GCM Grosvenor Inc. Q3 FY2021 Earnings Call

Please stand by. Good day everyone and welcome to the GCM Grosvenor November Webcast. Today's call is being recorded. At this time, I would like to turn the call over to Stacie Selinger. Please go ahead.

Thank you. Good morning and welcome to GCM Grosvenor's Third Quarter 2021 Earnings Calls. Today I am joined by GCM Grosvenor's Chairman and Chief Executive Officer, Michael Sacks, President, Jon Levin; and Chief Financial Officer Pam Bentley. Before we discuss this quarter's results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. This includes statements regarding our current expectations for the business, our financial performance, and projections. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any of our expectations of future results. Please refer to the factors discussed in the risk factors section of our 10-K for the fiscal year ended December 31st, 2020, our other filings with the Securities and Exchange Commission, and our earnings release available on the Public Shareholder section of our website. These factors could cause actual results to differ materially from those indicated by the forward-looking statements on this call. We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of non-GAAP metrics to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are available on the Public Shareholder section of our website. Our goal is to continually improve how we communicate with and engage our shareholders. In that spirit, we look forward to your feedback. Thank you again for joining us. And with that, I'll turn the call over to Michael.

Thank you, Stacie, and thank you to all of you listening for your time and interest. The third quarter of 2021 was a strong one for GCM Grosvenor. We enjoyed good investment results, fundraising, and business performance. As a result, our outlook with regard to the remainder of 2021 and 2022 is constructive, and our Board has increased our quarterly dividend 11% from $0.09 per share to $0.10 per share. The dividend is payable on December 15th, 2021, to shareholders of record on December 1st, 2021. Our assets under management, fee-paying assets under management, and contracted but not yet fee-paying assets under management increased 20%, 13%, and 19% respectively as compared to the third quarter of 2020. Our fee-related revenue and fee-related earnings grew by 11% and 21% respectively, as compared to the third quarter of 2020, and 10% and 22% in comparison to the nine-month period ended September 30th, 2020. Our fee-related earnings margin for the third quarter of 2021 was 36% compared to 33% in the same quarter a year ago. For the fourth quarter of 2021, we anticipate that growth in our fee-related revenue will approximate 5% compared to the third quarter of 2021, with resulting 2021 full year fee-related earnings coming in moderately above the high end of our 15% to 20% expected range. With regard to 2022 and our fee-related revenue and fee-related earnings, we expect growth in fee-related revenue of 12% to 15% as compared to 2021 and growth in fee-related earnings of 20% to 25% as compared to 2021. To achieve those results, we need to close 2021 in accordance with our current plan and experience flat net flows for Absolute Return Strategies in 2022, with 2022 Absolute Return Strategies performance in line with our normal run rate performance assumptions. In addition, we are assuming private market fundraising in 2022, which is consistent with the fundraising levels of 2021. It is worth noting that 2022 fee-related earnings growth of 20% to 25% would exceed that of our original merger presentation. Obviously, if we do not achieve our projected investment performance or fundraising goals, our numbers will vary. As we have said before, due to the nature of the crystallization and realization of performance fees, it makes the most sense to focus on our fourth quarter and full year results with regard to adjusted EBITDA and adjusted net income. That said, we are pleased that adjusted EBITDA and adjusted net income increased by 12% and 16% respectively compared to the same quarter last year, with increases of 24% and 38% for the nine-month year-to-date period. Importantly, as of September 30th, 2021, we enjoyed $44 million of unrealized annual performance fees eligible to be realized in 2021. This means that we would have received $44 million of annual performance fees in addition to the $9 million we have already collected this year at September 30th. Then at the end of the year. In the third quarter, we saw continued strong investment performance across private market strategies. The firm's share of investment and unrealized carry at NAV stood at $410 million as of September 30th, 2021, an increase of 17% from June 30th of this year and an increase of 125% from September 30th, 2020. Turning to fundraising, we saw strong fundraising momentum across the business. In the third quarter, we raised $3 billion of new capital, bringing our year-to-date fundraising to $7 billion. As a reminder, we said last quarter that we thought fundraising in the second half of the year would exceed the $4 billion raised in the first half of the year. Clearly, the third quarter was a strong step in the right direction. It is worth noting that as of the end of the third quarter, our pipeline stood at a similar size to our July 1st, 2021 pipeline, despite having successfully closed on $3 billion of fundraising. Through yesterday, we've raised approximately $1 billion in the fourth quarter and we continue to see opportunity for the remainder of the year and into the future. While Jon will delve a bit deeper on fundraising, investing activity, and investment performance in a moment, I do want to mention two fundraising-related items. First is that as of today, we have raised approximately $2.2 billion since launching the four private market specialized funds that are in market, that is up from approximately $1.7 billion at the end of the third quarter. The second relates to the $500 million Structured Alternative investment solution that just closed this week. This effort was led by GCM Grosvenor Insurance Solutions in close collaboration with our strategy and investment teams. It saw us begin a number of new insurance company relationships, and it supports our confidence in GCM Grosvenor Insurance Solutions going forward. I would like to quickly call your attention to slide eight, which is new and provides an overview of our Absolute Return Strategies vertical. As you can see, this vertical has performed well over the last year with solid investment performance, stable fee rates, and 12% growth year-over-year in fee-paying assets under management and management fees. We saw $476 million of contributions to Absolute Return Strategies fee-paying assets under management in the third quarter against $391 million of redemptions and $110 million of distributions for a very modest net outflow of $25 million. Importantly, as we saw in prior periods this year, fee rates were higher on inflows than on outflows, which means run rate revenue increased modestly from flows before the positive impact on compounding. Slide eight highlights the ability for the Absolute Return Strategies vertical to grow in a flat flow environment, and I think is likely a better result than the market expected one year ago. I want to mention that we recently published our 2021 Impact Report in conjunction with our 15th Annual SEM Conference. The report is available on our website and reflects the ways in which we embrace our core values for the benefit of all of our constituencies. Culture is important to us at Grosvenor, whether a culture of compliance, a culture of excellence, or a strong culture of service to our clients, and our Impact Report is a good way to get a sense of that. In closing, we leave the quarter pleased that we continue to meet or exceed the metrics we have communicated to shareholders and remain optimistic regarding our prospects for the remainder of the year and for 2022. And with that, I’ll turn the call over to Jon.

