Invesco Ltd. (IVZ) Earnings Call Transcript & Summary

All right. Good morning, everyone. Welcome to day 2 of Barclays Global Financial Services Conference. I'm Ben Budish, I cover the U.S. brokers, asset managers and exchanges. And to kick it off today from Invesco, we've got Andrew Schlossberg, President and CEO; and Allison Dukes, CFO. Welcome. Thanks so much for being here.

Thanks for doing this, Ben.

Thank you.

Maybe just to kick it off, can we start with your latest observations in the marketplace. How is investor appetite trended since the heavy volatility we saw earlier in the year. How flows look more recently? Your AUM release came out this morning.

Given the time.

A bit out of time, but what's sort of your latest observation?

Yes. I mean going back to the early part of the spring, things were obviously a little tepid and investors were, I think, reacting to a lot of the trade news and things out there. But really since then, the volumes have been quite strong for Invesco. We did release our assets for August, and we had net positive flows of a little over $11 billion, which is one of the best months we've had on record in a long time. And that followed other good months since April. So for the third quarter to date, we're flowing more than we did in the whole of the second quarter and approaching what we already did in the first quarter. So I think volumes are picking back up. For us, it's been a lot of the places where demand has been high, ETFs, SMAs, investment-grade fixed income, global equities, especially out in Asia, but in particular, China as well has really come back online. So we're starting to see investors move their capital back into the markets.

Great. Maybe looking at a couple of the things you've done over the past year or 2, the MassMutual preferred redemption, the QQQ fee structure change. Just curious from a high level before we kind of dig in a little bit more deeply, how else are you thinking about creating value at Invesco?

Yes. A couple of things you mentioned were really important for us in unlocking value. But I think they're just indicative of the work that the team has been doing for the last several years to really tighten the strategy, simplify the business, get focused on creating operating leverage, a more flexible balance sheet, which we can talk all about. But in terms of going forward, there's a few significant strategic priorities that we're really staying laser-focused on. And the first one is always and will be delivering good high-quality investment outcomes, especially in our active equity portfolios. And we've seen performance improve over the last several quarters. We now have about half of our assets in those active strategies in the top quartile of peers, which is up from 25% just a few years ago. And we have started to see the flow volume out in Asia and Europe for equity strategies in the positive territory, and we're working towards getting the same thing in the U.S. We're focused on secondarily scaling strategies where there's high demand and where Invesco has a pretty significant strength. So ETFs, SMAs, model portfolios, private wealth for private markets, so wealth management for private markets are all sort of things that are really significantly important for us. And the Barings partnership that we formed, the flow volume that we're seeing in the ETF space, getting our SMAs to over $30 billion are all examples of how we're doing that. The international markets for us, Invesco's Asian business and European business, are about 40% of our long-term assets, and they're accounting for about 80% of our really sort of record long-term flows. So those markets are really critical for us. Places like China, India, Japan, the U.K. are all going through significant demographic changes or wealth changes, and we're participating there, and we seek to really differentiate. Our investment operating platform and investing in innovation, we announced that we were going to go to a hybrid solution for our Alpha platform, which is going to allow us to finish that project more quickly and really start to unlock the value it was meant to create. We divested our IntelliFlo business, which we can talk about a little while later, all to focus our energy on next-stage technology. And then lastly, just putting up financial returns and strong operating leverage. So in the first half, operating income was up 10%. Operating margins were up 200 basis points compared to the first half last year. So a little long-winded, but just trying to -- quarter-by-quarter, just put up big events and outcomes like you asked about.

You mentioned the IntelliFlo sale. Just curious if you could unpack that one a little bit. What was the rationale there?

Do you want to go ahead?

