Thank you very much. Good afternoon. Welcome back. Hopefully you guys have been able to grab some lunch. I see some plates out there, so it's fantastic. My name is Bill Katz. I am the asset manager and retail broker, sell-side analyst who covers the group on behalf of Credit Suisse. Excited everyone came out to our 24th annual financial services conference and forum. This is our first year on the team, super excited. We don't cover Ares at this point in time, we've gotten to know the company a little bit, and they were generous enough to come on down and do a fireside with us. We're super excited to hear a little bit more on the story. From, from Ares, we have Jarrod Phillips, who's the CFO. We also have in the audience, the strong IR team. Carl Drake is here, who was just telling me that he no longer works on the sell side, so thank you very much for that. Greg Mason and also Cameron Rudd. Gentlemen, thank you so much for coming today. Ares was founded in 1997, is a leading asset manager, as of the end of the year, about $350 billion of assets under management. The firm has grown rather dramatically over the many years, both de novo and through acquisitions to help support expansion beyond credit into real estate and secondaries, as well as continued leadership position in the private credit area, fueling what's been significant growth for the credit franchise overall. Jarrod joined in 2016 if my notes are correct, and you're also the CFO of Ares Acquisition Corporation as well. Yeah. First of all, thank you very much for coming. Nice to spend some time with you. Thank you. If anyone has any questions, we'll try and get a microphone around. Pretty small room, so, try to keep it somewhat intimate, despite the microphones and the lights. First question maybe big picture... Sure. -a little bit. Obviously, big footprint. See a lot of different things going on in your portfolio companies. Can you give us a sense of what you're seeing in terms of inflationary pressures? Obviously, we got a CPI number today that was relatively in line with expectation. What are you seeing in terms of inflationary pressures or growth or maybe even some of the asset quality trends? Yeah. What we've seen in both the credit and, actually in the private equity portfolio as well is EBITDA growth year-over-year. While we have seen inflation, we're aware of the inflation pressures at our portfolio companies, they have been able to, let's say, pass some of that through and continue to grow EBITDA. In both, direct lending and our private equity, we grew about 9% year-over-year in EBITDA. We continued to see strong growth there, and that was combined in the credit portfolio with strong interest coverage and LTVs around 45. Overall, while we are certainly aware of inflation and we see it happening, the industries that we invest in and the areas where we specialize, they have been able to successfully navigate it and still grow, despite the macroeconomic environment. Great. Any signs of stress that you're seeing across the portfolio? Ultimately, that's, you know, all those data points lead to a pretty strong portfolio. The thing to always step back and really zoom out when you're talking about credit is we invest in the top half of the capital structure. When I'm talking about LTVs of 45, that means there's 55 of equity underneath it or mezz and equity that's underneath it. What happens in a time like this is you see interest rates rise. You know, you have the rising EBITDA to go along with that to cover some of those cash payments. In the event that you're having more cash or liquidity pressures, what really happens is there's a transfer of value between equity and credit. While the interest rate increases, being normally one of the sole lender or the only person in that position or the lead, it allows us to negotiate with those portfolio companies should there be pressure and say, "Hey, well, here's the cash level yield that we can go with, and we'll take the rest in PIK." Do some other sort of equity transfer, non-cash change that allows us to continue to support our portfolio companies, allows them to continue to service their debt, and actually provides attractive economics in the long run. Okay. It's a consistent theme we've been hearing for the couple days we've been doing this. Okay, so maybe another big picture question, then we'll dive into Ares in a moment. Just given your breadth, it's always great to hear what you're seeing as well. There's been a lot of delay in terms of fundings through 2022, just given the market volatility, uncertainty with interest rates, the macro backdrop more broadly, the denominator effect, PIK your poison along the way. As we're working into 2023 now, any shift in allocation trends that you're seeing? How might that influence what's happening for the Ares footprint? Sure. We've certainly heard of the denominator effect, and we've seen it but not so much experienced it. The denominator effect has largely been in the private equity side, and we haven't had a sole private equity fund out in the market over the last couple of years. Ultimately, what we've seen is investors who understand the vintage of private credit that they're at right now, that we're at right now, and have been very interested in continuing to deploy into that market, so continuing to invest with us. We've been very happy about that. I mean, if you go back to when I joined and, you know, maybe go back even a little further, I think private credit has become more and more popular, and it's become more and more understood as the risk that you're getting paid for ultimately when you do it. It does sit right in the middle of your investing allocations. As interest