Thank you, Michael. I’ll begin my remarks on slide six. We’ve experienced persistent and strong growth in our assets under management, fee-paying assets under management, and contracted but not yet fee-paying AUM. As you know, these are the metrics that in combination with stable fee rates and expanding margins fuel our earnings-powered growth. Our total AUM has grown at a 10% compound annual growth rate since 2018, and the combination of our FPAUM and CNYFPAUM has compounded at a similar figure. As you are all well aware, it’s been a healthy environment for private market alternatives over the past few years, and our business has benefited from that backdrop. We’ve had a 16% compound annual growth rate in private market AUMs since 2018, with growth occurring in each of our private market sub-strategies. From a composition standpoint, it’s worth noting that private markets represent 62% of our firm assets under management as of the end of the quarter as compared to 54% at the end of 2018. Michael already spent time on Absolute Return Strategies where the earnings power has likewise increased from growth in both fee-paying AUM, which drives management fees, and AUM eligible for annual performance fees. We continue to believe that having expertise across the full alternatives landscape better positions us to serve our clients and win mandates. Reflective of this value proposition, the new capital raised this quarter and this year has been highly diversified across channel, geography, investment vertical, investment implementation style, and fee rate. Notably, more than 50% of our assets raised this quarter came from clients outside of the United States. And as we’ve discussed, our recent hires in Canada and Europe, along with our already strong presence across Asia, set us up well for continued future success internationally. As you will see on slide 12, private markets drove more than three quarters of fundraising this quarter, benefitting from the strong tailwinds I mentioned. Within that, infrastructure was the most significant contributor, and we believe we have a meaningful addressable market in that strategy. Finally, we continue to see support from both existing clients, which is always job number one, as well as new clients. As you know, the foundation of our business continues to be partnering with our clients through customized separate accounts, which represent three quarters of our current AUM and are highly tailored to a client’s unique needs and circumstances. Through customized partnerships, we’ve become deeply embedded in the client’s overall investment activities and are viewed as an extension of staff. We have a track record of successfully expanding our customized programs and cross-selling between our verticals. As of quarter end, more than 48% of our top clients work with us across multiple verticals, up from 36% a year ago. Customized separate accounts are key to our ongoing growth, but as we’ve discussed in the past, we also see a significant opportunity from scaling our specialized funds. On a year-to-date basis, approximately one-third of our fundraising has been in specialized funds, meaning they are growing at a faster rate than their current share of AUM. We’ve talked before about our six identified private markets specialized funds. And to-date, we’ve raised $2.2 billion across those vehicles. Notably, it won’t be until 2024 that all six of those funds are done with fundraising, and we also expect to launch additional products on top of those six that we previously identified. We’re excited to see our recent investments and our business development team have a positive impact on our fundraising momentum. The $500 million Structured Alternatives Investment Solution, which will invest across multiple of the firms’ specialized funds, is a good example of human capital investments in our business driving growth and opportunity. We anticipate building on the recent success of this vehicle and expanding similar offerings to investors in the coming year. What is clear to us from this effort is that there is ample opportunity to add value to the insurance industry. Another area where we are seeing accelerating growth and significant growth potential is in the non-institutional capital space. Today, we offer our products and solutions on six platforms. Non-institutional capital comprised approximately 5% of our current AUM but has represented approximately 10% of capital raising year-to-date, meaning, again, that the growth in this channel is outpacing its current share of capital in our firm. Importantly, despite this growth, we still believe we are long on the origination of investment opportunities. What we mean by that is that we have ample manufacturing capacity to continue to scale the business. Our vast footprint and sourcing network is a cornerstone of our success. Year-to-date, we've reviewed more than 2,500 opportunities across the platform. With regards to investment activity, I mentioned the breadth of our sourcing network, but the third quarter was a very active one in terms of deployment. In the quarter, we invested nearly $3 billion of capital across 117 investments, bringing year-to-date capital deployment to nearly $9 billion. We've also seen strong performance across the verticals. Trailing 12-month net performance for Absolute Return Strategies was 14% as of September 30th. Annualized net performance over the last three years was approximately 7%, which we are very pleased with on both an absolute and relative basis. As a reminder, in addition to creating a favorable backdrop for asset raising, strong performance compounds our Absolute Return Strategies fee base and directly increases our management fee earnings power. Within private market strategies, we saw a 17% increase in gross unrealized carry compared to the second quarter, which speaks to the significant appreciation our clients experienced on their investments during that period. Now, I'll turn the call over to Pam to talk about our financial performance in more detail.

