All right. Hello everyone. Thanks so much for joining us for our noon session. For anybody who's just walking in now, I'm Ben Budish, a Barclays analyst covering the U.S. brokers, asset managers, and exchanges, and delighted to have with us right now, Michael Arougheti, CEO of Ares. Michael, welcome. Thanks so much for being here. Thanks, Ben. Appreciate it. Let's start with a macro question. You know, can you talk about, you know, how the firm is positioned for a higher inflation environment? I think we all saw the CPI prints this morning. You know, what sort of challenges and opportunities do you see in terms of deployment, fundraising, realizations? You know, how should investors kind of think through all these factors? Sure. There's a lot 'cause we have a pretty diversified global business, but maybe we'll talk about inflation and rates. Just a quick zoom out. Ares, a global alternative asset manager, $335 billion of AUM, strong market-leading franchises in private credit, private equity, and real assets. Depending on which business we're talking about, the impact of inflation and rates will be slightly different. I'd say generally, rising rates is good for Ares. The reason being, if you look at our credit portfolios, of our over $200 billion of credit, the majority is private credit, loans to institutionally backed companies, institutionally backed real assets. Those loans tend to be short duration and floating rate. They tend to sit high up the capital structure. Even when we're dealing with the challenges from inflation, those challenges tend not to overwhelm the opportunity that exists just from base rate increases and spread widening. As an example of what the embedded opportunity is in the private credit part of our business, we have a publicly traded BDC, Ares Capital Corporation, largely invested in floating rate loans. If you look at the core earnings in that company, and the same would be true for our publicly traded mortgage REIT, ACRE, those companies talked about the value going forward from rising rates, and basically on their Q2 earnings call said that as of June 30, to the extent that we saw an incremental 100 basis points of rate increase, that would translate to roughly a 17% increase in core operating income just from the rising rates. We're already there, right? Now we have the prospect of further rate hikes on the horizon. That's a pretty nice place to be when you're dealing with a floating rate book. Earnings are going up dramatically quarter-over-quarter. The offset to that is whenever the market's transitioning the way that it is now, transaction volumes can slow a little bit, but we also get repaid less than we typically would. There's a healthy amount of ballast in there. In terms of inflation, if you look at the positioning of the private credit assets, generally high margin, high free cash flow, high return on invested capital. Until the last report on inflation, we've actually seen them able to deal with inflationary pressures quite nicely. Generally speaking, are positioned somewhere between 2.5x-3x cash flow to debt service. There's a fair amount of buffer that even with rising rates and potential, you know, deceleration in earnings growth, quite a long ways away, at least relative to what we've seen in past cycles, before we see stress emerge in the portfolio from the confluence of inflation and rates. The real asset side of the business, maybe stating the obvious, is inherently inflation hedged. The place where I think the industry is most challenged is in what I would call regular way private equity businesses, where the increased cost to borrow, the devaluation from rising rates, and the potential impact economically from inflation could be challenging. I think we're fortunate that's a pretty small part of our business. Great. Maybe kind of continue with the macro theme. I think, you know, the top question from investors tends to be, I see rising rates, I see lower valuations, how is this going to impact the fundraising, deployment, realizations? Being I think more credit-focused, you have, you know, impact from a more challenging realization environment than peers. Maybe could you touch on those three topics, and kind of what you're seeing? I think we've been fortunate, year to date, that we are not seeing any impact show through in our fundraising. Maybe somewhat counterintuitively, we tend to see flows increase when markets get volatile. If you were to look at the history of the firm, the periods of our fastest growth in all of our financial metrics were through the GFC and through COVID. Part of that is because of the DNA of the firm as a distressed investor. We've been a big beneficiary, just generally, of the secular trend in alts. We manage a significant number of strategies globally. We could have anywhere from 20-25 funds in the market at any point in time, which de-risks both to the upside and the downside, candidly, the impact from fundraising. What's interesting year to date, we've raised about $30 billion, which is a very healthy clip, but we've done it without any, what I would call flagship funds, which are the largest funds within any of our core strategies. That's really a function of enhanced retail distribution, the diversification of the fund strategies, and just generally the way that our investors are increasing their wallet share with us. While year to year you may see some volatility, the floor in any given year in our fundraising is actually going up. What about on the deployment side? Are you seeing you know, perhaps in credit it's a little bit less relevant, but I think investors look at, you know, again, public valuations are a little bit lower on the private market side. You know, do I wait to accept this better valuation? Meanwhile, you know, you and your peers are looking at, you know, more interesting opportunities. What are you kind of seeing there, and how do you think that plays out in the