Blue Owl GP Strategic Capital's Sean Ward - transforming GP stakes into an industry

This episode of the Alco's mainstream podcast is brought to you by Ultimus, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. Ultimus is a leading full-service fund administrator for asset managers in both private and public markets, offering a wide range of capabilities across registered funds, private funds, and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products. Trusted by institutions, investment consultants, registered investment advisors, state governments, and fund managers, Ultimus provides solutions for nearly every investment structure in the marketplace. Visit www.ultimusfundsolutions.com to learn more about Ultimus's Technology Enhanced Services and Solutions, or contact Ultimus Executive Vice President of Business Development Gary Harris on email at [email protected]. We thank Ultimus for their support of Alt's Going Mainstream. All my family is sick. See you on Mainstream. We're going Mainstream. Wall Street to Melrose Avenue. We're going Mainstream. Venture Capitalists to Athletes to Prehears. We're going Mainstream. To a person who has collected trading cards. We're going Mainstream. And a collision of culture and fighting. We're going Mainstream. Welcome back to the Alco's Mainstream Podcast. Today's podcast illustrates just how far private markets have come. We dive into the world of GP Stakes with the Senior Managing Director from Blue Owl GP Strategic Capital, Sean Ward, where he's responsible for helping to oversee the firm that has done the lion's share of GP Stakes investing. Blue Owl's GP Strategic Capital Business was started out as Dial Capital has accounted for over 61% of the total capital raised in the GP Stakes space, closing on over $33.3 billion across their seven funds. They've taken minority ownership stakes in many of the industry's leading alternative asset managers, accounting for 85 plus percent of all GP Stakes deals, $600 million or greater in size. Sean is a Senior Managing Director of Blue Owl Capital Inc. and a member of the firm's board of directors. He also serves as a member of the GP Strategic Capital Investment Team. Prior to joining Dial Capital, the predecessor firm to Blue Owl's GP Strategic Capital Platform, Sean was a vice president at Lehman Brothers and held several roles in New Burger Berman after it became an independent firm, including Senior Counsel for New Burger's Alternatives business. Sean was also a lawyer at Covington and Burling LLP and Davis Polk and Guardwell LLP. Sean and I had a fascinating conversation about the evolution of private markets through the parallel evolution of the GP Stakes space. We discussed the early days of the GP Stakes industry, what it was like to convince GPs and LPs why stakes made sense, how the $1 billion GP commitment by Bain Capital and their fund post-GFC really opened everyone's eyes to the need to tap into financing as firms grew their fund sizes and their business, why GP Stakes investing is mainly about positive selection since managers are choosing to sell a stake in their business, how alternative asset management as a business has evolved, how GP Stakes investments have elements of bond like coupons from cash flows due to management fees and option value from the upside of carry, why GP Stakes investments are the most diversified single line item investment one can make in private markets where allocators bucket GP Stakes investments, what makes a great GP Stakes investor, the power of permanent capital and the different paths to liquidity in GP Stakes investments. Thanks Sean for coming on the show to share your views and wisdom on private markets. We hope you enjoy. Sean, welcome to the Alcos mainstream podcast. Thanks for having me. After many delays. Pleasure to have you on. It'll be worth the wait for sure. And I think that's actually a great segue into your career and the world of GP Stakes investing, which is very patient long-term investing. But you've been patient throughout your career but have since built the largest platform in the GP Stakes space. So we'd love to hear how you got started in this space and now where you've ended up. I don't think anyone's more amazed than we are at what we've managed to build. In fact, we had an offsite of senior folks on our team just last week and there was one slide that gave us a little bit of a victory lap. We have 90% market share and large transactions and we've raised something like two thirds of the money that's ever been raised globally for GP Stakes investing and yada, yada, yada. And this all started from a very, very low base. I think it can safely be said that no one, including probably most especially us, ever anticipated the level of success we've had. And I think I have a hard time giving people career advice because mine is such a result of luck and path dependency and so forth. But the way I got started in GP Stakes investing was by being part of the world's largest bankruptcy at Lehman Brothers. I was a lawyer back in the day. I worked at two different law firms. I won't mention them because they're probably embarrassed to have me as an alum, but I was not a great lawyer and so always looking for a way to stop doing that. And I went to Lehman Brothers and briefly worked with the merchant banking team as sort of a hybrid legal business role and then got subsumed into various corporate strategy type projects. And one of them, which was just as a good indication of how unimportant I was, it was probably plan Z on the list of options circa summer of 2008 to figure out a way to save the firm. And one of the ideas was, oh, maybe we'll spin out some or all of the investment management division of Lehman and post bankruptcy. That became the spin out of Newburger Berman from Lehman Brothers and that closed in May of 2009. And then subsequent to that, Michael Reese, who's the head of the GP Strategic Capital Business here at Blue Owl, we were working together and in the alternatives. And he had the idea of continuing the stakes program that had been on Lehman's balance sheet prior to the bankruptcy, continuing that but in a fund format. And the funny thing is he sat down with me and was going on about, well, we could really use someone with a legal background on the team. And these are very contract heavy transactions and so forth. And his basic point was, do you know anybody that you could recommend? And my thought was, well, how about I do that? And we could hire somebody to be the general counsel or whatever of the Alts business. And so that was really the beginning. And that started with a base of, well, if we're lucky, maybe we can raise 300 million to do this. And we ultimately raised 1.3 billion for our first fund after crawling through glass and so forth. And now our last fund was just shy of 13 billion. So it's been quite a journey over the past however many years, 15 years or so. That's such a striking set of figures. So I think to your point, you do almost 90% of all transactions over $600 million per transaction. So that is quite a run. I'd love to just touch on your background as a lawyer, because the stakes space is so contract heavy and structuring deals are so important. Understanding alternative asset managers and their businesses are so important. How do you think being a lawyer helped you being a stakes investor? I think it was hugely important. And the good news is that these are detailed investments. You do need to make sure that your contracts are strong. We're a minority investor. We're always a minority investor. So by definition, we don't have control of people's businesses. And so we need to make sure that no economics are leaving the system except as allowed by contract. And so certainly it's incredibly important to have competent outside counsel. And we've added on our own team more powerful lawyers than me. Certainly, Jamie Lurie is a colleague here, and she's certainly taken up the mantle of day-to-day contractual negotiation. But I think of GP stakes investing as being one of the few areas where having a legal background is actually additive to an investment. I think the other one is credit, because at the end of the day, when you're a credit investor, all you have is a contract and you need to make sure you're going to get paid back. And I think here, all we have is a contract as well. These aren't businesses that typically have many, if any, physical assets. So you're really talking about a series of cash flows and making sure that you're getting what you're entitled to. But the other side of it, and this is a little bit different from a credit context, is that because these are minority investments, because these are friendly investments, again, by definition, but you're not coming in as the hard-nosed M&A, Wachtel lawyer