Patria Investments Ltd Q2 FY2021 Earnings Call

Good day and thank you for standing by. Welcome to the Patria Investments Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Josh Wood, Head of Shareholder Relations. Please go ahead.

Thank you. Good morning, everyone and welcome to Patria's second quarter 2021 earnings call. Joining on the call today are our Chief Executive Officer, Alex Saigh; and our Chief Financial Officer, Marco D'Ippolito. Earlier this morning, we issued a press release and earnings presentation, detailing our second quarter 2021 results which you can find posted on our Investor Relations website at ir.patria.com or on Form 6-K filed with the Securities and Exchange Commission. Any forward-looking statements made on this call are uncertain, do not guarantee future performance and undue reliance should not be placed on them. Patria assumes no obligation and does not intend to update any such forward-looking statements. Such statements are based on current management expectations and involve inherent risks, including those discussed in the Risk Factors section of our Form 20-F annual report filed earlier this year. As a foreign private issuer, Patria reports financial results using International Financial Reporting Standards, or IFRS, as opposed to U.S. GAAP. Additionally, we will report and refer to certain non-GAAP industry measures which should not be considered in isolation from, or as a substitute for measures prepared in accordance with IFRS. Reconciliations of these measures to the most comparable measures calculated in accordance with IFRS are included in our earnings presentation. As a quick overview of the results, Patria generated $73.4 million in IFRS net income in Q2 '21. On key non-GAAP measures for the second quarter, we generated fee related earnings of $17.6 million and performance-related earnings of $56.4 million, driving distributable earnings of $74.2 million or $0.545 per share. In alignment with our policy, we declared a dividend of $0.463 per share payable on September 16 to shareholders of record as of September 2. With that, I'll now turn the call over to our Chief Executive Officer, Alex Saigh.

Thank you, Josh. We appreciate all of you joining the call this morning to discuss our excellent second quarter results and outlook. We are very excited about our progress since the IPO, and we have generated distributable earnings of $0.67 per share year-to-date. Now with good visibility on fee related earnings for the second half of the year, we have a clear line of sight to nearly $1 per share of distributable earnings for the full year. And not only are we delivering strong results in 2021, but our key growth drivers for the coming years are well intact and running ahead of our expectations from the beginning of the year. We are deploying capital faster with nearly $1.8 billion invested or reserved in the first half of 2021, equating to an annualized pace well above our historical average. This deployment acceleration means faster fee-earning AUM growth which is driving 31% fee revenue growth and 19% fee related earnings growth compared to the second quarter of last year. Faster deployment also means that we are accelerating our fundraising timelines and we expect to have a first closing for our next-generation Private Equity Fund in the second half of this year. Our funds are performing even better with more than $2 billion of valuation growth across the platform over the last year and our net accrued performance fees rising to $325 million. We are now delivering an attractive yield to our shareholders as evidenced by our realization of $56 million in performance-related earnings in the second quarter. I'll now cover some key highlights across our businesses. The strong deployment environment is again evident in our second quarter activity as we invested or reserved more than $1.2 billion in our closed-end funds. That is on top of $550 million in the first quarter, bringing the year-to-date total already to almost $1.8 billion. In terms of strategies, more than $1.2 billion was deployed in our flagship Private Equity Fund and $450 million in our flagship Infrastructure Fund year-to-date. In Private Equity, recent investment activity included new commitments in our thesis areas of cybersecurity, grocery retail, and cold logistics, where we have conviction in our ability to build market-leading businesses in Latin America. Our current vintage Private Equity Fund is almost fully committed as of June 30 and well above the threshold that allows us to return to the market. As noted, we expect to begin raising the next-generation Private Equity Fund during the second half of this year and continue to be optimistic about the opportunity to scale this fund again by up to 50%. The timing acceleration is positive for our fee related earnings growth in 2022 and beyond, and this new revenue stream is being pulled forward. Investment performance here continues to be outstanding, with Private Equity Fund V, a 2015 vintage fund, generating a net IRR of 36% in U.S. dollars, making it top of the sale by vintage, not just on a Latin America or emerging market basis but on a global basis. Private Equity Fund VI, a 2019 vintage fund that is still in its investment period, is already generating an impressive 28% net IRR in U.S. dollars. We are excited about the value creation our world-class investment team is delivering, which will also accrue to shareholders over time as these funds mature. Our latest flagship Infrastructure Fund continued to actively commit capital to new projects. You may have seen in our press release highlighting our growing toll road portfolio and specifically our success expanding into Colombia in this space, making Patria now the third largest toll road operator in Latin America. We take pride in not only generating returns for our limited partners with these investments but also in delivering projects that will fill critical needs for our communities and society. We believe there is an incredibly large and diverse infrastructure opportunity to address in the region. And Patria's scale and expertise allows us to be selective, with an ability to tackle complex development projects where few other firms have the necessary resources. While we expect to bring the next-generation flagship Infrastructure Fund back to market sometime next year, also ahead of schedule, we are excited to announce plans to launch a new dedicated renewable energy fund in the second half of this year. This will also be a closed-end fund targeted to our global institutional LPs, which we believe fulfills an important seed of demand from investors who want more targeted mandates focusing on renewables and the accelerating global energy transition. Fundraising in our country-specific strategy should also pick up in the second half of this year, with opportunities to raise money in credit as well as our real estate investment trust and infrastructure core vehicles. These vehicles are denominated in local currency, and we see a path to raise about BRL4 billion this year, including BRL800 million raised for our Infrastructure Fund in the first quarter. About 80% of that would be in permanent capital type vehicles, which further contributes to the duration and stickiness of our fee earnings AUM. On the realization front, our major news for the quarter is the crystallization of $56 million in realized performance fees from Private Equity Fund III. We are nearing a great outcome for a 2007 vintage fund that has generated nearly a 2x return and top quartile Latin America and emerging markets performance while investing through a very challenging time period. Marco will provide more detail on this realization in a moment. But I want to congratulate the team who has worked diligently to deliver value both to the limited partners and now shareholders with this fund. Since the quarter end, we also completed the initial public offering of portfolio company, SmartFit, a great example of Patria's approach to value creation and building market-leading businesses through consolidation and geographical expansion. SmartFit is now the largest fitness club operator in Latin America and is one of the nine investments in our outstanding Private Equity Fund VI portfolio. This initial public offering is another step towards creating liquidity in this fund and being able to realize gains for our limited partners and performance fees for our shareholders. To put it simply, Patria is executing on all fronts and these examples are only the highlights, just scratching the surface of the excellent work our investment teams and portfolio companies are doing. Let me turn the call over to Marco to take you through the detailed results and then I'll come back for some final words. Marco, the floor is yours.