Thank you, Jon. Turning to slide 10, we continue to execute on our plan and deliver a strong value proposition, generating asset growth at attractive fee levels and enjoying continued fee-related revenue growth. In addition, our earnings expansion outpaced our revenue growth as we unlock our embedded operating leverage and scale. Michael and Jon covered our asset growth in detail, so I won't address that other than to say we're very pleased with both the pace and trajectory of capital formation. With regards to our fees, our fee rates have continued to be very stable across the business, a sign of our value proposition resonating in the market. We continue to experience a mix shift towards higher fee activities such as co-investments, direct investments, and secondaries. Consequently, we are seeing an accelerating positive trend in our management fee earnings power. Our fee-related revenue this quarter increased by 11% over the third quarter of 2020. Part of this was driven by catch-up management fees from our private market specialized funds, which were $1.7 million in the third quarter. Based on our current pipeline, we expect catch-up management fees to be higher in the fourth quarter. As Michael mentioned, we expect growth in fee-related revenue in the fourth quarter inclusive of catch-up management fees to be about 5%. Moving to incentive fees, we realized $29 million in carried interest this quarter. And as we noted last quarter, while carried interest is realized throughout the year, we typically earn the majority of our annual performance fees in the fourth quarter. The earnings power of our incentive fees continues to increase, providing us with significant upside and flexibility which I will address in a moment. Taking fee-related revenue and incentive fees together, the firm's adjusted revenue increased 16% compared to the third quarter of 2020 and 24% on a year-to-date basis. Turning to slide 11, we are very pleased to see the investments we've made in recent years continue to drive growth in our assets under management and financial performance. As Michael noted, on a year-to-date basis our fee-related earnings, adjusted EBITDA, and adjusted net income all increased, illustrating the continued positive momentum of our business. We also saw continued improvement in our fee-related earnings margin, which was 36% this quarter, and we expect modest further expansion in this margin through the rest of the year. Our positive margin growth is the combined product of the scale embedded in our business and our continued discipline in managing expenses. In the third quarter, fee-related earnings compensation decreased slightly relative to last quarter. At the same time, our discretionary cash base incentive fee related compensation, which relates to both realized carried interest and performance fees, increased this quarter as we continue to further align our compensation structure of our senior professionals with our investment performance. In the third quarter, the firm retained approximately 63% of the incentive fees received after contractual carry obligations, with the remaining 37% anticipated to be paid out from our discretionary incentive fee related bonus pool. Specifically, this quarter, the firm's share of incentive fees before our incentive fee bonus pool was $9 million, and the incentive fee bonus pool estimate was $3.4 million. As I mentioned, the majority of our annual performance fees are typically realized in the fourth quarter, so you can anticipate some seasonality in our incentive fees and incentive fee related compensation next quarter. As of September 30th, the firm share of unrealized carried interest grew to $297 million, an increase of 179% from a year ago. Importantly, as you can see on slide seven, the firm share carry varied by vintage, ranging from 20% to 40% for older vintages and approximately 50% in recent years. Consequently, the firm shares incentive fees before any discretionary incentive fee bonuses will continue to grow as more recent funds where we retained 50% of any carry realizations start to mature. Over the longer term, this bodes well for the firm’s margin and earnings. For 2022, based on potential realizations of both carry and run rate performance fees, we anticipate retaining 50% to 60% of our share of these incentive fees than of any discretionary incentive fee related bonuses. Turning to our expenses, general and administrative costs decreased slightly from last quarter to $16.5 million in the third quarter, coming in lower than we anticipated as the spread of the COVID-19 Delta variant delayed a broad return to travel. Already we’ve seen travel start to resume in the fourth quarter. So, we anticipate modest increases in G&A relative to the levels we experienced in the second quarter. Turning to slide 13, the business continues to generate strong cash flow, and our cash balance at quarter end was $120 million. Our $25 million stock and warrant repurchase program remains in place and we have spent $7.5 million of this amount through the end of October. We have often cited strong free cash flow generation and the ability to return capital to shareholders as attractive features of our business. Last quarter we increased our dividend to $0.09 per share, and this quarter we are again increasing our dividend to $0.10 per share, which will be payable on December 15th to shareholders of record on December 1st. We continue to be excited by the positive trend of the business and the significant earnings power we are creating. Thank you again for joining us, and we’re now happy to take any questions.