kicking people's teeth in. That's not the role here. These are friendly negotiations, and you need to be mindful of, OK, well, we need to protect ourselves. We need to make sure our contracts are tight. But we also need to make sure that they're tailored to the situation and whatever an individual's unique sensitivities are. They always come up, and you'd be shocked. And from 30,000 feet, our deals look very, very similar. But when you get into the nuances, there's almost always a funny story behind something, the details of a particular contract. I'd love to dive into that concept a little bit more, because stakes as an industry with an alternative asset management is still relatively new. And early on, it was probably hard both to convince LPs, but also GPs, to take capital. What was it like in the early days of starting Dial and building the GP stake space? Well, I mean, you're certainly right. From a fund-raising perspective for us, we were joking before we started recording how much gray hair I have. When we started, my hair was dark, and I think a lot of the now very little color left in my hair, all this gray is largely the result of crawling through glass to raise money initially. I mean, it was very, very difficult, very untested hypothesis to the market. All of us who were senior folks on the team had Lehman Brothers in our biographies. This was not an auspicious beginning to an effort. So, yes, you're absolutely right. It took a while to convince LPs. And on the GP side, you're also right, because I think a lot of folks were worried, well, what are my investors going to think? If I sell a piece of my business, what are they going to think? I'm cashing out. I'm going and hitting the beach. I'm not aligned with them in the right way. And over time, it's been an education process, not just to investors and all the great things, hopefully, that come along with investing in a fund like ours, but for the GPs as well. And thankfully, over the past decade and a half, I think it's become, at least at the upper end of the market, a very accepted part of a firm's maturation that they might sell a stake over time. And the reason why I think it's become so acceptable is that for the bigger firms, investors recognize that private equity is a weird business and that it consumes a lot of capital. You compare a private equity business to a traditional asset management firm. Take a step back and think about BlackRock. $10.2 trillion of AUM give or take. How much of that is BlackRock's own proprietary capital? Interestingly, small percentage. I don't know the number, but I would wager that it's less than a basis point of that total. And as these businesses get big, the capital intensity measured by how much of their own proprietary capital is invested, tends to go down. With private equity, of course, as I'm sure most of your listeners know, every time you raise a fund, you have a GP co-investment obligation, the GP commitment to that underlying fund. And 2% is what people bandy about as being typical. Sometimes it's more, sometimes it's less. But when you're talking about big firms, the numbers get very, very large. One of our managers, now a public company called CBC, their last fund was 26 billion euro. If you assume a 2% GP commitment, that's 520 million euro in one fund across their $200 billion platform. So having someone like us that can inject institutional capital onto the firm's balance sheet, this is not a cash out. This is actually equity for the firm to continue to fund those commitments and grow in various ways. It's become something that I think people understand and that's become a more accepted part of the landscape. On that point, just to play devil's advocate, the skeptic would say, well, that is a really expensive way to finance a GP commit, giving up equity in a really valuable business that has long term and steady cash flows from management fees and then obviously the performance fee enhancement as well. Why would a firm want to do that instead of accessing capital to fulfill a GP commit in some other way? Yeah, no, you're right. It's not cheap. The implicit cost of capital here for someone selling a piece of their big profitable business is not low. There's a reason why we've been able to generate what I think are pretty good returns. That being said, I think there are a few reasons why this is a compelling proposition for managers. For one, the type of transactions we're doing, you've mentioned before that we have, well, I mentioned it first and then you've kindly repeated the statistic which I'll now throw out there one more time. The reason why we have 90% market share of these large transactions, these $600 million in up deals is simply that there aren't really other options for people to raise capital at that quantum. If you wanted to go out and borrow money to fund a GP commitment, well, there are a number of problems with that. One is that you typically can't borrow on a long enough duration to match your asset. Let's say you wanted to go out and borrow money to fund a GP commitment to your 10-year plus fund. Well, no one's lending you money for that long of a period of time. Maybe you get a revolver from your private bank. Maybe you can get a couple hundred million dollars here or there, but if you want $750 million, a billion dollars, two billion dollars, you're not able to borrow that kind of money, even if you're a big established firm. The dearth of capital available to actually fund those type of commitments is a huge help to us. There's also, I think, two other important factors at play here. One is that we are a minority investor. We're typically buying 10%, 15%, maybe 20% of someone's business. They still own the vast majority of the business. And if the capital we're providing can help them grow, whether it's funding the commitment to a bigger fund or launching a new product or maybe going out and acquiring a business to bolt onto your platform, CBC, I mentioned them before. They acquired a secondaries business and they acquired an infrastructure business with capital that we provided. Well, if we can help facilitate that growth, then the 70%, 80%, 90% of the business that they continue to own is going to be worth more than if we weren't there. And then the other piece of the puzzle, and I'll stop my monologue, the other piece of the puzzle is that we offer something strategic as well. We're not just a checkbook. We have a group of folks on our team. I think about 60 people now that we call our business services platform. And that's a group of folks who have, on average, 17 years of experience. They're not investment folks. They're subject matter professionals in areas like human capital and data science and procurement. And they provide a wide array of services to our underlying managers at no cost. So providing, hopefully, reasonably high quality services at no cost and taking advantage of the scale that we have. Even for these big firms we're buying pieces of, I mentioned CBC at Nausium, but they're the biggest. They have about 200 billion of AUM. That's still a boutique in the grand scheme of asset management. And we own stakes in firms that collectively manage something like $2 trillion of AUM. So we bring a lot of scale. We bring a lot of data. We bring a lot of insight to these firms that, sure, it is objectively quantitative as, here's a check, no. But is there value there? Absolutely. And I think that's something, again, that over time the market has learned there's substance behind. Embedded in your answer there is something so pertinent to the evolution of the industry as a whole, really from funds into firms. So what you're saying is that many of these firms have evolved themselves and have become multi-strategy, have become global, have become larger in size and scale. How does this all fit into the broader backdrop of the trends in the alternative asset management industry? Because you started when there really weren't GP stakes and you even started with hedge funds at dial. And then you've obviously moved into private equity or all sorts of alternatives, managers outside of the hedge fund world. Walk us through what that evolution has looked like and really when there was that click for the industry of, okay, these are now businesses, just like the businesses we invest in as private equity firms, but we need to treat ourselves as a business too. Yeah, no, it's been a really interesting evolution over time and you're exactly right. These firms went from a couple of folks starting a business. They generally came from some big bank and wanted to go out and strike out on their own and maybe thought they would raise a fund and then at some point down the line would turn off the lights and go home and the partnership would dissolve and that would be that. Very few