near term? You know, its deployment, I think, was surprisingly strong to many last quarter. We deployed this last quarter. Our deployment pace year to date is actually on track with where we were in 2021, which by all accounts was a record deployment year across most alt strategies. Interesting, because typically what we'll see in the private markets when the markets are transitioning and valuations are unclear, transaction volumes slow. We've all seen the M&A numbers, M&A transaction volumes. That gets reflected in our primary market opportunity. When that happens, I'd mentioned earlier, we're getting refinanced less so that the AUM in place actually is more durable. Other parts of the platform turn on, things like our distress and opportunistic credit business. Our liquid credit funds start to get much more active in the secondary market, and the competitive dynamic changes. If you look now, banks are de-risking and retrenching. Leveraged loan market is, for all intents and purposes, closed. High yield market is, for all intents and purposes, closed. On lower transaction volume, we're probably taking a higher share of the volume that's coming through, which explains why we're still deploying at rates commensurate with last year, even though volumes are down. Interesting. Maybe kind of following up there, I think, you know, with this environment, investors wanna know if fundraising is gonna go up or down, are allocations gonna go up and down. Stepping back and kind of zooming out, you know, where do you see broad institutional allocations to alts, maybe in general? Not secularly, not this moment in time. Secularly. I think there's an understanding that. Yeah. As you were mentioning, when banks pull back, it's sort of an opportunity for folks like you guys to take some share, and then that kind of continues. Yeah, zooming back over the next, you know, 5-10 years, where do allocations go? Do they continue to rise? Is there sort of a. I'm gonna say no. There's no limit. I think the reason is you have to say why do people focus on alternative assets as a investment solution? It's evolved over time from high absolute return to high relative return. What that transition has meant is that any investor that you're talking to, if it's a retail investor, a pension fund, a sovereign wealth fund, an insurance company, they're all looking at the alternative asset space as a place where they can get excess return relative to their liquid market alternative. Because of that mind shift, and there's been some structural shifts to help capital flow behind that mindset, we're now managing alts that have a return offering of 5%, but we're generating 200 basis points relative to what they perceive to be comparable risk. What that's meant is allocations across the board are increasing. We've seen pretty uninterrupted double-digit growth in alts over the last 10 years. I think the compound annual growth rate's been about 12%. We've obviously been growing at 2x plus that. Most forecasters will say that they would expect another doubling in investor allocations. Now, certain sectors are more allocated than others. Pensions and endowments are already fairly healthy in their allocations. Retail, not so much. Certain sectors are gonna grow faster, but I think the trend for the industry should be continued double-digit growth. The larger platforms who have more resources against sales, marketing, IR and investing are capturing a disproportionate share of that wallet. Per year for the next five years, folks like Ares are growing, you know, 20%-25% + as we continue to consolidate that share. Great. Maybe digging into credit a little bit. You touched a little bit on some of the structural drivers. How much of your credit business is tied to deal-making activities, LBOs and the like? You mentioned that, you know, higher rates are a good thing. Is there another side to that? You know, is it sort of diverse enough that the business can kind of grow? It sounds like, you know, fundraising, there's really no slowdown. There's no slowdown, shortage of opportunities. Mm-hmm. Could you maybe speak to that a little bit in more detail? Yeah, absolutely. One thing I didn't say this earlier, but it's important when you think about how our investment activity translates to company performance. Because of our credit orientation, we actually get paid on deployment, not on commitment. While fundraising is great, whether we raise $60 billion this year or $30 billion, what's gonna drive the growth in our P&L and our dividend is the investment side of the business. Interestingly, if you look at the positioning of the company today, of our $335 billion, $90 billion of it is uninvested. Almost $60 billion of it is uninvested and not yet paying fees. The reason I mention that in some respects, fundraising for us is, in terms of its positioning of future growth, really a 2023-2024 story. We're really investing the things that we've raised in the last couple of years. Yeah. Yeah, I mean. Well, okay, on the topic of the fundraising, you know, you mentioned that the $30 billion year to date is not from any major flagships. Yep. I believe on the earnings calls, you've indicated there's a flagship cycle kind of coming up. Can you talk about, you know, I don't know, any details you can share there in terms of, you know, which fund families are gonna be in the market, what the targets might look like, how much you're hoping to raise over what period of time? I think we said we have about five funds that are coming to market, and the prior vintages of those funds were about $25 billion. Those are all what we call them flagships, but think of those as kind of the core pillar of a strategy. It would be something like our next vintage of our European private credit fund. The last fund that we raised was $15 billion. We don't know exactly how large the next fund vintage would be, but our experience has been historically, when