TPG Inc. (TPG) Earnings Call Transcript & Summary

All right. Why don't we go ahead and get started here. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. The taking of photographs and the use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. . All right. With that out of the way, thanks, everyone, for joining us at the Morgan Stanley Financials Conference. I'm Mike Cyprys, Equity Analyst covering brokers, asset managers and exchanges for Morgan Stanley Research. And it's my pleasure to welcome Jon Winkelried, CEO of TPG. As many of you know, TPG is a leading alternative asset manager with over $130 billion of assets under management, I think $137 billion now, across private equity growth, capital impact real estate and market salutes. So, Jon, thanks for joining us.

Thanks, Mike. Appreciate it.

And appreciate you coming out here from the West Coast as well. So why don't we start off with Angelo Gordon transaction. You guys announced that back a couple of months, I guess, 2 months ago or so. It's been generating a lot of conversations with investors. So it's $2.7 billion transaction, big equity -- big part of the equity story going back to the IPO, I remember with you guys was about further extending the brand using the stock as a currency to expand the platform with an eye towards credit. So great to see you executing on this. But maybe we can go a little bit behind the scenes, a little bit more of the origin story around how the deal came about. So how did the initial conversations come about? How did the relationship progress over time as you kind of went through those conversations? And what stood out to you in the AG dialogue compared to other targets that you were engaging with?

Good. Well, I guess to start off with, I think deals like this is -- won't be surprising to anybody deals like this are hard to do. And so -- but we had been pretty clear even before the IPO that we wanted to continue to think about diversifying our platform and credit is something we knew and we felt like just based upon how we invest, what was going on in the markets, the prospect of capital formation going forward. The partnership that we have with LPs, we felt like being back in the credit space was very important to us. So we had said that -- we said that publicly when we went through the IPO process. As a result of that, we had a lot of inquiry. So we had a lot of opportunity to get to know and get to, if you will, kick the tires with a lot of different managers in the market. We met Angelo Gordon 14 months ago. So this goes back quite a long ways. We were introduced by someone that knew us mutually in terms of what we were looking to do. And Angelo Gordon importantly was not for sale. And so we got introduced. We started talking about what their journey was looking like, what they were trying to accomplish in the market, what we were trying to accomplish in the market. I think the first thing that we really look for and we were kind of very attentive to was just culturally, the alignment between the 2 firms. How did they do what they -- how did they invest? What was important to them in terms of their growth trajectory going forward? How are they looking at market themselves, the competitive environment, the competitive dynamic. And we honestly spent almost 6 months before even talking about deals in terms of what we could do together. Just really serially meeting with 1 another. I met with them a number of times. I also brought in a number of other people from our firm, expanded the group of people that we're getting to know them, they did the same thing over time, probably in a slightly more limited way. And to put it in perspective, Angelo Gordon, a 35-year-old firm, started by 2 founders. The 2 founders, when we showed up and going to dialogue with them, the 2 founders had already been out of the business for a while, they were progressively essentially buying the business back from the founders, buying the business from the founders. And the business had transitioned leadership to the 2 co-CEOs, Josh Baumgarten and Adam Schwartz. And they had brought in and recruited a number of people from around the industry that had strong backgrounds in various different strategies. And they've built a multi-strategy credit platform. The thing that was attractive to us as we got into it was besides the cultural fit. What we really liked about it was that it was a multi-strategy approach to the credit markets. And as we know, given what's going on in the market today, credit business is not just one -- when people talk about private credit, that means a lot of things in the market. There's the direct lending business, which is essentially the migration of deal-making or deal financing from Wall Street to the private sources of capital, there's what we think of as credit solutions or essentially things like used to be called distressed, now total return or opportunities related investing on the credit side, particularly given the world today and dislocations going on. They have a structured credit business as well, which essentially is asset-related financing. They have a real estate business that's regionally located around the world. We have a net business in that on the real estate side, which is essentially another form of financing business. So as we got more into it, what was also attractive to us as we thought about our reentry into the credit space was that it was a multi-strategy platform. And once we got deeper in terms of their relationships, our relationships, it became very clear that there were a lot of built-in synergies between our 2 firms. Just to give you an example, we have 550 institutional LP relationships. They have 400. We only overlap on a 100 of those relationships. Since we have announced our deal, we've already started to engage on our side. We've already started to engage with a number of our relationships where they clearly want to and are interested in engaging with us on the credit side of the business as an example. And so there were clear synergies in terms of helping them build their business further and then deepen our partnership with our LPs. So that's kind of how it got rolling. It was very clear sort of that we were starting to -- that we were -- that we thought a lot of like in terms of how to grow the business, what the opportunity was going forward. Very good with those LP synergies, be clear that us bringing Angelo Gordon in under the TPG tent given the quality of both brands would also then create new opportunities for us to attract capital that we might not have all the tools today to attract. So take insurance, as an example. Number of inquiries that we've had on the insurance side to do things like IMAs or particularly on the annuity side. We now have a toolkit as a result of the Angelo Gordon transaction that allows us to address some of those opportunities. So that's how it got going. It was very clear there were a lot of opportunities. Then we sort of got to the process of deal-making. And I think the one thing, and then we can move on. But the one thing that was really important was it was clear that they wanted to become part of our firm. It wasn't set up to be something where we were acquiring something that would then be sort of a walled off separate subsidiary, if you will. They wanted to be part of the TPG platform. And so they wanted to be part of the platform. They want to [ trend ] they wanted to essentially exchange their currency for ours. So folks that are coming along with the deal essentially in terms of the consideration paid, 85% of their consideration is stock as TPG stock. So they're sharing in the same currency essentially that we all share in at the firm. So there was a lot of things that kind of were right about the setup of the deal. And so obviously, we're able ultimately to agree on terms.

