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Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Cohen & Steers First Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, April 17, 2025. I would now like to turn the conference over to Brian Heller, Senior Vice President and Deputy General Counsel of Cohen & Steers. Please go ahead.

Brian Heller: Thank you, and welcome to the Cohen & Steers First Quarter 2025 earnings conference call. Joining me are Joe Harvey, our Chief Executive Officer; Raja Dakkuri, our Chief Financial Officer; and John Cheigh, our President and Chief Investment Officer. I want to remind you that some of our comments and answers to your questions may include forward-looking statements. We believe these statements are reasonable based on information currently available to us but actual outcomes could differ materially due to a number of factors, including those described in our accompanying first quarter earnings release and presentation, our most recent annual report on Form 10-K and our other SEC filings. We assume no duty to update any forward-looking statement.

Further, none of our statements constitute an offer to sell or the solicitation of an offer to buy the securities of any fund or other investment vehicles. Our presentation also contains non-GAAP financial measures referred to as adjusted financial measures that we believe are meaningful in evaluating our performance. These non-GAAP financial measures should be read in conjunction with our GAAP results. A reconciliation of these non-GAAP financial measures is included in the earnings release and presentation to the extent reasonably available. The earnings release and presentation as well as links to our SEC filings are available in the Investor Relations section of our website at www.cohenandsteers.com. With that, I’ll turn the call over to Raja.

Raja Dakkuri: Thank you, Brian, and good morning, everyone. My remarks today will focus on our as-adjusted results. A reconciliation of GAAP to as-adjusted results can be found in the earnings release and presentation. Yesterday, we reported earnings of $0.75 per share compared to $0.78 sequentially. Revenue for Q1 decreased from the prior quarter to $133.8 million. The change in revenue from the prior quarter was driven by several items. The primary driver was lower average AUM during the quarter. Also impacting revenue was lower day count compared to the prior quarter. As a reminder, we had also recognized performance fees in Q4 related to certain institutional accounts. These items were partially offset by improvement in our effective fee rate.

Our effective fee rate was 59 basis points, which was slightly higher than the prior quarter. The primary driver of this was mix change in our average AUM. Our operating margin was 34.7% compared to 35.5% in the prior quarter. As noted, we experienced lower average AUM as compared to the prior quarter. However, ending AUM increased compared to Q4. AUM was $87.6 billion as of Q1, compared to $85.8 billion at prior quarter end. The change in ending AUM was driven by a number of factors. We generated overall net inflows during Q1 primarily due to open-end funds. These open-end fund flows were partially offset by institutional outflows that were anticipated. This is the third consecutive quarter of net inflows. In terms of our strategies, global listed infrastructure experienced strong flows during the quarter.

Lastly, end-of-period AUM was positively impacted by market appreciation during the quarter. Joe Harvey will provide additional insights regarding flows and pipeline. Total expenses were lower than the prior quarter primarily due to a decrease in compensation and benefits. During the quarter, the change in comp and benefits was in line with the sequential decrease in revenue. As a result, the compensation ratio for the quarter was 40.5%, consistent with our planning. To a lesser extent, expenses were also impacted by decreases in distribution and service fees, while G&A expense levels remain consistent with the prior quarter. Regarding taxes, our effective rate was 25.3% for the quarter. Our earnings material presents liquidity at the end of Q1 and prior quarters.

Our liquidity totaled $295 million at quarter end, which represents a decrease versus the prior period. This quarterly change is in line with prior years and driven by our annual incentive compensation cycle. Let me now touch on a few items regarding the rest of year guidance. With respect to comp and benefits, we would expect our compensation ratio to remain at 40.5% in line with Q1. We expect G&A to increase in the range of 6% to 7% as compared to the prior year. This is driven by continued infrastructure investments, including completion of our foreign office upgrades. Also impacting G&A are expenses related to our recent ETF rollout, as well as business development activities. Lastly, regarding 2025 guidance, we expect our effective tax rate to remain at 25.3% on an as-adjusted basis.

I’ll now turn over to Jon Cheigh, who will discuss investment performance.

