DigitalBridge Group, Inc. (DBRG) Earnings Call Transcript & Summary

All right. If everybody can please go ahead and take their seats, we're going to go ahead and get started with our next session. For those of you who don't know me, I'm Matt Niknam, comm infrastructure analyst here at Deutsche Bank. And we are very pleased to welcome back DigitalBridge CEO, Marc Ganzi. Marc, welcome back. It's great to have you.

Yes. Thanks. Thanks, Matt Niknam [indiscernible] we're on -- very good. Matt, thanks. It's good to be here. Full disclosure, I'm DB alumni. So it's always good to be back here. And I think it's been a great conference. So thank you. There's been a lot of spectacular investor engagement. What I thought I would do, Matt, is just maybe spend 4 or 5 minutes just talking about DigitalBridge and what we're doing today and and how we see the digital infrastructure landscape playing out. And then I think we can go more into the fireside chat about credit and what we're up to. But just so you know who we are, we are a global alternative asset manager. We specialize in digital infrastructure, primarily owning and operating 50-plus companies around the world, all focused on the digital infrastructure ecosystem. And we do that from Asia, out of Singapore. We do it out of London and Europe, Latin America and the U.S. out of Boca, L.A. and New York City. We're a sector specialist. We believe in building great companies, high-growth companies. And ultimately, we pivoted from being a real estate investment trust into an asset-light alternative asset manager and owner and operator of this infrastructure. So why digital infrastructure? Why this moment in time? Why do we think this is topically interesting? First and foremost, we're back in this next multi-generational opportunity, much like public cloud 10 years ago. We see the world a lot like our lunch speaker yesterday as a big decade-long build, and it starts with the picks and the shovels. And so as we think about artificial intelligence and where we play in that ecosystem, as I tell some investors, we're kind of the dumb plumber in the equation. Someone's got to go build the pipes and someone's got to build the capillaries. What we do believe is what we do is mission-critical. We do think that our customers rely on us, and we have to wake up every day and deliver [ five 9 ] standards and be ultimately on point for our customers. 5G continues to be a big catalyst. Certainly, we can talk a little bit about that in terms of the spend on fiber and mobility and small cells. We do think we're about 2.5 years into the 5G build. We think there's another 4 to 5 years of densification coming and we have a very specific view on that, and that comes from the customers in Europe and then here in the United States. And then ultimately, why do investors like what we do? What we do is defensible, what we do is resilient. And we do think this notion that you can be a digital infrastructure owner and operator outside of a REIT structure that's asset-light, actually provides more benefit to public investors. And it really gives you the chance to own the entire asset class without having to pick swim lane and there's some great swim lanes by the way, we think a lot of the public companies like Equinix and American Tower great, but we provide to investors the converged ecosystem. And we do it on a global scale. And that's unique, differentiated and no one is doing it the way we do it. So with that, what I'd offer to you is that the asset-light approach is different. It's historically for the last 20 years as a digital infrastructure investor, you've been sort of fed that you have to invest in fiber or you have to specifically invest in towers where you have to invest in data centers. And you've got to pick management teams and you got to make a geographic bet, you got to make a sector bet and you got to make a team bet. Our approach is different. And ultimately, as a scaled operator being capital light and the amount of capital that we've been able to form at DigitalBridge is totally differentiated. And I think when we started down this journey 3 years ago, transitioning from a REIT to an alternative asset manager, a lot of people didn't understand what we were doing. And ultimately, in the last 18 months, as you know, Equinix, Digital Realty, American Tower have all gone out and used third-party LP capital to grow their businesses. just like we've been doing for the last 10 years. And so we believe that's a recognition even by the biggest players in the world that the size of checks that you have to write in this sector to ultimately support customers is large. And you can't do it through traditional public markets. And so what we offer to investors is the chance to play in that ecosystem, invest across all of the sectors and invest what we think is one of the best operating teams in the sector. We've been doing this for 30 years. Ecosystem investing is important, too. Again, we not only play in our traditional infrastructure funds, which is our sort of value-add infrastructure funds, but we're also here with our credit hat here at the Deutsche Bank conference, we have a credit fund, we have a credit team. We're investing side by side with some of the largest global institutions. I think some of you know, we led the -- co-led the CoreWeave transaction with Blackstone and a few others a few weeks