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

All right. Welcome back. Before we get started, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. The 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. Good afternoon, and thanks for joining us at day 3 at the Morgan Stanley Financials Conference. I'm Stephanie Ma, member of the Brokers, Asset Managers and Exchanges team from Morgan Stanley Research. For our next session, it's my pleasure to welcome Jon Levin, President of GCM Grosvenor. GCM is a global alternative asset manager with about $79 billion in assets under management across private equity, infrastructure, real estate, credit and absolute return strategies. Thanks for joining us today, Jon.

Thank you for having me.

Great. Maybe let's kick off with an overview. GCM itself describes itself as a solutions provider for alternative investments. Jon, could you tell us more about what this means in practice? And how are you different from the traditional GP?

Sure. I appreciate the question, and thank you for having me here today. I think that from a shareholder perspective, from an owner perspective, from a general understanding of the business model perspective, I actually think there's a lot of similarities between the solutions providers and what people think of as the bigger GP or the bigger all players in the sense that people give us -- fortunately, people give us capital to manage for which we earn a management fee for which we earn an incentive fee, for which we obviously have a cost structure that's largely related to people and talent. And we all have the fortune to benefit from the tremendous growth behind the sector, which I'm sure we'll talk about as we get on it, whether that's growth that comes from specific asset classes from specific types of institutions or geographies, certainly from the individual investor. And so there's a lot of similarities actually in terms of the business models. I think where the solutions provider name comes from, to me at least speaks a little bit more to the role that we play in the ecosystem in terms of how we interact with and serve our clients, and importantly, how we deploy capital. And in that ecosystem, we serve as a very important piece to making sure that the alt investment opportunity set can be effectively delivered to clients of all types from the most sophisticated well-staffed institutions in the world to some of the smaller investors in the world that don't have the same types of resources. And what that usually means is that -- there is a certain part of their alt implementation, a certain part of their alternatives investment strategy that they need help with implementing. It might be that they can do a lot of large private equity on their own or large infrastructure on their own. But when it comes to smaller investment opportunities they need a partner to help them or different geographies they need a partner to help them. We're helping them implement a co-investment strategy or a secondary strategy. And then increasingly, there's also, I think, direct investment strategies that the solution providers are well suited to pursue because of where they play in the ecosystem. And so being able to offer that completion portfolio, offer that complementary solution to institutions as I think a lot of where it comes from. And then that plays down to how we deploy capital as well. When you think about our role, for example, in the infrastructure ecosystem, we are there and sometimes to provide capital to other infrastructure fund managers. But importantly, and actually in more than half of our capital in the infrastructure space is there to invest directly in infrastructure assets to co-invest with infrastructure managers to be there to be a secondary buyer to be part of a continuation fund for an infrastructure asset. And so when you kind of think about that solutions right of word, is uptake again, you're providing some completion or interesting or integral part of a solution to an institutional or an individual investor alts portfolio, but then we're also there to be a partner to the GP ecosystem as well.

I think related to that, one topic that is often misunderstood by the market is that solutions providers like GCM are mostly focused on small investors and maybe not the large LPs, yet, I think many of the largest institutional investors around the world are indeed your clients. So do you get this question a lot and how would you address that perception?

Yes, I think it's a great point. I think that there's probably two parts of that, that I would address and maybe two misconceptions even. I think the first part of it is when you look at the solutions providers businesses, and I'll talk about ours, in particular, when you look at the composition of our assets under management, it is now the case that roughly half of our capital has -- is being deployed in a way that is not through other people's funds. So it's actually not a fund of funds, right? So we are doing -- we're investing directly in assets. We're investing directly in secondary trades. We're investing directly into companies, whether you want to call that a co-investment sometimes or a direct investment depends on the situation. But the first thing I would point out is when you look at our business, half of the capital and even more of the capital that we're forming. So over time, it will continue to shift this way is literally just not fund of funds, meaning we're not investing in other people's funds. So that's kind of the first maybe point I would make. The second point I would make, which is probably more specific to your question, is that even when we are deploying capital into funds, or when we're deploying capital directly into transactions or assets or securities. That is being done on behalf of some of the most sophisticated well-staffed institutions in the world, and it's also being done for investors that may or may not have spent as much time in the alt space or may or may not have as large of an investment staff to help do it. And what you might be providing the solution might you be providing might be different those types of investors, but the -- we have a role to play in both cases. So in some cases, it might be more of a -- for a less staffed investor, it might be more of a holistic solution, whereas for some of the very sophisticated investors, there might be a very narrow particular mandate that we're working on because there is a lot of stuff that they may be able to do on their own with their well-staffed organizations.