The rationale was really focused on a continuation of the same theme, which is how do we unlock value for our clients and our shareholders. And that comes with needing to be really focused, focused in terms of where we direct our capital, our investments, our time, our energy really thinking about our core business. And IntelliFlo is not entirely core to what we do. They are a market-leading, cloud-based, practice management software provider to independent financial advisers in the U.K. So a business that was never entirely strategic to the broader Invesco portfolio of businesses. So we announced, at the end of last month, an agreement with Carlyle to sell IntelliFlo to them for a purchase price of up to $200 million, of which $135 million would be received at closing, which we anticipate in the fourth quarter and the remaining $65 million is in potential future earn-outs. So great opportunity for us to monetize that business, unlock value. Because we have moved it to held-for-sale in the third quarter, we will be, in the third quarter, booking a loss on sale of something in the range of $40 million to $45 million, and that would flow through other gains and losses, so below the operating income line item. And because that loss is not a taxable event on a subsidiary in the U.K., we do anticipate an effective non-GAAP tax rate for the third quarter to be closer to 29%, just due to this discrete item that would be flowing through other gains and losses. The operating results of IntelliFlo won't actually come out of our results until the fourth quarter after closing. And that business is kind of breakeven to operating loss of a couple of million dollars in any given quarter. So the removal of those results will be neutral to modestly accretive to the overall Invesco results. So in keeping, again, with the strategy overall, focus, create operating leverage, really look for opportunities to improve our operating margin, really improve the direction of our investments really to our core business. I think it's a great opportunity. We're excited to get this one done in the fourth quarter.

A lot of helpful details. Maybe just sticking on the topic of capital management. So MassMutual, you repurchased $1 billion of the preferred, you're going to be paying down your term loans over time. What are your capital priorities, otherwise? How do you think about appetite capacity for M&A? What else is sort of top of mind?

Our capital priorities remain really balanced. Starting first and foremost with investing in the business and really supporting our business, broadly speaking, in terms of product launches and just the ongoing CapEx that we have to modernize our technology and our platforms overall. We're also highly focused on maintaining a really strong balance sheet. And that's been a real journey, as you know, that we've been on for the last few years, and we're making substantial progress there. And last but not least, returning capital to shareholders. So yes, in May, we did repurchase $1 billion of our preferred that is held by MassMutual. We financed that with two term loans of $1 billion at a 3-year tenure and a 5-year tenure. We have actually already paid down $100 million of 3-year term loan. We're able to pay $100 million down in this quarter. We anticipate continuing to pay those term loans down as quickly as we feasibly can. We have a $500 million senior note that comes due in January, which we intend to redeem as well. So really making substantial progress in creating that flexibility in the balance sheet that we're looking for. And there's a path for us to continue to look at doing more with MassMutual as it relates to the preferred. And so as we make progress on the leverage ratios. We're focused there. I think it's really an opportunity for us to come back at the right time to look at doing more to unlock that preferred, which is really just flexibility, and that is the focus on creating more of an all-weather balance sheet than we've had in the past. As it relates to returning capital to shareholders, we've been buying back $25 million of stock a quarter. We intend to continue that. We announced a 2.5% increase in the dividend back in April. So we're at about a 60% payout ratio this year, and we like where we are there, especially as we think about the opportunities to continue to unlock this capital to reinvest in the business and create flexibility in the balance sheet. And as it relates to M&A, again, I'll come right back to it, it's the balance sheet that's going to give us that flexibility to do what we want to do there. We can talk a little more about this, but we've got a lot of opportunities as it relates to partnerships. And we think that's just as productive sometimes as an acquisition can be. And of course, we've already entered into an agreement with Barings, which is owned by MassMutual, for a partnership that we previously announced there.

And we continue to have just a number of organic opportunities to reinvest in ourselves, as Allison was saying. So there's still a lot to unlock at Invesco.

We'll certainly come back to the Barings partnership. But maybe some other recent news you kind of alluded to earlier, you recently filed to make some fee structure changes to your flagship QQQ ETF. Can you talk a bit about the background why now? And a management fee for Invesco, lower fees for investors seems like a pretty easy win-win. What are the other maybe remaining hurdles that need to be overcome?

