Blackstone Inc. (BX) Earnings Call Transcript & Summary

Good morning, everyone. And welcome to Bank of America's 33rd Annual Financial Services Conference. This is Craig Siegenthaler, North America Head of Diversified Financials at BofA. And it's my pleasure to introduce Michael Chae. Michael is the Chief Financial Officer of Blackstone and also Vice Chairman. He joined Blackstone in 1997 and had several senior roles at the firm, including Head of International Private Equity, Head of Private Equity for Asia Pacific. He was also a senior partner in the U.S. private equity business. Michael is also a member of the management committee and sits on several investment committees across the firm's business Michael, thank you for joining us.

Great to be here, Craig. Thanks. Nice to see everyone.

So quick intro on Blackstone. Blackstone's AUM is now $1.1 trillion. It makes it the largest alts business in the world. It also has the largest individual investor business, which it started much earlier and has dedicated significantly more resources than its peers. The firm has also grown AUM by about 13x since its 2007 IPO. And Blackstone is a highly diverse business with leading and scaled businesses across real estate, private equity, credit and hedge funds. It also strategic partnerships with 4 life insurance companies and doesn't have exposure to any of their liabilities. Michael, let's start with the macro.

You have a very large portfolio across different industries, different geographies. It's always helpful to provide us insights in terms of what you're seeing, including around growth. So what is the state of the macro environment today? And where do you think we're heading in 2025.

So I think overall, the -- we have a quite positive outlook. We think the economy is on a very sound footing. As you referenced, we always like to start by looking within our own portfolio where we have something like 250 stakes, significant equity stakes in companies, 13,000 individual real estate assets. We have a borrower portfolio in the thousands and what we see, if you look at, say, the fourth quarter, where we survey our COs and obviously track our portfolio company metrics was a growth -- a revenue growth rate in our U.S. portfolio of nearly 7% with very strong margins. We've seen margin increases in aggregate across that portfolio for 9 consecutive quarters. It's really been a pretty remarkable display of sort of the underlying productivity in these companies. And frankly exceeded my expectations a couple of years ago when input costs appear to be rising. In our credit portfolio, fundamentals are very healthy across thousands of borrowers in our noninvestment-grade portfolio. Pretty minimal default rates that have been stable for a while now. And we do the survey of our portfolio company CEOs every quarter with a bunch of different questions and a grand total of 0% of them forecast recession for this year. So that's a pretty positive picture. In terms of inflation, I know Jerome Powell speaking right now, we see it is under control. We see it as effectively at target. We always focus on shelter costs. They are 36% of the CPI metric that the government uses. But they -- the way they do it inherently lags probably by about a year and even the Fed acknowledges that it's coming down in the real world and that there are measured lags. If you look at CPI in January, less shelter, ex shelter, it was about 1.9 you must carry a lot of that inflation. It was 1.9% ex shelter. Now the government's shelter component was over 4%. If you look at in our own portfolio and then an external sources at sort of market rents, real-time kind of market rent shelter cost data is running more around 1%. So when you combine those 2, it's at or even arguably below target. Now the Fed has room to ease in our view, but is going to be patient and we can all speculate why our own view would be. You have strong economy, you have a relatively strong and stable employment picture. And from their point of view, perhaps they want to have optionality, optionality around seeing some of these policy measures play out in the first half of this year. And also optionality to basically leave in their back pocket, the ability to be accommodative should there be some kind of shock or economic downturn. So again, we think they're actually letting monetary conditions run pretty restrictively. But that they think it's okay given the sort of relatively benign picture in the economy overall. They have room to ease. We think they will -- they're on a path to use it over time, but they can be patient. That's sort of the U.S. picture outside the U.S., as everyone here knows, a pretty different picture in Europe, U.K., Germany, Europe, overall, in China, more challenging sort of growth headwinds there, I think you'll see central banks being more accommodative. And I think that, among other things, will lead to a continued strong dollar. And then in contrast, markets like India and Japan, which we're quite focused on I think, are quite positive picture. And I think for us, there are promising places to invest. Now I think asset values in sort of some of these more challenged areas Europe, China, they're arguably reflecting some of those headwinds and perhaps what are becoming more interesting places to invest. So overall, it's a complex picture, but one that I think presents pretty interesting opportunities. And in September, I said at a conference early in September after kind of a volatile August that we were seeing signs that were consistent with the soft landing. That wasn't a total consensus view then. Now I'm not going to say it's more consistent with the no landing, which I think has a lot of different meanings to different people. But I think the idea of sort of above trend growth inflation under control, I think that's sort of the picture we're in at this point.

