KKR & Co. Inc. (KKR) Earnings Call Transcript & Summary

Great. Well, good afternoon, everybody. Next, I would like to welcome Scott Nuttall, Co-President and Co-COO of KKR. Over the last year, KKR has delivered industry-leading investment performance with private equity returns, up over 25% on a trailing 12-month basis despite quite significant market dislocations, deployed meaningful amount of capital and embarked on a new fundraising super cycle. Of course, at the same time, the firm also announced an acquisition of Global Atlantic, meaningfully enhancing its presence in the insurance space. To say the least, a lot is going on. So Scott is going to go through a few brief slides that they prepared, and then we'll go into the fireside chat portion of the presentation. So Scott, over to you.

Great. Thank you, Alex, and appreciate you and your colleagues having us again this year. Very nice to be back. For everybody watching, a pleasure. Happy December. You should all have, hopefully, a presentation in front of you, that as I understand it, you'll be able to flip the pages yourself. So I'll try to move through these slides rather quickly, but I just want to set the stage a little bit. So if you go to Slide 2, the executive summary, you can see we've got some building blocks in terms of how we think about our story and what we're doing with the firm. But in the first instance, we are very fortunate. We operate in an attractive industry. It's been growing at 12% a year in terms of AUM. We've been growing closer to 17% a year. So we're growing faster than a fast-growing industry. Secondly, we have a really compelling financial model that's a bit different than others in our space. We have third-party AUM, plus the Capital Markets business, plus a balance sheet which gives us multiple ways to win and is proven to be very resilient, as I'll come to in a few slides. The third building block is we really have very clear and identifiable avenues for growth. 18 of our 24 investing businesses have been in existence less than 10 years. We think many of those we can double, triple, quadruple in size in the near term. And we have huge opportunities to scale around the world and a lot of fundraising visibility, as we'll touch on. Fourth, we are very aligned with you as a management team. KKR executives own about 35% of the shares. We are the largest shareholders. So we're highly aligned as fellow shareholders with all of you. And then lastly, as Alex referenced, we, in the summer, announced an acquisition of Global Atlantic. It is a highly strategic and a highly accretive acquisition for our firm, which will close in early 2021. And if you go to the upper left-hand quadrant of the slide, you can see our opportunity ahead in one little box. We've got a big opportunity to scale our businesses, use our model to capture more economics from everything that we do, benefit from our perpetual capital, which Global Atlantic expands meaningfully. And as we do all of those things and generate investment performance, we compound AUM, earnings and book value. So if you go to Slide 4, we thought given that 2020 is almost behind us, it would be sensible to reflect a little bit on the year. And there's 4 things that really stand out to us about this year. First, we've delivered really strong investment performance as a firm. I'll hit the numbers in a minute. But portfolio construction has served us well, and our deal teams and our management teams have done an excellent job. Second, we're on track for a record deployment year. We've really leaned into the dislocation. Third, we're on track for a record fundraising year and in particular, have seen significant strength in Asia. And then lastly, our model has proven to be very resilient as we've gone through this period. So quickly, on each of those, if you flip to Slide 5, you'll see the investment performance stats. This is just the last 12 months through September 30, but you can see our private equity flagship funds, up 27% over the last 12 months. Infrastructure up 19%. Our opportunistic real estate strategy is up 10%. And our leverage credit composite is meaningfully outperforming its overall benchmarks and is performing quite well. And if you go to Slide 6, you can see one of the reasons we've had such meaningful outperformance. We've seen significant dispersion in the public markets. And there's a number of themes that have proven to have very high and attractive returns and a number of parts of the investing space that have underperformed. And we have been very focused