an $80 billion or $90 billion business for the firm. And that sort of tells you a little bit of what you need to know, and you alluded to this, which is to say U.S. market is older. It's 25, 30-plus years old. I would say relatively more mature, whereas Europe really started to develop post-GFC when the banking system got highly disrupted. So even though we started in Europe in 2007, the market itself really got going 2012, 2013. And further, U.S., one big market, it's all in dollars. Europe, 27 different markets, different languages, different regulations. So it's sort of harder to penetrate. And our strategy since inception is we've had local people and local offices. We have 7 offices around Europe, and that's really been helpful for us. Some of the other dynamics that don't fully translate is, number one, there are no BDCs, in the European market. And again, that's really the growth and generation of the U.S. market. These listed loan vehicles don't exist in Europe. And further, the wealth opportunity in Europe, the single biggest wealth funds in private credit in the U.S. are $70 billion, $80 billion of AUM. The biggest one in Europe, and we know this because it's ours, is $7 billion or $8 billion. So again, it's a little bit more of a cottage industry where you have to be local, and that creates entry barriers. So if you're a large-scale player, we think it's really attractive. And again, the penetration of private credit versus the banking sector also still has more to play out. So we see a lot of continued growth in European direct lending ahead.

Got it. Okay. Let's pivot away from direct lending, but I would like to stay on credit for a couple of minutes. I feel like one of the points that I kept just repeating over and over again for the last 6 months is like there's a lot more to private credit than just direct lending, which is where you see most of the headlines, and that's where most of the kind of concerns have been. The notion of private investment grade and asset-backed finance broadly has definitely evolved over the last couple of years. You guys have a sizable footprint in that market as well. Talk to us, I guess, a little bit about how you view the TAM sort of like the addressable market in that part of the world. What differentiates Ares' origination capabilities? And again, how does that differ from some of your larger competitors in asset-backed finance?

So first, let's define what we're looking at because, by the way, the TAM is enormous because basically everything that is not corporate. So when we think about the asset-backed opportunity for us, it's about a $50 billion business for Ares and growing. And we target literally 40, 4-0 different subsectors. It's everything from pools of consumer loans to mortgages to equipment finance. It can be music royalties. It can be health care receivables. It can be NAV loans. It's just incredibly broad. And as a result, the TAM is massive. And the way it's developed as an industry is pre-GFC, this was the domain of the banking sector and some specialty finance companies like CIT or GE Capital that changed in the GFC. And I think as a result of that, the strategy of many managers coming out was just to focus on maybe 1 or 2 of those subverticals. But at Ares, what we've said is we want to be the scale player. So not only have we raised 3 of the 4 largest funds in the sub-investment-grade space there, but we have 100 people around the world originating these loans, but also having a relative value lens. So every day, they have a view, we like this, we don't like that. Whereas if you're just a small subscale single area focused manager, that's really tough to do. So we see that continuing to grow dramatically as banks continue to do less. Then you have the IG opportunity. So the IG opportunity for high grade is about half of what we do within that business. It's growing. Insurance companies, pension plans want access to IG-rated product, but perhaps has a bit more yield attached to it due to self-origination capabilities than they can get in the more liquid markets. So that's growing significantly for us as a firm as well. I'd say the one health warning is that the fee part and the fee opportunity for the IG market is really a small fraction of what you see in the non-investment-grade market. So for us, we're having a bit of balance, but certainly, the sub-investment-grade business is more profitable.

Yes. And so how do you think about origination in that part of the market, right? Because I think with the sponsor community, it's well established, to understand to your point, it's a little bit more mature. We've seen different asset managers take a different approach to kind of driving originations in the asset-backed finance part of the world. Some would have captive origination platforms that they may on balance sheet or within the insurance complex. You guys are balance sheet light. So how do you approach that? And does that create a differentiation in any way?

So you're right. What we've done is that we have individual team members who might have subspecialties, but they're out in the market talking to other finance companies or talking to the banks about deal volumes and deal activities. What we've not done is have individual large teams simply creating opportunity. You've probably seen that a bit more on the high-grade market. But again, with 100 people around the world doing this, we're not finding any lack of opportunities for deployment.

Got it. Okay. So speaking of deployment, on the last earnings call, you guys sounded pretty bullish on the outlook for the pipelines and deployment within credit broadly, obviously, not just direct lending. We've seen the private equity sponsor community be relatively quiet yet again. I mean, this was going to be the year of -- the year of IPO, the year of realizations and the year of perhaps more deployment. It's been a little quieter given everything that's gone on in the space in the last 6 months. Yet I think a week ago or so, Mike was at a conference, still speaking to like effectively record pipeline in 2Q, 3Q. So talk to us a little bit about where that's coming from? And how do you just expect generally the pace of deployment to unfold within credit broadly through the rest of this year?