So we announced that in July. We did file the official proxy on August 18, I believe, which does contain all of the benefits and the risk and the considerations that I would point you to. It also contains all of the time lines in the past in that solicitation, which is underway right now. In terms of why now, there were a lot of reasons. I think this was a UIT structure that was probably one of the last few and is a very long-dated fund, and this was an opportunity to modernize it, consistent with the rest of our platform and convert it to an open-end ETF. A lot of the rationale, too, is tied up in the fact that the marketing budget has just become so large that it's hard to efficiently spend a marketing budget on one single fund that's approaching $300 million. And so it created an opportunity to enter into conversations with all of our stakeholders to look at how we could convert it into an open-end ETF. Very pleased we were able to reach the stage we've reached so far. It does have a 2 basis point benefit to the end investor. And that solicitation is underway right now. It is one of the most widely held ETFs in the world. So this is no small undertaking. And I think as published in the proxy, there is a shareholder meeting that occurs at the end of October. That will be the first available date that we might have any opportunity to see how things are going. So more to come there. Very excited. I think, again, in keeping with everything we've said, an opportunity to unlock value. We do anticipate the revenue on that fund will be around a net -- 4 basis point net revenue yield associated with the QQQ, which does continue to grow. And the flows, we often understate those flows because we don't create revenue on them today, but we look forward to a future opportunity to convert that to revenue.

Maybe staying on the subject of ETFs, can you talk about the current lineup of active ETFs? I think as of last quarter, you had 31. What sort of strategies you're seeing the greater success? What does the pipeline look like for more products? And maybe high level, how do you think about active asset management here? Does it makes sense to kind of clone prior mutual funds, generate new active strategies, come up with sort of new things, funds that use derivatives to generate income? How do you think about the approach?

I mean we started in the active ETF space almost 10 years ago. And finally, the market really seems to be adopting the premise of bringing together active management and the benefits of an ETF structure. So we think it's going to continue to grow. We'll continue to expand our lineup, which today is a lot of fixed income active ETFs, some commodities, options income and over the course of the next year, more so into the equity space. But Invesco, given the size and breadth of our ETF business, which I think you're probably all familiar with and its heritage being really oriented around alternative weighted data, a more sort of active approach to how to bring ETF to market and the size and scale of our active business as well as sort of the well-traveled path of reaching wealth advisers. I mean we're primed to be one of the real leaders in the active ETF space. With regard to how one will get there, whether it's probably not conversions for us. It's probably more -- and I'd say less clones and more new adoptions of active into ETFs. Many of us have relief that we're seeking to get on share class of mutual funds, an ETF share class. But I think it's really going to be for us just creating the optimal ETF lineup around active and not trying to spend too much time thinking about conversions and clones and share classes. It is going to be a journey for active ETFs. I mean you're seeing the pace of it move forward. But it's still, for us, $15 billion, $20 billion of $900 billion of ETF-related assets. So there's a lot of room to grow.

Speaking of active, ETFs being increasingly adopted, but active equity mutual funds have been across the industry trending the opposite direction for some time. You guys recently announced some management consolidation here among some other changes. What is Invesco doing to try to buck the trend? And maybe more broadly, Andrew, what are your thoughts on sort of the future of active versus passive?

I mean, look, the active and passive are going to coexist. I think the definition of active is going to continue to evolve. And I think it's relation to the mutual fund needs to be disconnected. So this notion of active equals mutual fund or mutual fund equals active, I think, is probably the wrong way to think about it going forward. So active will get brought forward in public markets, but also private markets. I mean, those are all active strategies as well. And it will start to, beyond just ETFs, find its way into SMAs, model portfolios, all kinds of custom solutions where you're able to bring active management. So we're working and building all of those areas. So I wouldn't overemphasize the mutual fund. But we're very bullish on the future of active. The bar has gotten raised as you all know. So no longer the days were being average and active was okay. And so hence my comments before about you really need to be in the top quartile, top decile, and that's what we're striving to do with all of our investment strategies. We did announce earlier in the spring some consolidations toward that effort. So we brought all of our global international emerging market equity teams across is now into a single platform. We did the same with our private markets between real estate and alternative credit, and we had done the same thing a few years ago with global fixed income. So having a scaled platform where you can share investment ideas across, like investment strategies, where the top talent can really rise, and we can promote that top talent and where you can really get the scale out of the investment support and the operating platform to drive investment quality. So we think the future for active has very much a home in people's portfolio, but you really have to be outstanding.