on being thematic as we headed into this year and have really doubled down on that this year even further. So we have been underweight COVID-challenged sectors and overweight tech, digital, e-comm, basically a number of winning themes in terms of coming into COVID and through COVID. And if you look at the page, you can see, if you aggregate hotels and leisure, energy and retail, it's been about 5% of our total portfolio in private equity and core equity and about 9% the total firm's AUM. And you can see, conversely, information technology has been 21% to 31%. So our portfolio has been meaningfully outperforming because of this and other factors over the course of the last 12 months. If you flip to Slide 7, you can see we also meaningfully leaned into the dislocation. So we were positioned nicely coming into this period. But we really took this as an opportunity to invest into what we thought was some really attractive value earlier this year. So we've been getting ready for this for quite a period of time. The firm has been very connected, and so we've leaned in. And you can see our deployment has really picked up significantly. And if you look at the chart, you can see this just goes back to Q1 2018 through Q1 2020, where we and our Private Markets businesses were deploying about $3.2 billion a quarter. And you can see what happened. In Q2, that stepped up to $5.5 billion. And in Q3, that stepped up to $6.2 billion. Now a few things to highlight. One, that deployment was really quite global, almost equal split, U.S., Europe, Asia. Private equity was a bit over half, but the other almost half was infrastructure, real estate and core. So it's been very broad-based. And what you see in terms of Q2 and Q3 deployment was really deals that were struck during Q1 and Q2. There's a 1 quarter lag. And if you look at the table in the middle of the page, it kind of gives you the punchline. Our deployment relative to our average over that period of time was up 72% in Q2 and up 94% in Q3. And what we did in the line below that, you can see, is we just aggregated the peers. So relative to our plus 72%, some of the public peers were down 1% in their deployment. And relative to our 94% in Q3, the peers were down 45%. So we've really leaned into investing in this period of time. And if you go to Slide 8, it's just a little bit more color. We have deployed about $45 billion year-to-date, and it's about equally split between our credit business and our Private Markets businesses. And on the right-hand side, you can see the themes. Initially, it was dislocated public markets and providing liquidity to companies in need, and that it transitioned to our portfolio companies getting more active, stable cash-flowing businesses and really investing behind a number of these themes that we think are going to be accelerated by virtue of COVID. On Page 9, you can see it wasn't just about investing. We also used the dislocation to lean into business-building. And this is probably the best example of that, our dislocation opportunities strategy. This was a vehicle that we raised in April and May. So we raised about $4 billion in 8 weeks. When the markets were meaningfully dislocated, we went out and raised capital quite quickly. It's focused on downside-protected investments, mid-teens target returns and basically using the whole firm. And so far, that capital is about 50% invested and gross returns are over 35% unannualized. So you can imagine what the numbers are on an annualized basis. Very, very strong so far. If you flip to Slide 10, we've got the fundraising detail. As I mentioned, the third big takeaway is this has been a record fundraising year for us. So you can see, on the left-hand side, this is trailing 24 months of fundraising, which is, we think, a good way to look at it. It smooths out some of our flagship fundraisers, which can be a bit more lumpy. You can see the 22% CAGR and the growth that we've seen over that period of time in fundraising. And on the right-hand side, you can see the fundraising through the first 3 quarters, $32 billion year-to-date. And you can see the split, U.S. and Europe, $17 billion of that. Asia, interestingly, $15 billion of the $32 billion, so 45-plus percent of our fundraising this year has been for Asia strategies. If you go to Slide 11, you can see the fourth reflection, that our model has proven to be quite resilient during this period of time. We've always had this view that with third-party capital that pays fees and carry, plus our Capital Markets business where we can generate