Maybe double clicking a bit. One of the unique aspects of your business model is your focus on customized separate accounts.

Yes.

Which I think we -- where we think represents nearly 3/4 of your AUM. I think on the last earnings call, you also highlighted the stickiness of the client relationships and just the perpetual nature of these re-ups. So what differentiates GCMs approach to these customized separate accounts that's led to this high 90% re-up rates.

I think that it's a few things. I think the first and most important thing and maybe it's all one big thing. It was a very, very intentional decision by the firm to take a view at how the alternative industry is going to evolve and how we could be most helpful to investors in the alt space. And we certainly -- and this goes back 30 years. We certainly took a view that for certain investors, given their size or scale or amount of resources, it was going to be completely appropriate to have a commingled fund offering for those investors. But for a huge segment of the investors, and certainly for some of the larger investors, the ability to craft a solution, back to your first question for them, that was exactly what they needed as opposed to what we wanted to sell was going to be very important to the future. And so it was a very intentional thing. And why I say it might all be wrapped up into one answer is so it's the experience, it's the intentionality, but that leads to your culture. And I think that you have to build your culture and manage your culture as well as build your processes in such a way as to be conducive to offering separately managed accounts. They are more intense. Instead of talking to your client once a quarter, maybe once a year at an annual meeting, oftentimes, we're talking to our clients every day or every week. We're talking about our investment pipelines in a very transparent way. We're talking about what other services or advice or analysis that we could help them prepare to help them make investment decisions, whether it's in our portfolio or managing for them or in a different part of their alts portfolio. And so that -- that you have to be staffed appropriately. You have to have the appropriate processes, but you also have the right culture to want to be in that business. And so I think for us, it was the intentionality of being in it, led to building your business and your culture to support it. And it's obviously turned out to be, I think, a very good decision and something that, again, we highlighted on, as to your point, highlighted on the last call, has led to very, very sticky relationships with high re-up rates. Re-up rates that often are at sizes that exceed the prior size, cross-selling opportunities because you've built this very trusted deep relationship with your clients, and so it's led to a lot of growth. And the last point I would just say is customization can mean a lot of things, meaning it starts with what's the investment objectives and the risk/return and the liquidity and the geography and the size, all those types of things, but it's also -- it's the governance, it's the reporting requirements. It's how often do you want to talk? It's all of these different things, so that you can evolve very flexibly with the -- as the industry evolves. So one dynamic that people talk a lot about now in our industry is the idea of evergreen funds or evergreen capital. That's a label now for something that has been a defining characteristics of many of our separate accounts for as long as we can remember. This idea that instead of sending us money back and then 3 years later, asking for it again, just recycle the capital and keep going, and we'll tell you when it maybe makes sense to stop or we'll help you size it based on where our own asset allocation is going. And so now you've got this new label that exists to define something we've been doing for a long time. And I think part of being in that separate account business allows you to be in a natural place to be where investors are -- want to be and where they're going. And so I think it's just been obviously a massively valuable kind of part of our value proposition.

Great. Maybe let's dive into some of the KPIs for the business. Turning to fundraising. It's been a challenging environment over the last 2 years. We've heard from you and several of your peers that the fundraising environment is indeed improving. So from your perspective, how would you view the fundraising outlook for the rest of 2024 and then maybe into '25? And how is that sentiment kind of among your peers change versus the LPs change versus a year ago?