rates go down and people are looking for a higher yield, they migrated over the last couple of years to private credit. That allowed more investors to come into private credit. Now, as interest rates have risen and we're seeing a vintage where, you know, 10%-13% returns are common, you're seeing investors maybe change their allocation from private equity into private credit. Sitting in between those two bands has been very valuable, and our investors certainly have understood that. As more people have allocated to private credit, we've been a beneficiary of that. In terms of our fundraising outlook for the coming year, we have several of our larger co-mingles in credit. We feel very bullish about those, and we're excited to have those out there. I think that, you know, the rest of the portfolio has also been equally strong. We will have a private equity fund that is currently in the market. We'll probably have it closed later in the year, but we're excited about that one as well. Based on the business, as you've noted, that we're highly focused on credit, that one private equity fund doesn't make or break the success of a fundraising year. Right. Understood. Okay, maybe just turning to some of the Ares opportunities. Forgive the, sort of the lateness of this kind of question, but on your 2021 investor day, you laid out what seemed to be ambitious goals, but nonetheless, here we are, and you're moving along very nicely. We laid out a goal toward $500 billion of AUM. It doesn't feel quite so far now. Certainly not all the way there, but certainly on the way, as well as 20% annual growth in FRE, and then a similar type of growth rate in the dividend as well. Can you help us unpack a little bit, maybe start with the AUM? Sure. of how do you sort of take that glide path from here to there, and where do you see the best opportunities? You know, if you just take a look back at 2022 and what we did there. We said in our most recent earnings call that we expect this year, 2023, to be more like 2021 and approach the record number that we had there. 2022 was a little bit more of a quiet year. We didn't have a large number of our biggest commingled funds. In fact, really the most significant commingled fund, we only had one in there, and that's our Special Opportunities, our second fund there. If you look, we did $57 billion against $77 billion the prior year. That's $57 billion without having a major fund beyond ASOF II out there, which by the way, had actually started in 2021 and had its largest bit of fundraising there at the end of 2021. That gives us kind of a good feel for what we can do without those major flagships out there, that $57 billion number. This year we have seven of our largest 10 that will be fundraising, seven of our largest 10 fund families that will be fundraising this year. Those won't all start and finish within this year. There'll be some that, you know, start this year and finish 12 to 18 months later. When you take a look at that, and you just take a look at two of the largest, our sixth European direct lending fund and our third senior direct lending fund in the United States, the prior vintages together were $30 billion. When you take that $57 billion, and then you think about things like, okay, two of our very largest funds coming at $30 billion coming into the market, plus another five of the 10 largest families, all of that gives us a really clear picture of what we can do over the next 12 to 18 months. By that time, you're only about six months away from the end of 2025. Right. I think when you, when you kinda look at it that way and you see how our successive vintages have performed and then raised, that's what gives us a lot of confidence over that number. Great. Then tethering that to... Actually, before we move on, let me just ask a couple questions here. Sure. With all these multi-vector growth opportunities, it's hard to sort of narrow down to sort of a few questions in 40 minutes. I apologize for thinking on trying to think on the fly here a little bit. In some of the growth here, the two flagship funds that you mentioned... Mm-hmm. Where do you think you are in terms of the J curve for successive funds being larger than the predecessor fund? I appreciate you may be in registration perhaps and can't say specifically. Sure. Directionally, how we think about bigger funds from here. You know, as you go to those larger sized funds, I think you definitely compress. I typically think of things in the 1.2x-1.5x, even up to 1.8x or 2x in certain circumstances, times the size of the prior vintage. That frequently happens when we go from, let's call it a $2 billion fund to a $4 billion fund. You're exactly right, though. As you hit those larger sized funds, as you're talking about a $15 billion fund, it's a lot of people have given you their kind of full allocation. They've given you their $500 million. That's not gonna really grow. I expect that we still generally expect growth, but we don't expect it to be at that 1.5x-2x level. Generally, where we're gonna be in is that 1x-1.2x. Now, the unique thing is, and I think it's important to think about it, that the industry has always thought about things in the private equity sense, which is you raise a fund, it's paid on committed- Right. It steps down its fee when the next fund is launched. Credit, actually, the focus is more on your deployment because we get paid on deployment. When you're thinking about it, you really want to be able to raise, close, and deploy the fund and raise the next one. When the next one goes online, you don't stop paying management fees, and you don't reduce your management fee on the prior fund. Right. That stays out as long as the