GCM Grosvenor Inc. (GCMG) Earnings Call Transcript & Summary

For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. Taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. Thank you for joining us again. I am [ Trima Wanko ], member of the Morgan Stanley brokers, asset managers and exchanges team in Morgan Stanley Research. It is my pleasure to welcome the President of GCM Grosvenor, John Levin. GCM Grosvenor is a global alternative asset manager with $75 billion in AUM. John, thank you for joining us today.

Thank you for having me.

Let's again. Okay. So if we start with the company overview, starting big picture, Grosvenor is a relatively young company, but you've -- I think you went public in 2020. But you've been at the firm for over a decade. I'm sure you've seen a lot. So curious, as you look back on your time, how would you describe how the business has evolved during your tenure?

Sure. So GCM Grosvenor is a young public company, but it's actually an old company, certainly in the context of alternative asset management. We've been around for over 50 years. When you look at the business today, we're about $75 billion in assets under management. We're covering the entire spectrum of the alternatives universe from liquid alternatives, absolute return strategies, through credit strategies, private equity, real estate infrastructure. And inside of each of those verticals, we are deploying capital in multiple ways as a primary fund investor investing in other manager funds as a co-investor in companies and assets and securities. As a secondaries investor and also increasingly as a direct investor. One of the things that makes us unique, we think, in the alternative asset management industry is the significant focus we have on customized separate accounts. About 75% of our assets under management are customized separate accounts, where we are working in partnership with an institutional investor, but not always an institutional investor, usually an institutional investor to help them solve a particular type of -- or provide a particular type of solution to some aspect of their alternatives program. When you look at the business over the past decade or so, it's grown tremendously from the first few decades as a firm, the large focus was on the liquid part of the alternative universe through some organic build as well as through an inorganic deal that we did about 10 years ago, we have significantly built up and expanded our private markets capability. The AUM of our private markets capability has really gone from probably something less than $20 billion, 10 years ago to something that represents almost 2/3 of our AUM today. And where that came from and where that evolution kind of came from was the idea that as a solutions provider as a firm that can offer both co-mingled funds as well as separate accounts as a firm that really thinks of ourselves as a partner to our clients that we would be more effective as a partner to the extent that we can help clients across their alternatives portfolio. And when you look over the past decade, a lot of the evolution that we've seen in our business has just been to continue to build out their capability such that we're able to be that holistic solutions provider to allocators to alternatives broadly.

Excellent. And as you look back over that time, what would you say that would be the most significant challenges that the business, I guess, that the firm faces today. And if I'd asked you this question 10 years ago, how different would your answers have been?

Yes. I think that at its core, our business is -- and our industry is a human capital business. and our most precious asset is our team, is our culture, is our people, and I wouldn't -- not putting that necessarily in the challenge category, but it's always got to be your first focus, which is -- how do you make sure that you are attracting and retaining talent such that you can continue to drive that strong value proposition for clients. We're a very process-oriented firm. And so making sure that not only do we have the right people, we have the right processes such that we can continue to scale and grow and evolve the business. And I think whether you ask someone in this space, whether it's 20 years ago or 10 years ago or 5 years ago today, what's the biggest challenge? And frankly, what's the biggest opportunity is 2 sides of the same coin. It's just making sure that you keep laser-focused on your talent, keep laser-focused on your human capital so that you can continue to drive. Obviously, you can get into some of the more micro or cyclical factors that exist in any industry I think the good news about our industry is that -- and I know we'll probably talk about this in a little bit, despite the fact that maybe the fundraising environment isn't as good as it was a year ago, although frankly, I would argue it's -- there's certainly signs of improvement there. When you get past kind of those kind of micro kind of cyclical factors, it's really about just making sure that you're executing on your game plan because we are in an industry that has so many positive attributes to it. It is an industry where you are providing an investment solution, you are providing a service solution that clients value greatly in good markets and in bad markets. It's a place where allocations at worst are kind of staying flat and in many cases, are actually improving depending on what type of balance sheet you're talking to. And it's fortunate to operate in an industry where you have those tailwinds. Those tailwinds have been going on for decades. I think they'll continue to persist. And so it's really about just making sure that you're executing on providing that strong value proposition so that you can take advantage of your participation in what is a very attractive industry.

