Good day, ladies and gentlemen, welcome to the Bridgepoint update call. The presentation will commence shortly. After the presentation, we will conduct a Q&A session. Please note this call is being live streamed to a webcast for a wider audience and will be recorded. During the Q&A element of this morning's call, if you wish to ask a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. If you already have a question, please do this now ready for when the Q&A begins. I would now like to hand the call over to Raoul Hughes, CEO, to open the presentation.
Good morning, welcome. I'm Raoul, the Group's Chief Executive. I'm joined this morning by Ruth, our CFO. We're thrilled to welcome Al, Chief Executive of Kayne Anderson. As you'll have seen, today we announce the coming together of two great firms through our acquisition of Kayne Anderson Real Estate, another major step forward in our plan to build the clear global leader in middle-market value-added investing across all alternative asset classes. I'll let Al take you through the brilliant business that he has founded and built into the powerhouse that it is today in a few moments. First, a few points from me. The addition of Kayne Anderson Real Estate broadens our product suite and ensures that we now have category-killing products operating at scale across all four major private market asset classes, as well as a growing secondaries pillar. This acquisition is bang on strategy.
Kayne Anderson Real Estate is a GBP 22 billion AUM scaled mid-market value-added investor, a true leader in medical offices, senior living, student and multifamily, as well as light industrial, sectors that benefit from what Al so perfectly describes as a silver tsunami. Most importantly, it's an extremely strong cultural fit. The team are entrepreneurial, alpha-focused, and humble. They are committed for the long term, taking nearly half of the consideration in long-term locked-up stock, ensuring that we're all fully aligned from day one. I hope Al won't mind me saying this. Based on the day one consideration, the acquisition is priced at an attractive sub 9x multiple on the midpoint of 2027 EBITDA guidance and is highly accretive for our shareholders.
Now, as you'll have heard me say for a while, we've been looking at the real estate space. I've always felt it particularly important to buy both the right asset in exactly the right part of the real estate market at the right time in the cycle. Al and I met several years ago. It was clear back then that this was absolutely the right asset. Just like ECP isn't any old infrastructure play, Kayne is a specialist and sits in the growing part of the real estate space with a 19-year track record of strong returns. The timing is now perfect for several reasons. Firstly, we've completed our successful integration of ECP. We have the bandwidth and experience to do it again here. Secondly, the real estate market is at an inflection point and is taking off. Thirdly, the momentum in the business is undeniable.
Having just closed an oversubscribed latest flagship fund at GBP 5.1 billion, double its previous successor. We believe there is significant further growth potential in KARE, driven not only by the underlying growth in its specialist markets, but also by the meaningful scale benefits of joining Bridgepoint's platform, including our strong IR capabilities, immediate cross-sell opportunities, and the potential to launch incremental organic product initiatives. The deal doesn't just add scale. It accelerates our growth and raises the quality of our earnings, improving our FRE centricity significantly from 50%- 60%. It further diversifies our income streams, meaning that the fees from our largest fund now only account for around 15% of our overall revenue.
Ruth will take you through the numbers in detail later. Ultimately, it's a highly accretive transaction, mid-single digit in 2027 and over 20% in 2028, and a 27 multiple broadly comparable with the discounted multiple we've been trading on. A testament in many ways to the undervalue that Al and his colleagues see in our current share price. Accretive, high quality, scaled, high growth, well-priced. It ticks every box. As I said at the very start, this is transformational for the group. It will take our overall AUM from GBP 95 billion- GBP 117 billion. It balances the business post-deal with 50% of our AUM in the U.S. and importantly, 50% in real assets. It builds on what we do. From independence in 2000 to Hermes, to EQT Credit, to ECP, a proven disciplined track record of platform-enhancing M&A.
Kayne Bridgepoint, as it will become, is the next chapter. In fact, in autumn 2023, I sat here and presented ECP, a combination that I hope you all now see as enormously successful. Today, I sit here just as excited to present KARE and introduce you to Al as I was to introduce Doug back then. Kayne is the ECP of the real estate world. That brings me briefly to our existing business, which continues to fire on all cylinders. Since our last market update, fundraising has continued to exceed our expectations. BE8 held its first close and now stands at EUR 6.7 billion, with the fees having been turned on at the beginning of June. ECP VI is heading towards its hard cap and is expected to close in the coming weeks. BDL5 should close at around GBP 5 billion, 25% above its cover number of four.
Our 11th CLO has also now been priced. I'm therefore able to go beyond confirming our fundraising guidance and instead raise it from GBP 24 billion-GBP 28 billion. These efforts are of course, the result of continued performance across all our strategies. Our deployment remains on track. We continue to drive value across our portfolios, and critically, we continue to return cash to our investors through delivering exits. ECP V is a particular standout and is now beginning to look very much like BDC III. Thanks in no small measure to the brilliant ProEnergy deal, which if it maintains its current momentum, could result in a greater than three times money multiple for that fund as a whole.
To conclude, the group has never had more momentum with strong performance across all broad and our IR machine really bearing fruit, both in cross-selling and strengthening our existing relationships with the world's leading LPs. With that, I'll hand over to Al and take you through the Kayne Anderson business and explain why he thinks the Bridgepoint Group is such a natural home for their next chapter of growth. Al.