we come to market with the next series in a flagship fund, we tend to see 20%-50% type growth rates. We have two private credit funds in the U.S. coming. We have a flagship private equity fund coming. There's a lot of what I would call kind of the core offering coming to market in the next 12 months. Great. In terms of realizations, I think we touched on this a little bit, but, you know, being more credit-focused, it's not as much of an issue, but how do you see that environment sort of changing? Should investors be expecting that realizations are gonna get pushed out? Do you see, you know, plenty of opportunities kind of given, you know, the current, you know, portfolio that you have? Yeah. I think realizations will slow. Less of an issue for someone like us who's balance sheet light and not PE heavy. Any time the market is price discovering the way that it is, transaction volumes will slow, which means that realizations will typically slow as well. That's natural. What that means is equity owners of high quality assets will just have to own those companies longer. That may create increased opportunity for the secondary side of our business, where LPs and GPs will be looking at full allocations in a given fund and try to create some liquidity. It may mean that equity owners are turning inwards to their existing portfolios to try to, you know, tease out deal flow, and so you become a little less reliant on the IPO market or the true sale market to sell. There's a healthy amount of activity, but it's appropriately slow, so I think they would get pushed out. Again, given our credit positioning, and you're probably sensing a theme here, the bulk of our credit funds have what we call European style waterfalls, which means that we get all of our carried interest and incentive income at the end of fund life, right? Because we have to return investor capital and a preferred return before we start generating carry. Versus what the industry calls an American style waterfall, where you earn carry as you monetize. The idea of what kind of a realization environment am I in is much more relevant if you're an American waterfall, because you're only earning promote when you sell an asset. Structurally, these credit funds, because they are floating rate credit instruments against fixed rate hurdles, particularly in a rising rate environment, as they get to the end of fund life, the distributions from promote off the European waterfall starts to kick in, and it's pretty consistent. We've spent some time talking openly at our Investor Day into the market about this embedded engine of profit that we have in these European waterfall credit funds. I think realizations will absolutely slow. By definition, they're gonna get pushed back into next year. From the Ares positioning standpoint, that's not gonna disrupt the trajectory of these credit funds because as they get to fund life, that promote's just gonna come in through coupon. For your group of European waterfall funds, you know, as you said at the Investor Day, I think you put out some targets in terms of what you expect to realize. Is there any risk there in terms of valuations? You know, I know these are older funds, but, you know, presumably invested at, you know, lower rates. How should investors be thinking about that? You know, is there a risk that as we're getting to the end of the fund life, the valuations come down to a level where maybe it's more challenging to hit those targets, or do you feel confident there? No, I think we feel really confident because again, what happens when they get to end of fund life is they either mature out or they get refinanced, right? If you think about these funds, you're typically harvesting your European waterfalls in year 6 or year 7 of a fund's life. We're talking about flagship funds that we were raising in 2016 and 2017. By the time you get to that, you're effectively naturally de-leveraging and that portfolio is running off. Yeah. That's helpful. Maybe in terms of your mix a little bit, we've obviously talked a lot about credit. Can you talk a little bit about perpetual capital? You know, how big is that for you today, and what are the kind of key components of your perpetual capital offerings? Yeah. Perpetual capital is an important component of the AUM and the value proposition. It's a little over 25% of our assets and growing. The growth in that is coming from an increase in our offering. It incorporates things like our non-traded REITs, our interval fund, our BDCs, our mortgage REITs. Those funds are growing in number and growing in size. I would expect to continue to see that. I think we're seeing more investor appetite for more permanent and more open-ended fund structures than we ever had before. Makes sense. I wanna talk a little bit about retail, 'cause I think they're somewhat related. Mm-hmm. You mentioned secondaries earlier. Yeah. I wanted to make sure we hit on that. Can you kind of give us an update on Landmark and at a high level, you know, how has that integration gone? Maybe more broadly, like how do you think about industry growth of secondaries in general? How big can that asset class be relative to, you know, primary investments? It could be quite large. The secondaries experience is actually quite interesting. The reason we made an acquisition versus building it organically was we saw an inflection point in terms of the market's growth, and that growth was being driven by a couple of different catalysts. One was a general shift from what we call LP-led secondaries to GP-led secondaries. Landmark, now Ares Secondary Solutions, was probably one of the earliest pioneers in the secondary space. In the early days, the market was really a tool for institutional investors to cull their portfolio of illiquid assets. Pension fund XYZ has a new CIO. They wanna change the composition. They own a bunch of fund investments that are illiquid they need to reposition. What's