It's a good segue into the private side, which you mentioned. Maybe before we talk about Barings, curious on the real estate side. So in your wealth channel, you've been showing some solid inflows to INCREF. I'm curious, what would you say is going well here? It seems like most non-traded REITs, in particular, are not having that sort of kind of success. So what's going well for Invesco? And maybe can you give us an update on where you are in terms of distribution, how many wirehouse platforms, where else are you selling the product?

Why don't you go ahead, Allison?

We're seeing strong demand for real estate credit. So I think relative to non-traded REITs, this is a bit of an alternative solution, and we've seen really strong demand there. So we launched INCREF just about 2 years ago, it's a $4 billion in AUM today. So really nice demand, good growth in a relatively short amount of time. I think it provides a pretty attractive asset class for investors. And as some of, I would say, rhetoric around real estate and real estate credit, in particular, continues to improve, I think it bodes well for the future of INCREF. One of the things we're seeing, too, is just strong cross-sell opportunity between our fixed income SMA and INCREF. I think you got a very similar target high net worth, ultra-high net worth and client there. So we're seeing pretty good cross-sell opportunities between those. It is today on over 20 platforms, most of the wire houses is what I would say. And I think continuing to grow. I mean we just were awarded another very significant platform recently. So we're very optimistic about the future of INCREF and the ability to continue to get that one placed on a number of platforms.

I mean our private markets complex is about $130 billion between real assets and alternative credit and our wealth management team and profile in the U.S. market, we're top 10. We've been investing behind, bringing private markets to wealth over the last several years. We've added specialists onto the team, all sorts of thought leadership capabilities and really investing behind the wealth platforms and making it easier for these end investors to get into these strategies and for advisers to really understand them. So everything Allison described has been sort of a multiyear journey starting to pay off now. And you can kind of see the setup for the next set of strategies that we can bring behind INCREF.

We've mentioned the Barings partnership kind of in passing a few times. So maybe let's talk about that one a little bit, that was announced earlier this year. Talk about the arrangement. What does each party bring to the table? What are your sort of 12-, 18-month expectations? And how are you thinking about potential future product creation opportunities?

So just to remind everybody, we announced this alongside the restructuring of the preferred and the establishment or the intention to establish a few products, of which MassMutual is going to put its capital, its general account capital behind these strategies. And so the idea was to take the strengths of Invesco's alternative credit and real asset capabilities with the strengths of Barings on the credit side. And in particular, Barings bringing to the table, upper middle market direct lending, bringing some of their loan capabilities, bringing some of their specialty finance capabilities alongside what we do in the lower end of direct lending, distressed and our loan capabilities alongside real estate lending. And so being able to bring a diversified credit strategy wrapped in a vehicle that will make sense for mass affluent, high net worth into the wealth space. And so the arrangement is essentially Barings as a piece of the management, of the funds -- us a piece of the management of the funds, us distributing the funds to market, MassMutual's capital into the strategies. And what was important for us is when we announced it in April that we get to market as quick as possible. There's a lot of partnerships being announced. I'd say, watch what happens rather than the headline of them getting announced. And we will get this to market relatively quickly. And we're just in the throes of that right now. And that will be the first of two products along the same sort of theme. So we're really excited about it, and we really think it's kind of a perfect connection. And I think we have a road map now for doing more things like this going forward.

Maybe one last question on the private markets topic. So private asset utilization, the 401(k) channel, is one of the hot topics recently. How do you see Invesco positioned for that opportunity?