folks, I think this is probably even true of Henry Kravitz and the other pioneers in the space. I think they were hand on heart. I think very few of them ever thought these would be institutions with true enterprise value over time. I think there have been a number of maybe aha moments over the history of the industry. Certainly post financial crisis, when Bain wrote a billion dollar GP commitment into their first post-GFC fund, I think that was a real wake up call for folks say, wow, okay, the dollar amounts getting involved here from the GP side are quite real and it became a little bit a slow moving but a bit of an arms race for folks to say, okay, well, would it make sense to have an actual firm balance sheet to be more flexible and do things like launch new products with warehoused set of investments and maybe it makes sense as a marketing tool to not just do a 2% GP commitment, maybe we do a 10% GP commitment and maybe we should go out and buy a credit business to put alongside our buyout business. Again, these were a slow motion effect. But I think as the industry has developed, people look around and they see the folks that have done the best. Many of them have this balance sheet that folks like us have provided. And look, I think I want to be completely intellectually honest here. I do think there's an element of correlation as well, not just causation. And sometimes people get the chicken and the egg confused. They'll say something like, well, the folks at Blue Owl bought a steak and then this firm grew like crazy. It must be because Blue Owl is telling them to grow or showing them how to grow or whatever. That is getting it completely backwards because it is the firms that want to grow, that want to further institutionalize that are most likely to sell a steak because that's why they're doing it. We're in essence providing growth equity. And so when someone like Clearlake grows from $7 billion of AUM at the time of our first deal to $9 billion today, it's not because we told Jose and Vedad anything they didn't already know. We just helped them actually execute on the plans that they already had. It's a really important point. You just shared this. Michael has also shared this in the past saying, we are investing in firms that are coming to us from a position of strength. They're deciding to sell a steak in their firm. Can you unpack that a little bit more in terms of what that actually means? The best firms are coming to you saying, hey, we want to sell a steak, not the firms who need capital necessarily. This is probably the most important aspect of what we do is there's a huge element of positive selection here. And look, that was one of the first objections that people had back in the day. Well, it's only going to be bad GPs that want to sell a steak and no one who actually has a good business is going to want to sell a piece of it to you. And I'll tell you a quick story that it'll sound like I made it up, but I promise to you it's true, but it's so on the nose. So our fund three was our first fund really dedicated to private markets and a quick footnote for the listener that when both of us keep saying private equity, we're really talking about the broader strokes of private markets. So not just buy out, but private credit and infrastructure and real estate and growth venture, really anything that's in a closed end drawdown format. So as you said before, not hedge funds, but really pretty much everything else. When we were raising our fund three, the first deal we did in the fund was with VISTA equity partners. And that was in June of 2015. I remember right before that deal became public, I was sitting down with a prospective investor in Northern California. This person was a partner at a VC firm, very smart. And we were at a Mexican restaurant and he looked at a page of names that we had of like target universe sort of firms we would talk to. And he said, I can see why some people might do this when he's pointing at different names, like they're having a succession issue and their last fund didn't do that well and so forth and so on. And then out of the entire page, I swear to God, this is true, he pointed to Vista and he said, yeah, but there is no chance you could ever do a deal with someone like Vista. There is no chance that Robert Smith would ever sell a piece of his business to you at the prices that you're talking about. And this is like two weeks before that deal became public. Well, you know, you might be surprised, but it brings back to the point that it lets use Vista as an exemplar here. They were poised to really turbocharge the growth of that firm. They had roughly $14 billion of AUM at the time that we did our first deal with them. And Robert's goal was to build a much bigger business. Their next flagship fund raise was going to be more than double the size of their previous flagship fund raise. And they were going to raise their foundation fund for middle market deals and the endeavor fund for smaller deals, et cetera, et cetera, et cetera. And to help facilitate that growth, they wanted to increase their GP commitment from 2% to 5% of these much bigger funds. And so we were really providing the capital that allowed them to get that done. Otherwise it would have been impossible, quite literally impossible for them to do. And so that is just one example, but you multiply that across all of the different deals that we're doing and the type of names of the firms that we're partnering with. At this point, I don't think people have really a whole lot of doubt that there are good reasons for doing these deals and that these are really good firms that are selling stakes. Yeah, I think that's such an important point because it shows the quality of the types of firms across pretty much every category of alternative asset management. You mentioned Vista, you mentioned Clearlake, you mentioned Bridgepoint, NEA, all sorts of funds. Those are just a few amongst many others. One question when it comes to what the capital is being used for, you mentioned the GP commit being a large area where your capital is being used. But now as alternative asset management continues to evolve, you've even done some of this yourself at Blue Out of acquiring firms that add to the platform Adalaya, the $10 billion private credit manager focused on asset-based finances, the latest of which you also took a stake in as well actually, keeping it in the family. But I think it's indicative of a much broader point, which is firms know they need to have the currency to be able to supplement their platform, add to their platform in different ways, whether it's acquiring, hiring a new team, launching a new strategy, maybe committing a bunch of capital to that strategy to start. What would you say the breakdown is of the capital that you're providing in terms of where it's being used? Because we're providing capital that is a reasonably large quantum and where the manager has complete flexibility in what they want to use the capital to do, these are not mutually exclusive things. There are all sorts of different considerations that come into play over time. And some of our favorite deals are doing follow-on investments with managers in whom we already own a stake. And so those needs can change over time. But just to answer your question directly, certainly GP commitments are a big part of it. One topic that we haven't really mentioned at all, but it's at least adjacent to the GP commitment topic is succession planning. The typical manager we're buying a stake in at this point has more than $20 billion of AUM, in most cases, much more than $20 billion of AUM. Most of them have been around for at least 20 years, in some cases, much longer than that. And so just by biological necessity, if nothing else, you have a founding generation that's starting to think about, okay, how do I ultimately exit the stage left here? But the next generation coming up that's going to be taking control of the business over time and needing to fund those GP commitments themselves, they typically don't have the personal balance sheet to write those type of checks. And so one way to facilitate that transition is for someone like us to come in, inject capital onto the balance sheet, that next generation is then equitized, they get equity in the firm, and they then have access to that capital to write bigger checks that they could otherwise do on their own. And so over time, that incumbent managerial generation can start exiting and taking their money with them and not having to roll capital, add in an item from one fund to the next, and that next generation can step into those rather big shoes. That's certainly a big topic that's come up from time to time. So I'm certainly a believer in private equity, private markets, but there's obviously an