Thank you, Alex, and good morning to everyone on the call. Our results for the second quarter reflect continued progress on our FRE growth drivers and an attractive yield for our shareholders. We generated fee related earnings of $17.6 million in Q2 '21, up 19% from $14.9 million in Q2 '20, driven by fee revenue growth of 31% over the same period. We have now generated $34.9 million of fee related earnings on a year-to-date basis and continue to be very confident in our FRE growth trajectory for the full year '21. Fee earnings AUM was $8.3 billion during Q2 '21, up 17% from Q2 '20. Remember that for our flagship funds, management fees are charged twice per year, and our reported fee earnings AUM reflects the basis that is generating management fee in the current reporting quarter. For funds where management fees are charged as capital is deployed or reserved, the Q2 fee earning AUM will not yet include the impact of deployment in the first half of the year, which will begin to generate management fees in the second half of the year. Therefore, you can expect less movement in fee earnings AUM and management fees from Q1 to Q2 but a more substantial change from Q2 to Q3 as the second half management fees are charged and recognized. Based on the significant flagship fund deployment in the first half of the year, we expect our effective fee earnings AUM for the third quarter to rise substantially to $9.4 billion to $9.6 billion, depending on where some of our country-specific strategies land. That should give you a good indication for the uplift in our second half fee revenues. Our pending fee earnings AUM is expected to move from $2.8 billion to about $1.5 billion next quarter, given the heavy deployment from Private Equity Fund VI, but this amount will be replenished to even higher levels than before as we begin to raise our next-generation Private Equity Fund. Total assets under management rose to $15.8 billion, up approximately $3 billion or 24% from $12.8 billion one year ago. About $2.2 billion of debt increase, or 17% of the 24%, was driven by the appreciation of our underlying investments before accounting for the improvement in the Latin American currencies. Just further highlighting the significant value creation happening in our portfolio. On that note, net accrued performance fees increased to $325 million, up 29% from $253 million last quarter, and that is after accounting for the realization from Private Equity Fund III. The accrual for Private Equity Fund V rose to $144 million, and that does not yet account for the successful IPO of SmartFit, which was completed in July. Also of note, the accrual for Infrastructure Fund III rose to $48 million as the fund moved through the 100% catch-up phase of the accrual waterfall. The continued strength of the accrual should be a positive sign to shareholders as it underscores the accumulated value that can contribute to distributable earnings in future periods. We recognized $56 million of net realized performance fees in Q2 from Private Equity Fund III as we returned full capital and hurdles to the limited partners, and the fund transitions to a liquidation status as we near the fund's termination date. This particular scenario is somewhat unusual. So let me quickly explain what this means and how this impacts the P&L. As we have noted, the remaining assets in this fund consist of shares from one remaining portfolio company, the Brazilian medical diagnostics company, Alliar, as well as escrows and receivables from prior exits. With the full return of capital and hurdle, we effectively fulfilled our obligations to LPs, leaving the remaining fair value of the fund equivalent to our performance fees earned as of June 30. While the monetization of the underlying assets and escrows will occur in future periods, the performance fee crystallizes as a liability to the fund and as a revenue and an asset to Patria. Given the end of the life cycle status of the fund, we are recognizing this as realized performance fees and distributable earnings in Q2. Future amounts received upon monetization may vary from the amount being recognized this quarter, and any difference would be recognized throughout distributable earnings at this point in time. Underscoring the active nature of the divestment process for Alliar, just earlier this week, there was an unsolicited public tender offer by a third party to acquire Alliar's shares at the price consistent with the June 30 valuation. Putting that all together for the quarter, distributable earnings were $74 million or $0.545 per share. And as noted, we will pay a dividend of $0.463 per share. Combined with the first quarter dividend, this amounts to a yield of more than 3% year-to-date based on our IPO crisis. Now, let me give you some perspective looking forward on how our current momentum is shaping the road ahead. As noted, we expect to begin raising our next-generation Private Equity Fund in the second half of the year, along with launching the new renewable energy fund and raising more capital in certain country-specific strategies, all of which will have little impact on the 2021 earnings but are positive drivers for the 2022 earnings and beyond. Our net accrued performance fees continue to build, and Private Equity Fund V is poised to be the next major driver of realizations. While the timing is always difficult to predict, we're making key steps toward liquidity, and our expectation for this fund's future contribution continues to grow. On the M&A front, while there is nothing to be announced at this time, we continue to be very active in our efforts and pleased with our progress toward putting our IPO capital to work. For fee-related earnings, we expect an uplift in the second half of the year as first half deployment drives effective fee earning AUM to nearly the $9.5 billion level. With this greater visibility on the second half, we feel confident that fee related earnings will exceed $75 million for the full year 2021, with a margin in the mid-50% range. Combined with performance earnings generated in Q2, that outcome would already lend us close to the $1 per share of distributable earnings for 2021 which Alex highlighted at the beginning of these remarks.