And what's been the feedback from stakeholders as you think about whether shareholders, customers, employees, anything in particular stand out that maybe you'd like to address?

Yes. I think -- so let me take that in 3 parts. I think, first of all, importantly, when I think of our stakeholders, I think of our employees on both sides, I think of our shareholders, and then I think of our LPs. And so let me take it in those 3 parts. First of all, internally, I think that there were an increasing number of people as we got close to announcing a deal internally at both firms that knew about the deal. I would say that when we announced it and people absorbed what was happening, I would say the internal reaction was excellent. We immediately -- we had -- we're well planned out in terms of the initial engagement with one another, getting together town halls, all the kinds of things that you do. I would say that the overall reaction internally on both sides was very, very good. Shareholder reaction, we had a number of shareholder conversations post announcement. I would say, overall shareholder reaction has been very, very good. In particular, I think people -- we try to be very transparent, as you pointed out, Mike, with respect to what we were trying to accomplish in broadening our platform. So I think people felt good about the fact that we have executed on something that we consistently said we were going to execute on. I think from here, shareholders are obviously interested in how is it going to work? What kind of synergies do you see? How you're going to create value. Execution risk in terms of bringing 2 human capital organizations together, which is not a trivial thing to do. So I think shareholders are appropriately wanting to know more detail about the transaction. wanting to understand more over time in terms of the price we paid. Is it a fair price, which I'm convinced that as people see what happens over the course of -- we're going to close this transaction towards the end of '23. I think as people see what's going to happen over the course of '24, I think the more people see, the more people believe that it's -- we paid a fair price, and there's a lot of value inherent for shareholders. And then on the -- and then -- but appropriately kind of a bit of a -- let's see you execute, which I think is more than appropriate. And then on the LP side, I think the reaction has been overwhelmingly positive. I think a view that both organizations are very high quality in what they do. I view that there's lots of natural synergy between it. A lot of confidence that we'll be able to pull it together in terms of the cultural fit of the 2 organizations. And as we've talked about before, our biggest LP partners want to do more and more with us. By the way, including some of the big channel partners, like Morgan Stanley as an example, who have said to us, we're distributing product through the Morgan Stanley system, as an example, I think more and more firms like Morgan Stanley are looking for channel partners that have multiple strategies that they can offer their wealth management clients. So I would say overall that the reaction has been very constructive and very positive.