Great. So I wanted to go a little deeper on the transaction side of this. So a lot of us are expecting an upward trajectory and transaction activity on both the investing realization side. What's your outlook for deployment this year?

Yes. I think the transaction environment it's -- this all translates favorably without talking about sort of when in the year, things will take off. I do think acceleration through the year is a watchword. The IPO markets, you look at IPO markets, M&A markets, both corporate and sponsors on the IPO markets, the market has been basically suppressed in a historic way for the last 2 years, 2023 and '24, we're at basically 2 years in a row, the lowest levels in terms of volumes since the financial crisis. So we certainly see those -- the IP market coming back, just sort of normalizing -- the IPO market volumes normalizing against kind of 15-year averages would mean the market will be up in the order of like 40% this year. I think it will start with -- you see some 1 billion-plus IPOs, the pipelines kind of doubled versus a year ago. I think it will start with sort of category-leading larger scale kind of at the higher end of mid-cap or large cap. But I think that will -- if the markets hold up, that will broaden over time as well. So I think that's a favorable picture. And then on the M&A side, and everyone is sort of waiting for to go here, but our view is it's happening. And if you talk to LPs or GP and what they're seeing with GPs, you talk to bankers, we look at our own planning, we see this pipeline really filling and taking off perhaps more second quarter than first quarter in terms of announced signed deals. And these things take time. So things we decided to launch in November of last year, we're preparing investment memoranda. You've got to have the full year financials. And on and on, you then launch them and then sort of sign deals ensue. So I think it's acceleration, putting aside sort of exactly measuring sort of the timing through the course of the year. For us, in terms of deployment, we really tried to lean in ahead of out of market recovery, which is always the best time to lean in. Last year, we deployed $134 billion across our firm. That was up 81% year-over-year. And so -- and we continue to think it's a good environment to invest.

I wanted to talk about the interest rate impact. We obviously had a very large increase in the 10-year and the fourth quarter. Last year also private credit was very strong in the fundraising front. Do you expect a rotation into the equity side of the business, private equity, infra equity, real estate equity?

It's a good question. I think right now, I'm not going to call it a sweet spot, but I think in a very encouraging way, it's sort of a positive and balanced picture in terms of demand it flows into credit as well as the equity side. And I think there's a blend of kind of cyclical and secular factors on the credit side, despite spreads tightening, overall yields are still very attractive and compelling and even in the sort of traditional market, if you look at the BBBs, the bond yields are the highest in relation to S&P earnings yields in like 20 years. And so we are seeing, among other things, very strong flows continuing into floating rate products. And then within credit between traditional liquid credit and private credit, I think it's becoming clear and clear that private markets are sort of the destination for investors to find excess spread, whether it's investment grade or sub-investment grade, and that's a real secular thing where the structural benefits of direct origination doing it at scale across the sort of risk return spectrum within credit, that's really coming into its own. So I think that's very positive on the credit side, both again, cyclically and also from a secular standpoint. On the equity side, we are seeing, I think, a more and more positive constructive environment. And again, I think it's a combination of a cyclical recovery in some strategies and a secular trend towards allocations and others. You're seeing -- more on the cyclical side, you're seeing the easing of some of the technical factors that constrained allocations in the last couple of years around the so-called denominator effect around sort of the DPI challenge. I think those things are easing, if not reversing. And I think, particularly in areas like traditional private equity drawdown strategies, that cyclical recovery is underway. I think it will take a bit longer in real estate, especially real estate open-end strategies. And then in areas like infrastructure, secondaries, there you're seeing, I think, a lot of LPs on average, just adding to their allocations. That's strategic thing. And so that's very positive for our business. So again, if this coming together, I think of the cyclical and the secular. And right now, between credit and equity, I think it's a very constructive environment.

So how does this impact your overall fundraising expectations for 2025?