ago. And so we're doing that as well. We're a provider of capital to great digital businesses around the world, and we're going to continue to grow our credit platform, and that's part of our growth plan to double AUM in the next 3 years. As I said before, a lot of high growth. As you heard on our last quarterly call, our data center businesses are growing at 23% CAGR. Our fiber businesses are now posting very solid 8%, 9% organic growth, and we see a lot of good things happening in fiber now. Towers very steady. Globally, we own 9 tower companies. The organic growth across those 9 platforms over the last -- through the first 3 quarters is about 14%. So towers are growing that. We can get more specific about that. And then small cells, unfortunately, is our laggard, growing at about 3%. But we see a lot of growth coming in small cells as 5G moves to densification. And ultimately, as you see the proliferation of C-RAN and OpenRAN network. So it's pretty exciting. I mean our worst business is growing at 3%. Our best swim lane is data centers growing at 23%. So a lot of growth going on here. And then ultimately, this is how our ecosystem works. I think this is a pretty interesting slide. And if you think about how traditional REITs operate, whether it's Equinix or whether it's Crown or American Tower, they play in kind of 1 or 2 swim lanes here. What we do is we deliver holistic networks. And the way that starts is ultimately, it starts in a private cloud environment, it migrates into public cloud, public cloud then moves into the Edge. Edge ultimately moves to Near Edge, which is C-RAN and O-RAN computing, and that proliferates through dark fiber and lit fiber services ultimately to small cells and towers. And data gravity, that's really the logical progression of how data gravitates to you, the end user, but it also is how it gravitates to the enterprise. And eventually, we think the big trend here in AI is when we say Edge delivered, most of the AI traffic will be machine to machine, as we heard at lunch yesterday. That's really where this happens. And ultimately, where the applications reside. I think we heard 3 pretty cool case studies yesterday around DoD, Shell and then in a private enterprise environment and how ultimately at Coke Industries, how they're ultimately transforming their supply chain through AI. This is no longer science fiction. And we talk about generative AI and ultimately, what does that mean? It means that there is a decade-long build in infrastructure. And so while these applications are happening, the only way it happens is through the delivery of the data. And I think this is really for us the most exciting thing we're working on. And here's the good news. We kind of get to play the entire ecosystem. Again, as an investor in DigitalBridge or an investor in our funds, you don't have to choose. You don't have to make that choice in an asset-light model of where you get to play as an investor. And so for us, we think about ultimately the initial learning models sit in private cloud, which is happening at Switch. Those workloads eventually in the next 2 to 3 years begin to proliferate out to the public cloud as the public cloud operators start moving that data out. And then ultimately, you move to the Edge, which is interconnection and then it proliferates out to mobile, which is Near Edge, again to C-RAN and O-RAN hubs, which some of those sit in interconnection hubs. But ultimately, there will be an ecosystem where you have smaller edge delivered facilities similar to what Vapor IO is doing, by example. So we talked about earlier, we're here also with a second hat, my partner, Tommy Yanagi is here. We've issued close to $15 billion of debt this year alone as an issuer across our 50 companies. So we're very active. We're very active in the bank market. We're very active in the ABS market, CMBS market and, of course, in the private credit market. So ultimately, A lot of our capital structure is initially bank debt or club debt, but ultimately, we migrate to securitization structures. And so across the $72 billion of assets, we're levered today at about a 41% loan-to-value, and 87% of that debt is securitized at a coupon sub 4% fixed. So very stable long-term capital structure and we've been a pioneer in the space. We're the first to issue cell tower securitization notes. We were the first ones to do a small cell securitization. We're the first ones to do hyperscale securitization. And we also -- what we did in Brazil, I think it was really interesting with the green bond down there, 100% renewable energy data center bond. So we'll continue to be active in this marketplace and we'll continue to be an active participant in this conference with 2 hats on. So those are some of my comments. I tried to be quick, Matt, and happy to go to Q&A -- well, fireside and then Q&A.

We've got a lot to touch on. And by the way, for the audience, if anybody does have a question, just raise your hand and we can get a mic to you to ask. You've been busy last couple of years, obviously, transforming the business. We talked about the evolution from a traditional REIT towards a digital infrastructure focused capital-light alternative investment manager. What are you most focused on right now as we close out the year? And maybe within that, if we can talk about the next steps to sort of help unlock greater value for the company.