Angelo Gordon adds a full range of capabilities, as you mentioned, across real estate and credit. But which ones do you see the biggest runway for growth? And on a combined basis, where do you see the most exciting opportunities?

Well, let me start in reverse with the -- on a combined basis. I think on a combined -- so when we think about what we can do together. One of the things that's really interesting about the way we invest as a firm right now across the whole private equity complex is that we -- as you know, we are very sector focused. We're thematic investors. We're deep in terms of understanding our companies. We have the opportunity as a result of focusing our efforts on seeing a lot of different companies in the market, some of which, obviously, we don't own now, but we know a lot of companies in those sectors. One of the things, given the dislocation in markets, we're clearly seeing is opportunities to do things higher in the capital structure, right? Raising equity at various prices may be more challenging today. Companies need liquidity. Companies need liquidity to grow. Companies financial sponsors want to return capital to LPs. So there's clearly some interesting opportunities higher in the capital structure. We have some inquiry ourselves from LPs of ours that are interested in what I call kind of hybrid opportunities. Like let's call that sort of low to mid-teen type returning vehicles. This gives us the ability with a credit platform like Angelo Gordon, they have a, what they call credit solutions business. which is looking for total return opportunities across capital structures, across industries. It's run by again named Ryan Mallett that originally came over from GSO. It's an interesting opportunity for us to do some things together. We can co-source opportunities. We can work on how we think about risk reward of certain opportunities. Again, we've already had some inquiry from our own LPs that who want to put money to work in that category of risk and return. Our generally or pools of capital, maybe with the exception of tech adjacencies, which is more of a hybrid pool of capital. Generally, our capital is higher return. So it gives us an opportunity to co-sponsor some opportunities. That's just one example. I think when you look at their existing businesses, I think there's lots of opportunities for growth in those channels. I mean I already mentioned credit solutions in terms of just kind of sizing that up. When you look at their direct lending business, they have a business called Twin Brook, which is located in Chicago. It's a lower middle market direct lending business, primarily sponsor finance. And what they do is they have a very similar focus to what we have from an industry perspective, they're one of the larger health care investors at that end of the market. So there are opportunities, I think, to do more together there. I think that the business currently is somewhat capital constrained. I think we can help on the capital formation side in terms of expanding the pool of capital available to them. Then the other interesting opportunity there is they're financing companies that are sponsored back in generally the range of about $5 million to $30 million of EBITDA. And in some cases, they're the lender to these companies for 3, 4, 5 years. As these companies grow and get to the next level, right, where they may be looking to go from structured, they may be looking to go from a lender like Twin Brook, which is basically focused on covenant protections, et cetera, into a world that might be more cov-light as you, as companies get bigger, there's clearly a question as to how can we stay with some of these companies for longer. And so that's an opportunity for us to think about expanding the platform in some way. That's another example. The other area, I think, which is really interesting is structured credit. I think if people are paying attention to what's going on in the market right now, I think one of the phenomena that we're going to see evolve in private credit is something similar to what's happened in sponsor finance, which is basically financing capability moving from Wall Street or banks over to the private capital side. I think in structured and asset-related financing opportunities, particularly given what's going on in the regional banking system right now and the contraction of the provision of credit there. I think in terms of asset-backed financing type of structuring, I think there's a big opportunity that's available in private credit there, where you're going to see a similar formation of capabilities around opportunities like that. And the structured finance business, the structured credit business at Angelo Gordon is already doing some of that. I think we can continue to build on that going forward. And then lastly, on the real estate side, they're in places on the real estate side that we're not. So for instance, they have an Asia business that they've had for quite a long time. It's been very successful. I think we can -- we have an Asia private equity business. They have an Asian real estate business. I think there are some things that we can continue to build on there. They have a net lease business, which is in this environment is an interesting enhancing vehicle for companies, particularly midsized companies, we do not have a net lease business. So there's a bunch of opportunities, I think, to create value.