Thank you. And we'll first hear from Chris Kotowski of Oppenheimer.

Good morning. Thank you for taking my question. Could you provide more details about the $500 million alternative strategies fund that you've raised? Can you describe the fee structure and the expected duration of the fund? When will it be activated? Additionally, is this fund replacing other investment vehicles previously utilized by insurance companies with GCM, or is it entirely new and additive?

Thanks, Chris. It's Michael. I'll take that. First, this is not replacing anything; it's new. It was led by GCM Grosvenor Insurance Solutions along with our strategy and investment teams. This initiative represents a strong start for the future of GCM Grosvenor Insurance Solutions, and I find its prospects reassuring as we just began the effort we announced. It has likely gotten off to a quicker start than I anticipated. The capital is full fee and mostly in private markets. It’s a long-term initiative and can be thought of as having a structured approach, similar to a collateralized fund obligation regarding its duration. The capital is new, and from my viewpoint, what's most encouraging is that these will start generating returns as early as this quarter and continue into the fourth quarter. Additionally, we are collaborating with a significant number of new insurance company partners and clients already. There are also others who considered it but weren't able to participate this time but are interested in future collaboration. Overall, we feel very optimistic about this development.

Okay, great. And then maybe you said it, and I just missed it. But were there catch-up fees this quarter? And I think Pam said, we expected some in the fourth quarter, and I was wondering, is that what is the primary driver of the expected roughly 5% fee revenue growth in the fourth quarter is primarily the catch-up fees or is kind of underlying fee?

Pam, you can address that. I would say that the growth in the fourth quarter is evident. It's due to a mix of fundraising activities and specialized fund closures in Q4 that include catch-up fees. Additionally, there's also strong compounding on higher fee-paying assets under management at the start of the quarter compared to the beginning of the previous quarter, along with positive performance in ARS. Pam, would you like to revisit the scripted comments?

