Morgan Stanley (MS) Earnings Call Transcript & Summary

Well, thank you, and welcome back. Next up, we have with us Morgan Stanley. But before I get to introducing Dan, I have a disclaimer to read, so bear with me. The discussions may include forward-looking statements, which reflect Morgan Stanley management's current estimates and subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake to update the forward-looking statements. This discussion, which is copyrighted by Morgan Stanley and may not be duplicated or reproduced without their consent, is not an offer to buy any security. So with that out of the way, good morning, and I'm excited to introduce Dan Simkowitz, Head of Investment Management and Co-Head of Firm Strategy and Execution at Morgan Stanley. Dan, welcome. And those of you don't know Dan well, Dan began his career at Morgan Stanley going back to 1990 and has been previously the Co-Head of the Global Capital Markets business, was the Lead Capital Markets Partner for the firm's assignment for the U.S. Treasury and the Federal Reserve during 2008 through 2012. So Dan, thank you so much for taking the time and joining us today. And with that, Dan has some prepared remarks and slides for us. So I'm going to hand it off to you, Dan.

Great. Ebrahim, thank you so much, and thanks for having us back at the conference. And as you said, I think I'm going to do about 10 minutes with some slides to set up the positioning, the investment management business, and then I think you and I will do some Q&A. And in this positioning, we may put it in the context of a presentation I made at this conference actually 2 years ago, a bit, as a reference point. So if the participants could go to the first slide that says premier global diversified asset managers, it's the slide after Ebrahim's great forward-looking statement slide, and it's Slide #3 on the page. We started building a leadership team to grow MSIM with the mandate from James Gorman and the Board in 2016. And the focus of the team through that period to today has really been on the intersection of secular growth, which is another way of saying, what do clients need, where are their issues, where are their challenges, where are demand partnership from their asset management partners on one side, and on the other side of that intersection, where does Morgan Stanley add differentiated value to clients? And that strategic vision of matching up those 2 elements of the business that really drove the strong organic growth we saw from 2016 through to today. But importantly, it will set us up well to evaluate, to act and now integrate well the combination with Eaton Vance. Constantly thinking about how can we partner effectively with clients has really set us up today, we think, to be one of the best positioned diversified asset managers in the world. The critical elements are on the page that everyone sees. Individually, they're quite powerful in terms of where they sit in the industry. But in combination, we think they are very unique. And in fact, if we had to build from scratch a diversified asset manager for the next decade, these would be the ingredients. And so we're really pleased with the positioning that we have in MSIM pro forma going forward to today. Turning to the next slide. This is the exact slide that we presented at the 2019 Bank of America Financials Conference. At that point, the team had taken revenue in 2016 from $2 billion to through latest 12-month 2019 when we presented to $3 billion, so a 50% increase in revenue in those 3 years. And what we laid out at the conference was a path for the next 50% of revenue growth in the business over a 5-year future period. If you can turn your slides to the next slide, slide 5, MSIM delivering growth only 2 years later, not 5. MSIM stand-alone was already almost 50% higher. So 50% from '16 to '19, almost another 50% from '19 through the latest 12 months today in terms of revenue growth. But importantly, away from the stand-alone MSIM organic growth, it set us up -- the strength of the Morgan Stanley as well as the MSIM franchise, put us in a position to be a great partner to Eaton Vance. So today, pro forma, the AUM in the business is a $1.5 trillion and latest 12 months pro forma revenue is $6.4 billion. Importantly, together, we can provide even greater differentiated value to clients and be a better solutions provider. So as an example, our business mix is more balanced, with Eaton Vance contributors. But in particular, they have a very strong value-add fixed income group, which allows us to partner with clients who were really challenged by a low interest rate environment because they bring real investment excellence in loans and high yield, municipal bonds, emerging market debt. And then what we're already seeing and already doing is pairing that, for example, with our private credit capabilities and being a holistic credit solutions provider to clients. So across all of MSIM, we believe the unique mix of either a private and public equity and fixed income solutions and alpha provide great value to clients, but also set us up for long-term sustainable growth. If you turn to the Page 6, and this is titled, key secular growth areas in the presentation. We believe 3 core areas can be great drivers of growth within MSIM. Customization, alternatives and sustainabilities are really important secular growth themes in asset and wealth management. In each of these areas, we're very well positioned today, but highly committed to invest and grow in these areas to deliver value to clients and grow the overall franchise. I think we said this for now over a year, we're pretty consistent, Ebrahim, customization in wealth management executed via separately managed accounts is a very, very powerful and long-term growth area. The researchers, there's a whole bunch of them, have put growth at 20% annually. They see the market exceeding $1 trillion. Parametric is the absolute clear market leader in the space. And if our growth is the market leader is an indicator, the levels may surprise on the upside. What we've seen in the wealth management, SMA customization business at Parametric is a growth of over 50% in AUM since last September, as clients and advisers look to really incorporate customization and greater scale in their portfolios. Alternatives have been a big focus for a long time at Morgan Stanley and at MSIM. We now have over $175 billion of client investable capital in the alternatives area. We think we're still in a growth phase in alternatives as clients increase their allocations to private equity, private credit, infrastructure, real estate, growth capital, and they do it around the world and across different segments. So I think there's probably even greater growth in the wealth management platforms, not just in the United States, but in Europe out there in front of us. Importantly, our alternatives franchise is very balanced across the segments, as I mentioned, across private credit, private equity, real assets. And importantly, the franchise is also balanced in terms of clients. It's a fully third-party capital client base and capital base, but it's balanced geographically around the world. And then as I mentioned, balanced pretty well between institutional capital and increasingly wealth management capital and not just in the U.S., outside of the U.S. as well. And the third key secular growth area is sustainability. Growth, again, is projected over 20%. And we now have Calvert funds, a market leader and their growth would indicate we have a shot as an industry to beat that type of growth areas. We see Calvert as a tremendous asset as we partner with clients who want a leader who has real history. They've been around for 40 years. This is all they do. There's authenticity to their brand, but also real intense level of experience and data and investment excellence. They won the Lipper small fund award 3 years running. And importantly, real engagement experience with the clients and the sectors that they are engaged with. And as we've said along for the last couple of years, it's not just Calvert, MSIM has 2 of the fastest growing active equity sustainability funds, global change and global sustain. They were launched just in the last 3 years and just the 2 of those alone now have $15 billion of AUM. So we're excited about the sustainability space. Last slide that I'll go through, and then we'll turn it over to Q&A, Ebrahim, I believe, is we are blessed and this is a slide connecting alpha and solutions to the world. I mean at MSIM and now combined MSIM with Eaton Vance, we're extraordinarily blessed to have phenomenal investment teams and solution providers. And we think the recipe there is to give the teams really deep investment autonomy in the marketplaces. So you don't see us with a CIO of equities at all of MSIM as an example. But that investment autonomy is matched with really intense client holistic perspective. So it can be a partner and client solutions provider. But all around that on the investing side is to create an environment where we continue to develop and generate great next-gen investment talent. One of the leaders and all of that is a partner of mine, Dennis Lynch, who runs our Counterpoint team, the ability to build junior talent and then develop them over is a real focus on all of us, and we're seeing it throughout our franchise, not just the example I'm going to go through in a moment, but we have 2 emerging market teams, 1 in New York and 1 in Singapore, sort of next gen. They each generated 1,000 basis points or greater than 1,000 basis points of annualized alpha over the next 3 years, and we see pockets of that, not just pockets, examples of that throughout our franchise. So we're continuing to think about new -- not just new strategies, but new talent to bring into the marketplace. What you see on this slide is one of the greatest examples of that. And again, if that alpha was just sitting in my basement and no one knew about it, it wouldn't be adding value to clients and certainly wouldn't be adding value to Morgan Stanley shareholders. So the other just great asset we have is the power of the Morgan Stanley Global footprint and our global client base. And so what you see on this page is an example of matching up that incredible alpha development and then getting connected to clients. The global opportunity team is based in Asia. It's part of Global Counterpoint team. 2016, they had $1 billion of AUM. Today, it's $78 billion. They've gone from 4 strategies to 8 strategies. It's driven by this incredible alpha performance. And so what you can see on the right-hand side of the page is that flagship fund within their team generated 20% annualized return and over 800 basis points of annualized alpha and then what we've been able to do is translate that into real client value by connecting them. All of that is great. It's been exciting. I've been watching it. It's been fun. What was remarkable is when we did the work actually right now for this presentation, which is where are the clients of that flagship fund, and that was pretty amazing. 40% in Europe, 30% in the U.S., 30% in the Americas. So this incredible client balance matched against the alpha. And what's exciting for us going forward is we now have an even larger distribution footprint in the United States because of what Eaton Vance brings to us in Wealth Management. And we've got new things to bring to the world. So either Eaton Vance, fixed income teams I mentioned on the value-add side or the Calvert funds, we can bring those into that distribution powerhouse in Asia and Europe as well. And so a lot of the sort of elements of bringing this all together are things that we really look forward to focusing on the rest of this year and into 2022. Thanks, Ebrahim.