And you've talked about running Angelo Gordon as a more integrated part of TPG than perhaps Sixth Street was, which was your former credit business that you've since have parted ways. So what lessons did you learn from the Sixth Street experience? How did that factor in the transaction and the integration?

Yes. Well, the basic lesson is that Sixth Street operated essentially as an independent platform. And so -- and as a result of that, when you run sort of as an independent platform underneath the kind of the overall firm umbrella, there are naturally things that are harder to do with respect to synergies and realizing the benefits of kind of a combined platform like that. Just simply -- something as simple as incentives and incentive structure in terms of sharing economics, how do you cross incentivize people to work together. It's harder when you have kind of a walled off business relative to the rest of the firm. So we've learned some lessons like that. I mean Sixth Street as a -- honestly, is a fabulous platform. They're out on their own. We disaffiliated -- but we did learn some of those lessons in terms of what we want out of a integrated credit platform. So when we started talking with Angelo Gordon, this -- the kind of the foundational principle was integrated into our firm. Oversight -- in terms of management oversight, governance of the platform, think of it this way -- simply this way. We have currently 5 platforms in our firm, they're all managed and governed the same way. Think of Angelo Gordon coming in as the sixth major platform of the firm. Manage, govern, et cetera, all the same way. Having said that, of course, as you know, Mike, we in terms of how we invest, right, each of our businesses, each of our platforms have investment committees, they have delegated authorities. They're investing their money with investment committees with the leadership of those businesses. Angelo Gordon will be no different. There'll be deleted authorities. We're not going to change the way they invest. We're not going to change the way they make decisions. What we'll do is we'll will work together to try to grow the platform. We'll work together to try to challenge one another in terms of what else we can do. And that's the way we run our firm, and that's the way we'll -- Angelo Gordon is coming into it.

What are the areas we've not yet addressed and spoken to, which excites people is that it progresses your capabilities in the private wealth channel in particular. So can you talk about the retail product set that's coming aboard, the distribution capabilities coming, where there might be white space to expand? And what are some of the steps that you guys might be able to take to expand your presence in the private wealth.

Yes. No, it's a good question because I think if you look at the business today in terms of where Angelo Gordon has built to, one of the things that they still have plenty of white space on is evolving their liability structures and their product structures to appeal to the wealth channel overall. There's a small percentage of the business now that essentially you would look at it and say they are sort of semi-liquid products that have -- that are open-ended that are structured in the way we know private wealth likes to engage in these products. So some level of liquidity available, yield-oriented investments that are basically creating cash flow opportunities and across a range of different risk spectrums. The good news is that Angelo Gordon has the risk spectrum. They have whether it's the direct lending product, which lends itself, obviously, to things like BDCs or interval funds, whether it's the credit solutions business, where that could be a feeder and some of the opportunities could be a feeder to something like a yield-co that might be sort of like a best-in-breed product from different strategies around Angelo Gordon. And then lastly, I would say, on the real estate side, real estate debt, as an example today, I think, is a very, very interesting opportunity. I think we've talked about the fact that TPG has been building and has in the market a fund that we call Treco, which is a real estate credit opportunities fund because of the dislocation in that market right now. But again, over time -- and I don't want to sound like a broken record on this. But again, what's going on with respect to the provision of credit or the availability of credit as a result of the regional banking structure, what's going on there, more constriction in terms of their ability to do things, probably consolidation coming there. The real estate lending infrastructure around the country is highly dependent on the regional banking system. And so there's going to be opportunities there to do more in terms of originating the real estate credit product, and that's also potentially an interesting structural opportunity for private wealth. So I think there's a number of places that we'll be able to be a more important partner and a more important player in that part of the market.