Jon Cheigh: Thanks, Raja Dakkuri. I’ll cover three topics. First, our performance scorecard, second, the market environment in the first quarter, and last, our investment outlook and how we see our asset classes and strategies playing a bigger role in client portfolios. Beginning with our performance scorecard, the first quarter saw 81% of our AUM outperformance benchmark. On a one-year basis, 89% of our AUM has outperformed while our three, five, and ten-year rates are all above 95%. Our one, three, and five-year excess returns of 257 basis points, 189 basis points, and 254 basis points, respectively, are near or above our expectations. Ninety-two percent of our open-end fund AUM rated four or five stars by Morningstar. In short, we continue to provide meaningful long-term alpha for our investors.

Turning to market conditions. In the first quarter, US equities declined 4.3%, while developed market ex-US equities rose 5.4% in dollar terms. US REITs gained 2.8% and global listed infrastructure rose 4.8%. In both cases, outperforming the corresponding broad equity index. Additionally, listed real assets performed well as investors rotated into more defensive or attractively valued hard assets, ranging from utilities to gold. As anticipation of tariffs and sticky inflation raised macro concerns. This rotation in our view is not an anomaly. In November of last year, we published a paper called FOMO, reversals of fortune and the opportunity in real assets. The punchline being that decade-long market leadership tends to mean revert. To us, this one-quarter rotation is a harbinger of what the new market leadership might look like.

Spearheaded by real assets, and potentially non-US equities. A shift built on a mix of attractive valuations and macro forces. Either way, we believe that diversification and a balanced strategic asset allocation is a requirement in a world of macro and geopolitical change. Of course, Q1 performance has taken a backseat to what has transpired in the first few weeks of the second quarter. What’s our interpretation of what has happened and where do we go from here? Coming into the year, we expected a slowdown due to a combination of a tiring consumer, fiscal tightening, immigration reversals, and trade impacts. Offset by economic benefits from deregulation. When combined with US equities at all-time highs, tight credit spreads, and expensive price-to-earnings multiples, financial markets were vulnerable to a negative surprise.

Global investors had become complacent. The April second tariff announcements represented just such a surprise. And in our view will lead to a meaningful stagflationary impact on the US, at least in the short run. As we’ve seen over the last few weeks, it’s a fluid situation but the impact of tariffs and business uncertainty has meaningfully boosted the odds of a US recession. Although our base case is that we narrowly avoid a recession. We continue to expect core US inflation to remain above the Fed’s long-term target. Tariffs and potential trade wars only add to this pressure. Certainly, in the short, and likely in the medium term. US equities have recently stabilized but were down approximately 17% on the year at one point. Despite the correction, US equities still look relatively expensive and appear to have gone from trading at roughly 22 times earnings to about 20 times today.

Although, after some expected negative earnings revision, that 20 times may still be closer to 22 times. We would expect some combination of both earnings and multiple contraction over time to drive disappointing US listed equity performance. In contrast, we believe listed real assets combine three highly important attributes: less sensitivity to tariffs and flow and growth, attractive relative valuations, and liquidity. At a time when both the explicit and opportunity cost of liquidity are high. To the first point, listed real assets are likely to feel less at the brunt of the negative impact of tariffs. To illustrate this point, estimates of the impact of tariffs on S&P 500 earnings are around 10%. Based on our current estimates by comparison, US REIT earnings are likely to be down only 0% to 1% and infrastructure down 2% to 3% because of the direct impact of tariffs.

Real estate and infrastructure companies largely are not importers or exporters. Within real assets, natural resource equities face the biggest headwinds with direct pressure to EPS of around 10% to 15%. But with wide divergences between winners and losers. Though higher commodity prices could provide some offset. As it relates to slowing growth, real asset companies also tend to generate more predictable revenues due to longer-term leases, or contracts, or less economically sensitive demand. On valuation, in contrast to US equities, all core real asset categories are either mutually or attractively valued versus history. You see companies in the space as positioned for higher profitability levels. Driven by factors such as commodity undersupply, and a move away from globalization.