Yes. I think that for us, and I think this goes back to kind of being a solutions provider, which means you see the world from the LP lens. You see the world from the GP lens. You see the world across the different alt asset classes. And then you see the world super intensely from that separate account process. It gives us pretty good insights and kind of predictability to where we see the trends. At the end of '22, we were ingenious, but we were saying '23 is going to be harder than '22, throughout '23, we said '24 is going to be better than '23, I still believe that. I think '25 will be better than '24. And so I think you see an improving environment generally. And then I think it gets nuanced between the different asset classes. I still -- there's still a tremendous amount of interest and demand for private credit. There's a tremendous amount of interest and demand for infrastructure. Real estate is a tougher answer to put one theme to, but for us, our real estate business has been a nice growth profile. I would still to place where it's probably still a little bit slower, although everything I just said about '23 being worse than '22, '24 better than '23, and '25 better than '24 still applies to private equity, just where you still are it's the most mature of the alternative asset classes, which means that everyone entered into the phase with the fullest allocation, right, or the most towards their target, they were at their target in terms of the asset allocation, you just still haven't seen the distribution, realizations, flywheel turn on yet really in terms of sponsor to sponsor activity or IPO activity or corporate M&A activity. I think as you have a more clear picture around the rate curve as you get longer into the cycle of it having been a slow period, all those things just create more and more pent-up demand for it to come back on. Do I know if that's tomorrow or next week or at the end of the year, I don't. But history has proven that it does happen. And when it does that, it will help pick up the pace on private equity as well.

Yes. Since you brought up private credit earlier, maybe let's dive into that. That's one of the fastest-growing asset classes in the alternative space. So how is GCM positioning itself to capture a part of this growing market and do you think that this increasing allocation story to private credit, is that a trend here to stay? Or could it fade a little bit as we look out here?

Yes. So I think that -- we're still in the early innings, I think, actually in some ways of the evolution of the private credit market, so to speak, meaning I'm not making that comment in terms of where we are on flows and whether -- where people are at their asset allocation. But I think what I mean by that is it's still only a 10-year-old asset class or whatever. And so we're -- whereas private equity has been around for 40 or 50 years, and the idea that people in private equity have 25, 30 manager relationships, and they've got large, and they've got small, and they've got geographic, and they've got co-investments, and they've got secondaries. And I'm not saying there's not institutions that have different views of that. But there's kind of a generally well-settled view of how someone would implement an institutional quality private equity portfolio. You still have a lot of dispersion of what that looks like in the private credit space. And I think that the initial wave of the private credit space was very much focused on implementation that almost looked a little bit more like a traditional fixed income allocation, like, "oh, I've got these three big, very large fixed income players, I'm good on fixed income". A similar thing actually happened in private credit. I've got these two or three big partners that do upper middle market or large sponsor-backed lending and I'm good. And I think over time, what you're going to find is the implementation is going to look a lot more like the private equity implementation than it is the traditional fixed income limitation where you're going to have multiple partners, you're going to have large, you're going to have small -- you're not just going to have sponsor, you're going to have nonsponsor, you're going to have asset backed. You're going to have real asset-type private credit. You're going to have investment grade, you're going to below investment grade, all these different types. You're going to have co-investments to help bring the cost down. A secondary market will develop over time, although, obviously, with shorter duration assets that might look a little bit different. But -- so I think all those things will come at play. And I say all that to give you the context for why I think that as a solutions provider, you're actually super well set up to help people along with that evolution. Okay, if you've got these three big players doing your sponsor direct lending on your own, well, maybe we can help you with the co-investment portfolio. Maybe we can help you get into the nonsponsored part of the private credit world. Maybe we can help you downsizing in terms of accessing more of the small cap or low middle market part of the segment, whatever it might be. And that's how our business is set up. Not to mention, we are one of the unique players in the sense that we've got both liquid and illiquid alts. And in credit, there's no better example of a grayer than credit for what is -- where are you on that spectrum of liquidity, right? And so having the history of absolute return strategies, credit as well as the history of what you would think of as kind of true private credit, distressed whatever might be on the other end of the liquidity spectrum and everything in between, we come to that kind of credit market where I think with decades of experience across the different types of credit that I think suits us well to help people with that implementation as that asset allocation continues to grow and as it matures as well.

Yes. Across that spectrum, where are you having the most dialogue today?

I would say that there's just a lot of dialogue around private credit generally. And is the first part, I would say. But I think for us, in particular, it's probably most around on the fund investing side of things, helping people on the non-sponsor direct lending kind of credit allocation. But where I think it gets really exciting is our ability to help people build out co-investor direct, however you want to call it, but more asset-specifics private credit portfolios to complement what they may be doing on the fund side of things.