So I think the catalyst for the public company right now is really two things. One is deconsolidating our balance sheet, which we successfully 2 weeks ago, deconsolidated data bank really important for us as we get our target net leverage down to 1x. And keep in mind, when I stepped into this Chair 3 years ago, I inherited a $14 billion debt stack, and I think we were levered at like 30x. And so it was a daunting challenge. And so to be kind of on the 1 yard line of getting down to that target leverage range between 1 and 2x EBITDA, I think, is really exciting for us, and it puts us in a different category for institutional investors and it really takes the risk off of owning DigitalBridge, which we -- the last piece of debt we have is our Vantage stabilized data center business, which we will deconsolidate inside this quarter. And that will get us to basically all we have left is $300 million of securitized debt. And so against a business that generates pro forma run rate about $240 million, $260 million of EBITDA will be basically levered at about 1.2x, 1.4x in that range, depending on how EBITDA comes out in the fourth quarter. So my first priority was taking care of the capital stack, maintaining a strong liquidity position. We have close to $600 million of cash and cash equivalents. As we go into the cycle, we want to be underlevered, and we want to have cash. That's worked well for me in '02 and '03, that worked well for me in '08 and '09. And the difference between being a wartime CEO and a peace time CEO is very different. And so our mentality right now is have a very conservative capital structure. Have access to a lot of capital and ultimately play offense. And we're pretty excited about the things that we think we can do in the next 24 months. There's a lot of opportunity out there. And I think we're better prepared today than we were in 2003, and we were better prepared than we were in '09. Why? We've had the benefit of having gone through those 2 cycles and having learned what worked and what didn't work in those cycles. The second point about our transformation that I'm focused on right now is capital formation. And so we've had a fantastic year forming capital. Tom has done a great job of raising $15 billion in debt capital. Kevin Smithen and Leslie Golden have done an amazing job, raising equity capital. We've raised over $5 billion of co-invest 2 weeks ago, we hit the Databank deal. We did the AustralianSuper EUR 1.7 billion commitment to Vantage Europe. And investors keep putting equity behind us because I think we have good platforms, great CEOs and good teams. We guided that we would raise $8 billion of equity this year. We're clearly on that path. Perhaps we will do better than that. And our flagship fund is doing well. We have a new -- our third flagship fund is in market right now. Credit has been spectacular. I mean, Dean Criares and Mike Zupon and Chris Moon and the team have done an amazing job. We've invested about $1 billion into credit That product continues to outperform. It outperforms our expectations, and it's sort of top of the league tables and performance. And so we're going to continue to grow that strategy, Matt, that's working for us. And we've got a pipeline of close to over 60 new credit deals in our funnel. And we don't go alone in those situations. I mean CoreWeave was a great example where we worked with Blackstone, and we worked with a couple of other key GPs and I think that's the trend. You'll see that over the next 2 to 3 years. Nobody goes alone in this market. And I think what you find is your frenemies are really important in the credit space, we're more -- I think we're a little more collaborative in credit than we are in equities. But in a challenging market, you need friends. And so we're forming a lot of capital, and we're deploying a lot of capital. I think that's kind of the third leg to the stool is just staying out in front of our customer commitments and meeting the demands of what's coming. And the demand is incredible. I mean you particularly look at what's happening in private cloud and public cloud. Every time I look up every month, I've got Sureel, and I've got Rob and Raul coming back to me saying, "I need more capital." And immediately, I call Tom, and Tom goes, no, not again. And so every time we put a budget out, these guys just blow through it. Leasing pipelines at Switch and at Vantage and DataBank are up 5x against the pipelines last year. I can't even contextualize that. Even in our best days in towers in the late '90s when towers were ripping, leasing pipelines were sometimes up like 2x or 1.5x. What's happening in the data center space is confounding to me. And we're going to have to say no. There's going to have to be situations where we have the discipline to say we can't fund that. we can't do that because there is a finite amount of capital. But look, right now, if you look at the Q2 results from DataBank, Raul booked and closed 60 megawatts in a quarter. I don't think we did 60 megawatts in a year at DataBank, let alone close 60 megawatts in Edge computing in 1 quarter. And what Switch and what Vantage are doing, switching the private cloud and Vantage and public cloud having management teams that are singularly focused on those product lines is a huge weapon for us because as a data center operator, we have 6 data center companies around the world. But here in this domestic U.S. market where I've got Rob and I've got Sureel and I've got Raul, I got 3 killers that wake up every day and focus on their swim lanes. It's a huge advantage over a DLR and Equinix. And no indifference to Andy and Charles, they're great guys, great CEOs, good friends, but we got 3 of them. and they're waking up every day, very focused on their product set and their customers, and it's a huge advantage for DigitalBridge. And this is again why that asset-light model works because what we've done is we formed a ton of capital around Raul and putting his business into a continuation fund. We've been a serial issuer for Vantage. And Rob Roy for the first time has $1 billion of surplus cash, so he can go do the things that he wants to do. in public cloud, and -- I'm sorry, in private cloud, and he's -- Rob is really succeeding right now.