So 2024, we raised $171 billion in the course of the year in a not unchallenging environment, where we also had a pretty light calendar of drawdown and flagship drawdown strategies. For 2025, it's early in the year, but we really see -- are feeling strong momentum, and we're very, I think, constructive about where the full year could take us and it being a very productive year. If you look at sort of drawdowns, perpetuals and then we can talk about credit on the drawdown side, as I mentioned, we have in a positive way heavier drawdown fundraising calendar planned. And so I would expect drawdown fundraising in '25 to be sort of a multiple of what we did in '24. And we have a handful plus of very well performing, I think, what will be, I think, much demanded products in our private equity secondary strategy in our Asia private equity strategy, in our life sciences fund, in our GP Stakes fund and tactical opportunities. So that's -- I think that bodes very well. In perpetuals, on the institutional side, we have this infrastructure business reached $55 billion of AUM at the end of 2024, up over 30% year-over-year. We've introduced a European sleeve around that. So there's a lot of good momentum there. And then on the individual investor side on perpetuals, and I think we'll talk more about this, it's -- there's a lot of momentum. And we have now these 4 critical sort of pillar strategies. In January, we raised $3.7 billion, which was our highest fundraise in over 2.5 years. So that, I think, bodes quite well. And then in credit insurance, that business's AUM was up 20% last year, and we continue to see that on a really positive trajectory.

So you're right, I do want to hit on the individual investor business. Blackstone is #1 in this business globally. There's a very large gap to sort of #2. Your model has been to launch these large I'll call them category killers from BREIT, BCRED, BXPE. So my question is, what's next? And then also, if I look at sort of distribution around the world, to me, look very strong. Are there any gaps there remaining?

I think overall, if you sort of step back, it's a really exciting time where the innovation engine in our private wealth strategy is really, really firing. Really, I would say, taking off. And as you know, we started building this area within the firm in private wealth, about 15 years ago. We took a -- as we always try to do, we took a very long-term view around building this. And again, I would say we reached the point where the innovation flywheel after all that time is really, really accelerating. So 8 years ago, we launched our first sort of core large-scale, customized product in BREIT. Today, we're at $260 billion of private wealth at AUM across the firm is about -- it's nearly 1/4 of the firm with multiple category-leading products. In the last year, we've gone -- sitting in this room, maybe 14, 15 months ago, we've gone from sort of 2 core strategies to now what we call the core 4 in the original 2, nontraded REIT, nontraded BDC, BREIT and BCRED. We've delivered over 6, 7, 8 years net returns inception to date of around 10%. And on BREIT, that's like 65% higher than the public REIT index over the same time period. For BCRED, we're delivering a yield today of over 10%. And I think in the nontraded BDC area, you're going to see in the direct lending area, you're going to see more and more performance dispersion over time. So that's -- those were 2 really important foundational products so obviously, a year ago, in January of last year, we introduced BXPE. So we've been at it now exactly a year, we're really, really pleased with the performance, most importantly, the investment performance and also the fundraising, the growth in NAV. So we're really, I think, the work that took and I think how that translated into performance in the first year was very gratifying. These private equity retail products are not easy to do. And I think we're uniquely positioned because of the breadth of our platform, our experiencing structuring and so forth to do it well. And then our fourth core product, we call BX Infra, launched on January 1. It was the largest sort of first time fundraise for an infrastructure retail product by like a multiple of 4 or 5x. And what was cool to us is in terms of, I would say, kind of a proof point around the private wealth strategy for us is out of that first inflow, which was over $1 billion, over 90% of the financial advisers who transacted had been in another Blackstone retail product and over half had been in all of them. So that, I think, gives you a sense of the power of the brand, the sort of the network effect and so forth. And then again, in terms of the pipeline, we've talked about this, but we have a multi-asset credit product with the ticker execution actually, that's in filing, and we expect it to launch in the coming months. We think multi-asset credit overall is a really, really important product both for individual investors and institutions in the private credit world. And again, because of the breadth of our strategies, including real estate credit, infrastructure credit, investment grade, sub investment grade, we feel very, very well positioned around that. And so that's just a sense again of this innovation flywheel. There's more in the lab and there's more to come and we're really pleased about it. On the -- that's the product side, the distribution side, sorry for this long answer, Craig, you call them gaps, we can also call them white spacing opportunity, both positive. And I think when you step back, much of the action to date naturally so has been, think about geography and channels around wire houses in the U.S. and on channels and on geography, as you referenced, there's -- it's really early innings around the opportunity. So on the channel side, whether it's RIAs, IBDs, very large family offices, maybe insurance-linked products, very exciting opportunities. Obviously, generally kind of more accredited investors and smaller investors versus QPs. And then on the geographic side, I'd just say nearly every sort of major developed country and market, there's opportunity, whether it's in Japan, a very important market for us. Canada, pan-Europe, Australia and on and on. So it's $260 billion, but we've never been, I think, more excited about the global opportunity across channels and really, really importantly, around sort of the product innovation flywheel.

