TPG Inc. (TPG) Earnings Call Transcript & Summary

Okay. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please read talk to your Morgan Stanley sales representative. Great. [indiscernible] Mike Cyprys, equity analyst covering brokers, asset managers and exchanges from Morgan Stanley Research. Welcome to our fireside chat with TPG. And we're excited to have with us here Jon Winkelried, CEO of TPG. Jon spent most of his career, 27 years, at Goldman Sachs, most recently as President and Co-Chief Operating Officer, and joined TPG in 2015 as Co-CEO. And more recently, that's about a year ago, he became the sole CEO at TPG.

Yes, right. Yes.

As many of you know, TPG is a leading global alternative asset manager with $120 billion of client assets under management. Jon, thanks so much for joining us.

Thanks, Mike. It's a pleasure to be here.

Great.

And thank you, Morgan Stanley, for everything you do for us. So appreciate it.

We're excited to have you. And it's your first conference appearance since your IPO earlier this year.

That's right.. This is our maiden voyage, yes, so.

All right, we'll go easy on you. So it's been 5 months or so since the IPO. A fairly new company, but the firm has been around for 30-plus years. So can we just do 30 years in 60 seconds? Just give everyone a little bit of a flavor for the firm that you've built out and kind of what's unique about TPG for those that are less familiar.

Yes, absolutely. So we call it 30 years young at TPG. We -- our firm started -- essentially grew out of a family office and then ended up headquartering on the West Coast, which is, I think, an important dynamic in terms of the ecosystem that we live in and what we see day in, day out and how it influences our thinking about investing. We have essentially grown our firm by and large organically over the 30 years. We have now built out give platforms. I would say that just around the global financial crisis is when our firm started to become really a multi-product, multi-platform investing business. And we have prided ourselves on really being an investor-led organization, an investor-led culture. We're very sector and theme focused in terms of how we invest. Those things cut across our entire organization and cut across all of our platforms. We're a global firm. We've been in Asia since the mid-90s, actually. So we were one of the first to be there. I just came back from our Asia AGM last week. And it was a long week and a long trip to Singapore, but it was a great meeting. And we are -- we're at a point where we're $120 billion of assets under management. So among the big public firms, we are actually on the smaller side and -- but we feel like we're poised for some really interesting growth opportunities as we go from here. We are in the midst of a very important fundraising cycle at the firm, which is going well, by the way. And so we feel like we're at a point where we are at that kind of steep point of the growth curve in terms of driving scale, operating leverage and then ultimately continuing to drive and improve our margins over time. So that's who we are.

Great. And we'll dive into some of those growth opportunities as well. But maybe first, when you think about some of the reasons for going public, how is that playing out relative to expectations? What sort of new challenges but also opportunities does that present?

Yes. Well, going public for us was really the culmination of a kind of an evolution at the firm because I think we recognize at some point that with a founder-led, founder-governed organization, that it would be pretty important to think about having navigated through these first 30 years. I mean pretty important to think about the next generation of the firm, the next 30 years, and how do we set ourselves up for success. And as we thought about the reasons we're going public, we thought a lot about the importance of putting ourselves in a position to be able to be offensive and grow. We thought a lot about the -- what I think of as sort of the transition in equity ownership and alignment within the firm. And the founders put themselves in a position of redistributing equity, and we did that in a very purposeful way as we went public. So everybody in our firm, just as an example, participated in this IPO and was given stock in the IPO. And we redistributed in a way that kind of aligned with trying to make sure that people were connected around the organization. And now we obviously have a public currency in which -- that binds people across the firm. And we wanted to make sure that we were in a position where we had capital, access to capital, and we had a currency to be offensive about how we continue to think about growth. In my -- actually, this is the second time I've lived through a private to public. I was there at Goldman Sachs. I was on the Management Committee when we went public, and so I sort of had a ringside seat to that. And obviously, as the CEO of TPG, going public was a little bit more in the cold phase when we were doing this. But the -- one of the things that I've learned over time is that if you want to have the best firm and the best franchise, you've got to create an environment where you've got two things going on. One is that you can retain and attract the best talent. We're in a people business, a human capital business. And in order to do that, you have to have two things in place. One is that you have to create an economic opportunity for people. And secondly, you have to create sort of what I think of as kind of psychic income, where people believe they're on a winning team, there's going to be broad-based opportunity for people around the organization, and we're going to be offensive. We're going to be on the -- we're going to be on the -- we're going to be kind of front -- on the balls of our feet and front footed. And so as a result of that, the IPO put us in a position to be able to do all of that. And I'll say that post actually having done the IPO, it's really -- it's fascinating how quickly people adapt in terms of mindset and orientation and how quickly people realize what we need to do to be successful as a public company. And we spent a lot of time with our partners and our people when we were going through that in terms of the things that will be important so that our shareholders have a kind of experience that our limited partners have had with us over time. And so I feel, frankly, great about it in terms of -- even though we're navigating into a different market environment, I feel great about it in terms of sort of the energy and people's focus.