Thank you, Marco. Just to put that outlook in perspective, a distributable earnings outcome near $1 per share would generate a dividend yield of approximately 5% to an investor in our IPO, and that is nearly 4 times the current dividend yield on the S&P 500. When you consider Patria's overall growth opportunity and the growth rates for revenue and fee related earnings that we are already demonstrating, we believe our stock sits at an attractive valuation today. Looking across our industry and the second quarter results, you just have to be impressed with the momentum across the board. The secular trends driving capital to alternative investments and private markets, in particular, are strong, and we believe Patria is harnessing these strengths just the same. While we are newer to the list of publicly traded names and still introducing ourselves to the market in many ways, we are certainly not new to the business. We have grown our AUM at 18% per annum since 2009. Since our inception, we have raised six fund vintages in private equity and four in infrastructure, with the next generation soon on the way. Even with our established track record, I want to stress that our growth story is still in its early chapters. We believe private capital and alternatives are underpenetrated in Latin America compared to developed markets around the world. And Patria is better positioned than anyone to meet the rising demand and deliver world-class investment expertise in our market. We see a compelling growth and expansion opportunity for our platform in the coming years, and we are confident that we have the resources and leadership in place to capitalize. As significant shareholders ourselves, rest assured that we are highly aligned and we look forward to sharing this journey with you. We are now happy to take your questions. Thank you.