Thanks, Raoul. It's great to be here with you and Ruth, and we're incredibly excited to be partnering with you to create the premier global middle market investment platform across all alternative asset classes. In a minute, I'll take you through why we think we're heading into a super cycle for our real estate sectors and how we're different in a differentiated platform. First, let me quickly address why this transaction makes so much sense. From the moment I met Raoul and the team, it was clear to me that we belong together. We share a similar culture, there's no overlap of strategies, Bridgepoint has a bigger platform with global distribution, we can grow our business while not having to change anything in how we operate our business. In every single way, one plus one equals three or even four. Who are we?
Kayne Anderson Real Estate is the category killer in the alternative sectors of real estate in the U.S. We are a vertically integrated operating platform focused on medical office, seniors housing, student housing, and light industrial. All sectors with structural demand tailwinds, higher growth, supply constraints, and under-investment. We manage over $22 billion in AUM and approximately $38 billion in gross asset value. We have a strong track record over our last 19 years with our flagship equity funds generating a 15% net realized IRR since inception, and our debt platform generating a 12% net IRR across all debt investments while only having a two basis point loss ratio.
Based on that track record, we have been able to take advantage of the most recent dislocation in commercial real estate and have raised approximately $10 billion across the platform since the beginning of 2024 and had our most active years of deployment. Quickly unpack how we're built, because those numbers come from a platform whose capabilities span the entire capital stack. We manage around $22 billion in total, roughly $17 billion in equity strategies, and a little over $5 billion in debt, we can move up and down the capital structure to stay relevant in every market. On the equity side, it starts with our flagship opportunistic and value-add strategy, where we develop and reposition assets across our specialist sectors, medical office, seniors housing, student housing, light industrial, and multifamily. Alongside that, our core equity strategy holds stabilized income-producing assets in those same specialist sectors.
Our attainable housing strategy is focused on multifamily at workforce attainable rents, an area of deep structural demand in the U.S. today. There is our debt platform, approximately $5 billion today and one of the most differentiated parts of what we do. It is fully integrated with our equity business. We only lend in the sectors where we already have deep operating expertise, which gives us a true edge in market knowledge, underwriting, and the ability to step in operationally if we ever need to. We have originated or acquired more than 10,000 loans since inception with a realized loss rate of under two basis points. Since 2015, we have invested more than $18 billion across direct originations, loan purchases, SASB CMBS, and Freddie Mac structured products. That loss rate matters. It speaks to the same discipline you see right across the equity platform.
Put it together and you have a single vertically integrated operating platform that can invest through the whole capital structure and across every part of the cycle. I'll come back to Kayne Bridgepoint in a second, but let's quickly cover why real estate and why now for Bridgepoint shareholders. The sectors which we focus on are mission-critical asset classes. These are the best sectors within real estate, and real estate as a whole is the third-largest asset class after fixed income and equities. For investors around the globe, U.S. commercial real estate is an essential part of an allocation to alternatives. As you can see on the chart, across all private real estate, allocations are up around 20% since 2013. Private real estate has consistently delivered attractive returns with lower volatility than public markets and with a much lower correlation to the broader macro environment.
Our sectors have done even better as we essentially have the trifecta today, an attractive buying opportunity, limited new supply, and strong rental growth. I often say that I'm old enough to have lived through and worked through 1988, 1998, 2008, and the global pandemic for commercial real estate. I can tell you hands down that the past three years, and continuing today, is the best buying opportunity for real estate that I've seen since the GFC, and one of the three best that I've seen over my nearly 40-year career. There is no doubt real estate is at an inflection point, particularly in the alternative sectors in which we invest. I believe that we're entering a decade-plus long super cycle for our asset classes as real estate recovers and investors continue to rotate out of the more traditional sectors and into alternatives.
Essentially, what happened is we had the era of free money/quantitative easing from 2012- 2022, which drove up prices for all assets, including U.S. commercial real estate. This peaked in early 2022. I will point out that while most real estate firms had their biggest allocation years in 2021 and 2022, we were very disciplined during that time period, believing that we were at or close to peak pricing. Beginning in March of 2022 and continuing through May of 2023, you had rates move up 525 basis points. Obviously, cap rates expanded and pricing collapsed, with most commercial real estate falling in value by 20%-50% from the second half of 2022 through the first half of 2024. The good news is values have stabilized and started to recover, but interest rates have remained higher for longer, which has extended the buying opportunity.
At the same time, equities and corporate bonds are at or near all-time highs. On a relative basis, real estate looks very compelling. On top of that, supply constraints are virtually certain to stay in place for the foreseeable future, making the investment case even more attractive. Traditional real estate, often defined as office, retail, multifamily, and large bay industrial, has been heavily invested in, and in many cases is facing a much more difficult outlook. This has forced capital to look elsewhere. The reason that we chose the sectors that we're in, medical office, student housing, seniors housing, and light industrial, is that you have demand tailwinds for the next 20+ years that makes them incredibly resilient. These asset classes are not highly correlated to the macroeconomy and do not require GDP growth to have rent growth.