Great. You mentioned some of the products you're looking to raise here in the market. Maybe you can give a little bit of an update on that. But also, we've been hearing about some challenges that some are having in the marketplace around fundraising just given the crowdedness of many firms out there as well as LPs facing the denominator effect, particularly U.S. pension. So maybe you can just kind of help us think through what does that mean for the timing and magnitude of TPG's fundraises, particularly some of the newer strategies that you're looking to raise.

Yes, sure. Well, look, I think we're coming into this -- some people call it kind of our -- a super cycle of fundraising for us, particularly over the next couple of years. We talked a lot about that on the IPO -- at the IPO and the road show. We're coming off a period of time for the firm where we went into that or we go into that with a lot of momentum as an organization. I mean if you look across our strategies, our returns have been really best-in-class returns across the firm. And the other thing that I think is just important to point out in terms of the setup going into this is that the -- as we've navigated through this investment environment over the last couple of years, one of the things that was clear to us is that we were in a period of very substantial kind of frothy valuations. And I think you probably talked about this with other people, but how people are underwriting deals now, how people were underwriting deals in terms of thinking about valuations going forward, in terms of multiple contraction versus multiple expansions, things like that. And we're obviously doing all of that. One of the things that we did, though, which I think was important and tactical, and we probably did it to a greater extent than most of the other firms in the industry, is we really leaned into trying to be proactive about returning capital and monetizing a number of important investments across the platform and returning capital to our investors, because one of the things that you've seen in this cycle that we've been living through over the last number of years and ongoing is that people were investing at a pretty substantial pace and then coming back to the market for sequential fundraising. And eventually, what you're hearing is a little bit of indigestion aggravated by the denominator-kind of numerator effects in terms of people having not returned a lot of capital, coming back and wanting to raise more money. As a firm, I think we've got the sort of industry-leading -- if there's a ratio -- if there's such a thing as a ratio of capital return to capital invested, I think as a firm we probably got the industry-leading metric there. I mean as a firm overall, we've returned about 1.5x the capital invested over the LTM period ending in the first quarter. And if you go -- if you break it down by business, there are certain businesses like our buyout business, TPG Capital, that metric is over 2x. And so we tried to be -- as we were watching the market environment and as we were thinking about how to underwrite deals going forward, we tried to look at that and say, let's put ourselves in a position where we're actioning on these high valuations. And so we have a very long list of really interesting monetizations. But I think we were proactive about that, and that's now coming back to us as we've gone out to talk to our LPs about raising more capital. So that brings me to the setup in terms of fundraising. And our fundraising process so far, I think, has been quite successful. We are feeling -- I think we talked about on the last earnings call that we were confident that we would continue to have a lot of success in fundraising, and I think we continue to be confident about that. This year so far, we've actually completed two really important fundraises in terms of important growth drivers for the firm. So we completed our fourth fund raise for our opportunistic real estate fund, which is what we call TREP IV. We've hit our hard cap at $6.5 billion. That's almost a double from the prior fund. That business has a tremendous amount of momentum and really industry-leading returns. We've hit our hard cap on our first climate fund. And I'm sure we'll talk maybe a little bit more about that, but our Impact business, which is a very unique business at TPG, we really innovated the space, as you know, Mike. And we hit our hard cap of $7.3 billion on our first climate fund, which I think is the largest first-time fund probably raised in private equity. And so successfully completed both of those, hit our hard cap. We're now in the market with TPG Capital, our ninth buyout fund, and also accompanying that as Healthcare Partners, too. Our goal there is about $18.5 billion. We are going to do our first close very soon, kind of midyear. We would expect that first close to be successful and also indicative of momentum. And the first close, I think, as you know, relative to what we had talked about when we went public, is probably being accelerated a little bit. We're in the market with RISE III (sic) [ Rise Fund III ], which is our third Impact fund. We're targeting about $3 billion, and we will also be looking at a first close around midyear. We expect that to be where we want it to be. And we're in the market with Asia VIII (sic) [ Asia Fund VIII ], our eighth Asia fund. Our target there is $6 billion, and my guess is toward the end of the summer, we'll be doing our first close there as well. So I feel pretty good about the momentum. I think what we're seeing in the market is -- of course we're hearing the same things from U.S. pension funds that everybody else is hearing that I'm sure people have heard a lot about. People are slowing down their commitments within the pension fund world as a result of lots of funds returning to the market as well as this denominator effect. And -- but having said that, I think one of the things that we do see going on is we see a selection process going on, where LPs are making some tough decisions about who to lean into, who not to lean into depending on performance, depending upon sort of strategic, top-of-the-house relationships. In other words, what GPs do they want to focus on and emphasize. And I think I feel like we're in a period where you're going to get kind of positive and negative selection. And I feel like we're getting -- at this point, I think we feel pretty good that we're getting generally positive selection bias. The rest of the world is a little different. Asia is very situational in terms of some of the sovereign wealth funds there. But generally, I think we're seeing pretty strong demand there. And the Middle East, for a lot of reasons that are probably relatively obvious, is pretty flush with cash. And so there's a lot of -- there are a lot of commitments coming out of the Middle East. So anyway, we're on track.