transaction fees, plus our balance sheet where we can generate dividends, interest income and realize gains, we have lots of different ways to win in a very diversified business. And so what we did here is we just looked at the first 9 months of results. We're in the left-hand column. The right-hand column again is that peer aggregate. You can see management fee growth is pretty similar, plus 13% for both columns. Our distributable revenue growth, however, is higher at 7% versus the 2%. And where it really gets interesting is on distributable operating earnings and after-tax distributable earnings growth. So we're up 9% and 6% and the peers down 2% and 7%, respectively. And when you cut through it, our margins are actually up 100 basis points through this first 9 months of the year, and the peers are down 200 basis points. So the model has been working very well. We've been able to not only maintain our margins but actually increase them during this period of time. And what's critical to understand, Alex, as you look at this page, this is before Global Atlantic and what it will bring to our firm in terms of incremental management fees, earnings power and visibility. Now if you flip to a couple of slides forward, we thought we'd spend a minute on 2021 and forward to lead into the Q&A. And so if you go to Slide 13, you can see a picture of what our assets under management have looked like over the last many years. This goes back to 2005. As I mentioned, the industry has been growing AUM about 12%. We've been growing at 17%, so nearly 1.5x the industry growth rate. If you look at the second to the right-hand column, you can see the $234 billion that we have in AUM before Global Atlantic. It's now quite diversified across our different businesses and geographies. And then you can see the impact of Global Atlantic on the far right-hand bar chart. And you can see that brings us to a bit over $300 billion of AUM, adding a lot of perpetual capital and visibility and more diversity. And if you go to Slide 14, you can see why we have such confidence in the go-forward. So we have a lot of strategies coming to market. And that gives us a lot of forward visibility and a lot of forward growth. And so just to give you the background, if you look at the bottom left-hand chart, you can see, from 2016 to 2019, our management fees went from $800 million to $1.2 billion, so up 50%. We had said, before Global Atlantic, that we thought we could increase 50% again in the next 3 years. And that's the $1.2 billion, call it, going to $1.8 billion by 2022. And then Global Atlantic is on top of that, and that's how you get to $2-plus billion on that bar there. And so the reason that we have such confidence is what you see on the right-hand side. We've got 4 flagship strategies coming to market, plus 20 other strategies enumerated in the box there, plus Global Atlantic on top of that. And so we have a lot of visibility and a lot ahead of us. And a number of these strategies are already in the market. And speaking of GA, if you go to Slide 15, you can see just how meaningful and important this acquisition is for KKR. So for those of you that aren't aware, Global Atlantic is a life insurance and annuity company that operates at meaningful scale. It's a great management team. They have had really strong performance organically before KKR entered the scene and a lot of growth opportunities ahead of them today. And so Global Atlantic, as our new partners, are going to have a big impact on our firm. And you can see this in the numbers on the page, 33% increase in AUM, 43% in fee-paying AUM. Our insurance AUM goes up from $32 billion to $109 billion. And meaningfully, bottom left-hand side, perpetual capital goes from $20 billion to nearly $100 billion. And so it has a big impact on our firm, not only in scale, but it also has a big impact in terms of the longevity and visibility that we have across our capital base and our earnings trajectory. And if you look at the bottom right, you can see pro forma for the transaction closing, which, as I said, we hope is going to be early next year. About 40% of our AUM is perpetual or long-dated. And so we, as a firm, just to back up, have done a lot of foundation-building in the last 10 years. And a lot of the businesses that we've begun are really starting to scale and inflect to the upside, and Global Atlantic will just supercharge that growth story. So that's the high level, Alex. I thought I'd do a little scene-setting before we got started. Appreciate you giving us the time to do that.