Excellent. And thinking about the business itself, I think you described yourself as a solution provider for the old space. Can you tell us what that means in practice that you use a description, which I really liked, so I want you to share that with the audience, when we were talking earlier. How are you different to what traditional GPs are doing?

Yes. I think it's -- I actually think of all the labels and names that people come up with in our industry. I actually think solutions provider is a very good one. I think that it properly characterizes us as well as a couple of our public peers as well as some of the other businesses in our space that aren't public. And when I think about it, what it really means is that you are acting as a partner to your clients. You are providing an investment risk return solution at its core. But around that, you're providing a tremendous amount of advice, consultative services, extension of staff, knowledge transfer. You are very much embedded in your clients' processes and they're somewhat embedded in yours. And I think sometimes there's a misconception that as a solutions provider, your client base is going to look different than what it might be of some of the other large public GPs that don't fall into the solutions category, maybe it's clients that are less staffed or have less experience in the alt space, and it's really not true. When you look across our client base, and my guess would be that it would be similar to others in the solutions provider category, you have everything from institutions that are just getting started out in alts and may not have a huge investment staff and are trying to figure it out and really do need that partner to help build that program. All the way up to some of the most experienced, well-staffed institutions in the world that still have a part of their portfolio or part of their alts game plan that they need to rely on partnership for. And that's certainly true across our client base, and I think it's a nice label, I think, for providing that role, meaning you're not just coming out with a fund every few years and you call them up and say, "Hey, do you want to be in this fund?" But the nature of the relationships are such that there's regular dialogue, regular communication regularly and you're evolving with that client as they evolve. And we've seen that play out in our business. Maybe it's a client that starts with working with us to help allocate capital on a primary basis or a fund basis, but then it might evolve into co-investing or secondaries and then it might evolve into another asset class and just trying to make sure that you're staying relevant in the client's kind of journey through their alternatives program.

Excellent. I really like the description of partnership there. And specifically with Grosvenor, when -- you mentioned that you have peers -- some of which are public, why do clients come to Grosvenor specifically as opposed to -- and they may also use some of your peers, of course, but what are they coming to you for? When it comes to you? What do they expect?

Yes. I think that people that operate as a solutions provider in our space and do it at institutional quality level are a very, very good group of firms. And I wouldn't say that they can't -- that they don't compete effectively, I think everyone does. And I think the nice thing about our industry structure is it the growth that we all have collectively, and this is true for alts providers, is less about taking more than your fair share. It's just all about participating in an industry that has great growth qualities and winning your fair share. I think the reality is like anything else in life, people do business with people they like and trust. You go through processes of all different shapes and sizes to develop those relationships of trust in likability and in some places, you click, in some places, other. I think there are nuances once you get into it in terms of where you might just actually set up differently than one of your peers, for example, we have a very large and successful 50-year-old alternative -- absolute return strategies business. That's something that's unique to us. We happen to have, over the last 2 decades, developed a fantastic practice, investing capital in funds and co-invest alongside small and emerging managers, particularly managers led by women and people of color. We actually just had our conference that we have every year for that in New York with almost 1,000 attendees. We have a very good track record and a very long history of providing these very, very complex custom separate account solutions. And so I do think there are some nuances at the margin. It's maybe a little bit of a boring answer in the sense that I probably think more similarities than there are differences. And it just comes down to everyone finding their match through that process of client and prospect acquisition.

Yes. I think we'll come back to the ARS business, which I think is differentiated in something that not everyone else out there has. But focusing now on fundraising, everyone's favorite topic, we've heard from several of the money managers that the environments look quite challenging with denominator effects elongated sales cycles, making it much more difficult. I think one of your peers said he's working twice as hard to raise half as much. So from your perspective, how would you -- how do you see the environment? And are you expecting any significant change through the rest of '23 and into '24? And how are you thinking about all that?

