For important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. Please note that taking of photographs and the use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. All right, good morning, everyone. Thanks for joining us here at the Morgan Stanley Financials Conference. I'm Mike Cyprys, equity analyst, covering brokers, asset managers, and exchanges for Morgan Stanley Research. For our next session, I'm excited to welcome Jarrod Phillips, the Chief Financial Officer at Ares Management. As many of you know, Ares is a leading global alternative investment manager, with approximately $430 billion of assets under management, invested across credit, real estate, private equity, and infrastructure. Jarrod, thank you so much for joining us. Thank you for having me. Thanks for making the trip from L.A. Yeah. My pleasure. Why don't you start big picture? Let's set the stage with the macro backdrop. Clearly, a lot of debate in the markets today, whether it's around inflation, rates, credit, health of the consumer, and on and on. What are you seeing at the macro level through the lens of your portfolio investments? And as you look at the portfolio today, are there any sort of areas of concern or softness, and any areas that are maybe holding up better than expected? Sure. You know, fundamental to our approach is that we always avoid certain industries, so cyclical industries, essentially. And so that means that we're never coming and going from different industries. So where we're at now is where we've always been, and in general, those industries have continued to perform. And if you look at the fundamentals of our portfolio, right now, we've been very pleased with how they've been able to absorb the higher for longer interest rates, with how they've continued to grow. So we've seen EBITDA growth in that 10% range year-over-year continue in our portfolio, both U.S. and Europe. That's without taking into account, in the U.S., the acquisitions. In the portfolio, it's a little bit higher than that, obviously, when you take into account the acquisitions that those portfolio companies have made. What we saw last year was a bit of a compression in your interest coverage ratios as interest rates were rising. Now that we've continued to see EBITDA growth, but interest rates have been more flat, we've seen that now begin to expand again. So you're seeing that expanded interest coverage. When you look at your LTVs, current deals that are being done now, they have about a 53% on average in Q1 equity contribution. That's, that's on a macro. For us, our LTVs are in the 40- low 40s to mid-40s right now in U.S. and Europe, so very strong LTVs in the portfolio. So overall, I'll remind you, we have a look at about 3,200 different companies, so that's a tremendous amount to see across the globe, you know, we're very happy. And we've seen that that portfolio has held up despite the increased interest rates, the longer interest rates, and our delinquencies continue to be below our 15-year historic average we have seen in the industry, and I think you've heard me mention it, Kip and Mike in other forums, that with higher interest rates will come some stress to portfolios. You will see increases in delinquencies over the long term, and we're seeing that in some external managers' portfolios now that you can see publicly. For us, we expect it to tick up a little bit, but it's to be expected with this type. Overall, though, we're seeing, you know, that soft landing come into play, and we've expected for a while now that it was unlikely maybe that interest rates would even reduce this year, and feel the portfolio is well-positioned to handle that. So there's still a lot of strength throughout the economy, and there's a lot of strength in terms of what we look at and what we do. Portfolio performing well, soft landing, you guys are in for. Any house view on rates? I'd say that we would generally... I don't know that it's a house view, but if you talk to most of us, Kip said it on a number of occasions, that it's pretty unlikely you see a rate cut this year. If you do, it's probably only one. So I'd say that I'm not banking on anything. Fair enough. You started to kind of address some of the cracks that we were seeing in some areas. Maybe just digging in there a little bit, if we do remain at a 5% level of interest rates for some extended period of time, I guess, how do you think about some of the risks, but also opportunities from that as well? Where might we start to see cracks? How are you monitoring this? We did see headlines the other week around a potential restructuring of a software LBO. Yeah. How is Ares positioned here? Yeah, again, because of the fundamental performance I mentioned, we feel pretty, pretty solid about our footing right now. I do think that you have others out there that, you know, they'll have to work through their portfolios. One of the most important things that I believe we have in place is the ability to manage a credit once you have issues with that credit. So, remember that when you're on the credit side of the capital structure, you're senior. So if you end up taking control of an asset, that means that someone has lost all of their equity in the asset. So that's why LTVs are a very important metric, because that tells you what a sponsor has at risk, and in general, sponsors will protect that risk, because for them, it's a disaster for them to go