TPG Inc. (TPG) Earnings Call Transcript & Summary

Before we get started, for important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. Taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to Morgan Stanley's sales representative. With that out of the way, good afternoon, everyone, and thanks for sticking with us here on day 2 of the Morgan Stanley Financials Conference. I'm Mike Cyprys, equity analyst covering brokers, asset managers and exchanges from Morgan Stanley Research. And welcome to our fireside chat with TPG, and we're excited to have with us here today, Todd Sisitsky, the President of TPG. As many of you know, TPG is a leading global alternative asset manager with over $250 billion of assets under management. Todd, thank you for joining us today, making the trip out here.

Thank you for having me.

Great. Well, look, you've been President of TPG since its inception and have led -- co-led the health care investing practice. Can you talk a bit about how your role has evolved over the years, how you're allocating your time today? And as you reflect on the journey of TPG over the years, what lessons learned stand out as you've built a $250 billion leading alternative asset manager with global footprint.

Absolutely. Again, thank you for having me. I'm excited to be here. I have been at TPG now. I'm in my 23rd year. I've been there 22 years longer than the furniture, really have grown up at the firm and grown up, as you said, on the private equity side. The only continuous job I've had that entire period is investing in health care, but the role has evolved quite a bit over time. I became President of the firm right ahead of our IPO. I was the first President, even that role has evolved. In context of my firm-wide responsibilities, I've co-run the Management Committee and the Partnership Committee. I've been involved in leading some of our really important initiatives, including the Angelo Gordon acquisition, which I led with our CEO. And then I'm focused on some of the areas that we're trying to really develop strategic growth plans, including places like Europe and then some of the businesses that are growing nicely, like our secondaries business where I support the team. So I've had a number of firm-wide responsibilities, but maintained a lot of focus on investing. I think actually when I was asked to be President, one of the primary reasons was not just my historical experience as investor and hopefully credibility as investor, but also my ongoing passion for investing. And ultimately, the job as President in all of our jobs is just focusing on investing excellence. And I would say one thing that is interesting about TPG, I think it's been a real positive is that nobody retires into middle management. We're all on the front lines. That's part of how we think about ourselves. It's how we evaluate one another. And that has certainly persisted for me. I can tell you also that my credibility as investor allows me to do things as President that I think to your question about reflections on what has been the core part of our DNA, but I'm able to sort of continue to push these things that I think are already strengths of the firm. One is this continued and singular focus on performance and making sure that you are distinguishing yourself in every asset class which you're involved, focusing on the areas where you have a competitive advantage, always thinking about your strategy and pushing strategy in the same way that you're pushing your investments, the portfolio of companies that you invest in to think about their strategy. And I think that, that's the only thing that gives you right to grow as an asset manager is really what you're delivering for your partners. The second thing I think is even perhaps more distinctive to us is this focus on collaboration. That's been really an exciting part of TPG. We've had some of our greatest success in the themes between sector teams, in the collaboration between businesses. As we've added Angelo Gordon, as we added our credit business, expanded our real estate business, we found some incredible opportunities to -- essentially to unlock investments that would otherwise not be available to us in other business units by working together, the DIRECTV, DISH transactions. There were actually a series of opportunities there. We were a great example of that. That as an investor, as a deal guy, that gets me really excited. And I think of a big part of my responsibility is trying to continue to encourage and support that type of collaboration because I think it's distinctive and has created some of our most important practice areas and investments and to continue to grow from that base. And then finally, it's a very distinctive culture. There's a lot of support. It's a very flat organization. Our investment committee dialogues are open to every professional and everyone is encouraged to participate. It's an entrepreneurial place. We focus on things that we think are really interesting as opportunities. We stick to our lanes where we have competitive advantage. Those cultural dynamics are also important to reinforce. And I would tell you from a cultural perspective, more things have stayed similar than have changed over my 2-plus decades with the firm.

Maybe shifting gears over to the broader macro environment through the lens of your portfolio companies, curious to get your take on the state of global economy, health of the consumer, path of inflation here, just given some of the uncertainty and volatility and how your portfolio companies are performing today?