Great. Why don't we shift and talk about fundraising. We've heard from several money managers, including yourselves about a bit more challenging environment for fundraising. You recently gave updated guidance around your expectation now for $23 billion to $24 billion of fundraising across your flagships, which is about 10% growth in aggregate over the predecessor funds. So a 2-part question here. First, talk a little bit about what you're seeing in the marketplace and how that has influenced the new guidance that you put out? And then what gives you confidence in the achievability of that guidance? And are you assuming any sort of improvement in the backdrop?

Yes. So I think that generally, in terms of an environment, I don't -- I guess what I would say is relative to what we said at the end of our first quarter call. I would say that fuels and looks the same to us, no real tangible change, I would say, just in terms of how the environment feels. I think that for us -- and I don't think this is different than any other firms right now. In terms of -- on the private equity side, in terms of raising capital, there's -- I mean we know, I mean the market is over allocated. The I think LPs generally as a result of that, are looking to try to differentiate and distinguish where they're going to actually allocate private equity capital. What we have going for us in that respect is a couple of things. One is were unusual, and we stand out in terms of generally the return of capital that we provided to our LPs. Our DPI has been very strong across our platforms. We've managed our business very specifically with respect to that. We've talked about when we went public, I think you had heard that, we were returning more capital than we were investing. And that's helped us a lot just in terms of LPs appreciating the fact that we have recycled capital to them. So as a result of that, I think it's been helping us. That said, I think it's been a very deliberate effort at our firm across our entire organization. And I can tell you that the top of our organization myself, Jim Coulter, Jack Weingart, Todd Sisitsky, the leadership of the firm generally very engaged in this fundraising process. I mean I have lots of LP meetings focused on this question of targeting different commitments that we're looking for. We just got -- I just got a call from a relationship that I have in Asia that finally made a commitment of multiple hundreds of millions to our Asia rays. I mean -- but it's basically -- I would describe it as hard thought, okay, hard thought. And we're -- but we're trying to be very targeted on the commitments that move the needle in terms of these capital raises, in terms of some of the bigger pools of capital out there in the market. So we feel like we're progressing the way we describe at the end. Things that I'm seeing that might be interesting in terms of how the environment could be changing. One is that we are hearing more from large LPs of increasing their allocation to private equity because they're either fully allocated, but they don't want to miss out on this vintage. So we are seeing some people proactively increase their level of commitment. Number two is -- and by the way, it takes time for that to come through and manifest itself. Number two is people trying to actually sell over older vintages. You've seen a fair amount of activity going on in the LP secondary space. A number of large institutions have actually already completed sales of older vintages to free up capital for newer. So we're definitely seeing that as well. So -- and that combined with the fact that when you look at the schedule of the number of funds that have been in the market from '22 into '23 and some of the LPs basically saying, look, we're not just going to give extensions forever, okay? So call it invest the money -- I think what you're going to see is a number of these fund raises, a number of the funds that are in market tapering off by the end of this year. So I think '24 is looking like a more interesting year in terms of who will be out there, who will be raising. And there might be a little bit of a breather in the market by virtue of the kind of timing and those forces coming together. So I do think that there's kind of '24, '25, I see sort of a bit of a reset going on in the market. Now obviously, all of that depends on valuations, volatility, what happens generally in terms of the market, but I do see a little bit of a breather there. We don't see any abatement right now in terms of allocations on the private credit side. All the LPs that we're talking to are continuing to move fixed income allocations over to private credit. And I think that train is still moving along pretty well. And I think that -- I think the private wealth side, I think, we're generally seeing overall a more cautious attitude in terms of allocations to private assets generally, even private credit to some extent. I mean, they're still allocating, but even private credit to some extent. So anyway, I think that's what it feels like.