Dan, thank you. And I am sure on this, I think all of it sounds extremely bullish, right? So I think stocks had a great run. I think every time you heard James talk about the business on the earnings call, he's very bullish. The one thing that I -- it comes out in my conversation with investors is some of the areas you mentioned feels like a lot of tailwind be it secular, be it cyclical, help us -- and I'm going off script, so hopefully, your team is not mad at me, but help us unpack a little bit around how much of this is execution, winning market share versus just being in the right place at the right time?

Well, first of all, it's bullish, but it's hard work. So I don't want to underestimate how hard this is and how long we've been at it. So I think there are -- you got -- I don't think it's an accident based on sort of my early comments to be in the right place at the right time. So to a degree, we've had a view for more than a decade that free beta and the -- would really revolutionize a little bit the asset management industry. And so if you look at our equity franchise, which has been a big driver of growth for us in the last 5 years, it's all high conviction concentrated portfolios. We were very fortunate. We've been doing that for 20 years. We didn't need to have to move to a degree the market came to us, but the market came to us because we thought, didn't know when, it would come to us. We had a similar view in alpha terms around alternatives. So for better part of a decade, and certainly intensely with the current leadership team over the 5 or 6 years, just grind it out, come up with new strategies, raise more in certain vintages, make decisions where you want to be, not want to be, we like that. At the same time, we actively said we can't compete in just generic data with the big players. That's what they should be doing. And even in a lot of elements of Smart Beta we said, we can't compete with the big players, they can go adopt into that. So we've stayed very disciplined, I would say, around the alpha sources where we can be differentiated and then a solutions provider in a way that is partnering and not commoditized as much as possible. But all of that is hard work and you got to say no to sometimes, right? So we said no -- for example, we said, does the world need another mega cap private equity term? And the view was, a, we're not sure that the world needs that more mega-cap private equity funds, but they certainly don't need another one. And where would we add value when you've got great firms, like Blackstone or KKR. So some of this is also saying no. But strategy, we've thought a lot over the last decade around strategy and thematics. And then Eaton Vance has provided us a great opportunity to execute on some of those into some of these very strong secular growth areas.

Got it. Yes. And I didn't mean to imply there wasn't hard work involved. I think for those of us watching from the outside, it's been fascinating over the last 10 years how the franchise has evolved. Maybe just drilling a little bit into -- if you could start with Parametric and the customization that it provides. Give us some insight into the kind of products and solutions Parametric allows MSIM to provide to the clients.