Okay. Great. Maybe turning to real assets for a minute. You've also seen a lot of success growing your infrastructure and real estate businesses over the last few years. So what's driving that higher growth rate in these strategies? And where do you see these businesses trending over the next 3 to 5 years?

So maybe I'll start with the infrastructure first. I think there's macro reasons for it. And I think there's reasons that are kind of idiosyncratic to us for our success there. I think from a macro standpoint, it is just -- even though infrastructure assets are as old as the world infrastructure asset management is still less mature And so people are still at a point in general or investors actually there still a point in general to be building allocation. So that's always a tailwind that helps anyone in the space. I think then there are specific things around rising interest rates around inflation protection around the ability to use infrastructure to help implement some of your sustainability goals. I think those are some of the kind of macro trends that are benefiting the asset class generally, not to mention the massive need for infrastructure capital in the world. I think for us specifically, there's not many people that have been doing it for 20 years. There just isn't. And that have done it globally that have done it at the fund allocation level, that have done it at the asset level and co-investment form in direct form in multi-asset secondary form in single asset secondary form. And so I think that as you've got these macro tailwinds that have benefited us, you're then also sitting as a player that is uniquely positioned given your experience in the marketplace. And so I think the combination of those things has led to a tremendous amount of growth in our practice. And I don't really honestly see that stopping. I mean I can't predict exactly when the asset flows happen, but the general strength behind the infrastructure tailwinds for the market and for us specifically, I think, is here for the foreseeable future. I also think that the infrastructure asset class lends itself in terms of the product design in terms of the type of assets and the return profile well to having success in the individual investor market. It's got the yield profile. It's not as crowded as what you've seen in kind of REIT world or BDC world. It's got the capital appreciation element to it. And so as we've talked about on many of our calls, we continue to make further investments and having success behind -- further investments behind the success we're already having in individual investor space. We've talked about being in market with a couple of different products of registered variety, one is in the private equity space, one still in registration is in the infrastructure space. And so I think there's -- generally speaking, I think there continues to be a lot of traction behind the growth, a lot of appetite for infrastructure and therefore growth for infrastructure. And I think there's a lot of different avenues and paths that, that growth can come from. I think real estate for us, I would argue, is a little bit of a different story in the sense that it's not like you have -- I would think, I shouldn't speak. I haven't said in all the sessions. I would guess you haven't had a lot of people up here talking about that like this has been the best market for raising real estate capital over the past couple of years. That being said, we've been successful. I think part of that is just coming off of a low base, right? It's one of our smaller verticals, and so I think there's a tremendous amount of room to grow. I think part of that is a function of the unique dynamic that we access the asset class in terms of JV partnerships, direct asset investing, seating managers, all those different ways where you can kind of benefit from the real estate returns that you're investing in, but also benefit from some of the growth of real estate asset management businesses. And so I think that that's a unique mouse trap. In that business, it's only been a separate account business to date. I think you'll continue to have growth through the acquisition through the re-ups of those existing clients through the acquisition of new separate account clients. But I also think at some point down the road, you'll see us have -- offer the ability for investors that aren't large enough for a separately managed account to access our real estate capabilities through some form of a commingled fund offering as well.

Yes. A lot to unpack and we'll come back to retail in a minute, but maybe just circling back to your point on the sustainability angle within infrastructure there's been a large focus on overall sustainability trends such as energy transition, but lately, we've also seen the rise of the Anti-ESG Rhetoric. So how are you continuing to see kind of strong demand from your clients for sustainability? And how do you see this evolving?