Great. Maybe looking beyond some of the near-term dynamics you mentioned '24, '25. Maybe you could speak to what the product road map looks at as you take a multiyear view at TPG?

Yes. I think -- so we've been through a pretty big cycle of capital raising. We have something like a private equity side, $45 billion of dry powder. Deployment, I would say, generally, is slower. There's probably one fund -- there's one business in our firm where deployment is about level with what it was last year, which is climate and impact. Outside of that, I would say deployment everywhere is down. That's, I think, consistent with what you're seeing around the industry generally. Markets are just still in that phase where people either have less confidence as what -- in terms of what the future is going to hold. So M&A level activity, M&A activity generally is down. Sponsor-to-sponsor continues to be spotty because of -- in some cases, sponsors wanting kind of old prices. So I would say that the capital that we've raised generally, and this is true of the industry. I also think, generally, will probably last a little bit longer than it otherwise might have or certainly the last vintage or 2 has generally been the case. And so on our docket in terms of how we're thinking about capital formation, I would say that -- and we've talked about some of this. For us, the next year or 2 is likely to be focused more heavily on some of the newer strategies that we've introduced to the market, where we're still in a capital formation phase. So for instance, we've talked about climate and evolving ourselves into a lower return, more infra like pool of capital, and we're still working on that. And we'll have more to say about that probably by the end of the year. We're in the market with what we talked. We talked about real estate opportunities, what we call Treco, which is credit real estate credit opportunities. We think the environment is really interesting for that. We're in the capital formation stage of that, and we will probably continue on with that into next year, and we are making progress on that. And then lastly, the GP solutions market, we've talked about, we call it TGS, which is continuation vehicles. There's been an explosion of activity there. Partly because of what I just talked about a minute ago, where sponsors are now less inclined to liquefy their investments at these kinds of valuations. So there's more stickiness there. So things like continuation vehicles. There's been a lot of inquiry. We've been raising capital for our first fund. We've already done 4 deals in our first fund. We did the largest continuation vehicle this year in Europe that's been done to date, which we led partly out of allocation from our first fund, as well as co-invest with LPs that are coming along with us. But there's -- we continue to see the inquiry level there, pick up a lot. So that's kind of our focus in terms of what I think we'll be looking at into '24 besides, obviously, once we get the Angelo deal closed. And I think we'll have a lot of focus on expanding those capital pools.

You mentioned deal activity being a bit softer. But maybe you could speak to what are some of the areas that look attractive for you guys are actually deploying capital into right here now?