Or onshore and reindustrialization. Persistent inflationary pressures as well as geopolitical uncertainty also support real assets. As the FOMO piece I referenced earlier highlights, the primary reason why decade-long mean reversion occurs is because investors get too complacent over a period of years and valuations move too far in one direction or the other. In our conversations with our clients, we see growing evidence that investors are beginning to embrace this idea of new market leaders. And a potential market rotation and fund flows towards the valuation laggards of the last ten years. Like real assets. My last comment relates to the importance of liquidity. And how investors value it. First, we believe the cost of illiquidity has not been analyzed or discussed sufficiently.

So we will publish our in-depth research on it in the second half of the year. At a high level, we believe the presence of the illiquidity return premium is taken as a given but the data indicates it has been more inconsistent than reported across different asset classes. Specifically, the historical data indicates a negative illiquidity return from the end in private real estate. And a more neutral premium in infrastructure. The explicit cost of illiquidity is only one element. The opportunity cost of illiquidity happens in three ways. First, investors not being able to rebalance when their illiquid assets don’t provide realizations as planned. Second, needing to sell their liquid assets when needed. In a major market downturn. As opposed to when optimal.

And last, the frictional cost of the j curve that occurs in most private closed-end funds. Only recently we see university endowments having to contend with questions about significant uncertainty around both the revenue side and potential endowment taxation. In a regime of high uncertainty, the opportunity cost of liquidity is high. To summarize, as always, economic uncertainty and financial market dislocations create opportunities to identify winners and losers. Across all of our markets, we believe active management can capitalize on these divergences and is important to boost returns. Combined with a more favorable backdrop for asset allocation we remain positive about the environment for real assets. With that, let me turn the call over to Joe.

Joe Harvey: Thank you, Jon Cheigh, and good morning. We will start by addressing the current state of our business, then review our key business trends in the quarter, and close with a discussion of our strategic priorities. Four weeks ago, we published our 2024 annual report to shareholders entitled Positioned for Growth. On April second, so-called liberation day, the administration announced a tariff policy that was more severe than expected and turned the global economic and geopolitical regimes on their heads. With the financial markets following suit with powerful volatility. Everyone quickly recognized that business decision-making would slow or cease entirely, raising the specter of recession. As a firm, we are still positioned for growth.

Notwithstanding the post-quarter setbacks in markets and asset levels. Our relative investment performance as Jon reviewed, is still strong and is the leading edge of our optimism. As I will discuss further, our institutional advisory unfunded pipeline declined in the quarter but our business activity remains healthy. Our wealth channel has led the way to firm-wide net inflows for the past three quarters. In addition, the case for real assets is gaining momentum as the reality of a nagging inflation backdrop gains wider acceptance. Meantime, portfolio liquidity has become a priority for clients as the cost of illiquidity and private allocations have become increasingly evident. Depending on how long the tariff roulette wheel spins, and considering it’s not going to affect our eyes are on potential for recession.

While this could slow the ramp-up of some of our recent vehicle launches, we are committed to these initiatives which we view as must-dos to enhance our market position. And as our habit, we would expect to further innovate to capitalize on any dislocations opportunities that emerge. Behind this executive summary is a well-organized and highly motivated leadership team that is backed by a very strong balance sheet. Looking at key fundamentals, in the first quarter, we had our third consecutive quarter of net inflows firm-wide at $222 million which followed $860 million in the preceding quarter and $1.3 billion in the third quarter of last year, when the Federal Reserve commenced its rate-cutting cycle. Leading flows in the quarter were open-end funds with $585 million of net inflows, offset by outflows in both advisory at $108 million and all sub-advisory at $258 million.

Our inflows stand out considering that most of our strategy categories have been in outflows according to Morningstar open-end fund data. Our positive differential to me comes down to a combination of our outstanding investment performance, our brand recognition, and strong client relationships. Accordingly, our market share of active open-end fund AUM is continuing to increase in US real estate, global real estate, preferreds, and global listed infrastructure. Leading flows in the quarter was global listed infrastructure, which had $586 million of net inflows, offset by net outflows in US real estate of $217 million, global real estate at $166 million, and preferreds at $76 million. Highlights for open-end funds include the breadth and flows across most key segments such as wirehouses, RIAs, independent and regional broker-dealers, bank trust, and defined contribution.