Yes. So I think the first thing is actually might have been one of the few times in my life where I was a little bit like ahead of the time so little because I got this question, I think, actually from your colleague, Mike, a few years ago. And it was kind of before there was a big rise in kind of an anti ESG movement to combat a pro ESG movement. And I think what I would have said at the time, which is what I would still say today is, first and foremost, for us, and I think some of this comes down to our history and heritage as a separate account provider. It's not our money, it's the client's money. So the client is -- the person whose money is gets to decide what initiatives, what objectives, what constraints are important to them. That's everything from risk/return to what geography on we're to invest in, to how I want you to think about or not think about sustainability when you manage my capital. And so I think the first and most important thing from our standpoint is, and again, I think it comes from that heritage of kind of thinking about the client-first and the custom account business is it's the clients' money. Our job is in the separately managed account business is to be very clear to deploy and invest the capital aligned with the client's objectives. And in the commingled fund offerings is to be very clear about what the goals and objectives of that commingle fund offering are and if it's appropriate for the client grade? And if it's not, it's not. That's the first thing I would say. The second thing I would have said, and I say again today, is I think the whole terminology of ESG is not a healthy one. I don't think that it is instructive or really frankly means anything. I think I can talk about all of the capital that we manage at our firm that would properly probably fit into most people's ESG bucket without ever using the word ESG again. I can talk about the fact that we manage infrastructure capital that we think is benefited from a risk/return perspective by better partnership with union labor, and therefore, creates union job hours. I can talk about infrastructure investments we make that are helpful towards transitioning the world to a cleaner energy source. I can talk about private equity investments that we make that are specifically focused on getting capital in the hands of managers led by women and people of color because we've been able to generate excess return by doing that. And I could give you five more examples and I never had to use those three letters. And so again, to me, what it comes back to is what are you really doing with the capital without using these letters that don't mean anything to anyone. And then most importantly, is what you're doing with the capital, what the client wants. Because it's their money, and it's not ours, and we're the ones that have the privilege of managing it.

Great. Maybe back to Private Wealth, clearly, a big theme for the industry. Maybe you can talk to your broader approach to distribution, how you're going about the channel, and what types of products could you bring to market?

Yes. So I would start with the fact that the individual investor represents about 5% of our AUM, but it's probably been more closer to 10% of our flows. So it's clearly a growing part of the pie. It's been about $2-ish billion of capital over the past 2, 3 years. And so it's clearly a growing segment for us. It's clearly a growing segment for everyone. I think for us, where that initial success has been in what I'll call, which seems silly to say the more traditional approach to the individual investor, even though it's also new, it's amazing that some things are already like the traditional approach. But it's been through closed-end fund offerings that have been mostly through wirehouse channels and things of that nature. I think where you see the future for the industry and the future for us going is just to expand upon that initial success. And it's going to be through a broader distribution effort beyond just the wirehouse, and it's going to be through more specific product design. And we've had registered products in the absolute return strategy space for almost 20 years. We talked about the fact that we are a key adviser or manager -- asset manager for a private equity registered fund that just got approved within the last month or so where we're partnering with distribution. We talked about how we've got other product that's in registration. There were some news on our tape recently that it's a product in the infrastructure space, where we will also have a partner in distribution. And so I think for us, it's been kind of a three-pronged approach, maybe, keep doing what we were doing with that initial success through our existing resources to raise money through generally the wirehouse channels with traditional closed-end funds. The second part being find partners that you can work with to help distribute products beyond just the wirehouses in registered product form. And then the third part would be all along the way, you're continuing to invest behind the success you're having. So that at some point in time, you have the ability to work with partners on distribution, if that makes the most sense or distribute yourself if that makes the most sense, depending on the specific opportunity. And if you ask me where the marginal dollar of investment is going in our sales group, for example, it's definitely going to be towards investing further behind that success we're already having.

So 10% of your flows today, some of the alt managers have said that could go to 30% to 50%, is that in scope for you guys?

I don't know. It's just going to be bigger, and it's going to grow it faster rates than the rest of your business. It's going to go at faster rates at an industry level. It takes a really -- when you look at it on a flows basis, maybe you can talk about those numbers on an AUM basis, it takes much longer because when you're talking about private capital, the duration of capital such that when you -- to change the existing pie takes like generations. But it's certainly going to continue to be a key growth driver for the industry and for our business as well.

Yes. Great. As I think about the GCM story, another unappreciated part of the story is a mix shift towards private markets and direct oriented strategies. So can you give us some color on what's driving this mix shift? And are there benefits mainly on the top line? Or does this also benefit the margin profile and trajectory?