Yes. I think as we've said and a lot of people have been commenting on, I think clients increasingly want personalization. But importantly, advisers, financial advisers in the wealth management community, they want their clients to have it because it builds a deeper more intimate relationship between the adviser and the client because they can then help them guide them through that journey. And if you can deliver it with real long-term value, so you can show the client what [indiscernible] either tax alpha or how did the sustainability objectives get delivered or where do they win or even lose around their focus on a certain factor [ to ], that creates dialogue. And in the cases of taxes and sustainability, we think it creates great outcomes. I would say the ability to design, execute and then report is you've got to constantly report to justify the value of all this is really valuable, but it's not easy. And what I would say at MSIM, we're on our way to building one of these. We didn't even know what the right questions to ask, let alone the answers for. So Parametric has this intense extraordinary couple of decades of history here. What I would say is what Parametric does and where there is deep client demand, as I mentioned on the figures, is they're helping clients think about hundreds of different investment objectives. And then within a single 1 or a collection of them, i.e., a portfolio, create a path that's customized against that. And again, we're talking about hundreds of potential investment objectives. And then in each of those instances, they're creating a model which even before it's implemented, can sort of track what is the tracking error an investor may have versus their customization objective. And they're going to need -- as you take the tracking error down, your customization goes down. So where do you want to be? And that's a dialogue. And again, if you think about it, that's a dialogue that an adviser creates an opportunity to engage with their clients in a more, I guess, a fully holistic way on their portfolio. It's also -- it's not straightforward because more than 50% of the accounts that we fund in Parametric today are not cash. People bring securities over. So they're bringing an existing portfolio that they put together. Not only do we need to figure out how to customize, it may be way off the investment objective they originally had. And so we do that. So we're running, for example, about 1,500 client transition analysis for advisers, wealth management advisers a month to help and then those -- that was transition analysis trade again for that adviser a dialogue. And where, I think, Parametric has a great brand and edge is they got 30 years of experience of trying to optimize the client experience around this customization. So you got experience, they've got an enormous amount of tech invested to automate that and to make that process efficiently. But they've also between -- and some of it's set at Parametric and some of it is set in the wealth management distribution arm at MSIM, 200 people just servicing the client base around that customization dialogue. And what we're committed to sort of going forward and where the go forward is to invest even more, especially in technology to make that education more digital, more easier to understand, the onboarding simpler, the execution more efficient and scalable, and then importantly, reporting digital and easy to use, all with the goal of just raising at the adoption levels. And along the way, and this is what's fascinating, it's not just an equity product anymore. It's a multi-asset product. So the fact that within Parametric, they got a huge municipal bond SMA business that they can incorporate against the customization objective is very cool. And then also, we're incorporating other things like charitable giving schedules, or if you have a concentrated stock position, or if you don't want to have FX moves and you only want to trade ADRs, all that element of customization sits there so that we can take the platform and the market opportunity up.

Got it. Then I guess moving to another thing that you flagged on Slide 6, just around sustainability. I had our CEO on talking about sustainability coming out of COP26, feels like it's going to be a huge theme over the next decade or 2. When you bring this to Calvert and you touched upon a few things earlier, just give us a sense of the value proposition on the ESG front that Morgan Stanley has. How did Calvert enhance that? And kind of what do we have to look forward to?

Right. I think Calvert takes us to a whole new level. I think we were doing great at MSIM with very discrete situations. So we had these phenomenal equity teams. And as I mentioned, probably 2 of the fastest-growing active equity sustainability fund launches in the world in the last 3 years, and we were doing real detailed partnership work with ultra-high net worth or clients around customization at the big portfolio level. But Calvert brings to us real breadth and capabilities that are going to be global and multi-asset class and multi-vehicle. And so in that instance, you've got a firm that was the original sustainability firm. So 40 years of history it came out of the [ part-time ] divestment movement. So that's really unique to have a business that has been focused on this area, only focused on this area, for 40 years. They bring that with insights into sectors of deep sector focus on their analytics. They have their own data because of all that experience, and they've got a very valuable data set. And then as I mentioned, it's a model that is driven with engagement. So they are engaged with companies on the sustainability journey and then strong investment results. At the core of it, there's not a sacrifice here. They were -- they won these awards with Lipper because of the investment element. What I would say, as we look at it, we would agree with the market opportunity that you mentioned earlier, it's probably even bigger than what we would have thought a year or 2. 3 years ago when we were thinking about it in MSIM context or even 1.5 years ago when we started to engage with Eaton Vance, the brand of Calvert is better than we thought. The capability sets better than we thought, but the opportunity is much bigger than we thought. So we're going to invest incrementally in the resources. So we're taking head count up pretty significantly, already have, and we'll continue to. We're going to invest in the brand. We think it's a very authentic, very powerful brand in sustainability. And then over time, invest in new products and new vehicles. So we're working through a lot of SMA product. Some of it is going to be powered, for example, by Parametric. Some of it, we've already done a diversity SMA with Morgan Stanley Wealth Management, that has been extremely popular. It's a diversity index product of Morgan Stanley Wealth Management. And we -- you will see Calvert ETFs over the next 3 or 4 years. We will be -- that will be one of the places where we will use new vehicles like the ETF vehicle is in the Calvert product. And again, we've been focused on this for a while, and the confidence to go buy Eaton Vance, as I mentioned, is part of built by building up the team at Morgan Stanley. And so we had a box up there, the front portfolio solutions. We had a view along the way that we had to be, be able to be in the shoes or the seat of asset owners, CIOs or wealth management platforms. So we hired, for example, Seema Hingorani, who was the CIO of the City of New York. But then when she left the city of New York, she left to found a firm called Girls Who Invest. And so she founded Girls Who Invest and we hired Seema, but that completely changed our dialogue with institutional asset owners around the diversity topic. She's a clear pioneer around diversity, but she's also staffed in the CIO seat. But you can imagine when she heard about Calvert how excited would she be because they've been an advocate for diversity. And so now we've got that. Seema came to us partly upon the recommendation of another person we hired, Ted Eliopoulos. He had been the CIO of CalPERS, largest pension fund in the United States, but his passion was climate. And he was a real leader around climate, science and climate risk in portfolios. And so again, he was an encourager of us going and making the league to acquire Calvert. All of this is both driving some product and some growth, but it also is changing the dialogue we're having with asset owners all around. We can have a real expert diversity dialogue, a real expert climate dialogue, a real -- the inequality dialogue that Calvert has been focused on. These are all things that help build the relationships that we have with clients.