from a balance to a zero. And that leaves them a large hole to dig out of in that vintage of that private equity fund. Whereas for us, we may have marked that asset down, but it does give us the chance to manage that asset back into profitability, potentially manage it above the par and the interest rate that we otherwise would have received. What you saw, you know, in the news last week was probably more idiosyncratic to that particular circumstance. I think there was probably a bit of misreporting, at least initially, in terms of how it was structured. You know, it's been addressed by a couple of the players since then, but this is still a situation that's very much still in play. These type of things do happen. If the managers do end up taking it over, they'll have the opportunity to manage that asset and own that asset, and certainly that's something that we've shown that we're very capable of doing in the past. But I don't think it was indicative of something that was a larger issue across the platform or across direct lending as a whole. I think it was really unique to that particular circumstance, to what was going on with that asset, with that sponsor at that time, more so than something that could have a broader impact. Just on that point, I think some people were concerned around maybe potentially an alleged asset-stripping movement of assets IP from one vehicle or one part of the business to another, then raising money against that to then fund interest payments. Like, just how do you think about the covenant protections you have- Yeah in your deals? In general, asset stripping doesn't happen in direct lending, and I think that's where I reference as a bit of misreporting in that. What they did was actually to create cash to pay the lenders, and the lenders at all times still had access to what was put into that vehicle. So it wasn't actually stripped from the lenders, so that it was outside of what they could attach to. That has happened in the past. I mean, there's been certain large transactions in the BSL market, and that is a little bit more common, and I don't want to act like it happens all the time. It's still a very low percentage of what happens. But I would say that that's something that is extremely uncommon in the direct lending market. All right, why don't we shift gears and talk about capital markets recovery, from bid-ask spreads to the financing market to, to market volatility? It's, it's been challenging to get deals done over the past 18, 24 months or so, but it seems like the tide might be starting to turn. First quarter for you guys was pretty strong, a little bit heavier on refi activity. I guess, where are we in the capital market turnaround as you see it, and what might catalyze the pipeline to manifest into more meaningful conversions as you look out? Sure. And, you know, I, I always try to remind everybody that, interestingly, our business is fairly cyclical, so the, the first quarter is almost always your lightest deployment quarter. Your fourth quarter is almost always your highest deployment quarter. What, what we've seen, and we entered the year, say, cautiously optimistic. That started to play out in the first quarter. There was certainly a bit of a refi boom. That was a, a macro theme, not an Ares specific theme, in that a lot of borrowers were looking at what spreads were at that time, what the opportunity was to refinance something that was maybe 12-18 months from being refinanced. Felt like it was a great opportunity to take that to refi. At the same time, the M&A activity from a count of, of transactions was lower year-over-year by over 30%. So there was actually less new activity, but a great environment to refi. So that demand was there to take advantage of that refi activity. So that's where you saw a lot of our work was in protecting that portfolio, and that, you know, we had that, a little bit over $9 billion of gross activity with about $2.5 billion of net activity. That spread is highly unusual, and it was a result of a number of those factors coming together. That's not something that we would expect. We're normally at that 60%-80% range in terms of a ratio. When we're at a 50/50 range, it normally means your net number is higher because it's really indicative of a pretty active market. Now, that cautious optimism, I think, has moved into more optimism. We talked about what ARCC had done on their earnings call for April, and they were at $1.2 of gross, $900 of net, with an eye on commitments of $1.3 for the remainder of the quarter. I've talked a lot about that. That could be just a normal quarter in many cases, not just a singular month. So we started to see that transaction, transaction activity pick up. We've seen, as a macro, more take privates over April and May, so we've seen that number increase. And what we know is driving that is two different things. One is you have an inordinate amount of aged private equity assets in private equity funds that are outstanding longer than they typically would be. So those LPs want their capital back. They are looking to get their capital back, and they're starting to, you call and say, "Hey, even if you think that there might be further opportunity, we'd rather just take that money off the table and invest into a newer vintage." And then you have expiring dry powder at those private equity firms that if they don't use... There's about $400 billion, if