Yes. So good question. So in some of this, I may have touched on already, but I think it's important to kind of hit it specifically now that you've asked the question. I think -- when you look at our fee-paying AUM today, about 65% is from private markets and 35% comes from absolute return strategies. That's just a function of the fact that absolute return strategies, depending on the year, has been in kind of a neutral flow type of environment. '18 was positive, '19 was negative. I think '20 was negative. I think '21 was neutral, '22 and '23 were negative. The first quarter '24 was positive. And then you've had some growth from compounding of the assets, whereas private markets has obviously had a tremendous amount of growth. And so I think our forecast would suggest that you're going to remain in that kind of neutral flows plus compounding environment for hedge funds, while continuing to experience growth in private markets, so the pie will continue to shift more towards private markets. The second part of your question, which I was -- one of the things I talked about earlier when you asked about that, the misconceptions of our business model question is also, I think, a good one, which is when you look at our AUM today, and I used 50-50 earlier, just to be rough, but I'll put more specificity around it now. It's probably about 55% or 60% of our capital is being managed in the way we're allocating to other funds, and 40% is for direct-oriented strategies. When you look at our flows, it's the inverse of that. So about 60% of the capital that we're raising is actually for those direct-oriented strategies. And I see that trend continuing. So I continue to see the pie shift -- the mix shift to be towards those direct-oriented strategies, which, to your point, do have higher average fee rates associated with it, and therefore, have that revenue growth element to it. And the reality is I think that when you asked about the question on revenue versus profitability, the reality is in all of these businesses, and ours is no exception, revenue growth leads to more profit growth, profit growth at a higher percentage than the revenue growth because these businesses have operating leverage, our does too. And we've shown that over the last 4 years, I think we've gone from 31% fee-related earnings margin to roughly a 40% margin. And embedded in our story that we think there's another -- a doubling of our FRE over the next 5 years. Roughly is operating, continued operating leverage for the business as well.

Great. I also wanted to get your views on performance fee outlook, assuming a more normalized deal backdrop, how would you expect performance fees to trend?

Yes. Look, we were just talking about this briefly before we came on stage, and we've talked about it in the context of the history of alternative asset managers being public company. Companies and the idea that investors generally have always favored management fees over carry, and I understand that in terms of the predictability and the stability and so on and so forth. That being said, when you look at the ownership model of alternative asset management businesses over the history of time, the incentive fees have been a massive, massive, massive contributor to value creation. And we're certainly in a depressed period of time now. And whether that starts to come out again in the second half of the year. This year, the first half of the year, next year, I don't really know, but I know it's coming on and the net present value of the incentive fee earnings power in our industry and of our business specifically is massive. You look at it on kind of on any basis, it's kind of meaningful to the valuation of these businesses. I mean for us, we have $370 million of firm share of carry that's only associated with dollars that are in the ground that have already appreciated, right? You still have -- you have billions of dollars of capital behind that, that either just got invested or hasn't been invested yet, that's also going to create carry dollars. And if you look at the history of how that has smoothed over time, even though it might be volatile year-to-year, you're talking about earnings power that is pretty significant relative to what you're seeing today. And so I think the net-net of all that is, and again, I'll only speak to our business as opposed to industry-wide. You've got attractive growth profile on the top line. You've got FRE growth profile that's more than the top line growth because of the operating leverage of the business. And then I think you've got adjusted EBITDA and adjusted net income metrics that are even higher growth in that FRE because of this latent earnings power that's coming from the incentive fee stream.

Great. Maybe in the last minute or so, wrapping up with a big picture question. Where do you see the business over the next 3 to 5 years? And how should we investors track and measure your success?

Yes. So we -- I think there's a few things. People tend to focus on capital formation a lot, which is obviously an incredibly important driver. And I would hope that from us, you would see that the results are what we've said they're going to be, which is continued momentum there, '24 better than '23, '25 better than '24. Obviously, to do that, you need to keep driving results for clients, first and foremost, most importantly, in terms of the investment returns and the overall value proposition. And we've put out very specific thoughts around -- I just commented on them around our financial results in terms of doubling FRE over 5 years and seeing adjusted net income and EBITDA growth in excess of that because of the incentive fee earnings power. And I think the way I kind of think about that general growth profile is, of course, by innovating and launching new products and doing different things. But it's not from doing anything that would be like super excess above that, meaning you find something that's interesting to do from an inorganic perspective. You find something that's interesting to do in terms of capital partnerships like you're seeing a lot in the insurance space. You have breakout growth beyond the growth that's there from the individual investor channel. All those things, I think, are options that could provide growth in excess of what that kind of base case is that we feel pretty good and confident about delivering for shareholders.

Great. We're looking forward to it. I think with that, we're out of time. Thank you, Jon, for joining us today.

Thank you so much.