I mean it's not sort of like what I was saying before about ETFs. I mean the scale and size of the private markets franchise that we have today, which has largely been placed with defined benefit plans, so institutions, sovereign wealth, endowment funds. So we have deep heritage in the defined contribution space. This executive order that came out, I think, that's excited everybody and should, starts to move down a path where plan sponsors can be in a better position to adopt these private assets into target date funds probably most likely. But there's a lot between now and then. I think litigation risk will be top of mind for plan sponsors. So we'll see how the executive order turns into either legislation or actual progress. But then you got to get the plant sponsors to adopt it. So I guess a slightly long-winded way of saying, I think Invesco is incredibly well positioned. We already have private assets in defined contribution plans in both the U.S. and in the U.K. But I think the notion that this is all going to turn like a switch for the industry, I think, is overstated. So it will be a little bit of a slow development. But Invesco, I mean, I don't think we couldn't be better positioned with all the tools that we need to do it. It will be kind of like the wealth space. You'll see preparation, preparation and then things will start to move.

Okay. Maybe switching topics, your international business. So in Q2 and early this morning, you called out positive flows outside the U.S. in Q2, EMEA and APAC. Maybe just unpack that a little bit, what's going well there? How do you see the broader trend playing out?

I mean I was mentioning it earlier, and I think it's not as well understood. I don't think about Invesco as it should be that 40% of the long-term assets come from clients outside of North America. And just to repeat the fact over this year through the results in August, about 80% of the long-term net flows are coming from outside of North America. So the strength of those businesses in all through Asia and in Europe are incredibly meaningful. And I think we owe the success to being in those markets for decades. We've been in China in our JV for over 20 years. We've been in Japan for 30 years. We've been in the U.K. for 50 years. And so we're really committed on the ground with locals. And so we run those businesses in a sort of domestic way around reaching clients and around putting together portfolios, but we use our global size and scale to bring investment capabilities produced all over the world. And so those markets, some of them are wholly domestic, like China, and others are very international like Japan. And so I think our commitment and our focus you're really starting to see that move. And all three of our regions, including America, are all in positive flows. So the diversity, and I think the offset to volatility that's in the market, and kind of you can see the strength of Invesco's global profile, I think, showing right now.

And what's the appetite like for domestic versus international assets? Earlier in the year that was sort of a big theme coming out of a lot of the new tariff news. There's going to be a shift in preference for local in Europe and Asia. Are we still seeing that? Has that played out?

It really hasn't played out. So I think the notion of U.S. exceptionalism dimming, we haven't fully seen it, right? So where you have seen decisions where people are redeploying their portfolios, I wouldn't say it's for nationalistic purposes. People are diversifying, taking advantage of valuation disconnects and some fundamental change. So it's really not -- we have not seen this sort of drive back to everybody kind of hunkering down in their domestic market. We have seen things broaden out. So we are starting to see portfolios not just be focused on U.S., large cap tech or short-duration fixed income. So that's been more of the trend we've seen. It's a little more broadening out, which is so needed for investor portfolios.

Got it. And maybe moving to China and APAC, starting with China. Can you give us an update there? It looked like the asset levels look pretty solid in August, you mentioned before, you're seeing kind of a pickup in demand, kind of an update on the latest there.

And just a reminder for everybody, our Chinese business is domestic for domestic. So it truly is a very isolated on that market. So how goes the Chinese economy, the Chinese development of its capital markets, its retirement system, those are the factors that will drive the success of our business. And as you said, we're reaching new high watermarks for assets under management. Flows have been very strong this year in China and kind of successively strong throughout the year. Those flows have been focused on earlier in the year, fixed income, and they've continued to be heavily fixed income skewed but moving into some balanced assets as well. So it feels like the reforms that the Chinese government has put in place for its domestic economy, its emphasis on capital markets and the confidence in capital markets, the diversification away from real assets and real estate, which was a challenge for them about 18 months ago. And I think maybe some of the tensions between the U.S. and China, which are still high, feeling a little more relaxed in certain places. So it's been a good progress in China. And it's a really differentiating piece of Invesco. And I think, again, our being there for 20-plus years and the success we've had in building what's regarded as one of the best asset managers there, we're seeing kind of return to the positive.