So after the election November, we've had a big pickup in inbound on the retirement channel and the potential for private to sort of break in. So what do we need to see from the regulatory front. And what is Blackstone's perspective on this topic?

We have noticed there was a focus on this. When you step back, there's a lot of different ways to describe this current situation. One way to look at it is you have a -- within the retirement market, you've got 2 -- like $12 trillion markets in defined benefit and defined countries sitting alongside each other. And on the DB side, as folks know, there you have some of the most like developed, sophisticated, evolved alternatives programs that have led to superior performance and net returns for those portfolios over decades now. And on the DC side, you have minimal to none in terms of the presence of alternatives. On the DB side, you typically have for plans and larger plans like teams of 40 people, sophisticated allocators of capital, portfolio managers and so forth, working on behalf of planned participants. And on the DC side, what you've had is obviously planned sponsors who've been, I think, way too focused on fees and not net returns and worried about litigation risk. And so that does not seem right to us. We can't predict sort of timing on this. We think ultimately, this should happen and should happen because it would be a good thing for retirees. And so we are big believers in the democratization of alternatives and that all people should participate in this. And we think it can be done responsibly with strong fiduciaries looking on behalf of GC participants. Now in that, if and when that day comes, we think we'll be really distinctively positioned in it. In terms of brand reputation, a track record generally, but specifically in products for individual investors. And importantly, I talked at length of just now about our different products, this sort of stable of large-scale perpetual structured, open-ended products for individual investors, those are the right structures and products for this channel, frankly, as opposed to, say, the drawdown structures. And so we think all of that will position us well if and when this opens up, which, again, I think we would hope it would, given the benefits to investors.

So I wanted to move into the insurance channel. You've created a business model that's very different than some of your large peers. You have 0 liabilities. It's capital light. It's very diverse for IM agreements with third-party lifecos. I think 23 SMAs as of the end of fourth quarter as you keep growing that number. How does your model position you for growth globally? And how really -- what are your real competitive advantages versus the captive models that some of the other alt managers employ today?

So stepping back and to remind folks, we're the largest third-party manager of alternatives for insurance clients. We have -- as of the end of the year, in 2024, $229 billion of insurance AUM, basically 20% year-over-year. And what I'd say is it's the right model for us. It's true to who we are, capital-light minimizes risk, maximizes market opportunity. We use, in our view, the power of our brand and our reputation and our massive $453 billion credit platform and all the origination capabilities that come alongside that to address the whole market. We think that multi-client model leads to better growth. As you mentioned, 4 large strategic partnerships, 230 SMAs and counting. We don't compete with those clients at selling annuities in life insurance. We're there simply as a third-party asset manager to deliver excess spread to make them as competitive as possible in growing their own businesses. So it's a very simple proposition. And I think if you were to draw this up in a blank sheet of paper, hey, can you create a nearly $0.5 trillion credit business and a $230 billion insurance platform and growing with 27 of the most important insurance companies in the world and so forth. Without using balance sheet without taking on those liabilities and you might opt for that path ex ante. So 7 years ago, I think maybe the jury was out as to whether we could really scale using that platform. And I'd like to thank the jury is increasingly in on that. The Resolution deal, Resolution 1 of our 4 strategic partners. I think it really showcased the power of our model, sort of proof of concept. We announced a $10.6 billion deal for Nippon Life Japan's largest life insurance company, an important partner to us to buy Resolution that will close later this year. We took -- if you step back, we took and it was only after -- a little after a year of ownership that we announced that deal. We originally took about a 6% stake for the firm in connection with a long-term asset management partnership and other LPs of ours also invested. And this transaction would monetize a very attractive gain for the firm and for our LPs and we'll continue to be their asset manager. And importantly, Nippon Life is this extraordinary partner and the leader in a very important global market for insurance. They're also our partner in core bridge. And we see really significant potential over time where in Phase 2 of this under their ownership with us continuing to be their asset manager for the closed block acquisition market, this platform, driven by Nippon Life is going to be very, very competitive at a time when that market, I think, is the pipeline for deals in that market is as strong as we've seen in a while. So all in all, our platform for insurance was built to support a much larger business. And so we're excited, and it's early days.