Yes. Look, I think the -- we've talked about this a lot over the past few quarters. I think the environment today is certainly not as good as it was 18 months ago. It's the capital formation. I think it's a good description you heard from one of our peers in terms of it's just a little bit harder, a little bit longer. Where I think we take solace and frankly, where we get excitement is that the nature of those -- that elongated decision-making or the nature of that slower decision-making is not about the efficacy of the asset class. It's not about the efficacy of the value proposition. It's not about a lack of desire. It's about, frankly, more technical factors, which is, okay, last year, 60-40 portfolios didn't do as well. Okay, my asset allocation math looks a little bit different. I got to manage through that or I've had less distributions from our portfolio my cash flow profile is a little different than what it normally is. So, I got to do something about that. But hey, I love what this asset class is doing for me. I want to keep being active in this asset class. Frankly, I've learned from past lessons, and I don't want to try to time the market in missed vintages because that's never really worked out for anyone. It's cost people capital over periods of time. And so it's more about managing through that as a partner as opposed to saying, "Hey, I'm actually questioning what it is you're doing or questioning your value proposition." And so we've got all the patients in the world for that dynamic. My own view is that as you see interest rate stabilization, which maybe we're starting to see signs of even as of this morning with some of the inflation numbers, as you've seen some not only stability but frankly, recovery in equity markets you will see more M&A activity. You will see more IPO activity, you'll see more transactions, capital being deployed, capital being realized. You'll have some relief and asset allocation and things will start to open up. We believe, for example, and some of this could be idiosyncratic to our business in terms of the timing of particular events that our second half of '23 fundraising will exceed that of our first half. And part of that, again, is, I think, an environment that will continue to hopefully improve somewhat part of that is one of the nice things about our business is that because of the separate accounts because of the high re-up rates, because of the fundraising cover, we actually have great visibility into our business.

Got you. And just on that, do you need a recovery in the environment for that statement to be true?

I don't think. I think my own view about the capital raising environment is very similar to, I think, capital markets and M&A activity environments broadly, which is you don't necessarily need recoveries, you need clarity and stabilization. So in a period of time where you have rates going from 0 to 5 and you don't know, are you stopping at 3 or your stopping at 4, or stopping it 5, are you stopping at 6? When is it going to stop? That's a very hard environment to transact. And I'm talking about transact broadly speaking. It's hard to write to ticket to a fund. It's hard to sell your company, it's hard to buy a company. It's hard to take our company public. But it's not as if you can't operate any asset class and certainly the alternative asset class in an environment that has higher interest rates than it had before. look back to the early mid-2000s, you had 4% or 5% LIBOR at that time. Those were some of the greatest private equity vintages that ever exist by way of example. So it's not about the idea that you need to have an environment where the equity markets only go up and interest rates stay 0, you just need to get to a place where everyone is like, okay, the pieces are moving a little bit less right now. There's a little bit more predictability. We're now used to it. We've been operating in this kind of world for 12, 18 months. Okay, we can kind of start reacting again, we can start working again. We can start transacting again. So I don't think you need one thing to happen. You just need to have some clarity about what it is they didn't have...

So almost a narrowing of the distribution of outcomes...

I think that yes. Yes.

Got it. Okay. And are you seeing any significant variations across geographies and asset classes? Or is it just across the board, just tough?

Yes. I think what it fundamentally comes down to is probably less about the type of institution you are, less about the geography in which you operate, and it's probably more about where you are in your alternatives journey. So for people that have been allocating to alternatives at kind of what you would think of as a full bite size for decades. Those are the people that have to navigate the pressures a little bit more on asset allocation for people that are in the process of starting or building their alts program, it's a different dynamic because you're actually quite excited to be building your program or starting your program in a period of time where maybe it's actually going to be a nice time to be deploying capital. Now there is some correlation that exists between certain channels and certain geographies and that alts journey, but that's the kind of the output, not the input. The input in my mind is where are you on the alts journey. For example, for us, we see -- and we've talked about this a lot, insurance company balance sheet as being a very interesting place because of where they are in their alts journey. We see noninstitutional capital or retail capital being an interesting place because of where they are in their alts journey. There are certainly parts of Asia, where they're in an earlier stage of their alts journey and, therefore, are still in the kind of the build phase and not necessarily at the mature phase. So you see some differences. But again, I think for me, it all comes down to where are they in that evolution of building out a fully mature all program and less about the fact that they happen to operate in a certain place or in a certain industry.

Excellent. We're going to talk a little bit about growth targets. So we're following off from fundraising. So you're projecting double-digit FRE growth year-over-year for '23 and '24. So if you could just unpack some of the key elements and similar to what we discussed about earlier about fundraising what do you need to believe for those to be fulfilled?