So, starting high level, we think our firm is geared towards deployment. In that we're global, we're diversified. We see pockets of opportunity everywhere. And in particular, in credit, I alluded to this before, in the U.S., we have 200 deal professionals looking to make middle market loans. In Europe, we have 100 professionals. So we talk in Europe, for example, to 1,500 companies each year. So we are well positioned to find opportunities. But your question is, well, are there even opportunities to look at? And the answer is yes. The overall backdrop is rates are 200 basis points lower than peak levels. As a result of that, we're seeing the bid-ask spread for company valuations start to narrow. And there still is this pressure in the private equity system. We all know the statistics. There's $4 trillion of NAV. It's 32,000 companies with a weighted average life of 7 years that need realization. So what's important to know is even if we look at some statistics, deployment is still robust, because there is still robust levels of M&A. There is robust levels of PE activity. Where is it compared to peak levels matters from our perspective, a little bit less. The other thing we're seeing is refinancing activity. Whenever a loan is 4 or 5 years of a 6-, 7-year maturity, we're talking about refinancing. The last thing is at Ares, we have 250 direct lending portfolio companies in Europe. We have 300, 400 in the U.S. That creates incumbent deal opportunity for us on the refinancing side, it's financing acquisitions for buy and build. So just overall, actually, we're pretty optimistic about deployment. The one softer spot that we cited on the call was U.S. was a little bit softer earlier in the year, a little bit of Middle East war tensions and some other things. But again, that's starting to come back as well.

I got you. And from a competitive position, has there been any shift in the typical kind of direct lenders that you were kind of bumping up against and running into? And the reason why I ask is, obviously, the retail channel has been a very active deployer over the last several years, and we'll get to retail in a minute. But obviously, that part of the market has pulled back in a material way. Does that create an opening to be more competitive, less competitive across different players?

So the answer is yes. And the way we think about it is, number one, as I started by saying earlier, our firm is not dependent or over-indexed to retail. It's important for us. It's a $60 billion, $65 billion business, but that's out of $650 billion of assets. Two, our firm has record levels of dry powder, $150 billion, $160 billion that we are ready, willing and able to deploy. It doesn't rely on additional fundraising even though, again, it is refilling as we discussed earlier, too. So we're well perched for deployment and opportunity. When we look at the overall market, some of our peers who are over-indexed to high net worth and retail do have less capital to deploy. And that's precisely what's created, we think, 50 to 75 basis points of additional spread and fee opportunity, slightly better terms, slightly better documentation in the market. And again, that's partly why we think this is a really nice time to deploy. And by the way, that's, call it, on the direct lending side. We have countercyclical businesses, whether it's our special opportunities business, our secondaries business, doing NAV loans out of our asset-backed business, which also benefit through this period of dislocation and volatility.

Got it. Okay. Well, let's talk about retail in the wealth channel. Obviously, still a really important growth segment for the sector as a whole, you and your guys' peers. Notwithstanding the turbulence in the direct lending part of the market, the rest of the channel seems to be going pretty well. So when I kind of look at infrastructure, when I look at secondaries, when I look at even private equity has done quite well. So let's maybe unpack a couple of these. First, I would love to get your perspective on kind of the current pulse from financial advisers related to credit within the retail channel, where -- we've obviously seen a lot of redemptions in the first quarter. We're about to see more as kind of the first -- of the second quarter comes around. Gross sales have pulled back in a pretty meaningful way. We've seen subscriptions for now April 1 and May 1 for a bunch of products. What would it take for financial advisers, you think, to reengage more with the product, not even so much from a redemption perspective, but really on the gross sales side because that slowdown has been quite notable.

So remember, our narrative has been that generally within the wealth segment, there's been all this anxiety around the products without any distress. If you recall, when I talked about what we're seeing in our loan portfolios, it's the same in the wealth products. The wealth products are doing what they said they would do. They're hitting the yields that we guided investors to expect. The volatility has been low. So I think to sort of regain that trust to break away from the media's narrative, it's another couple of quarters of continued strong performance with relatively low volatility, again, making those yield payments that the investors expect.

I got you. So it's kind of like time and kind of proof point, right, that this product...