influx of capital, there's been a dearth of distributions. Those two things might suggest that returns could come down relative to what they have, and maybe not necessarily relative to public markets. If that were to play out and be the case that returns were to come down, how would that impact what you just said about more capital coming onto the balance sheet to help these younger GPs have equity in their business, but their GP commits are in effect investing in something that may have lower return potential than it might have in the past? One important secret, and I say that in sort of quotes because it's not really a secret, but I'm not sure most people like to spend a lot of their time thinking about it, is of course, when you're investing as the GP, you're getting the gross return of your funds. So even if it's a lower return than it was, maybe historically, when you're not paying any fees, the returns are still pretty interesting. And most people have a lot of faith in their own ability to deploy capital. But I do think it's important to take one quick step back and not to challenge what you said, because that's undoubtedly true in terms of distributions having been a lot lower of late than they were over the past several years before that. But when you actually go into the data, and we have some interesting slides that we talk about in industry gatherings, and I think you've seen some of them, it's a real tale of two cities here in terms of what contributions less distributions look like. Because when you look at the buyout world, traditional private equity buyouts, the net, I guess, out of pocket, if you will, again, you're where you're contributing more capital than you're receiving in distributions. It really hasn't been that dire, even in the last several years. And for the most part, over the past decade, inclusive of the last several years, you've had more distributions than you've had contributions. So you're still not really that far over your skis, where there's been a huge, huge mismatch is in the VC and growth world, where every single year in the past decade, with one exception, it's been net cashflow negative. So even in the boom times, the investors weren't getting back more capital than they were putting into these investments. And I think it's going to be a very long time before all of those 2021, 2022 investments work their way through the VC and growth world. So I do think it's important to differentiate between that part of the market, where I think the dominant narrative is very, very accurate, and the buyout part of the world where, yeah, did things step back quite a bit? Of course, but you're back to 2019 levels. It's not like the Stone Ages, you just moved back to a more normalized world. Now, an important point, and just for context for people, I saw a chart recently that showed distributions over the past 25 years from really pretty much all the private capital firms, I think 10,800 or so funds. The total carry that was distributed over those 25 years was over a trillion dollars. So there's still plenty of capital to go around. That brings me to another point, which is I want to discuss and touch on how you think about GP stakes investing. So there's the management fee, there's the carry, there's other streams of revenue, there's potential exit. Walk us through the mechanics of a GP stake investment and how you think about it from an underwriting and returns perspective. Sure. And it is something that we think about it all day, every day, but it is a little bit different from most folks natural, I don't know, mindset as LP investors, particularly if you're a buyout fund investor or if you're a VC investor, historically, well, what does that return profile look like? Well, you commit capital, capital is drawn down over time to make investments in various operating companies. And you have a negative return, typically the J curve, the dreaded J curve for some period of time. And then ultimately, those underlying companies are sold and an exit gets you hopefully a multiple of your money back. And that's how the return is generated. And so typically, and I'll stick with buyouts for a moment, when you're a buyout fund investor, you're very exit focused. And that's how a return is generated or not. And that's really the important question. When you're a GP stakes investor, it's a bit of a different story, right? Because we're buying into businesses. And again, hopefully to most of your listeners won't be shocked by this, they're very, very profitable. They're very, very profitable just on management fees alone. And so there's a lot of cash flow that's being generated by these firms. And that's really what we're underwriting to. There's an optionality that exists around exits. And we can talk about that. I'm sure we will talk about that. But our base case underwriting is based on the cash flow that these firms generate. And you're exactly right. When you think about, well, where's this cash flow generated? They're broadly speaking three buckets that it's coming from. One are the management fees that the manager's underlying investors are paying them. And the management fees, almost thinking about this with my lawyer hat on again, they look a lot like a bond coupon to us. And by that, I mean, they're contractual in nature. Investors have signed themselves on to pay fees. And they've signed themselves on to pay fees on a fixed schedule, in fixed amounts, over a fixed period of time. And so when you buy a stake in a big firm, with almost arithmetic certainty, what your cash flows are going to look like from the management fee side of things. It's very steady as she goes. On that point, what do you have to believe to think that you're going to get paid back in the future? Is it that they can raise their next fund successfully pretty much? If you really want to do rough justice back in the envelope math, that's essentially it. That over a long enough period of time, if they raise one more fund, you're usually going to be money good just on the management fees from their existing funds and that new fund alone. You'll get back a lot of your money just from their existing funds, management fees. But to really be, again, money good just on management fees alone, you're usually assuming one more fund raise. And again, given the type of firms we're buying stakes in, these big, established, multi-product, multi-decade old firms, the idea that they're going to not be able to raise their very next fund, hopefully that's a very low likelihood. To put an illustration to that, and you were the ones at Blue Owl who actually came up with this data, and I think you showed it in your recent GP Strategic Capital Outlook report, the top 10 funds in every category of alternative asset management are raising 25, 30% plus of the total AUM in that strategy in recent years. So that seems to be the bigger getting bigger. Yeah, and that's probably a topic we should come back to in just a moment. But just to round out where does cash come from? Management fees, very steady as she goes, sort of coupon-like, as I said, carried interest. So their performance fees, the performance fee equivalent, I guess the bad news about carry is that unlike in the good old days of hedge funds, you're not taking 20% of paper gains, you actually have to sell stuff and realize good returns for your investors. That's the bad news, I suppose. The good news is that when we're buying a stake in a manager, we're not just blindly assuming what is their performance going to be going forward. We're going through it on an asset by asset basis, underwriting their various portfolios, and saying, okay, what's the likely path to exit here? How much carry will that generate and win? And most importantly, we sensitize that down to say, okay, how wrong can we be before we get to an uneconomic outcome? And that analysis, by the way, is not rocket science. I mean, it looks very similar to what a secondary fund would do if they're buying an LP interest in someone's fund. We're just looking at it from the other side of the waterfall. And so it's very granular and it's very detailed, and we know we're not going to get it right. But we attempt to build in a lot of cushion so that we can be quite wrong. And I will say, take a step back and putting a finance nerd hat on for a second, I said, management fees look like a bond coupon. What does the carry look like? Well, the carry looks like an option on their performance. It's binary. You either get it or you don't. And if you do get it, it's quite convex. You tend to get a lot of it. And so it's sort of a turbocharged version of the fund's performance sharing in a carry. And then last but not least, in the various cash flow streams, is our share of the manager's balance sheet. And by that, I really just mean