underlying portfolio exists. Really it's as important in credit that you have a good deployment pipeline, the ability to deploy, as it is that you have larger successive funds. Still, we certainly have equity style funds, and there we do focus on, okay, we want to see sequential growth, but there are times where it makes sense to just launch a fund and build the next fund right after it. Mm-hmm. That being said, we're very excited about the next vintages here, and that's not something that we're looking at. Right. Gotcha. Okay. I wanna come back to the FRE growth in a moment. Okay. What the question I have now is that there's many of your peers are in the market raising capital, and obviously these are very, seemingly doable, but nonetheless, you get a lot of competition out there, and there's still some uncertainty. When you step back and you think about the business model itself. Mm-hmm. What are the two or three factors that really differentiates, Ares? Obviously, a lot of folks are. Mm-hmm. -getting into private credit. You were early, you know, sort of recognized that powerful theme, but a lot of competition's out there, and they're all trying to raise capital as well, you know. How should we think about that? Again, maybe taking a more macro view of the platform, specifically within credit, is we have an executive team that has been together for a very, very long time. We've had minimal turnover across that team. These guys have worked for, you know, 20-plus years together. We just celebrated, as you note, our 25th anniversary. A lot of these folks have been together for that entire period. A lot of people joined in 2004 when ARCC was launched. We have an extended track record with those actual employees being in seat. They've navigated through different market environments. They understand the underwriting process, the origination process, and we train that next level of employees with that in mind. You know, we have the largest footprint in terms of employees in direct lending. That is a pretty large moat to get over because those people have built sponsor relationships. They've built company relationships. People know what to expect if there's a problem when they're dealing with us. That can't be undersold how important that is when they're making a borrowing decision, is they wanna go with a borrower that's not going to knee-jerk, have a reaction at the first sign of trouble. They want a partner that will help them work through issues, that will help them succeed, ultimately. They don't wanna see their loan sold off to another person or another company when there's the first sign of trouble. Having that long history of being able to work with sponsors, being able to work with borrowers, and really create long-term relationships is something that I think that's a very strong moat. Okay. You didn't mention performance in that. Obviously, I think it's implicit to the tenure of the team. Yeah. Having gone through credit cycles. Mm-hmm ...you know, pretty robust underwriting standards, if you will. When you think about that, any sense of how you sort of foot up against, some of the other peers that are out there? Does that matter at this point in time, or is it more protection of capital, if you will, or both? I think it's probably a little bit of both. I think when we go in and underwrite, we know what we're willing to underwrite it at. We don't try to compete on price. We, you know, we've definitely seen people come in, and they might compete on price, but that's gonna create a performance issue down the road. We know that we need to deliver both to the LPs and to the sponsors in terms of a partner that they can rely on. Having a deep, experienced team that understands how to work with a sponsor, understands how to work with a borrower, but then can deliver those returns to the LPs is important. At the same time, we've seen other people come in and try to win maybe on the LP side and cut their fees there, but then not be able to deploy because they're not able to underwrite to originate. We've seen actual LPs that have said, "Well, we went to this party, and now we're actually gonna come to you because we believe you can deploy." There's, there's an importance in the ability to have all those relationships and to be able to deploy into that private credit market that matters, too. An investor doesn't wanna make a $2 billion commitment and then have that just sit there as they're waiting to deploy, because that's a drag on their own returns. Mm-hmm. There's two sides to it. Right. Within the direct lending footprint, how important is origination capability, distressed and/or private equity to ultimately either support the upfront origination process, which you were just talking about, or, heaven forbid, something were to go sideways a little bit, the ability to sort of work through that model and sort of you minimize the net losses at the end of the day? Yeah. I think, you know, what we call our portfolio management group, that's the group that does that. If people are interested, they can go to our ARCC investor deck that we put out over the summer that walks through what that group does and how they do it. It is absolutely vital to the success of the franchise and to the returns, as you've mentioned. The ability to work out with a company once they've gone into default or once they're experiencing financial difficulties, that's, you know. That's one of the main drivers of outperformance in the long term. Is what happened, you know, back in the credit crisis is when you had assets and liabilities mismatched. As soon as a borrower would have difficulty, and the lender would then have to sell it because they didn't have that right match, that's when you saw these distressed sales going at, you know, pennies on the dollar that people were really able to take advantage of. By having long-term locked up capital and by making sure that our financing duration matches our asset duration, it allows us to spend time focused on those companies to manage through the difficulty. You'll see there, you know, when you include equity, not just defaulted loans, but we actually have a gain overall on the portfolio whenever we've held equity. Mm-hmm. It's definitely been something that's worked to our advantage over the long term, and it's a, I think, really an important part of the value proposition. Does that value proposition, does that resonate with the LP base when they look at selecting Ares as sort of the mandate versus one of your competitors? I think it does. I think it does. 