Yes. The reason why we think that, and I think this is also where you started is we still firmly believe that wealth is a growth business. Wealthy individuals are underallocated to alternatives. And in fact, when we think about our product suite, we have 8 wealth products, 2 are focused on U.S. private credit and direct lending. However, the other 6, we have European private credit still growing. So again, the U.S. anxiety hasn't fully ported over to Europe. But we're also, as you said, seeing significant inflows in the other parts of our business, whether those are non-traded REITs, our infrastructure fund just had a huge month in May with $700 million of inflows, our private equity secondaries fund, our sports and entertainment fund. So overall, the guidance that we've given is we still expect our overall wealth business to grow in 2026, and wealth is absolutely not broken.

Right. So just let's double-click on that credit part of the business. It's been, again, encouraging that the gross inflows have been quite strong and the redemption picture has not really deteriorated. Maybe there'll be a little bit more than what we've seen in the last few quarters because effectively it's been almost done. But what's the sentiment on the ground for non-direct lending funds? Are you seeing people actively switch from the credit businesses to others? I might probably have an issue with the idea of somebody switching from senior direct lending to equity, but that's a whole other subject. But infrastructure is a yield product, so that probably works kind of really well in the current environment. So where is the momentum in the investor psyche for like the non-credit piece?

So I'd frame it 2 ways. There's a little bit of rotation. Again, even seeing that, for example, in our non-traded REITs inflows, and that's also on the back of very, very strong performance that they've continued to launch. But there's also a little bit of a thematic interest. When you talk about infrastructure, maybe we'll cover it later, the world needs $4 trillion a year of infrastructure spend. Digital infrastructure is very exciting. Data centers are exciting. That's a trend that investors get behind. They also get behind the sports media entertainment thesis. So maybe there's a little bit more thematic interest in some of these things, so a little bit of rotation. But again, overall, the growth picture is quite attractive.

You mentioned real assets. So let's go there, and we have 8 minutes. I definitely want to make sure we hit on that as well. So the real asset business is, to your point, facing several tailwinds, particularly related to kind of the global digital infrastructure build-out. You've previously sort of identified, I think, $900 billion opportunity for private capital broadly for data centers and digital infra space. So talk to us a little bit how you sort of pursue this opportunity and why Ares is positioned to win there, maybe rope in the GCP, obviously, acquisition and how that's performed so far?

Yes. Sure. So we firmly believe that we are in the midst of a generational CapEx super cycle for digital. The hyperscalers keep upping their guidance on spend. First, it was $600 billion this year, now it's $700 billion this year. And we're sort of seeing this on the ground with existing data centers. The demand vastly exceeds supply. We're seeing pricing power. So again, a lot of the signals are still flashing in the right way. And we know this because the foundation that we have as a firm is very strong. We've been investing in digital for 10 or 15 years, and we've seen the opportunity through our real estate angle, and infra angle through our special opportunities fund, our asset-backed funds, also our secondaries funds in infra and real estate. So again, we've had this sort of comprehensive investment lens around this opportunity for a long time. But GCP brought us the one missing piece which was we were never in the development business. So now we have a team of 100 technologists who really from the cold phase, they find land, they get power, they get permitting, they lease the facilities and they build them and deliver them. And that's where this $900 billion opportunity lands. And what that number is, is that the total amount that will be spent on buildings for data centers in the next 5 years, about $2 trillion. But a lot of that will be done by the hyperscalers themselves, but sort of the third-party bid is about $900 billion, which is just a massive number. And we're playing our part in it. We have about 1 gigawatt of facilities under development, and our strategy is really focusing on primary metropolitan markets. We're betting more on cloud development than I would say, AI development, although they are a bit interrelated. And we're also working on opportunities that are not speculative. They're pre-leased with major hyperscaler clients. And again, when we see the demand for those opportunities from a leasing perspective, it gives us real confidence in the mid- and long-term growth opportunity.

And how do you think product development? Because that's a big theme, right? Like it's a theme that you and many of your peers talk about. I feel like there's very little debate that this is certainly going to be an area where private capital is likely to participate. So when you think about the product development within Ares around this theme, what could that look like over the next few years?

So we articulated this a little bit at one of our Analyst Days towards the end of last year. The primary source of capital on the development side will be a large commingled fund. People hear more about that in due course. However, once those facilities mature and sort of the development risk has been realized and the development return has been realized, the next big opportunity there is the yield that's generated through these 15-, 20-year leases with large investment-grade hyperscaler counterparties. So the YieldCo opportunity is massive on the back of that. And that's something we've already seen in our real estate logistics business, in particular, in Japan, where we have both the development operation and the yield opportunity for investors. So I'd say that's probably the next big opportunity for us post maturity.