they don't use it over the next seven quarters, then it'll expire, so towards the end of 2025. So you have those two things working together that are essentially saying, "Hey, sponsor-to-sponsor activity needs to pick up, because we need to monetize some of those older assets, and we need to put some new capital to work." That's certainly behind some of the take private activity that we've seen lift up. And I know I get a lot of questions: "Well, what about the election? What about the rest of the year?" We haven't seen on the private side that much of an indication that the election is something that is going to create more activity before or after. Most people have said, essentially, they know that they need to have that activity, and we've had four years of experience with both administrations, so it's not really a private side issue. I have heard on the IPO side that people want to get IPOs done prior to that occurring. And we are hearing more and more from private equity firms that they're looking at it holistically in terms of their portfolio and starting to say, "How do we move out of these aged vintages? How do we sell some of these assets?" That's provided an opportunity on the credit side of the business, on the secondary side of the business, to work with GPs and create solutions, and that's really core, as you know, to what we do, is providing sponsors as well as LPs with solutions to the issues they have. Great. Just to dig in on a couple of those points, it sounds like the election, you don't think it's gonna be much of a lead to a slowdown in activity among the sponsor side. Is that fair? On the private side, yeah. Private side. You know, like I said, it could have more impact on the public side, which could impact the, the exits via that. But otherwise, I'd say that we haven't heard it slowing down, that private sponsor-to-sponsor activity. ... And then the gross to net conversion was a challenge in the first quarter, as you flagged. Sounds like that's more sort of idiosyncratic to- Yeah The events in one Q, and you're not really seeing that it's normalizing here in the second quarter. Is that fair? That's right. I think coming back to normal. And I wouldn't even necessarily categorize it as a challenge. It's not necessarily a bad thing to see something refi. It's really important to have that incumbency and to be able to continue to work with those borrowers in your portfolio. You want to be able to refi them out. And often, what's happening is, you know, they're spread across the portfolio in our retail products, in our SMAs, but also in our commingled. So it might be refi-ing something that's in an older commingled vintage and allowing deployment in a newer commingled vintage, which essentially is extending your duration, giving you a chance to originate something at a very attractive base rate right now with a really nice LTV. So it's maybe it's a challenge in terms of the overall modeling, but I view it as a positive to our overall platform, that we're able to have that incumbency, able to continue to work with those borrowers, and able to continue to deploy that capital. Great. Maybe just more broadly on, on deployment, you guys have over $115 billion of dry powder across the platform. Maybe talk about some of the best opportunities that you're seeing in terms of where to put capital to work today, how that maybe differs from six or 12 months ago, particularly when you contrast that versus, say, the regional bank challenges a year ago, how things have evolved, and any areas you're avoiding? Yeah. No, as I mentioned earlier, the areas that we avoid are areas that we historically have avoided, so there's nothing new to add to that. And look, kind of going down the chain, U.S. and European direct lending, as I've been talking about, we're seeing a lot of optimism there, a lot of transaction activity. We'll walk through the ARCC numbers, which are indicative of the remainder of the U.S. direct lending portfolio as well, and Europe is starting to see a bit of that as well. So it's a nice macro backdrop for those. Alt credit, as I think you're alluding to with some of the bank issues and what's going on there, continues to be non-correlated to those other groups, but a area of growing ability to deploy. That's an area where, you know, the fund series there is named Pathfinder, because their goal is to find the path in a number of different investment strategies that are best suited to generate the returns that the LPs expect. And so, you know, SRTs are something that have become more popular, I'm getting a lot of questions about, but we are working actively. They pop up more towards the end of each quarter, towards the end of the year, and they're a really great way for us to partner with banks to create opportunity for those banks to generate better ROE, to take better advantage of their Tier 1 capital ratios. They then generate a nice return for our portfolios. But that doesn't mean that we're not looking at, you know, CMBS, other asset-backed financing, could be shipping containers, music royalties. Whatever the best opportunity is, that's where that alt credit business wants to go. And because it's largely, or it's 55% of that business is in the illiquid, non-rated side, as opposed to the liquid-rated side, it does have the ability to go in a lot of different places and a lot of creative ways to solution, both for banks and other