Well, it has certainly been a remarkable couple of quarters for all of us. And I think even some of the statistics, I think it was the worst ever start 75 days to a year. And then it was the strongest rebound after a 20% drop in -- since World War II to at least. So it's a pretty dramatic moment in some respects. I would say that as long-term investors, we're not as caught up in the day-to-day, but certainly that macro environment is very important to us. And I would also say that during moments like this, we're always focused on our portfolio. But to your question about performance, we're particularly focused on trailing results, on forward indicators, on operating metrics, and we stay very, very close to the portfolio. That's sort of the nature of our investing style across all of our asset classes. I can tell you, not that I'm not perpetually focused and anxious, that's sort of my nature for even beyond my job. But I've been really pleased and encouraged by the performance and the persistence of growth that we've seen in our portfolio. So if you focus on the private equity side for a moment, I think we reported at the first quarter earnings call that our revenue growth across all of private equity was about 18%, which was relative to, I think, 5% for the S&P. And actually, the EBITDA growth was stronger at 24% relative to, I think, 10%. And we've qualitatively continued to see that strength. I think that strength is a reflection of both the macro resilience in the economy, which we're seeing across geographies and which I think reflects the starting point of a pretty good macro environment and economy going into some of the turbulence we've seen more recently. I think it also reflects our strategy. We try to be very focused on areas that are secularly growing. We outlined [ FOMO ] a long time ago. We don't worry about how the people are making -- seeking to make their money. But we're looking for areas of secular growth and areas in which we can bring what is a very broad set of operational capabilities to inflect the performance of our underlying businesses. And I think that's what you see coming through in the numbers. We've actually been cautious about the macro for some time. So we, in fact, have underwritten multiple compression into our centering cases really for a fund cycle and a half, which puts a lot of pressure on that focus on growth. So I think part of the reason that we're seeing this consistently strong growth is the neighborhood and the impact that we're having on our companies. But that's, I think that's certainly part of what's flowing through. I'd say elsewhere in our business, which is, of course, very important on credit and real estate, we're also seeing strength. We actually get questions because I think folks are particularly focused on the leveraged finance world on our direct lending business, which is Twin Brook. It focuses on the lower middle market, which is an interesting place, has an excellent market share, and it's been steady. I mean, we have 2x coverage ratio and consistently LTV of about 43%, loan-to-value of about 43%. And we've seen good growth in the underlying portfolio of 290 companies. Like the private equity side, I think that reflects both the resilience of the macro, but also the way we go about doing things in terms of the selection of companies, 100% of these companies have covenants. We sit at the table, I think 98% is senior secured. We're in the revolver. So I think the way we do things is another part of the reason that we're seeing such strength in the portfolio. So I'm not at all complacent. It's an interesting market and an interesting moment we're living through. But I can tell you that we've been very pleased with the performance so far.

Great. Turning to capital markets. Can you talk about the pipeline and opportunity set that you see in the current backdrop? How volatility has impacted that pipeline of deals that were arguably slated to get done? How has that sort of transpired? And how is it looking now in terms of the outlook for the remainder of the year?

Absolutely. I think that -- I mean I said on a number of our investment committees and sort of aware of what's happening across the firm. We're still very busy and active. I would have said going into the year, it might have been robust, maybe even more than we can handle. So I do think volatility, in some cases, causes folks to hunker down a bit, but it's still very active, and we're still, I think, quite pleased with our pace of investment. I think that there's a reason that we've continued to see the level of activity. There's -- in my mind, there's -- if you think about the private capital market, there's sort of a flow side of the business where things are usually intermediated and they come out with a chaperone -- you have a chaperone dinner with name your investment bank and the management team, very high probability that that's an actionable opportunity because it's for sale. On the source side of the world, which is where we participate for the most part, it's less certain that there'll be a transaction. But you're usually coming with a proprietary idea or strategic or some other partners coming with an [ ID ] to you. And that has been a very healthy portion. In fact, it's 70% of our latest U.S. flagship fund in the private equity side is either structured relationship with corporate, a carve-out or some combination thereof. So I think that side of the market is a little less volatile, a little less tied to overall deal market. And so that's, I think, been part of the reason. And if you look at Asian growth, the majority of those deals are also proprietary, and there's a very healthy set of those deals that are also corporate partnerships. In fact, we've also had partnerships with universities and not for profit. So very unusual sort of deal sourcing stories, which I think result in a portfolio for us to look a little bit different than others. On the credit side, volatility is sometimes your friend, I think, in terms of opportunities. On the Twin Brook, we have a very active pipeline. We're sort of the incumbent in those 290 or 300 companies in that they -- in these periods, they sometimes do add-on acquisitions with even greater frequency and we're the lender. Credit Solutions, really interesting capital structure opportunities. So good companies with challenging capital structures. I think the pipeline in that business is robust at this moment as it's ever been. And that's sort of, again, a very creative capital type of approach. And then structured credit, which is non-EBITDA-based, asset-based lending, the opportunity set is extraordinary. And frankly, the opportunity set significantly exceeds the capital base we have built there, although, of course, over time, we're going to try and address that. That is a business that has been driven from a number of different angles, including LPs, particularly insurance companies increasingly want to be in that space. And in some cases, including with our insurance partners, we've worked together to get into new areas and to innovate, investment-grade asset-based financing as an example. So there is a lot of activity. And then on the real estate side, I would tell you that we're getting access to some assets that either lenders or other -- sometimes REITs, some owners that are feeling some form of distress are selling. And these assets are not assets that we would usually get access to. So some really interesting high-quality assets, a lot of defensive space. We're not overly burdened by U.S. office exposure. And so we've been able to play offense. There have been some opportunities. We've looked at some really interesting take privates, again, opportunities that would necessarily be available in other markets. So there's no question that volatility often causes people to slow down. But I think in part because of the way that we source opportunities, we've continued to be very active.