Got it. Okay. Well, let's zoom out a little bit. We've got a couple of minutes left on the clock. Ares has been one of the faster-growing alt managers. You guys on the earnings call reiterated your targets yet again. You raised your dividends. I think it has grown like 20% this year. So that gives, I think, investors some sort of support and evidence in the underlying growth power of the business and FRE growth for this year and next year. So when you zoom out a little bit and you think about your less established businesses. So think about -- and to Greg's and his team's credit, you guys have a nice slide kind of showing the scaling of businesses that are relatively small now, but could be bigger over time. That list is fairly long. So if you were to say, hey, over the next 2 to 3 years, investors really have to pay attention to the following 2 or 3 businesses that are scaling now that could be relatively outsized contributors to growth, what should the market pay attention to?

So some we've already talked about, which I'll spend less time on, but I would say all the businesses that I will speak about have really large addressable markets where we think we have a leading position. So the first, again, is asset-backed credit. So within the credit department, that is the single fastest grower, you'll hear more news on some of those developments pretty soon, and we have a market-leading position there. Just on the digital side, I did want to point out that at one of our Analyst Days again at the end of last year, we said that when we acquired this business from GCP, it was literally the team, they didn't have revenues. So that business was costing us money. However, given the fundraising aspirations that we have, we said in 2027 and beyond, that business will generate $50 million to $100 million of FRE per year. So in terms of a catalyst, in terms of a growth engine, that is a massive contributor. And again, we feel very good about the positioning of that business. One we haven't really talked about is the secondaries business. So we acquired a secondaries platform, one of the largest 5 years ago. We've now doubled the size and profitability of that business. It's now a $40 billion business within the firm. It focuses on basically every vertical, private equity, infrastructure, real estate and now credit secondaries. And interestingly, a lot of the angst and anxiety in the private credit markets has led to a big opportunity for our credit secondaries business. So again, it's not only LP positions. It's now continuation vehicles. And it's also helping some of the semi-liquid vehicles evaluate their own capital needs, too. So I'd say broadly, these are derivatives of the primary markets and have a lot of catching up to do compared to private equity, which is probably the most mature. So I'd say secondaries is the last one to keep your eyes out on.

Yes, secondaries in private credit definitely feels -- it's got some real...

It definitely does.

Yes. Okay. Last question for you. I wanted to touch on M&A. You guys have been acquisitive over time. I feel like over the last couple of quarters, the sort of focus on private equity as a potential area of inorganic growth for Ares has been coming up more and more. Maybe talk to us a little bit about what that could look like. Obviously, there's a lot of fragmentation in private equity world today. Would you be looking to add inorganically something that has a lot of scale or something that's a little more niche? Does it need to be solely private equity or some of these businesses could obviously come with other asset classes? And what's your approach to that kind of inorganic opportunity?

Yes, good question. I think we told the market was that, in general, '26 for us was a year to digest GCP further. So I don't expect anything immediately. But that being said, we have a $25 billion private equity business. We like it, but it's subscale compared to the rest of the firm. And we like private equity over the long time frame. And interestingly, in a challenging market, you can see who's investing, who's giving their investors DPI, who's raising capital. So in a tough market, you can see who's differentiating. And when we think about what it could bring to Ares, it would help us definitely enrich the dialogues with our existing LP base because private equity is probably one of their largest exposures, one; two, lots of synergies with our direct lending business, which, again, has such a broad list of portfolio companies; third, financial characteristics of private equity from a margin perspective, attractive. And last, but certainly not least, it will help, I'd say, enrich our relationships with the Street. When you look at how our peer firms generate capital markets revenues from their private equity portfolios, it's a real opportunity for us. So I would say we're not in a rush. Certainly, there's a limited kind of buyer pool. So we're looking hard. That being said, to answer your question, doing something, I would say, in scale that kind of moves the needle is most attractive for us. But getting it right is the most important thing. And to do that, making sure you're aligned on culture, on governance, in addition to having conviction that's a great manager is all incredibly important. And that's not a decision that you make over 1, 3, 6 months. It can take years of courtship and really getting to know the counterparties to make sure that it's right for everyone. So again, interesting for us. It's definitely on the radar screen, but certainly not a make or break for our firm.

Got it. Okay. Well, with that, we're out of time. Blair, thank you so much. It's a pleasure to host you here.

All right. Thanks, Al. Thanks, everybody.