Our gross sales for open-end funds annualized at $12.8 billion in line with our average over the past several years. SMAs and models had outflows of $44 million and offshore CCAVs had inflows of $71 million. And we had modest inflows into our newly launched active ETFs which I will discuss in a moment. Institutional Advisory’s net outflows of $108 million were comprised of five new mandates totaling $147 million offset by two account terminations totaling $231 million and negative rebalancings of $223 million by existing clients. The weak spot in the quarter is our one unfunded pipeline, which ended the quarter at $61 million compared with $531 million last quarter. Obviously, that is a low number for us and reflects a lot of completed fundings and the timing of a number of finals competitions we are anticipating plus some customized mandates we continue to work on.

While it is tempting to attribute the low pipeline to the market environment, the regime change in interest rates has already occurred and thus we need to translate the solid level of activity in institutional advisory to wins. Last quarter, we indicated that we had approximately $800 million in pending redemptions. The majority of those have occurred and the known redemptions now stand at $290 million after the addition of one pending rebalancing outflow of $64 million. Turning to strategic initiatives. In February, we launched our first three active ETFs in real estate, preferreds, and natural resource equities. The strategies are compelling, differentiated, and by design, not thematic. But core strategies for asset allocators, they were seeded with firm capital, and we have but begun to see inflows.

We’re pleased with the pace of flows particularly through the natural resource equities ETF. We believe these vehicles will open access to investors who use them exclusively and thus expand our addressable market considerably. Given that AUM in active ETFs has surpassed $1 trillion industry-wide. At the same time, there are advisors who are converting their business away from open-end funds to ETFs. These vehicles will help us retain those assets particularly with RIAs who have growing asset bases. Our long-term strategy includes the development of ETFs for all of our core strategies and we’re working on round two. Understanding that implementation from here could vary based on how the market adopts different structures such as ETFs, as a shared class of open-end funds.

One small but percolating market for us is the offshore wealth market. We now have six CCAV vehicles with $1.2 billion AUM and which have had inflows in 19 of the past 21 quarters. We launched our sixth ETF or excuse me, CCAV sub-fund in the quarter a short duration preferred stock strategy. This strategy’s investment universe has attractive attributes with $1.3 trillion in size, and yields of 7.7% duration less than three years, and an average credit rating of triple B. We’ve had a lot of positive feedback in premarketing and look forward to being in the market. We are making good progress on our private real estate initiative. Cohen & Steers, Inc.’s Income Opportunities REIT or CNS REIT is the top-performing non-traded REIT for the twelve months ended February.

CNS REIT returned 13.4% compared with 4.4% for the average non-traded REIT over that period. Among private wealth alternative choices, private credit has been the most popular certainly compared with real estate recently. But we’re seeing early signs of caution in credit and emerging interest in the bottoming of the commercial real estate cycle. We continue to work on additional anchor investors while ramping up our engagement with RIAs. We are live on the Schwab, and Fidelity platforms, which provide access to the majority of RIAs. CNS REIT’s portfolio now comprises five shopping centers with a mix of power centers and grocery-anchored centers. Shopping centers should be better equipped to defend against a more challenging economy and we still believe they are mispriced considering their fundamentals.

The category of expanding our real estate franchise, we expect to launch late in the second quarter, a strategy to provide a better way for institutions to invest in core real estate using both listed and core private real estate. We expect to announce a partnership with a sub-adviser to collaborate on a vehicle designed for institutional real estate allocations which tend to be a larger share of the real estate portfolio. Our aim is to provide better risk-adjusted returns than core private real estate along with better liquidity and broader property sector allocations. Jon and I have been highlighting global listed infrastructure as a strategy that is generating a lot of interest and that began to show in our flows this quarter. We see more behind it with demand from new allocations and takeaways from underperforming managers.