So it sounds like a little bit of a differentiated sourcing funnel maybe versus others. But maybe along those lines, as you're thinking about this sort of backdrop, anything stand out in terms of the most compelling areas for deploying capital leaning into over the next 12 months?

I think there's a lot of interesting pockets. Again, we're trying to be super selective in terms of the areas we focus in, and it's a competitive market. We want to make sure we're focusing in areas where we have real competitive advantage. If I think about geographically, we actually feel like there's a lot of interesting opportunity in Europe right now. I look at Europe and I think about the areas that are compelling to me. Areas like on the sector side, technology and software, health care, climate investing, the deal type, some of the secondary opportunities there are that are GP-led secondaries. I feel like a lot of the real estate opportunities on the industrial side, the logistics side, student housing. I actually feel like the interesting opportunities in Europe are very well lined up with our authentic global strengths as a firm, the spots that we've picked. And so we've been busy, and I feel like that's an opportunity. There's an opportunity to continue. As I mentioned, spend a lot of time in Europe. We have an excellent group of folks across the platform and likewise, on the credit side in Europe. So I think that's interesting. In Asia, we've continued to be busy. In Asia for us, we've leaned into places like Australia and India, Southeast Asia, Korea, Japan, particularly on real estate side. And so we've been a little less active in China. We have a team there, but it's less than 2% of our AUM. It's harder for us because I think the rules of engagement are not quite as clear. So it's a good time, I think, frankly, to be a global firm. And I think there is some overall dialogue around global diversification, and I feel really well positioned as far as that goes. On the individual businesses, structured credit, as I said, super busy. So one of the things we try to do in all of our businesses is not only participate in the spaces we are in, but figure out where the opportunities are going to arise. We've been almost, in some respects, a first mover in areas like HELOCs, which is in a world where people have equity in their homes, but they also have lower interest rate mortgages that they don't want to refinance. That's a really interesting place. And we've found some strategic partnerships in this space to allow us to participate there. And I think there's a lot more opportunity to explore. Essential housing, I mentioned a really strong pipeline. There's another place. My partner, Ryan, talks about going into the lab. The team created an essential housing business, and that's essentially working with builders who are both reacting to the macro inadequacy of -- perpetual inadequacy of housing and also the desire of those homebuilders to become more capital efficient and more thoughtful about their balance sheet. And so this is a company that -- this is a business for us. It's on its, I think, third fund, $20 billion of project value, 16 different homebuilders that they've worked with. So again, these are places where we're not following, but we're really trying to lead, and we see a lot of opportunity there. So just a few examples. I could -- I know we only have 17 minutes, so I'll stop now.

Fair enough. Why don't we shift gears and talk about the exit backdrop. I think there's a lot of excitement coming into this year, but given some of the volatility maybe expectations have tempered a little bit. So I guess how do you see the outlook for exit activity from here? And how much of the portfolio would you say is exit ready?