So post the election, there's prospects out there for kind of broad deregulation or at least less restrictive regulation on financial services. I'm curious on what this could mean between some of the competitive forces between the alt manager industry and sort of the banks. If the banks compete more aggressively, are there any areas that you think are potentially at risk or are there some areas where you think are very highly defensible, potentially never going back to the banks?

Yes. I think -- well, I think in this topic, people are focused probably rightly so on credit and private credit. I think if you step back, it's a really big and growing pie. The private credit market is like $2 trillion of the global market of $90 trillion. So there's plenty of room there for growth for participants. The focus of, I think, perceived competition is usually around LBO financing, which is actually a relatively small piece of the ecosystem. But -- and importantly, around many other strategies, private investment-grade asset-backed infrastructure debt, real estate credit, there's really, I think, really competitive dynamics with banks is not really a factor. So there's a really long runway as the market grows. And if you step back, it's really to us, it's all about what's happening here is all about moving assets to the right homes in long-duration vehicles. And that's a structural phenomenon that really transcend bank capital dynamics. We're providing -- it's about bringing borrowers directly to the source of origination of high-quality private credit and excess spreads at scale. And ultimately, we have different models. It's sort of -- it's about this -- the moving versus storage model. They're inherently about sort of the moving model, and we're focused on the storage model for long-duration, high-quality private credit. And because of that sort of ultimate difference in models, it's not a zero-sum game. I think for us, there's more potential for cooperation and competition. And in that context, and you've seen us announce a number of origination partnerships with significant banks around the world in different asset classes, including with the asset-backed finance. And I think you'll see those continue. And all in all, we're a really, I think, important partner to banks and vice versa. And we think we'll continue to be a preferred partner in doing all the things there are to do in this space. So overall, I think we're very comfortable with that picture.

Michael, you guys have built a very big digital infra business. I think you got about $80 billion invested today.

Data centers. Yes.

Data centers, pipeline is even bigger. So my question is, we had some news a couple of weeks ago with the Deepseek R1 launch. I was surprised how quickly some of the markets moved on that. I wanted your perspective on this. Did that change anything? Is this still a really attractive segment?

The answer is definitely yes. By the way, just to clarify, $80 billion, that's not our actual capital invested or value of our equity in data centers, that's the sort of asset value of the whole platform, including sort of signed leases. So just to clarify on that. But look, if you start with the big picture, and the picture is really quite big as I think this room knows from a -- in terms of the growth in data, the demand for data, the amount of data created consumes stored over the last 15 years has grown like 100x. We expect that same kind of geometric growth to continue, obviously. It's really the mega trend of megatrends. And we've been major investors in the ecosystem, whether it's in data centers, other areas of digital infrastructure, cloud service providers and then sort of the power and electrification-related trends. And we think we're really well positioned to continue pursuing that. In terms of the recent developments and we have a couple of weeks to digest that. Our perspective is that the continued decline in cost of compute is going to lead to more usage and faster adoption and that will drive and continue to drive overall demand for data centers. And I think you've seen with the passage of a week or 2, almost every hyperscaler now has commented and sort of reinforce that view in some ways, up their CapEx planning even further in some cases. And that's consistent also with all the private industry conversations we've had. So I think that ecosystem for now and for the foreseeable future is full steam ahead now. Will there be some shifting within data center footprints, will the training component, which actually is a relatively small portion of data center footprints today, will that be sort of more efficiently deployed. But will that then lead to even greater demand for inference, compute, compute related to inference Will that lead to faster adoption to even greater demand from the enterprise portion of these data centers, continued robust growth from the cloud portion. So in aggregate, I think we remain very positive. And then I'd say in terms of our positioning in that with all the scale and incumbency advantages that you referenced, those are really powerful positives. And so what we have are this portfolio of large, very long term, 15- to 20-year leases at attractive unit economics with counterparties that are some of those important valuable companies in the world built not on spec, but based on that pre-leasing activity. So that's sort of the starting point in the foundation. And then I think to the degree that there's more uncertainty longer term around sort of the slope of the curve. We think that -- and does that drive speculative capital at the margin out of this. Again, I think that inures to the benefit of incumbents at real scale, I guess.

So Michael, let's stick with AI technology. You have many roles at Blackstone, but one of them is you oversee technology. So I wanted to see if you could talk about how the firm thinks about implementing new technologies, whether it's artificial intelligence, maybe Web 3. Maybe you can talk about what you're working on.