'Cause it goes into your long-term steady returns. Right. They know it's a return number that has been through cycles, cycle tested, and they see the end results. Great. Maybe we can circle back to, just the other part of the, of the equation. The earnings growth. Mm-hmm. You're already operating at a pretty high margin, but what's the building block for the 20%? I think you've been exceeding that, but what's the building block for what seems to be a conservative 20% at this point in time for FRE growth? Sure. It's a lot of it has to do with what we talked about in terms of when we begin to earn fees. As we look at the funds that we're currently raising, frankly, the funds that we've already raised as well, and as we deploy those funds, that gives us an excellent line of sight to what management fees will be. Certainly, we know the offset is primarily compensation and a small percentage of our G&A. Looking at that base that we're building off of and then thinking like we just talked about, okay, my next fund series is gonna be somewhere between 1.2 and 1.8 times the size of my prior vintage. Knowing when that should occur, you know, when in the life cycle we are for those funds, we can map through all of our funds and say, "Okay, here's about when we expect to launch, here's the deployment pipeline that we expect to put in place. Here's when we expect to earn those management fees, and then obviously, here's what we expect our headcount and comp growth to be that works with that accordingly." I'll remind you again, we have to hire ahead. The expenses always front run the revenues, which creates a bit of margin compression that then expands. When we raise a larger credit fund as a predecessor fund, in order to have the right originations, Yeah, we need to be able to underwrite more. You know, we underwrite right now, a tremendous amount of loans, but we only originate 4% of this. If you say, "Okay, I've raised now a fund that's 1.5x the size of the prior vintage," you have a choice. You can either originate 6% or you can view more loans and you can view more companies. Ideally, we never wanna move above that 4%. That's. You don't wanna make a credit decision in order to fill the fund. You wanna make the right decisions that you believe in for your returns, as we mentioned earlier. That means that we need to have more bodies to look at more companies to be able to do more underwriting, which leads then to your increased originations, but your relatively stable percentage of loans viewed that you've originated. Gotcha. Just to make sure I understand it, when you say originate, 100 loans come in, you're taking 4. Yeah. It's not like you're underwriting more and then you syndicate out some and you're sticking with four. Just four. That's right. How has that ratio changed over time? It's been fairly stable throughout time. Wow. That's impressive. Okay, terrific. Maybe tying it back to margins for a moment. I think you're just under 40%. My notes call it 40% for the, for the fourth quarter. 45% seems to be the goal. Mm-hmm. Two-part question. If only that's my modus operandi. Number one is from here to there, is it just simply the scaling relative to headcount growth, so you get that wedge? Secondly, a number of your peers sit with a resting state margin right now about 60%. Mm-hmm. Some a little bit bigger, but some not. Appreciate there's idiosyncratic, model differences, if you will, but how do you think you can be on 25 for margins? Yeah. You're exactly right on essentially what happens to grow the margin. It is the deployment of your funds. As you deploy, you're earning management fees on there. You've hired ahead, we front-ran our expenses, created more management fees by the deployment. That by nature should expand your margins if you do nothing else. Now, I strongly believe that it's important to not just be a single strategy manager, to not just be a credit manager. If you look at our credit business, it's actually extremely diverse on the types of funds that we manage in there, and we're actually always working on making it more diverse by hiring new portfolio managers with new specialties. It could be asset-backed lending, it could be commercial real estate, it could be a new industry vertical that we weren't previously in. We need to be able to build that out. That can often lead to, like we just had with our Sports Media and Entertainment Fund, we become experts in a certain field such that people say, "Hey, well, we'd be very interested in a fund that just deals with this." We built that, and certainly, it was a decent margin, but the minute you launch a fund that's just on that strategy, it really can increase your margin over the long haul. Right. At the same time, we've also done things like invested in Europe, where we started with no funds, had to hire and built the dominant