Well, exits is a place we spend a particular amount of time thinking about. I feel like this is a very important topic for our partners. It's a very important topic for us. Before I get into sort of the numbers, process-wise, whatever your strategy is, everybody spends a lot of time on the investing decision going in. There's always -- everyone has investment committees. I think ours is particularly robust, and we have a particularly tight strategy, but this is something that is part of the core job of private equity. I think one of the things we do a little differently is we try to bring the exact same level of rigor to the exit dialogue. And that's something that's evolved really over the last 10 or 15 years, we've gotten tighter and tighter. And it's a very engaged dialogue. I mean, I'm -- I think myself as an investor deal guy. We do sometimes fall in love with our businesses. So I think it actually really matters that we come together as a partner group and figure out not necessarily what's best for the business, what's best for the fund and for the LPs. That has led to some very interesting patterns for us. So if you look at TPG Capital, we were net sellers in '20, '21, '22, not '23, and then '24. And in '21, where everyone was really leaning in, we sold -- and we were actually busy on the origination side, but we sold twice as much in TPG Capital as what we invested at that time. And I think that, that's put us in a really good place relative to our partners. DPI has been important for us. We've demonstrated our focus on exit. We've continued to see a lot of activity. Actually, about 60% of our private equity exits have been to strategics, which is also a little insulated from the more open and shut IPO market. But in markets like India, I think we took 2 companies public last quarter, and we've had 11 in total in the last 3 years. We've continued to see good liquidity even into the choppiness of this year. I think on the growth side, we have 3 portfolio company exits, full exits that are out there, some of which I'm not sure we've disclosed the details of. We just finished our sell-down of Viking Cruises on the capital side. Rise Climate fully exited Tata Technologies and has had some other important liquidity recently. Growth is already, I think -- growth is, as I mentioned, 3 full company exits. I think they're already at $1.8 billion of exits, which is more than they had last year combined, and we're only in June. So I think the overall picture for us on liquidity has been good, none of which to say that it's easy because I do think in moments of volatility, people tend to hunker down a bit, but we've been able to find a way.

Were any of those second quarter events, Viking?

Yes. Yes, Viking was, I think, in the last 10 days.

Okay. And then those 3 on the horizon, that's...

Yes, sort of some [ announced ] and some a little less so.

Okay. Maybe turning to fundraising. We're seeing some headlines around some challenges around institutional asset owners potentially coming into the -- allocating to the asset class, whether it's endowments or China LPs. And then in the context, we still have the DPI challenges across the industry. So it seems like a little bit of a tougher backdrop for private equity fundraising. You're in the market with several flagship funds. Maybe just talk a little bit about your expectations, timing around that, magnitude, pace of those campaigns in the context of what has been strong performance and strong DPIs from TPG.