Our first question will come from the line of Robert Lee from KBW. You may begin.

Good morning, this is Margo. I'm filling in for Rob. Thank you for taking my questions. My first question is on performance fees. And where might we expect that performance fees come from next year as well as the outlook for the second half of this year? I know that PE Fund V is just entering harvesting. Should we expect some of those fees in 2022 or not until 2023? Any color you might be able to provide on that and pace would be great.

Okay Margo, thank you very much. This is Alex here. And thanks for also participating in this call. We are very excited about the performance of our Private Equity Fund V, as you can see from the presentation here given today. We are able to exit from some companies, and we were able to IPO a major asset of Fund V, which is the health club chain SmartFit. I think we believe that we are building exits in Fund V to start delivering performance fees in 2022, not 2023. So our projections here are for performance fees for Private Equity Fund in '22. Of course, some of that performance fee will be realized in '22, some in '23, but they're going to start in our projections to affect positively our distributable earnings in 2022. I hope I answered your question.

Great. If I could ask one on fundraising as well. I know that Infrastructure Fund IV is largely deployed right now. How close are you to fundraising Infra Fund V?

Thank you, Margo, again for the question. I think we are very, very positive in starting our fundraising for Infrastructure Fund V sometime next year. We did commit to several projects, as you just mentioned. But the way that our Infrastructure Fund works, we do commit to a project like when we win a concession, of a privatization. We then deploy the capital over time. So we would like to deploy more capital before I officially start our fundraising. Right now, we are close to 75%, 80% committed but approximately 20% deployed because of the mechanics that I just explained. You win a concession and then you're going to build up CapEx, so you deploy caps over the next quarters after you win the concession. So again, we would like to push that number higher than the current 20% which is exactly what will happen until year-end because we won the concessions, now we're going to have to deploy the CapEx, as I mentioned. So that puts us in a better position to start fundraising next year as limited partners do look at the deployment percentage, not only the committed percentage in our funds. However, what we did in the meantime, if you heard Marco's and my comments here during the presentation, we decided to raise a renewable energy fund this year, which we are having a reasonable success in that fundraising process, as investors are looking for more targeted mandates in this space, in the renewable energy space and the energy transition space. So we're going to focus on raising that fund this year while we then deploy more capital in our flagship Infrastructure Fund IV and then start raising Infrastructure Fund V next year. I hope I answered your question.

Great, that makes a lot of sense. Thank you. If I could just squeeze one more in on margin. I know that our forecast was light on G&A and it was also up from last quarter. Were there any one-time items in the quarter or is this the right run rate to use going forward?

Yes. I can take that one, Margo, and thank you. This is Marco. So FRE margins, you should expect us having around 55% FRE margins for the entire year. There has not been any one-off for the quarter. If you're comparing to the previous year, I just want you to remind you that versus the previous year, there's actually a change in the compensation structure relative to 2020, that accounts for the dividends that now transition to be part of our personnel expenses. But all in all, overall expenses have been very aligned with what we have last year, and there's nothing that's really worth attention here.

Great. Thank you so much for taking my questions.

Our next question will come from the line of Tito Labarta from Goldman Sachs. You may begin.

Hi, good morning guys. Thank you for the call. Congratulations on the strong results. A couple of questions also. I guess, first on the fee related earnings. I understand you deployed more capital there; we should get a nice uplift in the second half of the year. Just to think about, I guess, the management fees as a percentage of that fee earning AUM, should we expect sort of a similar ratio as we saw in the first half of the year? Any changes to sort of the fees that you earn on the fee earning AUM that you've deployed just to get a sense on how that should look? And then, second question also on the performance fees. Just to clarify, so the realized performance fees this quarter, it sounds like mostly from Alliar but with that center from editor, mean is there more that you can potentially realize this year? Just want to clarify in terms of the second half of the year, any performance fees that we might be able to expect? Thank you.