So there's a couple of things. So one, when I talked before about some of the predictability of our business or the line of sight we have in our business, it's not true for every part, right? There are certain parts of our business where how you do in markets and things like that matter in terms of compounding. But certainly for the private markets part of our business, we get -- we have pretty good insight as we enter a year into not only -- not before I even get to new fund raising, we have something that we have the longest acronym, I think, in the market, CNYFPAUM, I think it's 8 letters, but contracted, not yet fee paying AUM, which is AUM that we have raised to the capital, closed on the capital and adds that capital, either through the passage of time or through the deployment of capital starts to generate fees. So that's one area of a building block. The second area is we have a fundraising schedule. That's true for both separately managed accounts where we know what that re-up cycle looks like. We're fortunate to have an extremely, extremely high re-up rate which to me is always the best indication that we're doing well by our clients is the fact that they're willing to give you capital again. We know what we're doing from a fundraising standpoint in terms of some of the co-mingled offerings. So that's kind of another layer of kind of the building blocks. And then the last thing I would point to -- I'm sure there's many more, but in terms of some of the bigger drivers is we've talked about the fact that we believe we have operating leverage in the business. in terms of our fee-related earnings margin before you even get into the topic of the huge amount of earnings power we have through our incentive streams in the right type of macro environment. And we've proven that over the last few years, that was a public company that kind of slow but steady kind of operating leverage, and that's another factor where we feel like getting the payoff from investments that have been previously made and seeing that come through from a P&L standpoint.

Okay. So if I think about those 3 components, the long [ acuity ] and the deployments.

One past down.

To deploying contract and the fundraise and the leverage. As you think about all 3 of those which of those do you think has the most upside to -- in terms of where that could contribute to up-side on inventory and where do you think there could be most risk?

Yes. I would say that I would probably think about that more over the longer term than the next quarter or the next quarter, meaning just the math of it is certainly, as you continue to evolve your product suite as you continue to grow with your existing clients, as you continue to cross-sell with your existing clients, as you continue to acquire new clients, there is no more powerful thing than obviously the growth and scaling of your business just from a size perspective, which obviously is fundraising. And whether that happens tomorrow or 2 months from now or 2 quarters from now is probably less our focus. It's more about making sure that we are executing on our plan. That we are providing a strong value proposition. And we know if we're providing that strong value proposition, which we feel pretty confident we're doing in the industry that we operate in, that's a very, very nice tailwind. I think we do still believe and we've talked about it publicly, whether it's high 30s, kind of 40-ish fee-related earning margin over time is something that is quite achievable. Again, does that happen next quarter or next year, the year after, less about that for us, but it's more about just knowing that there's a lot of scalability and operating leverage in these business models and knowing what investments that we've made. So I would say of the 2, although CNYFPAUM is related to fundraising, just the idea of fundraising and operating leverage is something that you've seen exhibited throughout the life time of alternate advance managers of a public company being pretty powerful drivers. And then it's obviously before you get into the fact that there's nice assets on the balance sheet of our company in terms of investments, in terms of carry, liquidation and value or NAV value. Before you get into the idea of the new carrier you're creating and the new earnings part you're creating as you deploy capital and as you raise more capital, which is a pretty powerful dynamic as well.

Yes. And if people are right that these are -- the current vintages are going to be particularly attractive, then clearly, that has implications for future carry?

Yes. Look, I think that I've always been a huge believer in being a consistent participant and programmatic deployer of capital in the alternative asset management industry because none of us are smart enough to know the answer on that. I clearly remember sitting with one of our great partners on the institutional side in 2015. It's hard to think about this -- put yourself and choose them but you were -- at that point, you were kind of 6, 7 years into a bull market post financial crisis and the client was saying, "Well, I think maybe I'm going to pull back on my private equity right now. We've been at this while 2015 is going to prove to be one of the great vintages, a fantastic vintage for private equity." It's very hard to do this. Certainly, it's hard to do it at scale. I think one of the things we do well as a solutions provider and what the solution provider set does well, is helping clients with that programmatic approach with that consistent approach, with that diversified approach, with that institutional approach. And if you do that consistently over time, it's proven that those portfolios or the alt program can add considerable value on a risk-adjusted return basis to an overall balance sheet.

Excellent. And you touched on this a little bit earlier. Insurance, we'll talk about now. It's an area of growth you've highlighted specifically. So I wonder if you could talk a little bit about how growth in particular, is approaching insurance. and what the capabilities you can bring and how big do you see that getting?