emerged over the last five years, but really is accelerating over the last two, is a rise of GP-led secondary solutions. Now it's not just LPs looking for liquidity, but it's a GP who's maybe looking to own a great company longer, or an institutional equity manager that's going through a generational transfer and needs some mechanism to get capital onto their balance sheet through a financing or a stake sale or a structured financing solution to help facilitate a transition in ownership. It could be similar to what I just said about now, maybe they're at the end of fund life. Their new fundraising is getting delayed because their existing investors are overallocated to private equity, so they need to extend capital runway. Maybe they take out a NAV loan, which is a loan against those portfolios. There's an extraordinary amount of innovation happening in secondaries right now that's changing the TAM. The simplest way, and I'm giving a long answer to what was a simple question, the addressable market for secondaries is the primary market. We always think about the secondary market opportunity as a penetration rate of primary capital. If you think about private equity, private equity secondaries represents about 10% of primary capital. Still under-penetrated, but that's kind of a mature number. Real assets penetration of the primary market is probably in the 1% range, and credit is, for the most part, nonexistent. There's an opportunity here too, which was the second growth opportunity, LP to GP, but then also the maturation of the market to take a greater share of the primary market. As more people own alts, more people are gonna be looking for liquidity solutions, and that's one of the reasons why we're so excited about it. The integration's going great. Cultural integration is as good as we hoped it would be. We've been launching new product. Happy with performance. Yeah, we're really pleased. Great. All right, maybe we'll dig into the retail side. Maybe before we talk about Ares specifically again, you know, one of the kind of worries that investors have right now is that the macro looks a little bit uncertain and, you know, perhaps retail investors are less likely to allocate incremental dollars. Is that a, you know, is that a fear that, you know, is valid, or is the, you know, is the overall penetration of alts into retail portfolios, you know, so low that there's just like a, you know, a many year, you know, runway of upside? To be honest with you, it's too early to tell, and I think it's gonna be manager and product specific. Just to maybe just contextualize retail, to your question about how allocated are folks, you know, when you look at the retail investor and their portfolio that's available for alts, they're probably 4% invested in alts. Most platforms are trying to see that double to be 8% or 10%. Dollar-wise, you're then talking about taking what's roughly $2.5 trillion and turning it into $4 trillion or $5 trillion. That's a big pool of capital, which could and should theoretically overwhelm periodic volatility, which is why I think people are so bullish on the secular opportunity to capture incremental retail flows. I think it's important, though, that people understand the constraint to growth for somebody like us is the capacity to invest, not the capacity to raise capital. As exciting as it is to be able to diversify our funding sources into the retail channel with new product and permanent capital, if the retail channel wasn't buying that product, the institutional channel would. For me, it's more about what does it mean from a diversification standpoint, which is good for our business and from a permanent standpoint as opposed to opening up a new market per se. It's getting an appropriate amount of excitement, but it may not be quite as transformational as some would think. Historically, having run ARCC for as long as I did, and Ares has, the retail investor used to be pretty fickle around markets like this. One of the reasons why we diversified away from a lot of those public market exposures was because the retail investor would typically exit the market when they were supposed to be entering the market and enter the market when they were supposed to be exiting. I think the advisor community has viewed some of these less liquid alt products as a way to protect the investor from that type of behavior. I only mention that because if you asked me that question ten years ago, I would have told you retail investors will typically run for the doors when we're in markets like this. We're seeing the exact opposite, that we're actually not seeing a slowdown in our retail flows, year to date, and all this information is publicly available, and we're seeing very low redemptions. There's something that's changed in the structure of the market and the mindset of the retail investor or the way that they're being advised that's maybe changing that behavior. Again, it's early, but I'm encouraged by what we're seeing. That's great. Can you give us, like, just a super brief overview of the key kind of products and what makes them appropriate for retail? Maybe any color you could share on the, you know, the product pipeline, what else you may be kind of developing for this channel. Yeah, I think one of the big drivers of alternative appetite retail and institutional is just yield. I think in the retail market, it's durable yield, and income replacement. There is a long-term secular trend of just aging population, people living longer, retirements lasting longer, and needing to lock in the power of compounding income. In the early days of the development of this market, the products that are resonating the most are lower risk, higher yield, higher diversified strategies that people can kind of underwrite that compounding effect. That's non-traded BDCs, diversified credit interval funds, REITs. There is a shift happening too, whereas people get more comfortable