Great. And I do want to come back to the Impact platform. But before we do, maybe we can just talk about the deployment environment here. Just given the volatility that we're seeing in public markets, it would seem that perhaps there's a lot more attractive deals out there today. But there's also some question around, hey, are these deals harder to get done just because of a wider bid-ask spread, prices haven't maybe -- seller expectations haven't maybe adjust, you have higher financing costs as well. So I just -- how does your deployment pipeline look today? What's your outlook compared to, say, 6 months ago? And how do you see that evolving from here?

Yes. Well, first of all, in deployment, there's a couple of sort of lead lags that go on with deployment. One is that if you look at the way we source deals and how we do our business, our approach to sourcing deals is generally -- it's a long cycle. We're not just -- I mean, most of what we're doing, because we're very theme and sector focused as a firm, we're developing relationships and dialogue with companies over a long period of time. Our focus is sort of what are we interested in, not what is actionable. That's an important dynamic in terms of what -- how we sort of do what we do at TPG. And so as a result of that, deals that we're working on now might have been essentially originated and the process began, in some cases, 6 months ago, 12 months ago. And that might have been the result of relationships developed over the course of several years and other deals. So that's really how we do what we do. So we're actually pretty busy working on deal flow right now. But by and large, most of that is the result of origination of opportunity going back a little ways. No doubt, we're in a period where we're seeing that sort of bid-ask spread widening. We're seeing that period where sellers -- some sellers are maybe starting to adjust because the pace of revaluation in the market has been pretty torrid. Some sellers have not, some sellers won't ever depending on their business. And from my -- just observing how the transactional activity comes together or not, we're definitely in a period where we think deployment pace is going to slow for a period of time. I think you've heard that from other people as well. When I -- thinking back to my prior life, my Goldman days, I mean, when you -- when we used to look there at sort of M&A activity and transactional activity, confidence is a big factor. People understanding sort of what's going to happen or having at least a view on what's going to happen is generally correlated with people's willingness to do deals. When people are uncertain, lack confidence and lots of changes going on, people pull back. So that thread continues all the way through into the investing environment. And so it's going to take a little while. I think to your point about opportunities coming, I would say that the way we invest and the things that we do, back to the point of like we focus on what's interesting, we're very theme oriented, we've followed these for a long time. I would say that our investing style is kind of purpose built for this moment. We look at things and look at different industry sectors. And they may be really interesting to us in terms of secular growth opportunity, where the world is going, but it may be expensive and it may be hard to find interesting opportunities. We're in a world now where competitive sources of capital have basically disappeared. The public markets, the IPO market kind of shut. I think we were one of the last IPOs actually of any reasonable size to actually get done. And so that's competitive -- so that's kind of gone. SPACs, dead, right? SPAC were reasonably significant competition for private equity for a period of time in terms of interesting assets. So we're looking at a world where if you're a company in need -- that needs to transition ownership structure, looking for investment capital, looking for growth capital, so where are you going to get it? Private equity is where you're going to get it. And so I think that we're pretty -- even though we're sort of all navigating day-to-day through a lot of this uncertainty, and we're going to obviously hear what the Fed has to say later today, we're actually pretty kind of energized. Even though stocks are down, our group is down, our stock is down, we're -- normally, that would probably depress you, but we're actually pretty energized.