Hi Tito, this is Marco again. So on the management fee, what I would encourage you to pay attention to is on the expected fee earnings AUM for the second half of the year. If you look at the presentation that we shared with you earlier today on Page 13, what we show is that we have a $9.4 billion to $9.6 billion earnings AUM, and that should be the driver for the management fee for the second half of the year, which is a substantial increase versus the first half of the year, or actually the second Q for '21 which was $8.3 billion. So those dynamics will be driving most of the management fee for the second half of the year. And relative to the performance fee, as Alex indicated before, the next fund to be generating performance fees for us would be mostly Private Equity Fund V, which I note that there has been a substantial increase in net accrual from last quarter when we had $182 million and now closing $244 million. So that's a 34% increase, and that's the result of the massive appreciation of the portfolio. But besides that, it's interesting to note that there has been also a substantial increase coming from Infrastructure Fund III. When we had last quarter, we had $9 billion. This quarter, we are presenting, sorry, $40 million, and this quarter $48 million. And also on Private Equity Fund VI that came all the way from $15 million to $31 million. So Private Equity Fund V has, as Alex indicated, completed an IPO of SmartFit. We have divested from another company. So there's been a very good traction in terms of activities and with different possibilities within the fund. This is a fund that has nine companies now, and when I look through the assets of the fund, I see multiple possibilities. We don't think that we're going to realize performance fees from Fund V this year. So it's mostly concentrated next year. That means that there's a greater amount but slightly delayed to the next year.

Thanks, Marco. That's helpful, that's clear. Just one follow-up on the fee earning AUM. Yes, I understand the pickup in the second half of the year. I guess the question was more related to like the management fee. It was like 1.6% annualized this quarter. Should we expect that percentage to remain similar in the second half of the year? So right, as you have the $9.4 billion to $9.6 billion, a management fee around 1.6% is a reasonable number to expect as well?

Hey Rob, this is Josh. Just one thing to add there to think about is on the infrastructure fund, the fee rate is actually a blend where a portion of the fee is charged on commitments and a portion of the fee is charged on deployment. So you will get some increase in the effective rate for that fund as it deploys capital. But generally, it's going to be close to the rate you've seen over the past few quarters. So that's one additional thing to consider that could cause it to bump up just a bit.

Okay, thanks. That's great.

But all in all, you shouldn't expect any relevant change in the pattern of the management fees.

Got you. Okay, great. Thanks, Josh. Thanks, Marco.

Our next question will come from the line of Ricardo Buchpiguel from BTG Pactual. You may begin.

Good morning, everyone and congrats on the results. First, I wanted to understand a little bit better. You explained a little bit in our presentation on the realization of the Fund III in terms of its performance. So as I understand, correct me if I'm wrong; you still have this IRR and some receivables in this firm. But basically, you expect the monetization to happen in the future and it was already committed from the LP. I just wanted to understand what is the difference from that to the accrued performance fee on the balance sheet? And also for my second question, I wanted to just a little bit better, as far as I understand, one of the goals that you had in your IPO was to pursue some M&A opportunities to add to the franchise, particularly outside of Brazil. So I wanted to know if you have any update on that and if there are any ongoing negotiations, and what kind of assets would make sense for us to expect for this year or perhaps the following years. Thank you.

Thank you for your question, and it’s nice to talk to you again. This is Alex. Our Fund III is entering liquidation mode, which means that as of June 30, we returned all the principal investment, hurdle, and costs back to our investors. After that, all incoming funds, totaling up to $86 million for Private Equity Fund III, will be distributed solely to the general partner, Patria, on a full catch-up basis. Following this, the distribution will shift to an 80-20 split. In addition to this distribution phase, which differentiates this fund from others still being invested in, we are actively working to sell our main asset, the shares of Alliar, a medical diagnostics company listed on the Brazilian stock exchange. We have initiated a vigorous divestment process, including a tender offer to buy Alliar shares at a price consistent with our performance fee accounts from June 30. We anticipate receiving realizations from these shares shortly. The remaining assets consist of receivables and earn-outs from previous sales of companies within Private Equity Fund III, which are already signed off, and we expect to receive those funds in the first quarter of 2022. Given this liquidation phase, we accounted for these fees in our second quarter results. The unrealized performance fees you mentioned do not relate to this fund. For instance, with Private Equity Fund V, we are still building unrealized performance fees, and we haven't yet returned capital through sales in Private Equity Fund IV or V. There's a specific sequence where we must sell companies, return capital, and cover the hurdle and costs before we can start accruing performance fees. This is why we recognized the realized performance fees. Regarding your second question on M&A, we're actively seeking to broaden our product offerings and geographic reach. While we don't have any announcements today, we are pursuing both fronts vigorously. This includes developing products that focus not only on our Brazilian strategy but also on those with Latin American exposure. Additionally, our geographic expansion efforts will go beyond Brazil. Marco, would you like to add anything?