our slice of that manager's commitments to their various funds. And so that gives us exposure to all of their underlying fund investments. But keep in mind, again, we're part of the manager. So you're not paying fees to yourself as part of the manager. So we're getting the gross return of all of their different funds. And we're not talking about, well, oh, what is our slice of Clearlake worth? We're talking about what is our slice of all of Clearlake's underlying investments worth. So you add those things up. And you're getting cash flow every quarter, right after you make an investment, you're hopefully de-risking your investment relatively quickly. And you're getting your money back in five, six, seven years, and a nice multiple of your money back after 10, 11, 12 years, just from those cash flow streams, not even talking yet about the exit, not talking about the enterprise value of the firm, imagining that you just walk away and tear up the contract. Hopefully you're getting the type of return you would hope to get from a buyout fund, but you're getting it sort of in cash flows more smoothly over time. So you mentioned something really interesting, one that this is the type of return that you'd hope to get from allocating to a buyout fund. So probably high teens, mid-20s, IRR net, to something to maybe 3X, but you're getting it in a different form. And then you also mention things like private credit or bond coupon like and secondaries and reduction of the J-curve, because you're getting cash back faster from owning a piece of the management fee. How should investors think about GP stakes in terms of where they bucket it in their asset allocation? You should put it wherever you have the most capacity, but no, kidding aside, look, we've wound up all over the place in people's allocations, no doubt. Often, of course, we're in private equity because of the structure of our own fund and what a lot of our exposure looks like. We've wound up in people's private credit allocations, even though we're not a credit fund, but we produce a cash flow that you could think of part of it as being coupon like as I described. We've wound up in people's opportunistic buckets or absolute return buckets, again, taking a step back not to keep repeating that phrase. But when I think about what do investors get from investing in our fund, or let's generalize it to any GP stakes fund that doesn't need to be ours, ours is, of course, the best, but it can be anybody's. I think there are two main things that investors get. One is cash flow. And so if you have a bucket that prioritizes cash flow and yield, that's a good place to start, perhaps. But it's also a tremendous amount of diversification. And the reason why I say that is when you look at making a GP stakes investment, when you buy a piece of one GP, you are economically exposed in a variety of ways to every single investment that manager has ever made that they still own and everything that they do off into the indefinite future. And if you then multiply that by a portfolio of stakes in various managers, especially the bigger firms like we buy stakes in, you wind up talking about quite literally hundreds of underlying funds, thousands of underlying portfolio companies, every vintage year, every asset class, every sector, and so again, as we talked about, I have a legal background, I should add, I'm retired from the legal profession, according to the New York State Bar Association. So this is not legal advice, but I'm very careful about the words that I use. And I say this with that in mind, that I believe that this is the most diversified single line item investment you can make, full stop in private markets. And in the current environment, that really resonates with a lot of folks. But I will say, again, in an attempt to be intellectually honest here, I've obviously been emphasizing a lot of the good aspects of GP stakes investing. If you say, well, what's the trade off? There's got to be a downside, right? Nothing is just all upside. I will say, in my mind, if you look at a 10 or 12 year return, whatever you think of as being your traditional private equity time horizon, I think if you're making a pure play investment in a buyout fund or a venture capital fund, I think the distribution of potential outcomes in terms of multiple of money invested is much wider than what we produce. Maybe if you get it, you nail it, you invest with the right manager at the right time, maybe you get five times your money in a decade, or maybe you do a terrible job and you get 0.75 times your money or whatever. I think in our world, it's a much narrower likely distribution of potential outcomes. That's good on the left tail side. Everybody's happy to have less downside, but you're probably giving up some upside as well. You're probably not getting five times your money in 10 years from investing with us, but that's okay. How much upside are you really giving up, though, if you're almost getting exposure to pretty much, like in your case, most of the blue chip managers in private markets? Yeah, I mean, look, reasonable minds could differ there. We have some investments that have in less time been 5x type of investments, but that's the exception, not the rule. That's not what we're underwriting to. It's a much more boring underwriting process, and thankfully, the math is simple enough that even a reformed lawyer can do it. If you look at one of our investment committee memos, you're not going to see fancy Greeks, and you're not going to see a lot of sophisticated financial models. This is cash flow scenario after cash flow scenario, and yes, there's a lot of detail, and we are building portfolio up to the fund waterfall, and yada, yada, yada. But at the end of the day, there are only so many variables that you push and pull around. Like, when are they going to raise their next fund? How big is that fund going to be? How much carrier they're going to generate and when? And that is what we spend page after page playing around with. Some of our managers have absolutely massively out performed our most optimistic scenarios, but we don't underwrite to that. On that point, what is the most important skill set to being a successful GP stakes investor then? I'm not sure I have one answer to that, and I know that's a very pat answer, but I think when you look at our team, the diversity of professional backgrounds we have, and frankly, personal backgrounds that we have is very important. Now, this is a very bad news bears sort of group that came together over time. You won't find a lot of or any harvards or yales or whatever, and everybody's not an ex-investment banker. You have some former lawyers, you do have some former investment bankers, nothing pejorative there. You have some former consultants, you have former auditors, all sorts of backgrounds because there are a lot of different things that come together in trying to understand these businesses. But I will say you also need, and I think frankly, one reason why some competitors have failed in trying to build a GP stakes business is you need a little bit of a particular personality as well because these are collaborative partnerships. And I know that's probably the most overused word in our industry, but fundamentally they are. And we're shoulder to shoulder with these people. We're bottom line profit participants with them. We're a minority investor, as I said. We have a big effort to be helpful to these firms in some ways as much harder than if you're going and buying a ball bearing company and you can fire management tomorrow if you don't like them. That's not happening. That's a really important point in terms of skill set that it takes and what to look for in a manager too. I want to get to that as well. You've seen so many managers at this point. What do you think it takes to be a great alternative asset manager and what do you look for when you're investing in one of these firms? Long gone are the days where it's a handful of folks and they're smarter than everyone else. Everyone thinks they're smarter than everyone else. I'll keep my opinions to myself as to who actually is and who isn't. But I think at the upper end of the market by size, this is an asset management business. It's an institutional business. And so do you need people that are good at investing? Capital, of course you do. But hopefully that's the baseline. And I will also just say that one of the reasons why I personally, I'm speaking for myself now, like investing particularly in the upper end of the market by size is there is that other element of positive selection and that these firms have gone through the Darwinian winnowing that has been required to get to the size they're at. A lot of the business risk I think has been minimized because to get to be a 20, 30, 200 billion