And when we think about the deployment pipeline, what you guys are working on, maybe just give us a little bit of a flavor for some of the themes that you guys are investing into? And any particular areas that you're avoiding and maybe how that is evolving in this backdrop? Does this environment like lead you to pause on some areas and lead you to say, okay, maybe this is more interesting now?

Yes. well, I think -- so fundamentally, I mean, when you look at our firm, just to put it in perspective for everybody, on the private equity side, our firm is very growth oriented, okay, depending on what strategy you look at. If you look at the buyout business, if you look at TPG growth, if you look at Rise, if you look at Asia, we basically are a collection of hopefully what people think are interesting strategies across different growthy parts of the market, different size parts of the -- different size categories within growth in the market. And as such, we're really focused on certain sectors where we believe there's secular growth where basically there's a shift going on that will cause companies in those spaces to grow through the cycle. I think I saw some of the other commentary from other people that you've talked to over the course of this conference, and there is a common underpinning, which is that what people are looking for is whether or not multiples are expanding or multiples are contracting, if you own companies where you can drive revenue growth, drive EBITDA growth, you're going to be okay. You may end up with a -- you may end up generating a 22% return, you may end up generating an 18% return. Who knows exactly what -- depending on what that environment is in terms of when you're trying to exit. But you're going to be in pretty good shape on -- relative to anything else. Relative to the vintage, relative to public markets. So our style of investing is really focused on those themes where we believe there are secular growth and also a very engaged style of investing. We were one of the first firms to develop an operating group and operating approach. If you walked around our firm and you went office to office, you wouldn't be able to tell who's a deal partner, who's an ops partner. There's a very important integration and close connectivity in terms of how we invest. We evaluate deals that way, we diligence deals that way and then we execute on our portfolio that way. And so what we're very focused on is buying companies that we believe are well positioned in those industries, in those themes. They may be -- they -- a company may be in the right space, but because of the way it's managed, the way it's run, the way it's been run, it might be a B+ in an A space. Could be an A- it might be a B+, but it's in an A space. And we believe -- we call it bending the curve at TPG. We basically believe that we can engage proactively with a company, whether it is go-to-market capability, whether it's pricing, whether it's some expense rationalization, whether it's engaging or bringing them to new markets. There's a very high correlation in our portfolio between quality of CEO and successful outcome. And so in certain cases, obviously, we make changes at the leadership and management level. That's how we do what we do. So when you look at some of these sectors right now, obviously we're very focused on health care as a firm. And health care has -- I mean, we're probably one of the leading firms in the world in health care investing. And health care, as you, I think, all know, has many subsectors within it, but it's also a global theme. It's a theme that is interesting both from a kind of growth equity perspective. It's also an interesting theme from a buyout and a control investing perspective. And what we've done is -- we have this expression around the firm that we call kind of shared teams and shared themes, which is we work hard to keep the silo walls down, we move these ideas and these investing themes around the organization. So look, first is -- you look at what we're doing in health care in Asia right now. A lot of those themes were very present here in the U.S. 5, 6, 7, 8 years ago: contract research organizations, as an example; contract device manufacturing; generally quality of health care; hospitals -- hospital -- development of hospitals and critical care centers, things like that. So that -- so -- and we believe that's going to continue to be important. And health care, generally, is going to be an important, growing theme and a very large part of the economy. Another area that we're very focused on is what we -- what you might think of as software and enterprise technology. Software has obviously been a big private equity theme for a long time. We still think that when you look at the application of software technology across a range of businesses, we still think it has plenty of room to grow. And new areas like DevOps, as an example, or how do you manage all your software applications in a comprehensive way, so those are another example. Technology relating to transportation and logistics is another area that's very interesting to us. I mentioned before that we've been an innovator on the Impact side and on the climate side. The -- we're seeing an enormous push in terms of need for capital as well as technology development across -- in particular across climate-related solutions. Climate is probably now -- sort of think of that as like health care, software technology, consumer. There's a new -- think of climate as a new sector, completely new sector, climate. The amount of capital that will have to be deployed in order to begin to kind of knock down this climate crisis that we're in is going to be pretty extraordinary. I mean, the $7 billion fund, $7.3 billion fund that I mentioned, we've deployed already about $2 billion of capital. We're seeing an incredible flow of opportunity. So that's something that we think is a really interesting, systemically growing part of the market. Another area is EdTech. Going through COVID, right, you saw a pretty substantial shift in terms of how people get educated, the importance of that. EdTech is a booming area. It's now shifting itself. It's a global phenomenon as well. We just made an interesting investment in Asia in a medical health care education business. And so that's another theme that we think is really interesting and important. And then lastly, I would say another interesting theme has been -- and it's been -- it hasn't been easy to get invested, but we're seeing more interesting opportunities now, which is food, food technology and food safety, which is going to be a big issue for the world. And coming through this geopolitical world that we're living in right now, we expect it'll be -- there'll be more focus on access to food and access to safe food.