Got it. And I think a few of the things you mentioned in terms of the words you used, authentic, history, passion, I think all of those are very, very important when you think about sustainability and the kind of people that you see in those businesses running those businesses. Talk to us when you think about the growth of that, it sounds like a lot of that is just organically investing, hiring, building out talent, are there a lot more M&A opportunities where you have firms with as much history going back 30, 40 years, being really focused on an issue that provides some acquisition opportunities or there aren't as many?

I think the question is just generally, are there M&A ideas that we still are quite focused on. I go back to the original sort of premise we have. We like what we have. To be in the alternatives business and the scale we have, we'll continue to look at building or buying product sets in there, but we don't have to go and buy a big, broad scale alternatives provider and any element there. We -- as an example, we -- in private credit, we were a $1 billion private credit firm in 2016. Today, we have $20 billion of investable capital in the private credit space. We were able to build private credit. In core real estate, we're one of the largest in the world, and we were able to build an Asia business and a European business on top of the sort of flagship here in the United States. So to a degree, I think it's going to be opportunistic around small subsegments of what we already do from the M&A perspective, in the near to intermediate term because we feel like we've got all the core ingredients.

Got it. I guess maybe shifting gears to alternatives. You mentioned earlier that the world doesn't need a big mega cap PE firm. But at the same time, you closed on a large real estate fund not too long ago, which I think exceeded your internal targets. Just talk to us a little bit about the public private market solutions that the firm is providing on this front.

Yes. Again, I think we've been focused on building this for a long time, focused on building it as a sort of client capital business, but being disciplined around where we can have the most value. So in real assets, as you highlighted, that's a place where we do have long history and expertise. So the core real estate business has grown more than double over the last 5 or 6 years. The infrastructure fund, the vintage, the last vintage, which I think was over $5 billion was 50% greater than the prior vintage. So real assets, a big focus for us. I already mentioned private credit. Private credit not because the world is demanding alternative sources in a low-yield economy, but we are deeply embedded, not just in MSIM, but the firm in the private equity ecosystem. So private equity firms like to deal with Morgan Stanley. We have a natural spot to be a very large and effective private credit provider because of all the other connectivity we have in the private equity world. And that extends actually into some of our private equity funds. Some of our fastest growing and most successful private equity firms are partnership firms with private equity funds. So we are probably a pioneer in what's called general partner-led secondary offerings, GP-led secondary offerings, we have a fund that just does that. We have an entire fund that just does private equity co-invest with other private equity funds. And I would say -- the last thing I would say on alternatives, the private-public combination is helping us at the client level. I mentioned private credit being combined with public credit, but also in the product development element. So Counterpoint, which is one of our leading public equity franchises started a private fund, their first one a year ago. And so we're -- we can take that and move over those capabilities, which are executing phenomenally well in the public market, they have an incredible network, incredible analytic capability to [ create ] real alpha privately, and now we can do it on private companies, we know how to do it. And so again, this is a big strategic focus area for us, both in new products, growing the vintages and then packaging them together to deliver value to clients.

Got it. And we have 5 minutes to go. So the one area I wanted to touch upon, Dan, was just firm connectivity, right? James again talks about this on the calls, following all the deals, the product build out, the capabilities, give us a lens into how your business interacts with the rest of the firm, the synergies that come through and the opportunities there are from that?