So obviously, if we think about what's been very topical over the last couple of weeks, we've seen some of the public comm infrastructure stocks come under pressure, meaningful reset higher for longer interest rates. So I'm just wondering if you can speak to the headwinds this dynamic of higher for longer could imply for comm infrastructure business models and the risks that can ultimately post the underlying CapEx that we've seen move steadily higher for the better part of earlier this decade, call it, 2021, '22, '23. And then maybe segueing into that opportunities you foresee you talked about maybe the next 18 to 24 months getting a chance to be more opportunistic based on some of your prior track record. So maybe we start with the risks and then maybe we can talk about the opportunities as well.

Well, I think the risks are embedded in the capital structures, right? I don't think there's a material risk factor to [ SBAC ] Crown and American. Those capital structures are incredibly safe. Fixed rate debt. And to be honest, all 3 of those logos are out of the M&A market. So it's not like they're deploying a lot of capital at the moment other than what American Tower did with CoreSite. And the only way that got that done was with private infrastructure capital. So asset light. I think our business, Matt, has always been incredibly interest rate sensitive. And so tower stocks get hit really fast on either a rate increase or the potential promise of a rate increase because, obviously, it hits AFFO. And so investors get sort of freaked out about that. And free cash flows can degradate, but they really don't. I mean you're going to hear from Jeff, you're going to hear from Tom and you're going to hear from Jay that their AFFO outlook remains relatively unchanged. American obviously has a lot of currency issues they have to deal with. But the stock that perplexes me is Crown. I think that's a good company. I think it's a company with great assets. I think it's got good solid management. But Crown has the biggest opportunity for upside and their capital structure really hasn't changed. So we're under fire as the tower sector is under fire for the first time because the growth is not there. We're not seeing that double-digit organic growth that we historically saw. And so I telegraphed this 5 or 6 years ago at this conference that I said holistic MLAs would come back to hurt the companies that chose to do that in 4G. So if some of you remember, you go back in time, Crown and American Tower did holistic MLAs. And some of those MLAs included bucket loading for certain customers. And I won't get into the specifics of what that means, but there was a trade-off. And Jim and Jay Brown at that time, we're very specific about those trade-offs, which is they wanted to extend tenor. Most of those MLAs extended the tenor or with their customers for 10 years because a lot of those leases from the '90s were finally aging. They were kind of in the sort of that third renewal of 15 to 20 years. And so they were trying to get ahead of the curve, which was stabilize the cash flows, but the trade was bucket loading. And so giving customers a certain amount of wind load inside the rad center. I'm sorry if I'm getting really technical, but this was a really important moment in time. And Jeff Stoops said, "No, I'm not going to do that." He was -- he went against Crown and American because he said, this is a real estate business. You got to price the real estate very specifically to the specific customer with the specific equipment. Jeff was right. And then the other challenge I think that Crown has is they've been swapping the small cells with the towers, and there's been some horsetrading. And some of that is tough. And I don't envy what Jay has to do because he's got a fiber business. He's got a small cell business, he's got a tower business. And he's got the same customers using all 3 kinds of those infrastructure. So there's short-term pain for Jay. But in an environment where applications move to the edge through towers and small cells and RAN hubs, you're going to need more fiber, you're going to need more RAN hubs and you're going to more small cells. Jay is in a very good spot. He's in a painful spot today. But I think long term, Crown ends up in the right place. He's offering converged solutions, much like what we're doing at DigitalBridge with Zayo and Vertical Bridge in DataBank. We do the same thing. We offer a set of converged solutions in ExteNet and Boingo. And I do believe that while we're in a low in CapEx, this presents the opportunity. Now let's flip the script, which is the same thing happened in '02 and '03, and the same thing happened in '08 and '09, which is our customers are now CapEx constrained. You have to understand the last 2 to 3 years, AT&T and Verizon have been self-performing almost all their fiber in small cells, which is why you've seen Crown and ExteNet dip down a little bit in terms of demand. We've seen demand pick up at ExteNet in the last 2 quarters. The leasing pipeline was at its lowest at about $12 million. Now today, that leasing pipeline is at $19 million. And we're starting to see our customers come back because there's an admission that they don't have the free cash flow that they once had. So whether it's [indiscernible] they do need us. And in times of high cost of capital, we flourish. We get more opportunity. So I see it a little bit differently. We're seeing more opportunity at ExteNet. We're seeing more opportunity at Boingo. We've seen a big spike in Zayo. We had a very strong September. We've seen pricing come back in fiber for the first time in 5 years. And so this next wave of connectivity, which initially is 5G focused, but as C-RAN and O-RAN networks proliferate and as edge computing moves out to the edge in these RAN hubs, you're going to see an explosion in fiber, you're going to see an explosion in small cells. And it won't present itself next year. I think next year is a tough year for the industry. It will manifest itself in '25, '26 and '27. Keep in mind, at the beginning of LTE, there were about 96,000 small cells in the United States, pre-4G. Once 4G went through its densification, small cells jumped to 380,000 of which Crown and ExteNet were a big part of that. We were about 40% of the market, and our customers still self-perform. And I would be the last guy to tell Jeff McElfresh or [indiscernible] that they can self-perform. They can. They're very good at it, but they do need us. And small cells today are just a little under 0.5 million small cells in the U.S. today, It's about 480,000. The forecast from Moffitt and a few others is it's going to go to 1.2 million. And that's all machine-to-machine, that's IoT sensors. That's -- and small cells are changing. The equipment is getting a little smaller. And as the equipment gets smaller, the rents get a little smaller, but there's more of it. And so our average node pricing, which was probably somewhere in the $375 to $450 a month, you're going to see node pricing probably fall to $300 a month to $275 a month, but you're going to see leasing volumes spike. And smaller equipment, smaller loading and a lot easier to install, more zoning friendly. So I'm pretty bullish about the opportunity set. I know we're having more conversations with the 3 carriers [ and DISH ] about how to take their network forward. We've been on the front end. We built more C-RAN and O-RAN hubs, I think than anybody else. And so I do remain optimistic about the opportunity set. And I think it is kind of a -- there's 2 sides to that coin. There's interest rates, there's stock price, there's pressure. there's CapEx pressure. But if you're smart and you -- you've got cash and you have liquidity and you've got a balance sheet, you can selectively go play offense and put that capital to work behind great customers. And these are my customers for 30 years. We'll continue to work with them, and we're cautiously optimistic about what happens with 5G and what happens on the edge.

Great. Maybe just to follow on to that opportunity conversation, what are you seeing maybe broadly in terms of M&A opportunities and valuations? Any sort of change in terms of private market valuations tied to higher rates, even anywhere near what we're starting to see in public markets? And has this varied at all by asset class or by region?

We saw 1 trade this week, which was a minority stake sale of 49% of some, what I would call sort of Class C type towers in the Nordics, mostly rooftops, no co-location possibility 24x. So towers really haven't reset. And if you go back to '02 and '03 and you go back to 2009, they really didn't reset that much then, too. I think when we were building Global Tower Partners together in 2009, Tom, we saw M&A multiples go from 22x down to 16x. So in that financial crisis, there was about a 6 turn compression in pricing. Now if you go back a year ago, as you know, developer towers were trading at -- we saw some of the public guys pay 40 times for a single-tenant towers. Those same single-tenant towers today, we have a couple of bids that are going on right now at Vertical Bridge, and we're seeing those towers trade at 28 to 30x. So the smaller portfolios, which had risen all the way up to about 40x, have now come back down into the high 20s. There's not a big comp except the Cellnex Stonepeak trade, which was this week at 24x. So we're going to have to wait to see what happens in Tower land, but I'm not suspecting there's a ton of compression in towers. I think maybe the M&A market, again, like '09, comes in about 6 turns. Data centers is really interesting because I think most of you know that data centers kind of fit into 6 different business models. And those 6 different business models price very differently. So you start at the bottom of the stack at managed services, you move up to hybrid cloud. you go to enterprise colo, you go to edge, you go to hyperscale and then you go to Tier 5 private cloud, which is Switch. If you look at those 6 swim lanes, they're valued very differently. There isn't even a bid for managed services right now, right? Maybe it's a 6 rack space is worth what 6x, maybe 5x. You go to hybrid cloud, which is kind of a new business, which is more software defined. And it hasn't been a ton of comps yet, but I think you're going to see that space sort of codify. You move into enterprise colo and you've got businesses like Cyxtera and Flexential and other businesses like that, that are trading in the low teens, maybe 10x, 11x, but that's sort of old school enterprise colo, 