So you mentioned growth. It's a big area, a big theme of yours at TPG. There are some concerns in the marketplace amongst investors just given the sell-off in pure-play growth stocks, tech stocks over the past couple of months and even late last year as well. And I would also say some concerns as well but more broadly around the private markets that maybe haven't adjusted from a market standpoint. The concerns out there are around leverage, maybe even systemic risks. So I guess what's your perspective on that? Where are you most concerned if at all? Where do you think there's any sort of risk in the private markets but then also more broadly as you look at the financial ecosystem?

Yes. Good question. I mean I think obviously, in terms of public valuations, where you've seen the hardest reset are very ultra-fast growing, particularly top line companies that are not generating any profitability and that are capital consumptive right now in terms of them needing to go back to market for more capital. That's clearly where you're seeing the hardest reset. And probably for good reason because I think that valuations -- we've seen this cycle over the years. I mean I've lived through -- I started my career in 1982. I've seen a bunch of different crises now. And usually, there's a level of enthusiasm that can set into the market that gets a little bit carried away. That doesn't mean some of these companies aren't good companies eventually, but it got carried away and that's where we've seen the hardest reset. So on that -- from that perspective, I think if you're exposed to that part of the market and you're on the private side, you probably got a lot of work to do in terms of looking at your marks and your valuations and trying to figure out like how you want to mark your book. Our business has obviously very little of that. When you look at -- you look at our growth equity business. Our growth equity business is actually a really interesting business in that it's a combination of both control and noncontrol investments. But in every case, in virtually every case, we're in a position of governance or control in some way. Either we have a couple of seats on Board, we have negative controls. And we often, in our growth equity business, have a fair amount of structure underlying our investments. So top of the -- it's top of the equity capital structure as an example, kind of ratchets and warrants and things like that. So if you look at our -- it's interesting. We -- Mike, you asked about fundraising. If you were to dial the clock back a year ago, 2 years ago and we were out in the market fundraising for our growth equity business, what people would say is your returns are great, but over here, these firms that are investing in these high-growth, rapidly scaling companies that are not profitable yet, those returns are much higher. Well, today, if you took a snapshot of that, our companies are still growing through the cycle, still generating -- still growing on the top line, still growing on the EBITDA line. And we'll continue to, based on the sectors and the themes that we're involved in, but unclear whether or not companies that need to fund every 6 months in order to keep themselves growing, unclear how those companies will fare going forward. Certainly, some of them will not fare well. Some of them will fare better. But now when you look -- when people are now absorbing and digesting our strategy and growth, some people are coming to this idea that there's sort of a difference in our strategy and it's kind of like -- we call it sort of all-weather growth in a way that will kind of grow and continue to be viable through the cycle. So I think that -- so as we think about marking our book, obviously we're using public inputs when we mark our book. We have third-party oversight in terms of how we -- how our marks look. And we obviously have a very deliberate process of how we look at gauging growth, where that is and how we want to mark our book. So we feel pretty good about that. We feel pretty good about as we've reported at the end of Q1. We've had -- I think as a firm, we had about a 7% value creation across our book. If you took out deals that had actually been signed to be sold, we were at around 2% value creation in a market where public markets were down. And I think we feel pretty good about the -- that dynamic. So there was a second part to your question. Well, I forgot what it was.