Well, I would say just to keep it to some of the things that happened last year, the ability to act on Eaton Vance because of the relationships the firm had across the entire firm with their leadership and management team, right there, we get insights that are phenomenal. As we think about strategy, the strategy of the firm is really simple and powerful. We just help clients allocate capital access markets. And so to the degree that the dialogue that's occurring within the Wealth Management business and the securities business -- securities business huge -- a huge part of it is servicing asset managers, a huge part of it is helping clients raise capital. All of that is linked to some forms of MSIM and in wealth management. So we get huge just sort of natural dialogue value from being very focused at the firm level on a very powerful strategy around clients and capital. What I would say is in the securities business, we've been a huge beneficiary of the talent. So if you look at our alternatives business, there's over a dozen of the leaders of some of the subsegments of that business that started their career in ISG as an example. Some of them came over because they wanted to be investors, some of them brought ideas, products already thought about and shifted them over and have been really successful. At the same time, I think we raised now in the last years over $60 billion on referrals from ISG around our client base. And so they have a client list that's just phenomenal, and it extends even offices. So for example, the securities business is big in Brazil, and they've got a pretty big office in Toronto. We were sort of flying in to serve those markets. We were able to set up MSIM offices and get an ROI in days based on the fact that they're already there as an example. In Wealth Management, they're an open architecture system, but they're great, great partners for us as we do R&D. So some of that alternatives growth is out of an R&D lab where they sit down with us and say, we think our clients want this. Can you design that. But what I would say is Parametric in particular has -- or Eaton Vance has changed our relationship a little bit with wealth management. In MSIM, we created a wealth management sort of distribution platform from scratch about 5 years ago, and it was all based on alpha, right? It was public markets alpha, our international team or our Counterpoint team or our alternatives business. But we had a pure alpha relationship with the U.S. wealth management industry. Today, with Parametric, we have a solutions customization partnership. That means we're talking to clients in wealth management, more inside wealth management, but even outside that we would never have talked to before. We also now have a muni and a fixed income relationship with Eaton Vance with clients. Again, clients we may not have talked to. And now we get to have a sustainability dialogue. And so especially in U.S. Wealth, morgan Stanley just being a really big and important example, the dialogue we have is now much broader than just an alpha dialogue, it's a solutions dialogue. And we think that sets up well. And so that connectivity around R&D and guiding us strategically has been extremely valuable with the rest of the firm.

Got it. And I guess one final question Dan before we wrap up. Just big picture, tell us 1 or 2 things that you're most excited about as you think about just the outlook for the business over the next 2, 3 years? And maybe 1 or 2 factors that keep you up at night or which you view as a big risk factor.

I'll do the excitement at the firm level, and then I'll do the worries at the MSIM level. I think at the firm level, the sort of Morgan Stanley at work opportunity set and the related opportunity set that comes with E*TRADE and the [ linked ] opportunity set that comes with Parametric, in essence, our ability to engage with just a much greater potential set of households in America through the workplace, through E*TRADE enabled maybe by Parametric, these are things we just didn't even have 3 or 4 years ago in our wealth management model, which then, as you know, ISG is helping drive that corporate connectivity in the stock plan. And then we are helping to connect E*TRADE with better investing capabilities or Parametric into the workplace. So I would say that's the most exciting thing at the firm level [ in my strategy role is just the scale ] now of the opportunity set, the funnel that we have in wealth management. On the worrying side, prior to the last year or 2, I would always worry that we had this incredible alpha and not enough people knew about it. I would say, based on that slide, you saw there and the capability set that Eaton Vance distribution brings to us that we're in pretty good shape there, I would say what I would focus on, are we investing enough in the growth areas. I think we have big plans. Now we've got to execute on them around investing incrementally in Parametric or Calvert. These are businesses and brands and teams that are better than we expected. So the people coming over and the franchise they have were better than we expected, yet the market opportunity and where they could go is even bigger. And so I worry about, are we going to invest enough in those areas. And then are we going to drive collaboration so that we're delivering now. We've got more pieces, better pieces. Can we optimize the delivery of that to clients? Both client type but also taking things that used to be done just in the U.S., and can we take them to Europe and Asia? I worry about that. But that's execution. We think we have a great pro forma team. So those are good things, I guess, to worry about.

On that note, Dan, I'd like to thank you again for your time. This was great. And thanks to your team and Leslie for making this happen. Have a great day.

Thank you.