franchise in Europe. With our special opportunities group, we hired a team of 17 before we even had a fund to manage. Many other times, we'll work with some of our larger investors to seed a certain strategy to be able to begin a track record. All of those things are what goes into the 20% FRE growth. While we could sacrifice growth for margin, we don't think that that's the right call. We're happy with the steady improvement of the margin over time, while we're still focused on where are the different places where we can make hires that are incremental to our long-term growth. Just to play devil's advocate for a moment, if you get to the $500 billion, do you start to reach a little bit of a favorable inflection point where that rate of spend just decelerates and you get a little bit more margin lift? Maybe looking beyond 45% in 2025. Maybe that's a little greedy a question. Yeah. How do you think about that? We said 45%, so. Okay. Okay. Okay. Okay. Yeah, you absolutely have that potential. When you look at our businesses kind of across the board and you can look at them by strategy or segment and you'll see that some of our strategies are more mature, like a liquid credit business and our CLO business is more mature, and there's not as much growth there. You start to see a more stable margin over time. It's really where we're investing for growth, or where we're pivoting the business a little bit, where you see the margin dip down. Something like real estate has been a excellent example of how we can grow a margin quickly over time. That margin has expanded as that business has scaled very nicely. Right. Okay. I don't think that time is working, so I think we're good. That's why the only reason why I'm checking my phone, just to make sure we do stay on time. When you look out a little bit longer, I think that you have, and this is, I'm not as familiar with it, but you have a strategic initiatives bucket. Mm-hmm. Which I think speaks to sort of expanding the footprint and then sort of investing in front of that growth. Can we talk a little bit about some of the different initiatives that are sitting underneath that and where we might be along, like, the time continuum of those opportunities? There's three main businesses in there. There's some other just non-material things, but the three main businesses in there are, Ares Asia. Mm-hmm. which we just announced on our earnings call. We've reached an agreement to settle the final 20% that we didn't own, so that'll be, once regulatorily approved, we'll be the full 100% owner of that business. Then our insurance business is also in there, which is primarily through Ares Insurance Solutions, which is the manager of Aspida, which does both annuity and reinsurance contracts. Finally, the SPAC, which you mentioned earlier as well, which we announced that we've entered into a contract with X-energy, to finish our first SPAC. You know, when you take a look at all of those, when you take a look at the potential growth engines there, Ares Asia I think is a extremely compelling opportunity. I referenced earlier in talking about margin what we looked at Europe and saw. When we looked in Europe, 15 years ago, which they just celebrated their 15th anniversary as a franchise, we saw that this was going to work much like the U.S., where non-bank lending was gradually growing in importance over bank lending as banks were retreating. Today in the U.S., when we look at lending, it's about 70% non-bank, 30% bank lending. As we look where we're at in Europe today, it's about 50/50. Where we're at in Asia right now, as those markets mature, is it's 10% non-bank, 90% bank. We feel like this is the very early stages, much like 15 years ago in Europe was. When we were looking for how do we best operate in Asia, we actually did a deep dive into all the various managers there. When we found SSG, they weren't in a sale process. We approached them. We talked to them about our franchise. They were a team that had a long-term tenure together. They'd been working together for a long time. They had spun out of Lehman many years ago, and they had established an excellent track record. The one thing that we had learned, and we've learned it whether it's Europe, the United States, in direct lending, boots on the ground are vital. In the States, you need it for maybe understanding industries or what might be slightly different in geographies. In Asia, even more so than Europe, there's so many different regulatory bodies. There's so many different things that need to be understood that if you try and do that all from New York or you try and do it all just from Hong Kong, it's not gonna work. We knew we needed to have a platform that had offices in multiple countries throughout Asia where we wanted to operate. We're really excited about the potential for growth in that environment. We launched our first Australia-New Zealand direct lending fund. That's probably the most mature lending market in the Asia Pacific region. We're very excited about the capabilities that we have there and how we're able to leverage what we do in the United States and in Europe to benefit that business. That's certainly a very exciting initiative for us. The second one I mentioned, Aspida and our Ares Insurance Solutions. It's important to us to maintain our balance sheet-light model. We believe that using third-party capital to fund the growth of Aspida is very important and core to how we want to operate it. At the same time, the reason for that, I guess, is that we do have about $45 billion of other insurance companies' assets that we manage. Those are very important LPs to us. Those are very important relationships, we wouldn't wanna do