Well, there's a couple of really interesting things going on in the market. One is -- and I think this has been -- talked about just in the M&A press as well, which is larger companies continuing to evolve and adjust their portfolios of assets and companies. And so there's been an increase in the interest in things like selling pieces of larger companies, selling pieces of their business, companies spinning out. We're doing partial dispositions, things like that. That's kind of a stronghold for us. We've had a long built reputation of being good partners for companies looking to do that, looking to do corporate carve-outs. And so it's an area that we continue to spend a lot of time. This on -- this year, we've done a couple of them already. The one that we recently announced was acquiring a company called OneOncology, which we did in partnership with AmerisourceBergen. That's a classic example of the TPG style deal where what we were able to do is partner with AmerisourceBergen, who ultimately wants to own that company and likely wants to own that company in its entirety. And we structured basically a put-call arrangement where we have the ability to put our equity to AmerisourceBergen, which is an investment-grade company at a 15% downside rate of return. In this environment where you have the uncertainty that we're facing in terms of valuations in terms of volatility, interest rates increasing, will there be a recession, will there not be a recession. That's an example of a deal structure we really, really like. We did that before. You might remember, we did with Humana on Kindred, which was a very successful outcome for us in terms of an exit where we exited the company to Humana. So that's an area of really -- that's an area that I think generally in terms of the carve-outs that we're very interested in. There has been more -- obviously, there's been more activity and interest in take privates given public market valuations coming down. I think there's still -- there are a few situations that we continue to look at there. They're harder to get done in some respects, but I think it's been an area that's interesting. The other thing that we're seeing is we're seeing sponsors similar rationale to what we talked about with continuation vehicles. We are seeing sponsors look to do things like cell co-control in companies. Typically not something you see. It's not as common. But because a number of sponsors are saying, I do need to return some capital, but I don't want to completely exit the company. There is a lot of dialogue around co-controlled deals. And what tends to happen is they tend to be more bilateral because sponsors want to work with other sponsors, they have experience with in a co-control situation. So those tend to be more interesting from a valuation perspective. So I think that's an example. On the Climate side, we continue to see a robust flow of really interesting opportunities in a number of different transition -- energy transition categories. So we've been fairly active in the climate fund deployment there, I would say, is kind of on pace. Real estate is a place where deployment is well off its pace because of the dislocation of the real estate markets. As you know, we raised a fairly large real estate fund and opportunities fund, which is close to $7 billion of capital. We're about 7% deployed on a normal pace. In real estate right now, we'd probably be 35% deployed. We have proactively controlled our deployment because we feel there are just going to be a number of much better opportunities as things continue to unfold. Where we are looking at deals, I would say 2 areas, as an example, would be things like data center, where we think the surge in things like AI and the data requirements around that, I think we continue to view that as a very kind of well protected part of the market. Another example is student housing. And so there are deals that we're kind of involved in those 2 categories. Other areas, we're frankly a little bit more cautious in. I mean industrial as an example, which has been a very popular sector, we've been a little bit more cautious recently in. Multifamily, we've been a little bit more cautious in. We will see good opportunities there, though. And so we have a lot of capital to deploy. So those are examples.

Great. We're just about out of time. Final question, as we heard full range of opportunities you guys are excited about, TPG rounding out the platform here with Angelo Gordon. I guess as you look out over the next 3 to 5 years, more medium to long term, what's the voltage for investors? Why should investors buy the stock here?

I think we have -- we're building a very unique platform in the ALT space. If you look at our brand as a global brand that basically right now, it's TPG stand-alone, $137 billion of assets, bringing Angelo Gordon in another $70 billion or so, a $200 billion platform. We still have a lot of runway in front of us. But looking at our platform on a combined basis, we'll have a pretty unique picture in terms of a robust set of businesses where we have -- where we don't have dependency in one particular sector, private equity, credit strategies across a range of strategies, real estate, and then what we call market solutions, which is capital markets and some of these newer spaces like secondaries -- secondary activity in the market. It's a pretty unique collection of very strong franchises across the broader range of opportunities. And our abilities now to bring those 2 franchises together, have those 4 exposures in the market at a level where we have a lot of capital to deploy, and we still have a lot of white space in front of us in terms of building into some of these flows like the credit area, like the real estate credit area as an example. I think we're incredibly well positioned as a firm over the next 3, 4, 5 years. I think you picked the right kind of horizon, Mike, because I do think that it naturally takes time to integrate a transaction like this. I think we have a very robust plan to do so. We will do a great job of that. I think that if you look at, therefore, the drivers of growth in our industry in terms of being a valued and important partner to the largest pools of capital in the world. I think if you look at the number of firms that are positioned like that in terms of distribution of risk across the spectrum, there are very few firms like that. I mean there are some great firms out there, but if you look at the distribution of strategies and the diversification inherent in those and your ability to be a best-in-class partner to the largest pools of capital, I think there's sort of -- I don't know, 4 -- call it, 4 firms that are distributed like that across the various risk return spectrum. So I think we're in a very unique place. I think we have opportunities to continue to do things strategically. We've structured our balance sheet still even post Angelo Gordon in a way where our balance is still quite flexible and well capitalized. So new frontiers for us like insurance as an example, as a result. So I'm very excited about our prospects.

We'll have to leave it there.

Okay.

Thank you very much.

All right.