Hi, Chris. Thanks for the question. The catch-up fees in the third quarter were $1.7 million, and as I mentioned, they will be slightly higher in the fourth quarter and are included in the 5% expected growth number we discussed.

Okay, great. That's it for me. Thank you.

Thank you, Chris.

And next we'll hear from Jeff Smith of William Blair.

Hi, good morning. I'd like to discuss the $500 million Structured Alternative Solution, which has had a strong start for this new unit. What kind of additional demand are you noticing from insurance companies? Do you have any preliminary thoughts on the potential fundraising trajectory for that unit? It's still early, but any initial insights would be appreciated.

Yes, it's early. Jon Levin previously discussed our goals for this unit last quarter, indicating its potential to be a significant part of our business moving forward. Everything we have observed thus far supports our decision to invest in this area. Earlier this week, we announced a new senior hire at GCM Grosvenor Insurance Solutions, which we are very excited about. We plan to keep investing in this effort as we see real opportunity there. While we initially expected it to start contributing next year, it's already happening faster than anticipated. We are engaging with this channel in ways we never have before and are encountering various opportunities beyond just the Structured Solution, particularly with custom account solutions. We are feeling quite enthusiastic.

Okay, great. I'm looking at the private market fee-paying assets under management, which I believe is around $31 billion. Can you talk about how much of that consists of specialized funds now? I think you mentioned that $2.2 billion has been raised in this newer group of funds. Does that bring the total to about $7 billion or $8 billion? I'm also curious about how that compares to the beginning of the year and what impact the higher fee rate has had on the mix.

Sure, I know Stacie or Pam, if you have the AUM or FLAUM number for the specialized funds, obviously, the number that we cited was the fundraising number this year. It's the first time we've done that and we've heard the requests to do that. We've wanted to stay away from specific fund reporting until the funds are closed. But we did want to be responsive to the question set on how fundraising for the in-market funds are going, and I don't know Stacie or Pam, if you have the FPAUM number for private markets specialized funds compared to private markets?

Hi, it's Pam. We do not publicly disclose the breakout of our private markets fee-paying AUM between the specialized funds or the separate accounts is something we are considering for the future. But at this point, we have not done that today. But the $2.2 billion number that Michael referenced in his comments is the fundraising for this year.

Okay. And then just one last time on G&A, I think you'd said, it was down a little bit on the quarter due to low travel activity that should sort of move back up in Q4. What type of magnitude should we expect there? I mean, with the Delta variant going on, I mean, travel seems to be still down. So, was that just kind of a modest increase? And any guidance you can give on 2022 for G&A as well would be helpful?

Sure. Yes, just a modest increase we would expect in the fourth quarter given continued lack of travel. But that is baked into our guidance that Michael mentioned that we expect to end the year slightly above our 15% to 20% FRE growth range. So, our expense growth is kind of baked into that number. Similarly, for next year, certainly expecting some return to travel and higher travel in 2022, absent any further issues with the pandemic. So, certainly expect that next year and that's also kind of baked into our guidance for next year, the 20% to 25%.

Got it. Okay, that's helpful. Thank you.

Thank you.

And next, we'll hear from Ken Worthington of JPMorgan.

Hi, good morning. Thank you for taking my questions. I appreciate the additional information on the private market side. I’m going to keep pressing here. You're in the market with four funds, and I think the $2.2 billion was just the amount raised this year across those four funds. I know Jon mentioned six, so as we look out over the next couple of years, where do those funds stand in terms of assets relative to their targets? Are we nearing the point where those funds are almost finished, or is there still a significant amount of fundraising left to do? I’m curious if we're at 40% of the target or 99%. If you could provide insight into those products and how close we are, ideally collectively would be great.

Sure. We appreciate your follow-up questions and wish we had connected earlier, as we could have addressed your initial query more effectively. Currently, we have four funds in the market, and this year, only one is expected to have a final close, while the other three will remain active for a longer duration, providing more opportunities for fundraising. Additional funds are anticipated to enter the market next year, with all six funds we mentioned expected to be operational by early 2023. We can work on some metrics to help you gauge the time left for fundraising, but for now, three of the four funds will remain available, and we will provide an update on the one closing in Q4 during our next call. Overall, we are experiencing positive momentum with a strong pipeline, particularly for our multi-asset class fund, which is benefiting from the excellent performance of predecessor funds. The key takeaway from today’s discussion relates to our projections for fee-related revenue and earnings next year. We achieved our growth rates despite not increasing fundraising compared to this year. While this information may not be as precise as you'd prefer, we anticipate similar fundraising levels to this year, coupled with strong growth potential. As you've noted, we are in a favorable fundraising environment and are committed to moving forward effectively.