originators. And part of our balance sheet-light philosophy there is not to own the originators outright on our balance sheet, so that we have the ability to flex into the deployment that we want to see there. Then maybe moving from the credit side to cover a little bit of real estate, private equity, the more equity-style strategies, we are seeing on the private equity side, a little bit better monetization environment, a little bit more activity, as I mentioned, on the credit side. Real estate, Julie, who spoke earlier today here at Morgan, and Bill, have talked publicly a lot about that this is probably the trough that they're hitting. They're starting to see green shoots in that environment. Having more clarity on interest rates is very helpful. That's probably of what we do, the most interest rate sensitive part of the business, so the lower rates are, the better it is for that business. On the debt side, though, there's a lot of very attractive opportunities, and some of that even goes into our opportunistic real estate strategies, where we're able to come in with mezz solutions to really bridge people beyond this current interest rate environment, maybe into a future lower rate environment. And you do that with a little bit of equity subordination, so you're able to generate pretty attractive, almost equity-like returns in that space right now. So that's something that we're excited about. Infrastructure continues to be very attractive to us. There's a tremendous infrastructure debt opportunity, and there's a big digital transformation that that's going on that we find very, very appealing. Secondaries is starting to pick up with some of the GP activity that I mentioned earlier, and it continues to be a fairly mature, LP-led environment with an auction process there that works fairly well and allows you to buy some high-quality assets that are later stage in their life, closer to generating cash at a decent discount. Maybe just coming back to the synthetic risk transfers that you were referencing, maybe just you could talk a little bit about the latest partnerships, conversations with banks, how that's progressing as banks are digesting an evolving regulatory landscape, as they're looking to become more efficient with their balance sheet. Talk about the opportunity set that you see, and what are the different areas that you may become more involved with over time? We really thought that this was a transformation that was going to be happening over time, and that's when, you know, Joel joined us about six years ago to work with Keith as the co-heads of that group. And we've been building that platform to be prepared for this type of bank transition environment. What we saw, you know, last year in the first quarter with the regional bank issues was really an accelerant to what was already there. And we get a lot of questions as to whether, you know, this is a Basel III end game has changed our views or anything of that nature. And our answer has been, "No, this is all part of a long-term-... process where the banks are adjusting to their Tier 1 capital ratios, they're adjusting the opportunities they have, and they're ultimately seeing us as a partner in this. So there continues to be an increase in what we're doing with banks and how we can problem solve for them, and there's a multitude of different ways that we do that. But one of the things that, you know, I think is, is most attractive or easiest to understand is, this allows banks to continue to maintain customer relationships, but move the risk to a place that has locked up long-term capital, as opposed to have it offset against an uncertain duration of deposits. So when they have to manage through AOCI difficulties, when they have to manage through what could happen with deposits, knowing that that risk is in a place that has better match duration, is better for the regulators and is better for those banks. So that type of partnership is something that we only see growing over time, and we've been investing more and more time in building those relationships and increasing our touch points with banks so that they know the solutions that we can provide. And if you look at how we built our direct lending business, I'd, I view it as we built it from the sponsors. So creating relationships with the sponsors, having those sponsors know that we could problem solve for them. Our addition of the secondaries business was the extension of being able to provide different solutions for sponsors. We're building our bank relationships in very much the same way. We're saying, "Hey, we're here to solution with you, to partner with you, and to look for ways to best enhance your ROE, your capital structures, and, and how we can do that while delivering an excellent return for our investors." And one of the important parts of that is having that large illiquid pool of capital that we have. So that allows us to do certain things that are non-rated, that don't fit into an insurance company construct, but are there for LPs to invest in and generate those returns. And having that large pool of capital enables us to do bigger deals to provide better solutions for banks. So that's really a key component to it as well. Great! Why don't we shift gears? At your recent Investor Day, you outlined a number of different targets, including to grow fee-related earnings at a 16%-20% CAGR over the next five years, with underlying