Yes. No, of course, it was a great overview and great to close out 2020. On that note, I think about '21. So as we -- we're going to jump into the Q&A portion of the session. If you're listening to us on the webcast, you can submit a question online as well. And as we go through it, I'll try to get to -- ahead of all of these questions as well. But Scott, the first one for you, I really just want to pick up where you left at on the strong business momentum. But I was hoping to talk through that, sort of through the lens of some of the longer-term targets that you've set out back at your Investor Day in 2018, which arguably feels quite like a long time ago. Now you guys talked about pretax DE targets of $3.2 billion over the course of 5 years. That puts you somewhere in between like '22 to '23, kind of like in that zone. And that was obviously excluding GA. Over the last 12 months, pretax DE was $1.8 billion. Obviously, the pandemic had an impact on that, but you talked about the momentum really improving as we've seen from some of the slides. So do these targets still make sense? How do you feel about these targets over the next 2 to 3 years? And is that something that we should still think about?

Absolutely. Look, I appreciate the question. You're right. The Investor Day was in July of 2018. And so we're more or less 2.5 years into the 5 years. And the short answer is even before Global Atlantic, we think we're on track, Alex, to hit those targets. So just to give you a little bit more color, our fee-paying AUM growth and our investment performance are obviously going to be big drivers of the answer to that question. And so we're ahead on those key drivers. Our fee-paying AUM growth is ahead of what we expected when we put that in front of you 2.5 years ago. And our investment performance is certainly ahead of the assumptions that we laid out on the page in that deck back in that Investor -- on those Investor Day slides. And so if you break it down, I would say management fees, we're ahead of what we thought at that point. As you know, there's a big active calendar, as I mentioned, which gives us even more visibility. On performance income, it's interesting. If you look back, we had, at that point, about $119 billion of carry-eligible AUM. That number is now over $150 billion. And probably more impactfully, we had about $57 billion of AUM that was above cost and pay and carry. That number is now $105 billion. So it's nearly doubled. So that's -- in terms of that forward earnings power, I think you're right. There's probably a few things we didn't sell this year that we might have because of COVID. But when we think about the latent earnings power of the firm, it's definitely on track. And then if you go to investment income, our book value per share at the Investor Day was somewhere between $14 and $15, call it, $14.50-ish. And it's now over $20. So after 2.5 years, it's up nearly 50%. So now on top of that, good expense controls. And bottom line is, yes, we think we're on track. And then Global Atlantic will even add to that. And before too long, I'm sure we'll update those numbers. But as we sit here today, it feels pretty good.

Yes. That's great. Let's unpack some of those drivers, I guess, a little bit more. And I do want to focus quite a bit on FRE growth since it's such an important part of the story for you guys and obviously, a big focus point for investors. We talked about some of the flagship funds, clearly, being huge drivers of the growth story over the next couple of years. The bulk of Asia buyout has already been raised, while North America, global infrastructure, private equity in Europe, that's still kind of on the come. The one thing that really stood out to me this year, and you highlighted that on your slide as well, is phenomenal investment performance over the last 12 months across a handful of these strategies. Some of them are going to be out in the market with their next sort of success or fund. How big of a deal is that in the marketplace today? So meaning like could that investment performance through the disruption be a really big differentiator versus your competitors as you raise a new capital? And ultimately, how are you thinking about the sizes and timing of these funds?

Yes. Look, I would say, the first thing I would say is performance is just the most critical thing when you're raising capital. It really underlies everything that we do. So yes, it is critical. And it's one of the things that gives us such confidence in our fundraising outlook and the trajectory ahead. It is dramatically easier, Alex, even from an existing investor to raise money if you're first quartile than if you're third. And so happily, we've had really strong investment performance, which makes us feel good about the path going forward from here. But also, what's critical when you're having those discussions is what you're doing in terms of new deployment. And as I mentioned, we've been very aggressive deploying into this part of the market, which I think will be differentiated as well. And the way that we've been thematic and using the whole firm and being very connected and using our whole model to get deals done because a number of these deals we leaned in with the balance sheet to do underwritings. When the debt markets shut, as an example, we weren't the highest bid, but we were able to get deals done when others couldn't. And then honestly, brand helps, in a Zoom world, Zoom fundraising world, brand helps as well. So between the investment performance, the deployment and just the engagement with existing relationships and some new, hopefully, that will accrue to our benefit. We're not big on giving target sizes. We'll absolutely share with you along the way how things are going. But we're really quite optimistic. The Americas PE fund is already launched as is infrastructure, and Europe will be following before too long. But we'll keep you updated.