anything to be seen as a direct competitor to them. Mm-hmm. -or someone that was threatening them. We think it's an important aspect of the business, but it's not gonna be something that's all-consuming. However, it's shown great growth. you know, we have about an annual run rate of about $1.5 billion on annuity contracts. We just started writing annuity contracts for the first time in July. Our reinsurance business is doing about $2.5 billion annually in terms of reinsurance. We're doing all that off of essentially a new insurance company, so there's not a bunch of old assets to unwind or a bunch of old contracts to unwind. Right. It does create a lot of benefit. Right. Right. Okay. Terrific. Maybe turning back to retail a little bit, big area of focus. like what I'm learning on many of your businesses, you're early to some of these great opportunities. Can we just get a level set about how big your portfolio is today? Mm-hmm. Any lessons that you're sort of seeing in terms of, product innovation or financial advisor conversations, just given the macro uncertainty, the rates backdrop, and what we've been seeing in the marketplace around some of these, portfolios that are semi-liquid, but I think becoming, like, an educational process of what that really means for everybody. Yep. and when you say retail, Sure. level set for everyone that you mean the non-traded space primarily, correct? 'Cause we obviously have ARCC, which is, we view as a retail product. Right. -and is in the hands of... Then you have ACRE, ARDC, several other public... companies. The non-traded space, I think generally people use retail, and that's where, you know, that's where they're asking the question to make sure that's... Yes, I apologize for not being more refined in the question. Yeah. You got the spirit correct. The, when we take a look at our portfolio right now, we have about $17 billion across our AIREIT, our AREIT, and our interval fund. We recently announced in the earnings call that we had raised $850 million of seed capital for our non-traded BDC, along with $600 million of debt. That, as it gets through the registration process and begins to invest that capital, will begin to be available for retail investors at sometime this year. Ultimately, that was part of the acquisition of Black Creek bringing on the REITs and a much larger distribution network and capability. We had done our interval fund through a joint venture partnership prior to that. We've been really excited about the potential there. We certainly know the challenges and headwinds faced in the fourth quarter and even into January for a lot of the REITs and credit funds out there. We still saw positive inflows through that period. Ultimately, I think that that is because we do have, on your question on innovation, a pretty innovative product inside the REIT, which is a 1031 exchange that essentially allows someone to sell their multi-unit apartment building or their single-family home that they rent, any of their, any of their rental properties. As long as they put that cash directly into the REIT through a Delaware statutory trust, they don't have to pay taxes on that, so they can avoid capital gains. That keeps it within the REIT for a minimum of two years to receive that treatment. That's great because you know that you have that two years of solid timeframe when those assets come in. The other thing you know is if they really wanted the cash anyway, they just would have paid the taxes up front. They wouldn't then say, "Oh, I'm gonna wait two years and then pay the taxes." Generally, you've established a much stickier investor. It's a great way to estate plan. Mm-hmm. It's a great way to diversify your risk. It's been about 50% or more of the capital that we've raised over the last year, depending on the REIT. It's been, I'd say, pretty innovative and pretty exciting to a lot of different parties. Ultimately, you know, we believe that retail market is something that's gonna continue to grow, that there is a desire for alternative products in that market, that something like the credit funds where, you know, obviously we have a specialty in, is very, very attractive, that continual yield. They are slightly different in that they do have to maintain a little bit more liquidity. You, you will have a slightly lower return on a non-traded BDC than you would on a traded BDC, but you won't have the market volatility. The RIAs, they appreciate not having the market volatility, and, you know, still receiving a very nice risk-adjusted return as opposed to investing directly in the BDCs. Many RIAs will say that they won't invest in a public equity. They'll only invest in these non-traders that move that way. I think it's something you'll see grow continually. It slowed down in the fourth quarter, frankly. I expect that it'll be slow here in the first quarter, but our long-term view is still pretty bullish. This is a very large addressable market that's very interested in that type of return. The other product that I mentioned that we have in there that's small but growing is our Ares Private Markets Fund. That was really an example of the synergy between acquired entities. We acquired our secondaries business, we acquired Black Creek Group with the brokerage business, and we launched the secondaries fund, which really allows retail investors to get some private equity type exposure through this Ares Private Markets Fund. There's some exciting things that, you know, with portfolio contributions and things of that nature that we may be able to do while that product ramps. That product will have a ramp that's more like our interval fund, which is a multi-year slow growth until it really hits