Yes. And thank you. I do think it's an interesting market because as is often the case, different parts of your partner base are experiencing the world somewhat differently right now. We reiterated our guidance at the -- in the first quarter conference call that we were going to hope to raise, expect to raise significantly more capital in '25 and '24. And we continue to feel confident and comfortable with that guidance. On the PE side, where I think we get a lot of questions around the appetite for commitments, I do think it's a story of having differentiated ourselves in a positive way. DPI is important, as you mentioned, that's something we've been focused on a long time well before we started hearing phrases like DPI is the new IRR, which I've heard a few times today already. But that's been a positive. But I think the other thing that's positive is just the level of differentiation in the portfolios that we are looking at these structure relationships, these carve-outs, I think people really appreciate that. And they appreciate the consistency between the strategy that we're articulating and the discipline around that strategy and what we're doing and the execution. So I think that, that's been important. We are, as you say, in the market with our U.S. and European flagships, which will be [ TPG X ] and Healthcare Partners III and looking for a sizable close around the middle of the year. And of course, in heavy dialogue since we're approaching the middle of the year with a lot of our cornerstone LPs and continuing to feel like there's real progress along that front. Climate is another important fundraise for us. That is an area of the world where there is noise in the U.S. I think it's great to be a global asset manager at this moment, as I said earlier. I think it's great to have resources, investing resources and capital formation resources around the globe. We have had a strong start in the climate fundraise, so over 60% of our target. And I would say that despite the U.S.-centric noise, we continue to see an enormous amount of appetite, both from a capital formation and a deal flow perspective outside the U.S. So in Europe, we've talked about our Global South initiative publicly. That's another interesting sort of dimension where one of our good partners globally said we want to not only participate in this investment strategy, we want to have some of the capital deployed in the Global South. That's something I think we're going to continue to see. There's real momentum around that business. So Asia, the Middle East, Europe, really active, not at all, candidly affected by some of the noise. And then just from the underlying belief that we have that this is a bit of a generational opportunity. If you look at just energy transition as one subset of the climate opportunity, the needs for energy are growing so dramatically in the U.S. and elsewhere, data systems, data centers and the like. that you see it. And in Europe, you see blackouts, right, which speaks to sort of the aging infrastructure and clean energy is becoming increasingly competitive on a cost basis and I think increasingly relevant as you think about addressing some of these macro needs. So in any event, climate is global for us. And I do think we're seeing there and elsewhere to some degree, a little bit more of a barbell in terms of first close versus later closes as people want to see the performance. But again, we continue to feel really excited about the trajectory. And stepping back from any one campaign, I think you'll continue to see a little bit more of this barbelling in terms of the fund closes. On the credit side, we've said that we're going to raise more credit in '25 than '24. I think the thing I would want to highlight here is that we're feeling increasingly enthusiastic about the cross-sell opportunity. I think there have been over 200 introductions involving senior members of our team on the legacy TPG side and engaging with the senior team on the legacy Angelo Gordon side. We're all just one firm now. But the traction is only increasing there. It's beyond what we've closed year-to-date, just the dialogue around SMAs. We announced on our last earnings call, I think it was a $4 billion sort of special cross-platform relationship. We did not announce the name. We have 10-plus dialogues going on around those type of conversations now. And these things sometimes take a little bit of time, but it does feel to me like the flywheel is spinning. And I think that's really exciting to see, and I think reinforces the reason for leaning into this combination, which has been a really successful one for us.

Why don't we dig in a little bit on credit, newer area for you guys at TPG post the Angelo Gordon acquisition. First quarter fundraising was, I think, a little bit lighter, but you guys reiterated your expectations to raise more this year for AG Credit versus last year. So maybe just update us on the fundraising on the credit front, how the pipeline is shaping up and where you're seeing some of the most demand?

Yes. I mean, again, I think we feel good to sort of continue a little bit of what I was saying before about that cross-sell opportunity and feeling like we're having real traction and these sort of chunkier opportunities. I think we talked about $3 billion of discrete credit mandates that were closed or expected to be closed. That number has grown since our earnings call. And we're seeing clients that are continuing to broaden their relationship with us. We've had a really successful close in our middle market lending business, Twin Brook, and we're starting the dialogue and already engaged with LPs around the graduated product, which is again another interesting opportunity. I've mentioned before, structured credit is really interesting and exciting. A huge amount of opportunity, a lot of engagement around how to expand that into investment grade, I mentioned earlier and other avenues, but great uptake. And if you look at the insurance part of our overall LP base and AUM, it's up by 1/3 plus since we closed the Angelo Gordon deal. So that speaks really well to credit and particularly to the structured credit world. So we're seeing a lot of traction. And I think we're feeling really good about that momentum. So none of these things come immediately when you close a transaction. But the sense of cross-sell and probably at least as important, the sense of TPG as the world of LPs focuses on an ever smaller number of GP partners with whom they want to have broader and deeper relationships across asset classes, I think we feel really well positioned for that, and we're seeing that in the nature and level of engagement around these larger opportunities.

So you spoke to some of the benefits, the synergies of TPG coming together with Angelo Gordon. Have there been any sort of challenges that you've had to overcome as you brought 2 firms together kind of looking back, any sort of surprises or interesting learnings?