20-year-old data centers that are aging, and there's really not a bid for that today. But this is where it gets interesting. You move up in edge, which is really Equinix and DataBank. And DataBank did their recap at about 30x. And Equinix trades, I think today, even with the sell-off, it still trades in the 23% to 24% band. And then obviously, you've got the hyperscales guys and then you've got Switch, which is kind of in its own class of itself. And we haven't seen anyone really compete with Switch and what Rob does. But in the hyperscale space, there's a lot of activity. And we did this transaction with [indiscernible] Super 2 weeks ago, and that was done at a -- not at liberty to say the range, but it was done at a very tight cap rate. It was done at a cap rate that would surprise a lot of people. And you've got GI Partners, which did something with Digital Realty that was done effectively at a 6 cap. And so I think you see the bid today in hyperscale and is kind of in that 5.5 to 6.25 cap rate band, which implies that maybe there's only been about a 2 to 4 turn compression in M&A pricing. So hyperscale is hanging in there, private clouds hanging in there. I don't honestly tell you edge is going up. I think the valuation because there's such scarcity in what Equinix and DataBank does. We have a business in Southeast Asia called AMES that's going to, we think, be the DataBank of Southeast Asia. And then we have Atlas Edge, our partnership with Mike Fries and the Liberty guys in Europe, that business is going really well, growing at about 25%. And so Edge computing is nascent, it's new. You do have a good proxy in Equinix. And I think edge is 1 of the better spots. Fiber, I think, is the most interesting space. I mean it's kind of all over the place. And again, you have 4 different ways to play fiber. You can play a residential fiber you can play wholesale residential fiber, you can play enterprise fiber and then you can play wholesale transport and suboceanic cables. That last category is the most valuable. We haven't seen a lot of degradation in wholesale transport because why? The weighted average customer duration is about 15 years. You're generally 65% better in terms of exposure to investment-grade counterparties. And so that part of the fiber ecosystem is very defensible. So that's Zayo's transport network, that's the Level 3 assets. Certainly, EU networks sort of fits that category, Global Connect. And if you look at the last 3 comps in Europe in the last year, you look at where Eurofiber was done you look at where Global Connect was done and EU networks was done 22, 24 and 23x. So those valuations are hanging in. Why? Because you have scarcity and you have uniqueness in the capillaries that go across Europe and ultimately are providing that data center connectivity and that mobile connectivity. I think the pressure points in fiber today is really going to be in the resi overbuilder space. where you saw infrastructure funds come in at 18 to 25x. They layer, they put in [ senior lien ] then they put in subordinated debt up above and added 2, 4 turns. And so when you see the leverage stack, go to 8 to 12x in residential fiber where your cash flows are month to month 30 days, something hits the wall pretty fast. And so there's been 2 bankruptcies already in Europe in the broadband overbuilder space. We do think there's a correction that happens in that space, and we think resi fiber is kind of the first place where you see a few things hit the windshield. And so that will be an interesting opportunity. It probably doesn't manifest itself this year. but certainly will manifest itself in the better part of next year and into '25 and '26. And Sean yesterday at lunch, put that slide up, and I'm sure all of you were paying attention, $800 billion of LBO debt coming in the next 2 to 3 years to be refinanced. A lot of that is infrastructure. A lot of that's fiber. And some things will get reorganized and get through and some things won't. This reminds me of the CLEC space in [ 01 ] where we took capital structures and investment grade at 4x and a lot of the CLECs push the capital structure to 14x. And we know what happened. All the CLECs went bankrupt. And so I hope I'm not -- I don't want to paint the whole industry with a bad brush. But there are parts of resi fiber that we like. We like, for example, the wholesale space like something like Hotwire or Summit, IG. Those are really 2 really interesting businesses where you've got long-term contracts. And those of you that played in those securitizations, you understand what I mean, you had -- you were betting on 10- and 15-year cash flows. You weren't betting on consumer-facing cash flows that are month-to-month 30 days notice. So these -- digital infrastructure is complicated, right? It's simple, but it's complicated. And the underwriting is what matters. And we say this all the time you got to go back to what is the duration of the contracted cash flows? What's your exposure to investment grade, noninvestment grade? Do you have a building permit where you've closed the zoning door behind you? Do you have a will-serve letter where you have the last 80 megawatts of power in that jurisdiction. There's so many nuances to what we do, and these are the things that we're focused on.