that, I think AUM growing around 12% or so, and margin expansion annually up to 150 basis points, potentially taking the margin from the low 40s to 50%+ over time. So maybe you could just help unpack the key building blocks and contributors to this growth algorithm as you see it, and where might the guide that you put out, the 16%-20%, where might that be conservative? Sure. So that we put out numbers we have in high conviction that we would meet. I know I heard the word conservative quite a bit, but it's really taking a look at what we have the ability to do and laying that out in kind of a normal or average market environment. Of course, everything that we do is largely built on the ability to deploy. For us, right now, deployment is much more the constraint than fundraising is on the credit side of the world. And that includes all credit, as well as U.S. and European and Asian direct lending, is we wanna make sure that we're able to deploy into quality assets. And when we talk about deployment, we're focused on lower middle market, core middle market, and upper middle market. So we wanna cover the entire middle market. We don't wanna just be in one area, so we need to consistently be building pipelines across that, so we're looking to generate alpha for our investors. So when you do that, your ability to deploy means that you have to be very thoughtful about how you grow your AUM, and that means you wanna grow high quality AUM. It means that you wanna be very focused on what the management fees that you're earning on that AUM are, so that you're not outpacing yourself, so that you do have the ability to deploy that within a reasonable period, but you also have the ability to deploy that at a return that those investors would expect. So you wanna spread to the BSL market. You want to generate alpha against the other lenders that are in that market. You want to have low delinquencies. So that's really key to how we look at building that up, okay, how do we hire so that we can deploy more? Where do we need to hire? What are the right levers to change? And as our ability to deploy more grows, and then our deployment grows, that's really what can create outsized growth. And if you look back over the last five years, that's really what it has been. It's difficult to predict in any one year what deployment will be. But if you have a year, like we had in 2021, where deployment grows outsized related to other years, that generally is gonna create outsized performance within that five-year period. And so really, that's what you're looking for, is you want to have a franchise that is a coiled spring and able to deploy into macro environments that allow for it, and take advantage of that when that happens. So that's not something that we can model. We can't say all of a sudden there's gonna be a macro environment that's gonna be able to raise our deployment 30%, 40%, 50%, but we wanna be prepared in the event that it does. And if that does happen, then within that five-year period, it gives you opportunities for growth, and then it gives you stability to invest off of that growth that you took and look for those areas. I always highlight, I want those areas that go from zero to something. And in Investor Day, we highlighted credit secondaries. That was zero last year. We've raised $1 billion of co-invest in a, in a joint venture where there is, it's a seed co-invest, and then we have raised $1 billion so far in our first commingled product. So when you're able to take something from zero and, you know, hopefully, that commingled grows beyond that $1 billion first close, you're able to then double the, the second vintage, maybe you double into the third vintage. You grow with an infinite CAGR on something like that, which then layers very nicely onto your overall CAGRs for that five-year period. But you can't do that unless you're compressing margins, unless you're using the growth in your other businesses to help look for those areas to grow in those businesses. So it, it is, it's harder to predict what the speed on something that goes from zero to something will be. But that's also part of the strategy for us, is look at those areas to invest. How do we best invest that capital, and how do we look for accelerants in that over that period of time? Now, along with the growth in fee-related earnings that you outlined in Investor Day, you also outlined expectations for performance fees- Mm-hmm. to grow meaningfully, particularly the European-style waterfall performance fee funds to contribute more meaningfully in the years ahead. So just how do you see the cadence of that playing out, and is there any—what's the risk around that? Yeah. We've talked a lot about it's stable and growing, is how I would describe the cadence. And what we're beginning to harvest now in this 2024/2025 period, is really the funds that were launched in 2017 and 2018. And if you look at... We had a slide there in the Investor Day that highlighted. That was, you know, in the $30 billion range of incentive-eligible AUM, and now we're up in the $130 billion range of incentive-eligible AUM. So that means that it's that much more accretive. And if you think about how these work, it's a little bit different than I think people have been conditioned to think about performance fees. So people are generally conditioned under the American style, which is episodic, and it is much closer to what is on