Yes. Well, it's all about data. And I think in an AI world, and generally, the value -- it's all function of the value of your data. And so for us, we're really -- our focus right now is about sort of synthesizing, integrating the sort of trove of data we have. And if you step back, we think that these trends will only reinforce the advantages for investors in private market and the ones with the largest scale relative to public market investors with all due respect. In public markets, you're obviously definitionally sort of confined to the 4 corners of publicly available data, which I think will be increasingly commoditized over time on the private market side for us as the largest player in the industry, with troves of data across multiple asset classes and strategies with 4 decades or so of longitudinal data. We think that's a tremendous asset, and it's really early days in marshaling that for the benefit of the business. On sort of AI specifically, I think about it at multiple levels of how we're trying to attack it strategically for our investment business and for value creation for our portfolio companies, that's sort of the first level. Again, it's about leveraging this data and mobilizing it to enhance our insights and investing our data analysis and doing due diligence on companies and then portfolio value creation strategies, both trying to focus on businesses that are potentially most vulnerable disruption, and we're businesses that can go most on offense. The second level is our own operations and processes internally. Obviously, the kind of true north there is trying to deliver more and more productivity. That will be done through combination internally and externally develop solutions. Our focus on the internal side has been around creating in a secure way summarization and search tools, Blackstone customized tools that we can again use securely to enhance our own internal processes in the valuation area through a combination of our own internal stuff and also some partnerships with some emerging outside companies. We think that's an opportunity. Well, just generally in private market sort of solutions around operations, that's -- it's an industry that's sort of outgrown somewhat, I think, underdeveloped legacy systems around how these businesses run. So I actually think in a digital world and AI world, there's an opportunity to kind of leapfrog those legacy systems and really be a positive in terms of being an accelerant to supporting these businesses. And then third is investment strategy around all the themes related to AI, which we've hit on in park.

I want to ask a question on the firm's culture. It's something that's very hard to quantify. But I think it is maybe a little bit of a special sauce at Blackstone. You had a strong leader in Steve Schwarzman for a very long time. I think Tony James joined around 2005.

2002. I was on my honeymoon, I didn't -- wasn't on e-mail for 2 weeks. I opened it up and I see I have a new boss. I said, do I need a new boss? Turned out, I did. Made me better. Yes.

And also, John Gray kind of came up in the firm with you. Now you're seeing some of his style there. What is special about Blackstone's culture? I mean what I can see is you attract a lot of great talent and you don't really lose people.

Yes. I think -- and I do evangelize about this and hopefully not repetitive. But I mean, I think there are a number of elements to it. I'd just sort of like recap a few of them. One is from the beginning Steve and Peterson took and continue to take a really long-term view to building the firm and to building something enduring and something that could be institutionalized. And in the -- with the goal and the ambition of not just building a great like investment business, but one of the best businesses in the world. That's how high our leaders and founders aimed. This sounds generic, but I think we bring it to life, this focus on excellence in everything we do. Everything we do with actually sort of a client and stakeholder focus again, with a long-term view and applying that approach that rigor and that relentlessness to big things and also little things, making holiday videos and even smaller things, obviously, big things around the strategy of our business and investment returns. Third, I'd say sort of the, I'd say, 15 years ago, 20 years ago, same question when we were much smaller, we didn't seem small then was like what do we do? I said, well, we try to run a relatively large firm like a small firm. And that continues to be the case. And so -- and that takes, as you actually get bigger, more and more work, more and more processes and structures and so forth around communication connectivity, how you communicate to nearly 5,000 employees and 28 offices globally and so forth. How you build a culture that perpetually it's all that. That's a really important thing. And then you -- to end, this is a talent business. Capital is commodity. And so what I'd say is that we really are in a stronger position today to attract and retain talent than we were when we were a smaller firm. And I think we're at a point where as much as we've seen -- appear to have scaled, I actually think the power of the brand, both with our clients and also with our perspective and actual employees in terms of trying to attract them has scaled even faster than that. And the key for us is continuing to sort of tie together the power of that brand and the culture of the firm and done the right way, we're actually even better positioned today to perpetuate it and to attract great people than we were when we were a smaller firm.

Right. And with that, we are exactly out of time. So Michael, on behalf of Office at Bank of America, thank you very much.

Thanks, Craig.