Sure. Look, for us, it's an investment and a focus that we made over the past few years. And what we've seen as a result of that is capital raising from that channel that represents about 2x what it represents of our AUM today. So that is obviously coming from a small base but is growing faster at the overall rate. And I think at the end of the day, insurance companies like any other investors, but with some different constraints around regulatory capital and different issues that insurance companies face, is trying to drive ROA, trying to drive ROE. And historically, has not done that in a huge way through the alternatives allocation. Now do those allocations ever look like a public pension or sovereign wealth fund, no because some of the regulatory capital and liquidity is, but they're going to be more than 0% or 1% or 2%. And when we think about the insurance companies and the historical focus of insurance companies either on traditional fixed income manufacturing or on external management of some of the balance sheet, there's not been a long history of that alts focus. And so as a solutions provider your ability to partner with those insurance companies to say, here's different ways that we can help you in the alts more broadly, but then to combine that with the specific expertise of insurance relationships and insurance knowledge to then figure out the best ways to do that from a capital efficiency standpoint, from a liquidity standpoint is what we think is a huge opportunity. A lot of the folks in the asset management space that historically were some of the folks that were trying to drive that effort now also themselves have insurance company balance sheets. And therefore, in some ways, are competing to some degree with the insurance company channel, which I think is a fine and healthy dynamic. I think what sets us apart is as a solutions provider that's not really competing on the insurance or not competing on the insurance side as a solution provider that can customize the solutions to make it make sense for a balance sheet that does invest in an open architecture way through fund investing and co-investing and secondary investing and has now even more technical expertise about how to package that all together in a way that makes sense. It provides -- it's a massive opportunity. The numbers are silly, right? There's trillions of dollars of insurance company balance sheet. Obviously, what's going to go to alts will be some percentage of that, but it's not even something we have to worry about yet. And for us right now, it's just making sure that we're out there and making it clear that we can provide that solution and then doing a good job when we get the opportunity.

Excellent. So I take from that, you're not in the market to buy an insurance company.

No right this minute.

Okay. Excellent. And so moving on to deployment now. I think you've spoken about being pretty excited management team generally a growth been quite excited about the current environment. So hoping you can share some color about any particular asset classes you're particularly excited about? Or how you're thinking about deploying more generally at the firm?

Sure. I think that, broadly speaking, when you're in an environment where there's still a little bit of uncertainty around economy, around cost of capital, the focus of our firm and the focus, frankly, of our clients tends to be around things that can provide capital preservation attributes can provide cash flow yield attributes can provide some inflation protection attributes but not necessarily completely at the expense of capital gain opportunity as well. And so if you think about different parts of the credit universe, everyone uses the term private credit, if you ask 10 people in the room, what's private credit, you get 10 different answers but just generally speaking, kind of alternative credit or opportunistic credit, this is certainly an area of focus where the return dynamic there for the risk you're taking is unlike anything it's been over many, many years. I think infrastructure continues to be an extremely interesting asset class. I think we will start to see interesting opportunities in real estate, but I think you kind of tread carefully there. I think the opportunity will probably be more interesting on the credit side before they are on the equity side and the subsector you're operating in is relevant. Private equity is going to be interesting, too. It just is right now a place where you're still having to kind of meet buyer and seller expectations to transact on assets where you are having to underwrite a bit of a different capital structure, but you're seeing interesting opportunities in the secondary space. You're seeing interesting opportunities in the GP secondary space. The one area that people don't talk about a lot where the alpha production and the return production has really been fantastic over the last 12 years is in absolute return strategies in the hedge fund space or in the liquid alt space where you are seeing the benefit of that investment strategy when active management is good to have, which is when dispersion is there, when volatility is there, when interest rates are higher, and I don't necessarily -- we haven't predicted and aren't predicting kind of a sea change on the flows dynamic there. But if you can continue to put up the alpha production, the risk return production that you've seen over the last 12 years, I think it's going to pique people's interest to some degree.

But why don't we talk about that business, that hedge fund business? You mentioned earlier how that's a differentiator for you guys. How -- so performance was pretty good last quarter, actually been strong in the last year as well. Yet, it seems that investors when you think about your business, that's almost characterized as a part of the business that should be maybe even being diminished and you accentuate the private market side. What role do you think that business plays in the overall growth move?