dollar asset management firm, you are definitionally good at raising money. And you have to be at least reasonably good at investing it. And it doesn't mean people can't mess it up. They absolutely can. But to get to that level, they've done a pretty good job already. And they're at least reasonably institutional already. Now, what do managers need, I think to succeed and thrive in the current environment? Well, I think just looking around at the different firms we own pieces of, I certainly think it's a benefit to have different strategies, even if they're all focused on the same asset class, having different flavors of what you're doing allows you to navigate more difficult times. You might be an entirely enterprise software focused business like Vista is, but they have a lot of different flavors of that large cap, mid cap, small cap credit. That ensures that even if something isn't going well, you have other stuff to talk to investors about. And I think that's really important. I think a lot of our managers have spent a lot of time of late building out really professional investor relations and business development teams. And that wasn't always true. Even a lot of really big firms until recently were reliant on a handful of Rainmaker type partners to go out and raise the funds or they thought the funds would raise themselves. And I think people have realized that's not true. That's a bad idea. I think private wealth is certainly the next frontier that a lot of folks are focused on. And look at Blue Owl, we eat our own cooking. We have hundreds of private wealth people, salespeople and back office folks globally to raise money in that channel. And we're a leading firm in that. I think a lot of these big firms look around and they say, well, probably most of the institutional shift to private markets has already happened. There's some room to run a few percentage points here or there. And I think money's going to go out of the system. I think it'll rotate within the system. But the big moves from insurance companies and corporate pensions and state pensions, most of that in my view has played out. But on the private wealth side, when you're talking about ultra high net worth, the typical ultra high net worth family, which collectively own a roughly $72 trillion of assets globally, they have less than 5% of that in private markets. If you expand that aperture to high net worth, that's more than $200 trillion globally. So 1% shift is hundreds of billions or trillions of dollars. And I think the vast majority of that is going to go to the bigger, more established brand name firms. So all the different things you can do to build out that institution, I think, are critically important now. So all of these things stand to benefit the larger manager, which you have, as we've talked about, plenty of exposure to and really own that market. You recently launched a mid-market strategy with partnership with Looney, a $2.5 billion fund focused on mid-market alternative asset managers. Why do that when many of the things that you just said really benefit the larger end of their top end funds in the market? How do you then think about the middle market of alternative asset management? I think the reason why it took us so long to really launch the fund that we have and to do deals in the middle market. We've always done deals in the middle market, but it's been very selective. And there are a lot of auctions for those transactions. And a lot of those deals go to the highest bidder. And we were never interested in just competing based on who could pay the most. Other people could do that. I'm more than happy to give middle-sized managers those competitors' names so they can go and write those type of checks. Of course, we could raise money to do those deals and go out and just pay more than the next person, but that wasn't terribly interesting. What we wanted to do was have a partnership with an organization like Lunet. Lunet, I've heard many versions of how it's pronounced. I'm not sure anyone's quite agreed. That has a long history of LP investment that knows that market extremely well and that can help those managers get to where they want to get to with a much higher degree of certainty. So when we're looking at a mid-sized firm, we're really looking for firms that are interested in that Clear Lake type trajectory, that don't want to just keep doing what they've done. That's fine. Don't get me wrong. There's nothing wrong with that. But firms that are interested in becoming that next generation of institution. And we bring a lot from our historical background to help. We've seen a lot. We've done 90 minority stake deals in our careers, which many times more than anyone else has done. We have the big business services platform as I described, but now we have that missing piece of the puzzle with a big LP investor that can be helpful. So my version of the conversation I would have with a middle-sized manager is, look, if all you care about is maximizing the price you're getting right now, having the highest multiple of earnings or the highest enterprise value tacked on to your business right at this moment, we're not the right buyer. I can point you to who the right buyers are. But if you're willing to be a little bit shy of what that absolute top tick price would be, but have a partner that can make the 80, 90% of your business that you're retaining worth much, much more in the future with a much higher degree of confidence, then we should have that conversation. And look, the dollar amounts involved, if we take a business that's whatever, I'm making numbers up, five billion of AUM now and turn it into a 25 billion AUM firm 10 years from now, they're not going to miss the couple million bucks that they gave up on the front end. Is that suggesting that the needs in the middle market are different and it's really more about helping these firms capital raise well? And then, I guess, does that get to the wealth channel where you can really help with that? Because a lot of those firms may just be thinking about hiring their first big head of IR or private wealth team, but you can really help with that in a number of ways. I'm not sure I would characterize it quite that way. I think by definition, with these smaller firms, you're dealing with firms that are generally speaking less evolved in their institutional framework than the bigger firms. But I think the needs are very similar. They want balance sheet capital. That's generally what we're providing. They want the help of our business services platform. And the big firms do too. The funny thing is a lot of folks will say, well, geez, you know, sure, I get it. If you're buying a stake in a small manager, the BSP can do all this stuff. But if you're buying a stake in a gigantic firm, they've got it all figured out. And again, the bigger firms have obviously done something right. And that's why we want to own a piece of them. But they are still boutiques. As I said before, even CVC, $200 billion of AUM, well, our former home at Newburger Permanent, well, they have like 600, 700 billion. BlackRock has 10.2 trillion. They're still minnows in the grand scheme of asset management. Hopefully, none of them are watching this. And so I would say maybe there's a level of intensity with the smaller firms. Maybe they need a bit more, you know, all at once. But I don't think it's different in kind. Maybe the dollar amounts are a little bit smaller. And maybe the help from the BSP is a little more intensive. But I don't think it's a totally different ballgame. So if we think about the continued evolution of private markets, I think we'd probably agree on a few things. One is more capital is going to flow into private markets. So on the whole, there's going to be more AUM raised by firms large and small. But large firms have tended to, and I think certainly as the wealth channel continues to come in, the larger firms and the bigger brands will probably raise the lion's share as you've noted of that capital. How do you think the GP stake space evolves both in the large cap perspective and also in the middle market? Is there more opportunity, the large cap space, or is there more opportunity in the mid-market just because there's so many more firms, but so much less dollars transacted or financed in the stake space? You know, it's an interesting question. I'm not sure I have a great answer. I think that there's ample opportunity. And I think over time that our little sandbox has certainly evolved. It's certainly evolved from when it was just us to now there are other people as well. And I think that's a perfectly healthy thing. I think what you're seeing develop, pardon me for waxing a little philosophical or macro here for a moment, but over time, the evolution of the GP stakes world mirrors