Okay, great. And then I'm trying to kind of do the post mortem on Mosaic and Pamela, I'm not sure if this related to your comments. Incentive fee-related compensation was up this quarter, assuming I plugged the models and numbers in the model correctly, looked like $3.4 million. Incentive fees themselves, were just $300,000, again, assuming you're plugged in correctly. Is this related to how Grosvenor is treating the incremental earnings that are resulting from the repurchase of Mosaic? And was there a compensation payout this quarter on that earning stream that was previously directed to Mosaic?

Yes, in this quarter, most of our incentive fees are connected to carried interest that came from unwinding the Mosaic structure. The $3.4 million includes some carried interest that was realized this quarter. For the fourth quarter, we anticipate that the majority of incentive fees will be linked to the ARS performance fees expected to be realized. We expect related incentive fee compensation in the fourth quarter to primarily come from those performance fees, so you should expect a similar level in the fourth quarter.

Okay. And so just one follow-up here. How should we think about this payout on what was formerly going to Mosaic? What is the rationale of paying employees rather than letting all of that incremental earnings on what was essentially a financing fall to the bottom line? And then in Q1 2021, you presented a slide on the value of the purchase of Mosaic. The carry relative to the purchase price, so like a valuation of six times, did that slide incorporate a payout on these Mosaic earnings? Again, trying to reconcile everything, and I sort of assumed that this would fall to the bottom line and it appears to not be. So, I'm trying to do this post mortem. Thank you.

We have consistently accrued a discretionary cash bonus pool based on our firm's share of incentive fees, which includes some carry from Mosaic that is no longer present. We accrue this amount throughout the year and distribute it when we pay out year-end bonuses. We likely absorbed margin instead of impacting individuals during the Mosaic period, and we managed to recover both the Mosaic revenues and some of the FRE margin, realigning compensation in the process. We are optimistic that the firm's share of carries will increase, as both performance fees in the ARS business and our firm share of carry are expected to grow over the next several years. Currently, we are still moving past low firm share of carry, which paints a favorable outlook with a positive bonus pool for the future. If you need assistance with your modeling, we are more than willing to help. Overall, we anticipate growing firm share and EBITDA, alongside increasing FRE, which fosters a stronger alignment of interests between our people and the firm’s actual performance and revenue.

Great. Thank you very much.

We'll hear from Peter of Morgan Stanley.

Hey, thanks for taking my question. You mentioned 10% of capital raised year-to-date is from non-institutional clients. What products are driving those inflows? And what new products can make sense for that customer set? And also just a quick follow-up, I think you mentioned you're on six platforms? How do you think about building out distribution teams to support that growth in that non-institutional customer set? Thank you.

So, Jon, you take it.

Sure, I'm happy to take that one. So, I think that the in general, when you ask about what the type of interest that you're seeing in the non-institutional channel, I would say that it's similar thematically to what you're seeing in the institutional channel. And I think part of the whole thesis of trying to drive alternative solutions to non-institutions is to allow those investors to have the same set of experiences and allow them to build portfolios that are similar to what institutions can access. So clearly, you're seeing the interest being largely in favor of private market type strategies. But I would say it's a similar mix of private markets, more liquid alternatives to what you're seeing for the broader business. I think in terms of building out the distribution and the coverage there, definitely it's an area where making some incremental investment we think would have a positive return on capital. We have people that cover those channels, both from an external sales perspective, as well as an internal sales perspective. And as we continue to see the assets that we raised there take up a greater share of AUM, so we talked about 5% of AUM to 10% of flows will continue to make smart investments from a distribution standpoint.

And was there anything further, Mr. Indiscernible?

No, that's it. Thank you.

It appears there are no further questions at this time.

Great, thank you all for joining the call. We appreciate the questions and the interest and we'll talk to you again soon.

Thank you very much.

That does conclude today's conference. Thank you all for your participation. You may now disconnect.