with alts towards income plus, income plus total return. I think dividend and income is always gonna be a key component. Right now, as I mentioned, we have two non-traded REITs, a credit interval fund. We have launched a private equity fund leveraging the Landmark secondaries capabilities, and we are on file with a non-traded BDC that would have us have five kind of core products in the non-traded channel to complement our traded vehicles. It is likely that over time we'll build out that suite to touch other parts of our business. Great. Maybe one last question on the retail side. Can you speak a little bit about, sort of the distribution process, what is required from you to kind of help educate advisors or their end clients, what that looks like and, you know, what sort of? We have an entity called Ares Wealth Management Solutions, AWMS. It is what you all would think of as a traditional wholesaling and distribution infrastructure over 110 people whose sole focus is to sell and support product in the channel. That is a big investment that requires a lot of conviction and the ability to actually raise and service the channel. It is a requirement that if you want to be successful in that part of the market, that you need to make that kind of investment. One of the reasons why we're seeing some of the consolidation of wallet that I talked about earlier is because we can make these types of investments, support that type of infrastructure when an up-and-coming manager, frankly, just can't, you know, meet the requirement of the resources needed to service the product. The bulk of those people right now are domestically focused, and so the next phase of growth for us is to turn our attention to the European and Asian markets, and we've been systematically making hires to build out those teams as well now. Great. You know, I think I lied. Maybe one more question on retail, if it's okay. Can you know, you're not alone in sort of pushing into retail among your peers. I think the expectation, as you say yourself, is that there's so much more kind of TAM to be had and, you know, dollars to be allocated. What are you seeing competitively? You know, there's some quite healthy growth there, but, you know, everybody's trying to, you know, find their niche. Yeah. Kind of get into more wirehouses. Are there, you know, do you sign exclusivity agreements? Are there, you know, how do financial advisors think, do I want to sell an Ares fund or, you know, a different one? How do you think through all that? Yeah. There's a lot of sophistication that's entered the channel. I think the wires and the RIA platforms have restructured and re-resourced to make sure that they can appropriately evaluate and support the product the same way that we have. Part of this growth opportunity was created by folks like Ares making a commitment to the channel, creating products specifically designed and structured for the channel, but also the platforms investing in people, technology to underwrite, distribute, and support the product as well. It's a real joint effort to see this product come online. Importantly, brand name alternative managers are bringing institutional quality product into the retail channel with a commitment to give the retail investor an institutional quality experience. Whereas I think prior iterations of growth in this channel has been, you know, oftentimes lower quality managers that couldn't access the institutional channel, so they went retail, and it's kind of flipped on its head a little bit. It's competitive, but the market's much larger. The way we're experiencing is I would rather be in a market with more competition, but significantly more buy-in and available dollars than a less competitive market, you know, that wasn't open, and that's generally how we're thinking about it. I think the good news for us is we have been in that channel for almost 20 years, given our listed product. A key element of how we distribute institutional product is we put it through the high net worth and ultra high net worth part of that channel. There's a lot of brand recognition and positive experience that already exists for us. Now that we've made the investments and are bringing the product, we're seeing a pretty good uptake. All right. I promise that was the last retail question. Maybe let's switch over to real estate a little bit. I think at the beginning of our conversation, you talked about, in particular, how the credit, you know, side of the business is well-positioned. You know, I know you guys have a, you know, a large part of the portfolio in logistics, multifamily. Can you maybe speak to that? How should we think about stress testing? How sustainable are the kind of returns, you know, rent increases, that we've kind of been seeing over the last year or two? It's a similar story, but I don't wanna sound cavalier because real estate is a little bit more rate sensitive. I think the good news is, to your point, we are over-allocated to industrial and multifamily real estate and under-allocated to office, retail, and hospitality. If you think of the five food groups, we're in the two, you know, two best with the best fundamentals. I'd also highlight, at least in the markets where we're operating, generally those markets are still undersupplied for industrial and multis, and generally the real estate market is under-levered relative to past cycles. Where we've seen distress in real estate in the, you know, almost every cycle preceding what this one could be, you've had a combination of oversupply, over-leverage, and then fiscal policy comes in and the market is disrupted. We don't have that. What that means is even though there's anxiety about rates and its impact on value, fundamentals at the property level are as good as people have seen. You're near full capacity utilization. You're seeing rent and lease growth, you know, 20%-40% period over period. The interesting thing now, given