Yes. I would just add that what you should expect is consistency with what we have announced during the IPO and what we're looking for, bringing into Patria with our acquisition program, which would be geographical competencies, distribution channels and new products. So as Alex indicated, we've been actively working on this and we've been active in signing MOUs and working through negotiations, but there is nothing to be announced at this stage.

Thank you. Very clear.

And our next question will come from the line of Domingos Falavina from JPMorgan. You may begin.

Thank you. Good morning, everyone. Thank you, Alex Saigh, for your thorough question. I was going to ask about the $86 million related to the performance and whether you delivered above that. Let me add another question or two to your response. The performance you reported from the liquidation of the fund is quite clear, as it was very close to a tender offer for the assets. My question is whether there have been any discussions about a potential premium for control and if that has influenced the divestments, which should be reflected in this performance recognition. Additionally, how are you assessing the overall standard? On a related note, we are seeing an increase in interest rates in Brazil, which might alter your perspective on certain sectors that could become less attractive as you adjust your investment strategy. So, how is this changing environment in Brazil affecting your views on which sectors are becoming more or less compelling?

Thank you, Domingos. It's great to connect again. We remain very enthusiastic about the sectors that are central to Patria's focus. As we progress through the year and observe the economic and political landscapes in our country and throughout Latin America, healthcare remains a critical area for us. The pandemic has further emphasized the need for all countries to bolster their healthcare investments. We’re exploring exciting opportunities in this sector both in Brazil and beyond. On the infrastructure front, we've been actively engaged in logistics, as you may know. Several governments in the region are shifting their focus from public assets, particularly in logistics, which is a primary focus for us. We are now the third-largest toll operator in Latin America. Recently, we won a concession and acquired another asset in Colombia, highlighting logistics as a significant priority for us. Looking ahead, with interest rates rising, the growth of fees from these logistics assets, along with revenues from certain energy-related assets being tied to inflation, provides an appealing natural hedge for our investments in these two sectors. Returning to private equity, we're equally excited about logistics. We’ve been investing in cold logistics across the region, addressing a key cost issue given the rise in energy prices, which heavily impacts that field. Our focus remains unchanged, and as we observe countries recovering robustly from the pandemic, many in Latin America, including Brazil, are adjusting their GDP growth expectations for 2021 upward, compared to earlier this year. It’s an exciting time to invest in Latin America, particularly with several gaps in the market and limited capital pursuing deals, placing us in a favorable position. This is especially true in the infrastructure sector, where competition is less intense for Patria. I trust I’ve addressed your question.

You did, very clear. Thank you. And congrats on finishing the cycle on P3.

Yes, thank you very much. It was a 2007 vintage fund, and I really would like to praise the team for an amazing effort. The 2007 vintage funds faced a tough moment, which was the 2008 crisis, as you know. We managed to deliver a top quartile fund not only in Latin America but in the emerging markets ranking. I'm extremely proud, and we achieved a 2x return in U.S. dollars for our investors, which is something that makes us very, very proud given the vintage of the fund. Thank you.

Thank you. I see no further questions in the queue. I'd like to turn the call back over to Alex for any closing remarks.

Thank you for your patience and for participating in our call. We're very excited about our results, with earnings per share of $0.67 for the year-to-date, putting us in a strong position to deliver the $1 per share we discussed for 2021, which represents about a 5% yield for our investors from our IPO. I'm very proud of our results and as we look ahead, especially to 2022, we have reliable revenue sources given the business dynamics. The second half of the year regarding fee-related earnings is looking promising since we charge fees at the beginning of the semester. We're also excited about our expectations for fundraising for Private Equity Fund VII and a renewable energy fund next year, alongside our anticipated fundraising for Infrastructure Fund V. Our Brazil-focused strategy is performing well, exceeding our capital raising expectations. This positions us nicely to wrap up the year with $1 per share in distributable earnings as we look towards 2022 with optimism. Thank you again, and I wish health and safety to you and your families. Have a great day. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.