Private infrastructure still dominates the allocation landscape but we believe just as in real estate, that listed infrastructure complements private allocations. Resulting in better portfolio construction and performance. Fundamentally, secular trends including digitalization of the world’s economies, rebuilding core infrastructure, higher power demand, decarbonization, and deglobalization. Combined are accelerating infrastructure spending, An estimated $94 trillion of infrastructure investment is needed globally by 2040. With more angst about the stickiness of inflation and now tariffs, we’re seeing more interest in real assets from the retirement segments, model builders, and target date managers. This is welcome and overdue in my opinion considering the preponderance of financial assets in 401(k) plans.

Notably, the private equity firms are pushing for private allocations in these plans. Aside from the plumbing in these plans, which cannot even accommodate ETFs at this point, our view is that private allocations are difficult in 401(k)s, and listed real assets are a smart solution. With our multi-strategy real asset portfolio, for example, 401(k)s can have a single line item turnkey allocation to real assets, and have efficient pricing and daily liquidity. The only potential negative is the perceived volatility compared with private. But given the long-term investment horizon for most retirement savers, volatility should not be a major concern. I will close with a reminder that this year and next, we are focusing on investment in our distribution capabilities with the wealth channel being a high priority and more resources planned for the RIA and multifamily office segment specifically.

Our new vehicles and strategies have been designed for these advisors and allocators, which represent the leading investment models in the wealth channel and where AUM is growing the fastest. We look forward to reporting our second quarter results in July. Meantime, please call us with any questions. And now I’ll turn the call back to Abby to facilitate Q&A.

Operator: Thank you. And we will now begin the question and answer session. If you have dialed in and would like to ask a question, please. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from the line of John Dunn with Evercore ISI. Your line is open.

John Dunn: Hi, guys. Wanted to get maybe a little more color on the wealth management channel and kind of like the temperature there, you know, so far in April and maybe what areas are seeing, you know, float like a float bid or maybe not. And where do you think the redemption trends could go if the status quo sticks around for a while?

Joe Harvey: Well, obviously, as Jon and we all know, post-quarter end, the markets have been very volatile, and that creates uncertainty and starts to stem the decision-making. So it’s not been a robust flow environment. But, you know, what we’ve been saying, you know, more broadly is interest in US REITs in particular. Because, you know, as we have been talking about the past several quarters that investors have been anticipating the bottoming of the commercial real estate cycle, which is happening. And at the same time, continued easing by the Federal Reserve and those historically have been positive conditions for real estate securities performance. And, you know, we’ve seen some of that play out, but we would expect investors to continue to be most focused on that.

Secondly, we’ve been talking about and as I mentioned, more interest in listed infrastructure. And for the wealth channel, you know, listed is the way to invest in it. There are some private solutions too, but that’s not been as developed as some of the choices in real estate or in private credit. But the other, you know, attraction of infrastructure is that, you know, the portfolios tend to be less economically sensitive than other things. And so we’ve seen some of that dynamic in the institutional market, and it could also flow through to the wealth channel. What we have not been seeing are strong flows into our preferred stock strategies. And that’s been a little bit of a surprise. We’ve actually had some outflows in the preferred stock vehicles.

There’s been a resurgence in fixed income allocations in investor portfolios. But I think there’s still a little bit of a hangover with the many regional banking crises a couple of years ago and how that affected some preferred securities. And there’s just more choices in fixed income as well. But our preferred portfolios have performed very well over the past year and a half on an absolute basis and on a relative basis. And if there is one of our strategies that’s not so affected by tariffs, it’s certainly the preferred market, which are mostly issued by banks, which are in terrific capital positions and insurance companies. So those are some of my thoughts on ask anybody else in the room if they can add to it.

John Dunn: Okay. Great. And then you guys took us through the impact of tariffs on your different strategy areas. But and that listed rail infrastructure doesn’t have most of it doesn’t have much direct tariff exposure, but could I wonder if you could talk about kind of the second-order impacts from tariffs that you might see coming down the pike.