the inflation picture, the value of the installed real estate relative to the cost to bring new product into the market and the time to bring new product into the market, given supply chain constraints, is making the in-place real estate more valuable. We really quite haven't seen this setup before, but one of the ways to get your head around the fact that real estate values are holding is because it's very difficult to bring new product online, and the product that's in place is performing extremely well right now. Got it. Very helpful. The one part of the business we haven't touched on yet, the SSG business acquired a few years ago. Maybe just kind of give us a brief overview and kind of an update. You know, how are trends there perhaps different than what you're seeing elsewhere, and how should we be thinking through this? Yeah. This is a fun time to be in our business because for the first time in 10 years, we're actually seeing dispersion, right? You know, everything was seemingly correlated, and now Europe is on a different trajectory, different parts of Asia are on different trajectories. That tends to benefit us because we can actually go in and there's just more arbitrage available in these markets than there otherwise would be. SSG, just to remind people, we acquired almost 2 years ago, a market leader in private credit, a core competency in distressed and special situations investing, and a growing business in direct lending and private credit. Kind of a marriage made in heaven in the sense that we being the market leader in private credit in the U.S. and Europe, had the playbook we thought to really expand the business in the region. We're doing that. We've raised sequential vintages. We've added more traditional acquisition finance product in Australia, New Zealand. We've added resources around our infrastructure debt platform. We've added resources around our real estate platform. Over time, the expectation would be is that that broad business that we built will start to expand to replicate what we have in the U.S. and Europe, which is the full product offering across the platform, and we're starting to chip away at that. What's interesting about Asia, if you would've asked me two years ago, I would've thought that they would've led coming out of COVID because they were early, and there's a fair amount of technical sophistication, you know, around medical and medical tech. Obviously, they're having a very difficult time coming out of COVID. You know, China's zero COVID policy is having a meaningful impact on the opportunity set in the region. I would say, you know, there's more of a special situations opportunity developing in Asia relative to some other parts of the world that we invest in than I probably would've expected, you know, a year or two ago. Good news is that's kind of the core business. I think our folks on the ground there are getting, you know, pretty excited about the way those markets are developing. Great. We've got just a couple minutes left. I'd be happy to take a question from the audience if there are any. Otherwise, we can kind of continue. My question is just in general in terms of the company's private credit portfolio. How much capacity does it have with respect to either their margins or their service coverage in relation to pricing rates and costs? Sure. I'll try to give just directionally how I think about the risk. We talked about debt service coverage. They attach typically loan to what I'll call cost, because let's assume that value is murky right now. Loan to cost at about 45%-50%, which means that there's some institutional equity owner that owns the bottom half of the capital structure below us, which is important. They are average EBITDA margins, probably in the 20% range. They tend to be in high return on free cash flow type industries. Business services, healthcare services. Interesting thing about credit investing, which I'm sure many of you know, if you go back and look at prior cycles, there are roughly five industries that tend to be where the bulk of defaults reside. As good of a credit managers I think we are, just by avoiding those industries, we tend to avoid a lot of the credit challenges, and that's kind of true. There's a pretty healthy amount of buffer in those portfolios to withstand increasing rates and the margin degradation. The most important number I mentioned is the loan to cost, because what's different about this cycle versus prior cycles is assets are less leveraged, and there's more cash equity subordination. If you think about a portfolio generally that's invested at the top half of a capital structure, even if the company's having liquidity issues, the value to the equity owner to support that company and protect that equity is higher than it's ever been. If I had to predict, if we did go into a scenario where economic conditions worsen dramatically, I think you'll see lower losses given default rates because of the amount of equity in these capital structures and the need to protect. If that doesn't happen, I actually think it would be a very big boon to the private credit market because you basically have a call option on all of that equity, and it doesn't take a lot of capital to unlock it. We got our first glimpse of this through COVID when companies were having liquidity challenges. Significant amount of dry powder came off the sidelines and found its way into the existing portfolios to build that liquidity bridge and dollar deleverage. I would expect the same thing to happen. They're all private. Some structures will shadow rate or comparable rate. You know, I'd say generally when people think about core corporate private credit, you're talking high single B, low double B equivalent. With that, unfortunately, we're out of time. Thank you so much, Mike. What a great presentation. Thank you. Yeah, appreciate you having me. Thank you. Thanks for your time, everybody. Appreciate it.