the evolution of private markets in general. And by that, I mean, why have private markets gotten as big as they have? And why do I think they're going to continue to grow? Why do we maybe think they're going to continue to grow? Well, on the equity side in the private equity world, I think a lot of it has to do with how relatively unattractive being a public company is for a lot of firms. It used to be back in the 80s and 90s, everybody wanted to IPO. That was the ultimate brass ring that everyone was reaching for. Well, with Sarbanes-Oxley and a whole lot of other things, the number of big publicly listed firms in the U.S. has gone down almost every year for the last 15, 20 years. And at the same time, the number of private firms with over a billion dollars of enterprise value have gone up. And those companies need capital to continue to grow and they need it in various ways. And I think private markets have grown to facilitate that capital formation as public markets have become relatively less attractive. I think similarly in private credit, why has private credit grown as much as it has? Well, it's because the banks are being largely regulated out of that market in many ways. It doesn't mean they're going to disappear, but they're not necessarily a stable source of capital. They're not a flexible source of capital. And it's not necessarily a natural business for groups that have minute by minute liabilities to provide long-term debt financing. So I think that's why private credit has grown and will continue to grow over time. Well, similarly, these firms that are providing capital in the private markets, they have capital needs. Some of them will go public, but it's a small number. It's Aries, Apollo, Blue Owl, CVC, KKR. It's 20 firms in the last 20 years. So there's still the vast majority of firms, both large and small, and private markets don't want to go public. And maybe never will go public. Or even if they do intend to go public, maybe there's private rounds of financing to do ahead of that. So I think you're going to see a whole ecosystem. And you already see it in nascent form of people that provide capital in various formats to these firms over time, starting with seeders that provide initial capital, moving up to the really small GP stakes investors, then the mid-cap GP stakes investors, the large-cap GP stake investor right now, which is us. But you also have people that lend money to managers. We do it. We have a fund that lends money to managers on a long-term basis. You have people that provide structured equity solutions and preferred equity solutions. But this is all still capital markets 101. I mean, none of us are out here splitting the atom, right? So I think as the industry continues to develop, we'll see people like us continue to provide capital in various formats over time. I think that's such a fantastic explainer of the evolution of GP stakes and private markets. The next logical question from what you said is, okay, so this market continues to grow. And you also have firms that may not go public. The question on everybody's mind is going to be liquidity. What happens in this space from a liquidity perspective, both just in terms of managers exiting in some way, shape, or form some of yours, your portfolio have, you also created liquidity mechanisms within your fund. What happens from a liquidity perspective? Yeah, the $13 billion question or however much it is, I guess we have $55.5 billion of our own AUM at the moment to think about. What I've always told investors in just a level set for a minute, I always tell investors, prospective investors, our existing investors, anyone who'll listen when I'm ranting on a street corner, about focus on cash flow. Start with that. And if you can get comfortable that the cash flows are going to get you a return that you find attractive over whatever your time horizon is, then think of exit as upside to that. If you have to build in an exit into your base case like you would, if you were investing in a buyout fund, maybe this isn't the investment for you because that should be thought of as incremental upside. Now, that being said, when you own stakes in a variety of managers that manage hundreds of billions or trillions of dollars of AUM, there are lots of things you can do to create liquidity. And so going down the list of various things we've done and how we think about it, one feature of what we do that is certainly not immediately apparent unless you really get in the weeds of what we do is that it doesn't involve a lot of leverage. It doesn't involve a lot of debt. Again, compare and contrast. If you have a buyout fund, a buyout fund is going to have some level of debt typically at the fund level, maybe a nav loan, maybe a subscription line, whatever. And then every single portfolio company is likely to have multiple turns of leverage on it. That's leveraged buyout. That's how the industry developed. That's not a value judgment. That's just how it works. Now, what we do, we have the same fund level stuff. We have a subline that our funds typically, but our underlying portfolio companies, these managers themselves, typically have very little to no debt at the management company level. And so what that allows us to do is it gives us scope to issue debt, again, utilizing a portion of the cash flow that's coming up, essentially, securitizing a portion of the cash flow that's coming up. And we've done over $4 billion of those securitizations. Investment grade debt issued to insurance companies, long duration fixed coupon, blah, blah, blah, blah, blah. And we take the proceeds from those issuances and distribute them out to investors. But the important thing is, this is still very low loaned value. I mean, sub 15% loaned value. But that's the lever that's in the, no pun intended, I guess, so you leverage, lever, you get it. But that's one thing we have in the toolbox. And that's something that I expect we'll do more of in the future. Another thing we could do, and the most obvious one, perhaps, would be to sell some or all of these positions. Now, we go in assuming we're going to own them for a very, very long time. But every once in a while, there's a reason why it makes sense to sell some or all. And it's usually driven by the manager. Sometimes they're entering into a strategic relationship with a big LP, like a sovereign wealth fund or an insurance company. And we can help facilitate that relationship by selling a piece of what we own. We've done that several times, and it's worked out really well. Or sometimes, the company sells the entirety of themselves to someone else, like Archmont, a European direct lending firm that was sold to Nuvine last year. We participated in that sale, and it was great. As you mentioned, some of our managers have gone public, CBC, Bridgepoint, etc. And I think that'll happen. And that gives us a public market security that we can sell down over time, something liquid that we can sell. I think one of the more interesting developments over time, and you alluded to this a little bit, is the use of the secondary markets in an organized format on behalf of our investors. We've always had one-off investors who need to sell for some reason in the secondary market. And we have the ability to approve that sale or not. That's fine. That's a one-off, disorganized sort of thing. But more recently, we've begun the process with our third fund. We sold a 5% strip of the portfolio to some secondary buyers. And that was a really interesting way to get new investors, the ability to get exposure to a portfolio that they can look at and kick the tires on, but also an ability to get cash back to existing investors for a portion of what they own. 5% is a reasonably small slice, but I expect over time we'll do more of those transactions, most likely. And that's another way to provide liquidity. And I will say, for those who can't see you, I know you're dying to ask something. But the last just overlay I would put here is in our fund documents, our latest fund documents, we have a fallback where we tell investors, look, starting in year 10 and every three years after that, we're going to, at a minimum, in addition to all this other stuff, we're going to run a process, we're going to hire a bank, we're going to get you a bid for your interest in our fund. And if you're interested in selling, you can sell. If you're not, you don't have to. Most of our investors, again, I think think of this as a very long-term hold, a cash flow-oriented, yield-oriented investment. But I do think there is the opportunity to create equity upside for folks doing all the things I mentioned and hopefully more over time. Well, what you just mentioned, I think, is a really important contextual part of all of this, which is the power of permanent capital