I think the headline is definitely one of feeling really excited about it. I mean, as I tell you, I spent years of my life on it. And we started with a number that was probably 50 or 60 folks, but spent the vast, vast majority of time with this group and getting to know one another. The reality, when you're executing these acquisitions, you're really just merging 2 partnerships together, right? So one of the things we wanted to make sure of is that we were not engaging with someone who was just trying to sell their business. But instead, they were looking to partner and throw in with us and really become one firm and that they wanted to find opportunities for collaboration on individual deals across asset classes to build new asset classes like our hybrid solutions that we've come together. And across all of those dimensions, I would tell you, it is -- I think it's really been exceeding our expectations, the way I would describe it. On the challenges side, we have put a lot of energy against the integration, I think it's gone very well. It is the case that if you think about particularly a fund that's in mid fund raise when these deals come together, it's natural, and we experienced LP saying, let me make sure and see how this plays out. Let me take a pause. Let me see, is everyone sort of in their seat? Is this a partnership where people are going to keep growing? Are the incentives well aligned? Is the organ going to work? And so I think that, that's the reality of it. I don't know that it was a particularly a negative surprise so much, it's just a reality of businesses that are driven by people. But as we see now, the traction and the flywheel spinning, we're excited, and I think it speaks again to the logic of the underlying transaction. The thing I would tell you I'm the most encouraged about from my president seat as someone who grew up in one culture has been the way in which the cultures have come together and the sense of valuing the same thing, the collaboration, the intense focus on excellence and making sure that we always have earned the right to grow as our first job in the morning and the last job at night. All of that feels excellent and it's been just really encouraging for someone who has been around as long as I have.

And with the AG deal under your belt, how are you thinking about M&A at this point? Where could it be most additive? And how are those conversations progressing?

Well, I'd say -- I'd start off by saying we had a -- we've created a lot of value over time organically. So if you exclude Angelo Gordon and now we've recently announced Peppertree, I'll come to that in a minute. We've created very accretive growth by launching products, not with a blank sheet of paper, thinking here, we could add an asset class by following our strength and the IP and ecosystems we have and partnering with our long-term LPs into natural adjacencies. That continues to be a really important opportunity for us. But having said that, the inorganic side is also important. And I think we look at Angelo Gordon as a really good proof point that we can do this, we can execute, we can integrate, that was a platform transaction. It was a really important one for us for all the reasons we just talked about. And I think it is encouraging. The Peppertree transaction, which we announced, we are also very excited about. That is a little bit of a different type in that. It's an excellent team and excellent track record in digital infrastructure, which is an area where we have adjacencies already, but this gives us a really strong footprint from which to build further. And I think that we will continue to look at things that feel a little bit more platform-like, but also a little bit more like we're filling the blank, and we might also filling in sort of holes in our existing set of capabilities, which might call tuck-ins, but they're more important than that name implies. I think we might also find opportunities to sort of strengthen ourselves in geographies. You have mentioned Europe. We have great businesses in these places, but even more critical mass might help us. So we continue to be very active on the business development front. And I think we have a really clear sense of the areas that are logical and where we feel like additional resources would not only be additive from a growth perspective, but would make our existing businesses better, and that's really the primary criteria. So I think there's a lot of opportunities out there.

Maybe just somewhat related to that theme around M&A. Just curious how the dialogue is progressing around strategic insurance relationships. And how you're thinking about capital light, capital heavy or some middle ground of a hybrid in between?

Sure. Well, I think just to start, our broad firm-wide relationships with insurance have been great and growing. And I think it's yet another benefit to having credit in-house because I think that's really one of the key unlocks there. I mentioned that those LP relations have grown by more than 1/3 since we started, which is excellent. But I do think there's a symbiotic relationship in the industry, talking about us now with these more strategic relationships. The stronger returns on the asset management side help insurers be more competitive in their market and of course, from a capital formation and an FRE standpoint, there's a lot of benefits that revert back. What I would tell you is that much like we were a couple of years into thinking about credit, we're much more sophisticated and understand that market even better than we did when we started. And I do think it's something that could be quite interesting. We don't have actually a really preconceived set of ideas that it has to look like X, Y or Z. We have criteria. We want a distinctive business that is differentiated in what is also a competitive market of insurance. We want a team that understands their business and wants to throw in with this isn't trying to sell, but is trying to build. And we want flexibility to sort of build together and figure out, again, how to create synergy between the two. As to your specific question about asset light, asset heavy, what I would tell you is that we are open minded, and we can envision different states of the world that will be compelling. What I think is unlikely for you to see from us is something that looks like us shifting and converting our business into an insurance business with an asset management arm. That's unlikely. So we want to stay in the core business that we're in. We do think that there's a possibility if it's the right team, it's the right culture, and it's the right structure for an insurance capability -- origination capability really to help us with our long-term plans. But we're going to be selective and only do it if it makes sense and only do it if we're convinced as we were in the case of Angelo Gordon, that it's going to be a great cultural fit.

Great. I'm afraid we'll have to leave it there. Thank you very much,