Right. And I guess outside of the flagships, on one of the slides, you listed really a handful of other strategies that are going to be on raising, either in the market continuously or will be on the come. If you were to pull back a little bit and you think about some of the larger contributors outside of flagships on that kind of 3-year, 50-plus percent management fee growth targets, what else should we keep on our radar as some of the bigger contributors to KKR's growth?

There's a number of buckets. It's really the -- it's the other 18 of those 24 strategies that are scaling. So I'll try not to name them all. But if I put it into a few buckets, the first one that comes to mind is real estate. We, as you know, we started our real estate business less than 10 years ago. It's managed to now cross to a number of different strategies. We've doubled our AUM in real estate in the last 2 years. And we have a lot of growth engines. I mean we've got our Americas real estate opportunistic fund that's going to be in the market, our PP strategy in credit, real estate, our European opportunistic strategy, our Asia real estate strategy, dislocated real estate, core plus real estate. And that's even before the Global Atlantic assets show up, which will meaningfully expand what we're doing in real estate credit specifically. So all things real estate would be one part of the answer. Same thing in infrastructure. I think our whole real assets platform between real estate and infra are going to be massive growth areas for us. So we're raising capital, as I said, for our opportunistic infrastructure fund. We're also launching a core infrastructure fund. And we're raising capital for Asia infrastructure. So infrastructure would be another area that I would point to. Then there's another strategy that we don't talk about a lot but is core, which is this longer-hold period strategy, and there's really 3 now components to our core strategy. The biggest is, call it, equity. It's mostly private equity, not entirely. But that AUM now has 14 -- that AUM is now $14 billion, with $10 billion of that being third-party. And we're going to raise its successor vehicle there before too long. And then we also now got core plus real estate, which I mentioned, and core infrastructure, which I mentioned. So that core suite of products, we think, is going to see a lot of growth going forward. Then we have our growth strategies, which are really tech growth, health care growth and Impact. So we've now -- we're investing our second tech growth fund. Health care growth has a 50-plus percent gross IRR, and so we're raising money for the successor vehicle there. And Impact is off to a great start. So I'll stop there because there's probably 10 others that I missed. But it gives you a sense, those are some big buckets that you'll see a lot of growth from going forward.

Got it. Let's talk about insurance. Obviously, Global Atlantic is a massive deal for you guys. It really changes your position in the industry when it comes to a combination of insurance capabilities with alternative capabilities. Now as you pointed out, the deal is scheduled to close early in 2021. Over the last few months, it sounds like they have announced a couple of smaller transactions, GA, that is. Can you update us on how that business has performed since the acquisition announcement with KKR? Any sort of implications we should be thinking about with respect to that $200 million of incremental management fees you've outlined at the time of the deal? And the bigger picture question within all of that is really given the combination of block insurance, it's been such an important theme in this space. What do you think will really differentiate your approach with GA here versus what other folks have done?

Sure. Appreciate the question. Well, first off, you're right. We announced the transaction in July, and pending regulatory approvals, we're hopeful that we're going to close here before too long. But early next year is a decent expectation. And the company has been performing ahead of our expectations since the announcement. So whether it's actual financial results are ahead of expectations, certainly, the block reinsurance pipeline is well ahead of expectations. And the 2 transactions that have been announced since the July deal announcement will aggregate about $8 billion. And to be clear, we haven't provided an update on that $200 million of incremental management fees. But I can tell you that those 8 -- that $8 billion, Alex, was not in the $200 million guidance that we gave back in July, and we'll update that at some point. So that would be on top of the $200 million. And I think in terms of the answer to your question, overall, look, we've been thrilled with the partnership with management thus far. We had really high expectations, and they've been exceeded in every way to date. And I think in terms of why we feel so optimistic and well positioned, I think it's a number of different aspects. One, remember, Global Atlantic is originating their own annuities today through 200-plus bank and broker-dealer relationships, right? So they have a very good feel for what the market looks like. And so as they're thinking about the pivot, how much do we want to originate ourselves, how much do we want to go do in this block reinsurance format or the pension risk transfer opportunity or the flow reinsurance opportunity, we have a lot of data and can figure out where do we want to deploy capital. And the team has just really strong capabilities in structuring, executing these very complicated deals and then obviously, in investment and risk management. And probably, the most important thing around all that is relationships. The management team has been working together since 2004 and have really strong relationships with counterparties across the space. And there's just a lot of the trust. So a number of these transactions that we have gotten done and are working on are really being sourced by management's relationships that go back a number of years. So we think we're well positioned as a trusted partner to be able to structure these transactions into a bespoke way. But if that -- if the reinsurance market opportunity becomes less attractive than the originated, we can pivot back. So we've got lots of flexibility in the model.