Great. And can you talk a bit about some of your other key Asian markets? You mentioned Japan. You've been there a very long time. Same kind of question, what are the key drivers in that country? What does the local appetite look like? What's the latest?

Yes, it's been remarkable. It was forever, when is Japan going to start going and when are they going to actually have some inflation, which was always funny when I go there and they talk about how excited they were for inflation. It was the only place that, that happened. But we went from really about $30 billion in assets to $85 billion in assets over the last 5 years. So it's been a really good growth for us. And it's come in the form of global equities. So investors in Japan, big owners of equity assets outside of Japan, and we have a very strong global equity strategy and then also investment-grade fixed income with institutions. And I think one of the catalysts for a lot of this development in addition to us having the right products in the market at the right time has also been the government's focus on asset management. I mean their desire to have a much stronger capital market system, much stronger company management around equities and their desire to really advance ownership. The government is just very focused on those reforms. And so that just means the flywheel of capital flow for a company like ours that's been there for 30 years, really starting to be recognized.

Maybe pivoting to fixed income. So Fed cuts seem increasingly likely and likely just around the corner. So what's your latest thinking on how investor appetite for fixed income may evolve.

Well, hopefully, going out the duration curve a little bit, and I think we're starting to see that a bit more. And we have a $650 billion fixed income platform that goes passive to active, public to private, all of that duration spectrum, and we're starting to see a little more flow come in beyond short term. And I think that's been the anticipation. We're seeing it come in ETFs on the passive side. We're seeing it come in SMAs on the active side. And I think over time, this notion of public and private coming together in fixed income, we're well positioned for that trend if it develops. So I think we're cautiously optimistic and maybe we've got a little more central bank clarity now -- or rate clarity, I should say, and I think it will bode well for us. We've been in positive flows every quarter. So it's not a flow thing for us. I think it's just a diversification of those flows into maybe some higher yielding, higher fee strategies.

I was going to ask Allison if there's any color you have on the P&L implications of movement from shorter duration to money market assets to long-duration fixed income, how should investors think about that impact?

I mean of course, there is modestly higher yield opportunity there. So I wouldn't overstate it, but there is a bit of a revenue opportunity there. I think a lower rate environment actually where it's even more impactful is to our direct real estate business. That's where I think transaction activity has been reasonably low and a little bit stuck with just the higher rate environment. And so I think we are hopeful is that in a lower rate environment, you start to see some of that transaction activity picking up, which should bode well for future flows and future revenue generation there.

Maybe switching gears again. You mentioned earlier in our chat, Invesco is currently transitioning its equities platform over to State Street Alpha. Can you give us an update on where you are in that integration. Maybe talk a little bit about the longer-term benefits, how you hope to drive?

Maybe I'll start and Allison can jump in, too. We made that decision in the spring, and it's going quite well. Our anticipation is our next wave of go-live on assets on the platform will happen here in the third quarter. So that's been really great progress. And we'll start working on the final phases of that with the intention of finishing this program over by the end of 2026.

I mean you really summed it up. Why did we do it? It's more than anything. It's an intention just to make sure, we're simplifying our operating structure as much as possible and making sure we've got certainty of execution. And so the opportunity to get this finished up in 2026 was about most importance to us. And this migration in the third quarter is a significant milestone, and we'll unlock the opportunity for us just to continue to progress through this for a completion at the end of next year.