Joe Harvey: Well, from an investment standpoint, as you say, it’s much more second-order effects or indirect effects. So that’ll be economic growth, interest rates, and inflation. Generally speaking, we think economic growth was already going to be a little bit slow, and now it’ll be slower, and inflation will be a bit higher. Infrastructure really stands out frankly, as being the stagflationary strategy if you will. And that’s why despite everything that’s going on so far this year, infrastructure as a category is still positive on the year. It’s up roughly 5% on the year. So yeah, we think the economy is going to slow, so that will have a negative impact most on natural resource equities being relatively more cyclical. Second, most insulated would be on real estate, and then areas like preferreds and realist oh, sorry.

Infrastructure as Joe talked about, we don’t really see any kind of major impact. So it’s all very indirect impacts. As opposed to direct impacts. And, John, if your question was getting at what are we doing as a firm, you know, the first order of business is always to interact with our clients to help share our best thinking on what’s going on with them. But you know, we’re not going to make any rash short-term changes in how we’re operating. But as I said in my comments, clearly, have our eye on the potential for recession and so, you know, one of the reactions to that would be to raise the bar on hiring until we see how all of this plays out. You know, we’re not stopping on the strategic hires that we need to make. But if we have things that are more nice to haves or, you know, investments for a couple of years down the road, we’ll put the brakes on that.

As you know, our balance sheet is extremely strong. So, you know, we’re prepared for whatever comes down the pike. But you know, we’ll continue to focus on portfolios and really bear down on the new launches that we have because, you know, those are it’s a critical time, and we’ll see what happens. I don’t know. For the ETF launch, for example, you know, our head of wealth has seen and other examples how volatility can create some activity for ETS because investors are more apt to switch if they can take a tax loss or move in a down market to a better vehicle. So those are some of the things that we’re thinking about.

John Dunn: Right. Yeah. Maybe on active ETFs. Is there a difference in selling those products versus the open-end funds? And you mentioned that some of it is about keeping assets in-house. Are there also new people coming into that kind of vehicle? And maybe it’s early days, but do you have any idea of what kind of steady-state level of flows you’d like to get to?

Joe Harvey: Well, in terms of, quote, unquote, selling, I mean, it starts with a process of helping our advisers make allocations to the things we do. So it’s education about our asset classes, how they fit into a portfolio, how they enhance the return and risk profile of a portfolio. What is different is that the initial investors will come from the RIA market. They won’t come from the warehouses, which have criteria to gain size and scale of the end of vehicles. And in some cases, go through a research process. Although, for all the strategies we have, we’re pretty much got that box checked with the wirehouses. But what’s different is the initial investors in the ETFs are RIAs that we maybe don’t have relationships with. So it’s building relationships with model builders and RIA allocator specialists to active ETFs. But in terms of the so-called sales process, it’s no different than what we do everywhere and wealth.

And as I said in my comments, our strategy revolves around not thematic approaches to strategies in ETFs, which some firms do, it’s rather core allocations that we’re known for that could be a substitute for one of our open-end mutual funds. So as it relates to some of that initial activity, and it’s still early days. I wouldn’t say we have a statistically significant sample set yet to really bear down on. But we’ve seen situations where there are RIA allocators who only use ETFs. And that is money that we would never have ever seen before. So it’s a great validation of our launch and gives us confidence because we’re going to see this type of thing more and more in the industry. There will be examples where we have existing open-end fund investors who have been converting their business to using only ETFs. We’ve seen an example of two where they’re swapping out of our open-end funds into ETFs because that’s what they’ve chosen for their business models.

So in that case, we say, okay. Great. So we’ve retained assets, but more importantly, these advisers are growing. And, you know, had we not provided these vehicles, we would have ultimately lost a client and lost another growth engine. So in our underwriting, we factored in some swapping of open-end fund assets for ETFs. But it’s too early to start to try to quantify all of that. As it relates to what pace we would like, I would like it to be a lot, but the market is what’s going to tell us what the right pace is. But we’ve been pleasantly surprised with the activity we’ve seen so far and some volatile conditions.