and just the way in which investors think about this or could think about this, which is that it's cash flowing, it's compounding, and it's long-dated. And I think there's real benefits to holding an investment like this. These firms could keep going on in perpetuity as could the investments in these firms. And the power of compounding is very real when that's the case. That also benefits you as a firm. It blew out. How do you think about permanent capital in terms of that as an advantage to helping you partner with a lot of these managers? It's absolutely critical. And one of the reasons why raising our first fund in particular was so difficult was not only all the other things I mentioned earlier, unproven NASA class, no real track record that was validated, just kind of having come out of the world's biggest bankruptcy. But in addition to that, we were saying to folks, look, we need to get your capital into a fund structure that lasts forever in order to do these deals. And then it took a while, to say the least, to get people comfortable with that. But I think investors have gotten comfortable with that because if you just think about it intuitively, when you're sitting down with a big firm, and let's imagine for a moment that we didn't have this big capital advantage that we have, and it's just an even playing field. And you're sitting down with a firm and you're saying, look, Mr. or Ms. Manager, you should sell to us and not these other folks because of all these different things. But then you also need to say to them, oh, well, we're putting this into a 10 year fund. And so five years from now, I need to start thinking about selling this. Well, then you've undermined your entire pitch. You need to be able to tell these managers, credibly, I am your partner forever, or until you don't want me anymore. That's critical. And you never want to be a four seller of one of these stakes. That's a very uncomfortable position to be in. And we've bought from people who are in that position in some cases because they own a stake and a fund that's reached the end of its life. And that's not where you want to be. All of this kind of leads into question that you covered a little bit earlier where you said that this is potentially the most diversified single line item investment that one can make. And when you think about the quality of revenues that these firms have, contractually obligated management fees, which is very unlikely that LPs default, particularly institutional LPs, is this better than SaaS software as a service that people seem to like a lot in public markets, for sure. When you look at public markets, alternatives managers and the valuations they command, people seem to like them for the most part. Is this better than SaaS? Look, I won't necessarily make the value judgment there, but I do think it's analogous for sure. And I think the evolution of people's thinking around these businesses is very similar as well, because if you go back, you don't have to go back very far and look at software businesses, particularly on the credit side, people would say, well, gosh, why would I ever lend money to a software company? They don't have any assets. There's no factory for me to go and repossess if they don't actually pay me back. But then people got their heads around, wait a second, these are low capex, high recurring revenue businesses. Why in the world wouldn't I want to own them or lend money to them? This is like that on steroids. Your typical story in a SaaS business is that basically your customers are lazy. You have a payroll processor, and it's a real pain in the neck to change your payroll software if you're a big company. So even if it sort of sucks, you're probably going to stick with it. In this case, as we discussed, the investors are obligated to pay you. They're not going anywhere. And so it's like SaaS on steroids. And it took a long time for people to get their heads around that. But I do think not to hype up the home team too much, but I think Blue Owl and our valuation of the public markets is a good example of people getting their heads around that. Very high recurring revenue. We have a ton of permanent capital across our platform. And we trade at least at the moment towards the upper end of the multiple range. And I think that's a big reason why. There may be some very good reason for that. One of the equity analysts, Glenn Shore from Evercore, put out a piece on this talking about how for every dollar you raise, that's different from a margin perspective and from a just evaluation perspective in terms of what that means relative to other managers because it's permanent capital. So that is very real. I want to switch gears a little bit and ask, not ask you to pick between all of your favorite children, but for a manager that's thinking about a growth trajectory like many of the firms that you've backed have gone through, is there a manager that they should really look to and say, this is the North Star, this is how it can be done? Like you say, a very difficult question. And look, I'm not sure there's a perfect answer because different asset classes and we shouldn't underestimate the role of personalities as well. I think certainly every firm has a different flavor. And I think they're equally good firms from a business perspective that have very, very different cultures and ethoses and so forth and so on. I think it'd be very, very hard to argue with what CVC has done. If you really want to talk about an institution, obviously they've had great amazing performance over time, but they've built an amazing business development team. They've diversified their platform over time across credit, across infrastructure, across secondaries now in both organically and inorganically. So if you're really like best in class playbook to be a big institution, it's really hard to argue with that firm. And I think they have a very good culture at the senior level, very different firm and not nearly as diversified a business. But NEA, you mentioned them before, very hard to argue with how they've survived over the years in an extremely volatile sector. They're a venture capital firm and they've been around since 1977. They just raised their 18th fund and they're on their third generation of senior leadership. So clearly they're doing something right institutionally. What's interesting about NEA and I had former managing general partner Peter Barris on the podcast is he was an operator before. So he was a business builder. I don't know if that was the only reason why they were able to be successful, but I have to imagine it's the business mindset of thinking of yourself. And this kind of ties the whole conversation together. But thinking of yourself as a business, the business of alternative asset management, which the firms that have made the jump have figured out how to do that. Yeah, no doubt. And like you say, I'm not trying to choose among my various children. The vast majority of our firms I think are good models for different people, but certainly you could do a lot worse than NEA or CBC if you're looking for an exemplar. No, those are fantastic models for many to think about as they grow. And there's to your point, there's different ways of growing. There's being a scaled specialist like Vista. There's becoming a multi-strat firm. If you're a venture, that's probably a different question than it is for a private credit firm that started there versus buyout, etc. Also, if you just think about our, especially our folks on the business services platform, what their life looks like day to day, they're often asked, well, how should we build our institutional sales team? And it's not like we have one answer. We will say, look, here's what we've seen firms that look like yours do and hear different flavors of how they've constructed teams and how they compensate people and their coverage models and so forth. That's the real takeaway. It's very rare that there's one answer. Sometimes there is, but it's very rare that there's one answer. There are usually different options and maybe it's a blend of multiple models that works for a particular firm. Exactly. Well, Sean, this has been fascinating conversation. Thanks so much for taking us through the evolution of alternative asset management GP stakes. Congrats on the business you've built. Incredible. And I think it's only just starting. Well, yeah, you're mouth to God's ears, but thanks. Thanks very much. You've been very kind with your time and I'm glad we were able to finally get this scheduled. Likewise. Thanks so much. Thank you. Thanks for listening to this episode of alt goes mainstream. I hope you enjoyed it. You can read more about alts at my substack alt goes mainstream dot substack dot com. Thanks a lot and have a great day. We're going mainstream.