And look, simplifying our operating platform, we talked earlier about bringing together the benefits of our investment teams. With this platform complete, we'll be able to really exercise those benefits. And it's been an opportunity to bring together what was dozens and dozens of systems and processes and ways of doing things and all of this into a fewer set of those. And so the financial benefits and the operating benefits will be what they are. But I think actually the time and the energy that we invest behind things that are redundant, we don't need to do, and we can spend our time on new innovations and technology that we really want to take forward.

Curious, so maybe just unpacking that a little bit. I was going to ask, Allison, you talked a lot about simplifying the structure, raising the company's margins. This is part of that. I was going to ask what else can be done? Like where else is there space to become more efficient? Andrew, you also mentioned new technologies. Curious how you're thinking about utilization of AI, either internally to make things more efficient, to improve the investing process. A couple of questions in there.

Sure. I mean, look, I think we have pretty successfully demonstrated a real focus around expense management over these last few years. Our expense base has been around $3 billion, and we have been consistently harvesting some of those expenses, reinvesting them in places where we can get stronger growth. Our focus is, I would say, kind of maniacally focused on how do we improve operating margin quarter after quarter, create that operating leverage. Our focus is on scale. So how do we drive more revenue over a relatively fixed, and I won't say fixed, consistent expense base because we are looking to variabilize whatever we can. And in that, I think, look, everything we've just talked about, whether it's from the Qs to monetizing our investment in Intelliflo, which unlocks some expense there, the decision around both Alpha and Aladdin, those are all examples of places where we're looking to reinvest the expense base. We have had implementation costs kind of almost getting baked into the run rate of the expense base that we anticipate coming out after 2026. Those, as we have said, have run kind of $10 million to $15 million a quarter. Some quarters, $15 million to $20 million. Those are real examples of, I think, future efficiency. And then much like many, we're looking at various technologies all over the place that we can use, just to make our people more productive, make our people more efficient. I think you've seen our headcount has been flat to down. I anticipate that to continue to be the case for some time because we are now managing over $2 trillion in assets with fewer people than we had a year ago. And that's really because we're taking advantage of the technology. We're taking advantage of solutions that are out there. We're looking for places everywhere to make our people more efficient. We always tell our folks, we're not looking necessarily to get smaller. We're looking for the top line and our AUM to get larger with the team we have today, so we want to make our people more efficient so we can work together more collaboratively.

I mean just to add on the AI or generative AI front, I mean, it's still early days. I mean we're clearly heavily invested in the technology and probably more importantly, training all of our people to use it effectively from engineers who are way more advanced than the front of the house, where they're really users, and we're applying it all through those parts. I think the obvious use cases are the ones that you would expect in operational processes, technology processes, commentaries, marketing, things like that. But increasingly, our investment teams are also using it to be more efficient in their research to be able to bring together their ideas more rapidly. So we are deploying it all throughout the company, and I'd expect we're going to continue to. In terms of what will it benefit be, I think Allison started to summarize them, and we'll start to see it, I think, play through over the next several years.

Maybe one final question here, just talking about new technologies. I'm curious your thoughts on blockchain tokenization. You guys do a few things there. Yesterday, Nasdaq was here, they had a press release in the morning talking about an application they had filed to list tokenized versions of equities. So how do you think about opportunities there, either in terms of product creation, like ETFs, in terms of back-end like fund management, they use stablecoins to settle transactions, kind of a lot of different angles there, but how are you thinking about opportunities?

I mean, all of the above. Today, we have several digital asset, coins and other assets that you can invest in through ETFs. So we've wrapped them in ETFs. I think that's an early innovation. I don't know if that's always going to be the future. I think tokenization is probably the one that continues to be the most interesting for us. In particular, as the NASDAQ talked about yesterday, how could you see the future of tokenizing funds, how could you see the future of tokenizing some private assets? So I think for us, in asset management, being able to invest in digital assets will be 1 avenue. I think using tokenization and that technology has probably a lot more internal applications.

Got it. With that, we're nearly out of time, but we'll leave it there. Andrew, Allison, thanks so much for being here. It was a pleasure to having you.

Thanks for having us.

Thanks, Ben.