John Dunn: Gotcha. And in your prepared remarks, you talked about looking to further innovate to take advantage of dislocation. Was that a reference to maybe working on round two of active ETFs or were there other things you had in mind?

Joe Harvey: It could be round two of ETFs. It could be potentially inorganic growth. We’ve been going through a process to identify strategies for what’s next, several years down the road. And one of the things that’s happening in the industry with the interest in the wealth channel is that there are more small asset managers who want to get access to wealth, and they’re realizing the competition and race to gain share from the private equity funds. That’s going to be increasingly difficult. We have a strong market position in wealth, and that’s pretty well known in the industry. So there might be a firm with a strategy that would meet our criteria. And so we would be open to looking at some acquisitions. So that could come by way of dislocations with the market environment right now.

John Dunn: Gotcha. And then maybe one on the pipeline. Do you think we’ll look back and look at this quarter as kind of an anomaly? Or could we hang out at a low level versus because for quite a while, you’d been kind of leveled up to the more than a billion level. You think it’s just the timing or how we’re in it this period for a little bit?

Joe Harvey: You know, as I’ve been talking about on these calls, we have good levels of activity but we need to translate those into real mandates. When you look at the history, it shows consistency and strength in the pipeline. So, you know, I’m not looking over this data point, and we’re going to dig in and do everything that we can to drive it. One of the things that I talked about a little bit is that in the institutional market, there’s been more stresses on portfolios with the high levels of private allocations. Of course, the regime change in interest rate, which caused plans to up their fixed income allocations, and that had to come from somewhere. So that’s been a thing out in the market, but I feel like we’re getting through that phase, the interest rate regime change and the restoration of fixed income allocations.

So and as Jon laid out, we believe that the future looks better for allocations to real assets, so we need to go make that happen. Our activity is solid, and it’s got nice dimensions to it, as I said, which means to me, that there are new allocations. There are new allocations not just in the US, but also outside of the US. There are underperforming managers but also there are investors who want to work with us to collaborate to do something differentiated. I mentioned the real estate strategy that we’ve been working on to combine listed and private listed private core real estate and we’ll be launching that and announcing it before the middle of the year. And so we look forward to talking more about that because it’s pretty exciting. And that could be another way we can get in front of more institutions and do something that’s different with them.

John Dunn: Gotcha. And then maybe just one more on, you know, I think it’s smart to see if you can take advantage of dislocation by adding, you know, maybe getting a better price on a deal. But you haven’t done a deal in a long time. So it’s a bit of a change. Maybe talk through, like, whole deals versus team lift ads versus maybe some of the areas you might be interested in. Just any more color there would be great.

Joe Harvey: Oh, it could be a spectrum of things, including working a partnership with another firm where we would sponsor a vehicle and in the case of this real estate vehicle. Combined listed in private and it’s been a vision of ours, and we’re pleased to see some of our peers announce some of these types of arrangements. And so that would be one of the easier short-term easier, maybe longer-term harder ways to bring on new capabilities. But in terms of you’re right. We’ve not been an acquisitive firm historically. There have been many reasons for that, including the fact that we’ve had a great opportunity to build out our capabilities and broader real assets investing. But also looking backward there it’s been an environment where firms weren’t so interested in selling majority interest.

There are a lot of players who would buy a minority interest and let them do their thing on their own. But the dynamics in the wealth channel and firms wanting to get access to the wealth channel are changing the equation a bit. So we’ll see. We’re thinking about the things that we would be interested in. But we’re, as you know, very conservative and disciplined. And have a very strict set of criteria. And so we’re spending some time on it.

John Dunn: Great. Thank you very much.

Operator: And that concludes our question and answer session. I will now turn the conference back to Mr. Joe Harvey for closing remarks.

Joe Harvey: Well, thank you everyone for listening. We look forward to touching base with you in July. And, Abby, thank you for the call today.

Operator: And ladies and gentlemen, that concludes today’s call, and we thank you for your participation. You may now disconnect.