Got it. Great. Well, let's zoom out a little bit and think about KKR holistically at a corporate level. I know you guys thought, as the GA acquisition is soon to be closed, you guys talked about kind of restructuring your reporting a little bit to better maybe showcase some parts of the model versus others. And I know it's a focus for investors, and obviously, you guys are not ready to give us quite that yet today. But curious if you could give us any sort of sneak peek of how are you thinking about it. And I guess, more importantly, the core of my question is, what are you trying to showcase to the market that might not be as obvious with the way the company is reporting today?

Yes. Look, it's a good question. It's a little premature, as I said, but I would tell you where we're directionally -- how we're directionally thinking about it. First, on the GA part of the question, look, we're going to remain an alternative asset manager, right? Global Atlantic is going to be a very important part of who we are. But our market cap is almost $35 billion, and our investment in Global Atlantic will be a better part $2.5 billion to $3 billion. So we are going to remain an alternative asset manager, who will have a very large investment and have an insurance company as part of who we are. And so I think you'll see our reporting reflective of that, Alex. So basically, what you'll see is an incremental segment for KKR that will be insurance. And we are working on that now, and we'll come back early in the year and explain to everybody how to think about that new reporting segment on a go-forward basis. But that's probably the most kind of meaningful change, is KKR will have an additional segment, which will be Global Atlantic and our ownership interest there. The second thing that we've been reflecting on, to your question, is we've been on a bit of a journey as a space, right? We all started as publicly traded partnerships, and then a number of us became C-corps. We've changed other aspects of our structures so that we could be bought by indices. And as you know, we went into the Russell earlier this year, and we're becoming kind of easier to buy and easier to own. And as part of that, we changed our reporting from the old economic net income, ENI metric, to TDE, which is more cash flow-based and kind of how we pay our people and how we think investors should assess us. So we've been learning, and our shareholders have been providing input along the way, which we really appreciate. One area that we have noticed, however, is that not all of us in this space report exactly the same way with exactly the same definitions. And I'm sure that creates incremental work for you. And so one of the things we're thinking about is does it make sense to try to conform some of our reporting metrics to how others are doing it, and that's something that we're looking at. And as we incorporate Global Atlantic into our reporting and how we articulate the KKR story because it's going to be such an important part of who we are, it seems like a sensible time, Alex, to kind of figure that out and lay that out for everybody. So you should expect sometime after the GA deal closes for us to come back with a new look. Here's our reporting segments, and here's perhaps some other things we're going to do to try to make it even more clear, the earnings power that we have as a firm.

Great. Perfect. So we got a little bit over 5 minutes left. And I have a couple of questions still, and I'm just getting through the questions here and there's 10 or so. So I'm going to try to kind of bundle them all together and get them all alike. So the one topic really is around monetization, and I had that question as well for you guys. Look, I mean, you guys are sitting near an all-time high in terms of carry, almost $1.9 billion, over $2 a share. The embedded on-balance sheet gains are north of $2 billion as well I mean, almost $2.5 billion. It sounds like the exit environment is becoming a little bit more constructive. And from your comments, it sounds like you guys are seeing momentum there. So how should we think about the monetization activity? That was one of the online questions. But also from my side, curious how you think about the avenues of monetizing because you've been sort of creative with margin loans and things like that, kind of trying to get some cash out sooner. Are we going to go back to more of a traditional IPO, secondaries, maybe some strategic sales or sponsor sales, so kind of chunkier exits? Or do you think it's still going to be sort of incremental?