your balance sheet currently as unrealized. Now, you might have a chance to maybe you sell for 10%-20% above what you have your private equity asset marked at, and then you're able to harvest that. At the same time, a little bit tougher to predict when, when that will be, and it's, it's kind of already there. In a credit fund, you have what is in the ground today, and it's currently earning interest, and it's only what has-- it has earned that's accrued on your books. But you know with certainty, essentially, what you'll be earning over the next X amount of years of duration of that asset. Then you know you're going to be deploying out of that fund that exists, and you know essentially what that return should be or, or the range that it will be in. So then that allows you to calculate what it will grow to be. So that's what gives us that conviction over that balance, is we actually can say, "Here's what we should get on the maturity of these assets or on the refi of these assets or on sale of these assets," at the end of the day, with much higher conviction into the future than you would with a private equity asset, where you might say, "Well, hopefully, I grow this asset value at, you know, 15, 20% per year, and I'm able to sell it at the end of the fifth year." We know durations, or we know estimate of durations, and we know frankly, the outside estimate of it, you know, a 5- to 7-year maturity date on these loans. We know that it'll likely happen before that. So we know those 2-year increments, so we can be fairly accurate. We know the life increments, so we can be fairly accurate, and that allows it to continue to grow as we raise more funds in this stuff. And then it allows us to get even more sharp around that as we deploy those funds, and we know what the forward curve is for those funds as they're deployed. So all of those things lead into a performance income balance that is much more predictable. You're able to see it is growing and why it's growing, and you're able to get a general sense of when those dollars will come into the system. Great. Maybe pivoting over to private wealth, topic of interest to many across the space, including you guys. A large addressable market that is under-allocated to alternatives. Maybe just give us a sense of the conversations you're having with intermediary platforms. What sort of traction you're seeing? I think you have about six products or so in the channel. What sort of traction are you seeing here? We've been very pleased. And you know, Raj, I thought did a great job of outlining it in the Investor Day, that we have a target in 2028 of $100 billion of retail capital. Today, we sit at about a quarter of that. But when you look at the momentum that we have, we're really excited. I think Mike said in the earnings call, that we're at a tipping point here, that we've kind of really hit our stride. We have relationships with every one of the major platforms now, but we don't have any product that's on all of the major platforms. We continue to have those discussions. One of the things that we're always very thoughtful about, though, on the credit side, is that pipeline that I talked about earlier. You only want to be able to raise what you're confident that you'll be able to deploy into quality assets. So, you know, we've been moderating how we join different distribution platforms. We'll continue to expand that, but we'll do it at pace. We're not looking to do it all at once, and then raise an extremely large amount in any one period that overwhelms the rest of the pipeline. So that's something that we'll be thoughtful about there, but we've had excellent conversations. We have excellent relationships across the board there. We're really happy with how PMF has grown. That's our secondaries product. We think that's a perfect product for retail investors to get exposure to the private equity class, and it allows them to get it in a later stage vehicle that's closer to cash flows, so it delivers them cash flows, as well as exposure to the private equity industry. We added, we added a wirehouse in the fourth quarter. We've seen that grown out to over $1 billion at that fund level, and we've seen it continue to grow. So we're, we're very excited about the opportunities of that, that particular product and the growth opportunities that are ahead. Certainly, this has been a more difficult time for real estate, but I don't think that that's the long-term prognosis for that industry. That will come back, and, you know, we believe with our products, that we're very well-positioned there. What we have continued to see, though, is strong inflows in the 1031 exchange version of that product, which is pretty innovative. It allows investors to essentially sell commercial real estate that they own and invest with that same basis into our REIT product and avoid taxes for that period of time. So that's made a stickier investor base in those products, but it's also continued to help create inflows in that product. So, we're very excited about our positioning there. I'd expect to see us continue to grow in the European markets, continue to grow in the Asian markets. A lot of that is building geographic products for investors in those geographies, like we're doing with AESIF, but also then opening up those geographies to invest in other geographies products, like North American products, which we've started to see some Asian