scale. It's something that we're excited about nonetheless. Okay. maybe one more question in retail, as we think about this conversation. What's the pathway to growth? Is it simply scaling these products and a few more and/or is it an opportunity to fan out and deepen penetration on the distribution side? Maybe help me understand where you might be in terms of. Yeah. Relationship with the distributors. Right now, we just added a wirehouse in the 4th quarter. As we noted, we expect to add another one here in the 1st half. I think we said we'll add, you know, a couple different wirehouses on the total platform. Some of the, you know, the interval fund is on more wirehouses than the REITs are. There still is room to grow and to be put onto more wirehouses. That just takes some time. I'd say that it can take anywhere from 12-18 months to get put onto a wirehouse and have it up and running. We're pretty close with AREIT and AIREIT to being on all the wirehouses. We're still working through it. With the Ares Private Markets Fund that I mentioned, we're not on any of them yet. That's part of the slow growth of that business. Okay. Because they really do wanna see you at scale prior to adding you. We expect to be able to be on them with our non-traded BDC as well. There's still some, let's call that organic growth of those vehicles that will allow those vehicles to grow over time by having a larger distribution network. I agree with you. I think that it's important also to have more products out there. It's not 25 products, but there's products that make sense. We've hired a head of distribution in Europe and Asia, and we've been looking at what potential products might make sense in those markets, as well as obviously being able to sell potentially to those markets. I think that there's probably maybe one or two more product types, but then there's geographies that open up as well. Okay. Super helpful. In the last few minutes we have, I don't know if anyone has any questions, let me turn to sort of capital priorities, generate a ton of free cash flow. How should we think about, you have a lot of de novo opportunities, but how do we think about inorganic opportunities? If there's not that, how do we think about the waterfall of capital return to investors? Sure. We've, you know, you take a look at our dividend policy in detail, essentially I keep it simple. I say it's pegged to FRE. As FRE grows, you'd anticipate that our dividend would grow as well. We haven't talked very much about it, our European-style waterfalls, especially from our credit funds, are really starting to kick in, and will kick in in earnest towards the end of this year and into next. We guided that, you know, we'd have $100 million from that style fund and $175 next year. There is some exciting liquidity events on the horizon in terms of that cash generation. When I take a look at it though, I think you've highlighted appropriately, we have a balance sheet light model. We like to stay that way, but we like to invest for growth, and that happens in two ways. That can be seeding a new strategy or it can be making a nice tuck-in acquisition, essentially. I don't think there's any one major thing that any of us feel like, oh, we're really missing and we'd just be complete if we added this. There's opportunities geographically that we look at and we'd say, "Okay, well, this is a better decision to buy it versus build it." There's things, you know, infrastructure is an area where we're still a little bit small. We have a great infrastructure debt franchise. Our equity, we do have a really nice performing first Climate Infra fund, and we're working on our second, but I think we could still build scale, especially in different geographies there. That will take capital in the future. Acquisitions will take capital in the future. What you'll see us do a lot of times is, as I mentioned before, when we have some of our larger LPs that are invested cross-platform in the billions of dollars, we often work with them to seed new strategies that we say to them, "Well, what's something that we're not doing that you would like to do?" You know, depending on what they say, we say, "Okay, well, we might have some in-house expertise to pop that out, or maybe we need to make some hires to do that." At the same time, they normally wanna see the house invested alongside. If they're gonna put $1 billion to work, they may ask us for $100 million or $200 million in that same fund. Mm-hmm. I think that that's an appropriate use of capital because that's building a base for a long-term new fund family that hopefully potentially becomes one of our largest fund families, you know, as we do that. That's how we broaden our platform. We create new legs, and we, I think, most intelligently invest our capital. That's really how I would look at it, is obviously we wanna cover the dividend, then we want to be available to do M&A transactions, and then we wanna be able to seed future investment strategies. After that, obviously you pay down debt and simple things like that. Okay, I know we're out of time, but just one clarification. On the European waterfall, I apologize for not getting into that. Incremental margin on that, does it all flow to bottom line or is there a comp payout? No, it's a 60/40 split, but when I give you the number, I'm giving you a net number that's already accounted for. Okay, that's a net to- That's a, you know, if you wanna say margin's 100%. Super helpful. Listen, thank you very much for coming in today. Just wanna thank the team as well. Really appreciate the patience answering all the questions. I'm sorry if they were very elementary. That's great. Great. That's great. Great. Yeah.