Yes. Look, I would leave the investor sentiment part and the investor view part to you and the folks in the audience here. I think how we think about it is how are we most valuable to our clients. And we believe that we're most valuable to our clients by being able to help them across their alternatives portfolio. That's been a formula that has been successful for many, many years, and we think we'll continue to be successful. It provides the cross-selling opportunities, it provides the knowledge transfer opportunities. It provides the general advice and help opportunities to be knowledgeable. We think that operating in the liquid and illiquid side of the market makes us smarter investors makes us more insightful investors, makes us see the world from -- and share thoughts with the people come to from a different lens and different focus. And most importantly, we think that those portfolios are adding value to clients. And certainly, we've seen that over the last 12 months. I can't tell you the number of meetings we would go into with a client over the last few months where they thank you for what you were able to do in the hedge fund portfolio. Relative to the pain and experience they had in their 60-40 portfolio. And so at the end of the day, for us, it's about what makes us more valuable to clients. That's what we have to drive for every single day. And we think that, that absolute return strategies capability is part of that holistic solution. I guess, for the investor sentiment piece or for what the perspective might be, it also happens to be a business that has been around for 50 years. It has been producing cash flow for 50 years, has persisted effectively and found a way to add value to clients for 50 years. Where maybe the last 15 of those years, people have been maybe a little bit negative on it or calling that -- maybe for its demise that hasn't happened. I don't think it will happen. And for us, again, it just comes back to how are we adding value to clients, and we think that's part of the value proposition.

And as you think about the growth of that business, I think right now, it's currently something like 30% also of growth in total AUM, maybe a bit more on a revenue basis. How do you think that those numbers evolve over clearly private market has grown so fast that that's -- your own ones reflect essentially -- how do you think that trajectory looks over the next 5 years or so?

My instinct would be, as a base case matter that the behavior of that market and that growth dynamic looks much more like what you would expect out of your institutional quality kind of best-in-class traditional asset managers, meaning it has, with better dynamics, frankly, instead of being daily this it's quarterly or whatever, and there's some lag effect to that. But it's definitely a bit more mature, right? It's definitely not where the marginal dollar sitting here today is going, but it compounds. It has flows that will go in and out a little bit depending on where you are in the cycle. And maybe those traditional asset management firms don't -- in your models, your reports don't get the same multiples as their private markets, but they still have a lot of value, and they're still part of kind of the core part of the investment management ecosystem. So what we always say to people is kind of -- we're not expecting much in the way of net flows in either direction. You had a little bit of net outflows last year. A couple of years ago, we had net inflow and you get the benefit of the compounding. And most importantly, again, it's a core part of the ecosystem in terms of how we're driving the overall value proposition for clients.

Excellent. So I'm just going to pause for awhile, well, we have just 15 seconds left. So any questions in the audience. Actually give you an opportunity to ask. No? Okay. Well, I'll ask you the final one to just try and squeeze one in here about retail and how you're thinking about that opportunity set algorithm is attacking that?

Yes. I think it comes back to the comment I made when you asked about where the capital is coming from -- by geography or by channel, which is a simple premise that when you look at the balance sheet of a retail investor, the allocation that, that balance sheet is likely to have to alt is much lower than what you would expect from an institution or what do you expect on the efficient frontier in terms of a well-modeled diversified portfolio. There are some regulatory and structural limitations, while it'll never look exactly the same. But it's not going to stay 0 or very, very low. There's going to be a continued evolution of education, of product creation, of distribution channels that enable retail to participate in the alt sector because it's proven to add value to portfolios where we probably get the most leverage today, and we're seeing the -- similar to insurance, we're seeing the flows we see from retail be greater than what the retail represents of our AUM, which means it's obviously growing faster than as a faster part of the overall pie. You get a lot of that leverage on your distribution through partners with the wirehouse channels and the different wealth management private bank firms. You get it through some of the large independent RIAs. And it's always a combination of making sure that you have the right product suite and offerings for that market as well as you have the right boots on the ground to help you cover that market. And so far, it's been growing faster than what we've seen. I expect that trend to -- in the broader business and I expect that trend to continue.

Excellent. So you're free to leave us with that, John, thank you so much. Thank you. Thank you for supporting our conference.

Thank you.