inflows into our U.S. products. ... So that kind of gets to the next question, which is just around the product pipeline. Sounds like some of that is just bringing the existing products that you have to investors overseas and in the U.S. and Europe. That's right. You, you wanna do that, you wanna expand geographically, both in product set and access to products from those geographies. There's maybe one or two other, unique new products that could make sense, in the North American retail environment. There's probably not 10, 15, 20 products. It's still only a handful of products that you'll have. But really, what you're looking for is, what's the investor demand? They wanna have a bit of liquidity. Obviously, you need to have it within the structure, and then they wanna have access to maybe assets that they wouldn't otherwise have access to, that are generating cash flows. So if you think about some of the things we do, whether it's in the alt credit side or in the climate infrastructure, those are areas that have retail interest and may make sense for a product in the long term. And would it also make sense on the European and Asian side to have local deployment, local vehicles? Absolutely. Yes. Is there- Just like AESIF is doing right now in Europe. So, AESIF, that's our European direct lending. It's equivalent to a BDC. There's not a BDC structure in Europe, but it's the same thing. It's offering retail investors access into European direct lending, and it—that is Europe for Europeans. There's a future where you do Asian for Asians, and it might even be more country-specific, where it's Indian for Indians type thing. But there's the opportunity to grow in that manner as well. Great. In the final minutes we have left here, why don't we talk about AI getting a lot of traction these days across industries, including at Ares, with your recent acquisition of BootstrapLabs. You've also formed an AI and innovation group. So just how are you thinking about the impact of AI on the private markets? And talk about how you're experimenting with that today. Yeah. We're really excited about the BootstrapLabs acquisition. I really enjoy talking to those guys that put the... They talked about it at our AGM. They did a nice presentation, and Mike talked a lot about it at our Investor Day. It's something that we saw as an important transition that was happening, and I even mentioned digital infrastructure. So it increases your investing opportunities on the outsides of it, as well as within the inside of it. But the ability to deliver to our borrowers AI solutions or AI introductions through having that type of ability on our platform, we think is extremely valuable. It also is gonna help us look at what we do and how we do it. I mean, from someone who's in business operations, from my perspective, I'm really excited about what the opportunities may be. And if you just look at how operations have evolved over time, it's become less and less people over time. It's become more and more automated, and the more you can integrate AI into what you're doing, I actually think the more interesting you make people's jobs, the better you make your decision-making and the better you can harness the data you have. I mentioned that under the very first question, the number of companies that we have in our portfolio and the ability with AI to understand certain things that are happening within different geographies, within... You know, you could marry what you're doing in real estate and what's happening in geographies with maybe what's happening with customer bases to understand different macro trends, that, that could be interesting. How can you best take the data that you have, marry it with AI, and get outcomes that are differentiated? And, and that's really with the BootstrapLabs acquisition, what we wanted to make sure that we did, is we provide a differentiated solution for our borrowers, a differentiated solution for, ourselves internally, and really put ourselves on the front foot with AI moving forward. So an efficiency save opportunity. Have you had any sort of notable use cases yet? Are you able to quantify what that could mean in terms of margin uplift or expense saves there? I could say that we didn't put that in our Investor Day, in terms of where we're at, because we don't have any direct use cases in terms of what it would take away. When we look at AI internally, what we'd say right now is it can be the equivalent of a junior analyst, and there's times when it helps, whether it's write something up in a summarized way. I mean, you can even go out and use something like Copilot right now, and if you get a really long email, you can ask Copilot to summarize the email for you, and it'll give you the TLDR, essentially. So there's a lot of just little use cases like that that are enabling us to save times around the edges, and we're working actively with the team to say, "Okay, what's the most impactful use case that we can have on looking at deal memos, on looking at how we're operating things on a quarterly basis in terms of aggregating information? What are the different ways that we could be using it there?" So we're still at the early stages, and we've just acquired them in Q1. But I'm excited about all the things we've talked about as a possibility. Great, I'm afraid we're out of time. Thank you so much, Jarrod. Great. Appreciate the time. Thank you. Great seeing you.