Yes, that's a good question. Look, we -- I think you framed it well. By the way, you're right, we're sitting on record amounts of accrued carry. Our balance sheet -- embedded balance sheet gains are $2.5 billion, which is as high as they have ever been. So we think we're really well-positioned. And that's why we talk about investment performance so much, right, because the greater the investment performance, the more accrued carry we have, the more balance sheet gains we have and frankly, the more fundraising we're going to have. And so it is kind of the -- a very succinct forward-looking metric. I think we're going to continue to see a mix of all of those different avenues, in answer to your question. You're going to see more secondaries for our public positions. There is a decent, a good amount of strategic activity and a lot of interest in our companies. Honestly, we're getting calls from a lot of specs that want to kind of talk to us about our portfolio. And if we think the stock isn't reflective of value, we have a bunch of public positions we can take out more margin loans. So we do have a very robust pipeline of potential exits over the next several years. And I think that the environment is such that you'll continue to see more of that carry and those balance sheet gains realized. But critically, what we also track with you is, okay, let's make sure we're continuing to replace, so the net continues to show progress. But I think we have a lot of ways to win.

Right. All right. Last one, and this one probably not surprising around the balance sheet and capital management strategy. So -- and the question is, again, combining my question with some of the ones from online, is really to think about the balance, right? You guys have been, rightfully so, reinvesting a lot of the cash into the balance sheet, and that's yielding good results. But the business has gotten a lot bigger, and you're going to see a lot more cash flows over the next 2 years. The share, while you've been buying it back, is, on a net-net basis, has still been rising very marginally. So how are you thinking about maybe adding more to the capital return part of the story given the set -- given the fact that the balance sheet is quite sizable as it is? So take it however you want, but the core of the question is can we see a more robust decline in the share count?

Yes. Look, I think if you disaggregate what has happened so far, so end of 2015, we changed our distribution policy, right? And so what we said was we wanted to grow the balance sheet, and we wanted to use some of that excess dividend capacity and buy back shares. And so we've done that. So we spent about $1.4 billion in buybacks since the end of 2015, and we bought back stock, on average, at about $19 a share, which is below our current book value and roughly half of our current share price. So we feel pretty good about that as a body of work. And whatever increase in the share count you've seen since that period of time, it's because of strategic activity, it's not because we're paying our people in stock because we bought back more than 100% of what we've issued to our own people in stock comp, which you should continue to expect. And then what we'll do is we'll have periods of time where we're not in the market. And then we'll have periods of time like we did the first 4 months of this year. We bought over $280 million of stock in the first 4 months, when our stock was dislocated, and we bought that on average at $24 a share versus where we are in the high 30s right now. And so you'll see us lean in from time to time when we think the market is giving us a real opportunity. So we're going to continue with that program. I think you should expect, at a minimum, that we'll be offsetting dilution from compensation. And if the market is giving us downdrafts, you will -- you should see a net decrease. But we're going to stay wed to our current capital management strategy. And remember, everybody, like we all think like owners. We own 35% of the stock. So as we assess trade-offs, are we better off deploying on the balance sheet into new investments, are we better off buying back our stock. We're doing it like all of you as shareholders. We just happen to be the biggest shareholders. So it's much more meaningful to all of our collective personal net worths. And so we take that -- this capital management decision very, very seriously. But you'll keep -- you'll see us keep going in what we've been doing for the most part.

Great. Perfect. And you kept us right on time. So thank you for that answer, and thank you for the presentation. On behalf of myself, my team, Goldman, Goldman's clients, I always appreciate you being here, and hope you have a productive rest of the day.

Thanks again for having us back. Have a great holiday, and stay safe. Take care, everybody.