That's okay. We only have a few minutes left, and I do want to touch upon Impact, which, I think, is a real important differentiator for you guys at TPG. You were early to it, launching the platform in 2016. You have $14 billion of capital in the Impact platform. So maybe just in the last couple of minutes that we have, so just quickly, maybe just give us a sense for what led you to start the platform. What did you guys see back 6 years ago that others were not seeing? And maybe talk about your vision for the Impact platform as you look out over the next 5 to...

Yes. Well, 6 years ago, it was 0. And today, it's about $15 billion of assets under management. One of the things that we saw around 6 years ago was that, first of all, what we were seeing in our -- mostly through other businesses that we had and particularly our growth business, we were meeting and investing in a lot of entrepreneurs and CEO leaders of companies that were trying to build purpose-focused or mission-focused companies. And one of the things that we found is that when we started to talk to them about being a capital partner to them, we found that they actually cared a lot about who their capital partners were, what sort of the ethos or ethics of the firms were and what could we do besides give them capital, what could we do to help them grow and achieve their mission. And so it was clear to us that there was something going on in the market where purpose- or mission-focused companies were also getting, in some cases, disproportionate share of demand from the market. Consumers cared what companies that they were basically engaging with. B2B cared who they were engaging with. And so we looked around and we found, you know what, there's this impact investing category. Funds were $150 million, very undersized. And there was nobody essentially doing this at scale or institutionalizing the asset class. So we saw an opportunity. We partnered up with some people that cared about this a lot. Two of the -- we brought together what we call basically a founder's Board of our Rise business, Bono and Jeff Skoll, who were very passionate about this. And we evaluated the market. We realized we could basically do this at scale. We launched the first Rise Fund, which was a couple of billion dollars. Contemporaneous with that, we realized that one of the things we'd have to do is we'd have to be able to develop some rigor about how do you measure impact, because what we were doing is we were launching a business that was going to be essentially a dual-underwriting exercise. One is underwriting financial returns; and secondly, underwriting impact. And so what we -- and importantly, it would be nonconcessionary return investing because we don't think it's sustainable unless you're investing for the same kinds of returns or better. And by the way, it's turned out to actually be better because these companies continue to attract attention, attract capital. But we figured out that -- so we have to have this dual underwriting essentially. We call it kind of colinearity, which is both superior financial returns and also impact return. So we developed something called Y Analytics. And Y analytics is essentially an entity that's in Washington, D.C. that's dedicated to measuring impact. And we created an impact measurement that's essentially in financial terms. So when we underwrite a company in Rise, we have -- we evaluate the -- what we think is going to be the return, well, we expect to be multiple of money. And then our impact measurement is formulated as the impact multiple of money. $1 invested in a company will create some quantifiable dollars of output of impact depending on the impact pathways for a company. And we look at a company and we say, if a company didn't exist, okay, versus company existing, what's the difference and impact it's having. And again, for different companies, we evaluate it based on research that exists. So nutrition, education, financial inclusion, obviously climate, these are all the spaces essentially that we're underwriting, and we're underwriting a different form of impact depending on where that is. So what's happened is it's obviously become very successful. The thing we didn't anticipate is we didn't anticipate that we would get positive selection from entrepreneur, founders and CEOs when they're looking for a capital partner. And because of the distinctiveness of what Rise is and the fact that we have a separate brand, an identifiable brand with rigor around our measurement capability, we have companies that are basically 7, 8, 9 firms wanting to fund them and essentially proprietary deal flow as a result of that. So it's been -- that's been the biggest surprise, I would say, since we built it. We're now raising our third Rise Fund. We've actually had our first series of exits over the last 12 months out of our -- out of Rise I and II. And obviously, we've extended that into climate because what we saw was that if we just did all the climate investing at a Rise, it was quickly going to take over the entire fund because the capital requirement is so large. So that's why we dedicated it to a separate vehicle. So we think that there is essentially kind of a tidal wave of capital trying -- coming at the Impact business, and we're by far the market leader in it. And we feel we have a very special position in it. And so it's going to be a really interesting growth driver for us in the future.

Great. I'm afraid we'll leave it there, Jon. We're out of time.

Okay.

Super. Thanks so much.

Okay. Thank you.