The demand is structural in nature, driven by both demographics and secular tailwinds. One of my favorite sayings is, "Find the demand and let it run you over." That is exactly what Kayne offers to real estate in exactly the same way that you see ECP offering this to infrastructure. Just like ECP, we occupy a part of the market that has very high barriers to entry. Ownership is highly fragmented, and operating expertise is extremely difficult to build. There are very few qualified operating platforms in these sectors, and it takes years to develop the relationships, knowledge, and credibility to invest well. While more capital is coming into our verticals, most of it is not competing directly with us. Instead, much of it is looking to buy from us and/or partner with us to access the expertise we have spent more than two decades building.
In our target sectors, medical office, seniors housing, student housing, and light industrial, we focus only on the highest end of the asset classes, which is the most resilient part of already resilient sectors. We are the largest operator of medical office in the U.S. now, managing over 50 million sq ft or 5 million sq m across more than 1,000 properties in 45 states. We have relationships with over 211 hospital systems and large physician groups across the country. In student housing, these are all high-end, purpose-built student accommodation at the Power Four conference schools. Our assets are exclusively highly amenitized, best-in-class, pedestrian-to-campus properties at the premier public state universities in the U.S. Our seniors housing is focused exclusively on the higher end of the market. Our properties are all private pay with a continuum of care consisting of approximately two-thirds independent living and one-third assisted living.
The average entry age of our residents is 80 years old, and the average age is 84 years old. Our light industrial is focused on infill locations in urban markets, where we cater to smaller tenants renting 5,000-10,000 sq ft on average. Demand is driven by e-commerce and smaller businesses that account for close to 50% of U.S. GDP. In each of these sectors, we have a unique operating model where we retain all operational capabilities and control in-house, including a 14-person in-house construction management and design team. In addition to that, we have proactively aligned ourselves with the best operating partners in each respective asset class on either an exclusive or proprietary basis. This has led to both the majority of our portfolio being sourced on an off-market basis and superior operating performance. I thought I'd bring the demographic story to life a bit more here.
Across student housing, medical office, seniors housing, and light industrial, demand is compounding at the same time that new supply has fallen from 24% to 77% from recent peaks. In student housing, Power Four enrollment continues to grow while deliveries declined sharply this past academic year. In medical office, the 65-year-old population is growing significantly, with 11,000 Americans turning 65 every day for the next 20 years. Outpatient care continues to be the wave of the present and the future, yet new supply is down 33% from recent highs. In seniors housing, the 80-plus-year-old population is surging with the 80 and over population in the U.S. set to double over the next 10 years, yet starts are down 77%. In light industrial, e-commerce and last mile logistics continue to drive escalating demand, while well-located infill supply remains highly constrained.
None of this works without the team, that's by far our proudest achievement, our culture is a major part of our success, which I would sum up as a gritty and team-oriented culture. We call it One Team, One Dream. We've grown from five people when I rolled my own firm into Kayne Anderson to launch the real estate platform in 2007 to 128 team members today, with more than 100 of them focused on our investments and operations. We have deep expertise across the capital stack with David Selznick and me leading the platform and senior sector heads who have delivered through multiple cycles. This is a specialist team made up of the leading experts in each of the sectors in which we focus. Each of us lives, eats, and breathes our asset classes and teamwork-oriented culture. This is a true differentiator.
We believe that grit, discipline, and operating knowledge matter as much, if not more than IQ, this team brings all four. When we look at the opportunity today, as I said, it's a trifecta. First, demand tailwinds. Second, supply tailwinds, third, a buyer's market for which we are uniquely positioned. That positioning is why we have had access to both equity and debt capital in a liquidity-constrained environment. We are known as a certainty of closed buyer, that reputation matters, it earns us proprietary sourcing. The numbers on this slide show the momentum. Our flagship equity fund grew almost two times to $5.12 billion from $2.75 billion in the prior vintage, we achieved that in the most challenging fundraising environment since the GFC. That growth is a powerful proof point in itself.
It reflects the opportunity of our investment pipeline, the depth of investor confidence in the platform, it is supported by our long track record of top quartiles equity performance through cycles. This is not just fundraising momentum, it's further evidence of the expertise, discipline, and capabilities that have made Kayne Anderson Real Estate one of the leading specialist real estate platforms in the U.S. Since 2020, we have deployed around $40 billion across the platform. This also speaks to the discipline of Kayne Anderson Real Estate's deployment model. From 2020 to 2022, the platform deployed around $7 billion in equity and $7 billion in debt, using its debt strategies to lean into dislocation during COVID and the rate hiking cycle, while remaining more selective on equity deployment.
As equity market conditions improved in 2023- 2025, our deployment accelerated materially with almost GBP 16 billion deployed across equity strategies, more than 2x the 2020 to 2022 level. While total Kayne Anderson Real Estate platform deployment continued to compound at a mid-teens CAGR since 2020. We have also distributed over GBP 12 billion since 2020. This is not just a story about institutionalizing these alternative verticals. It's a story about discipline, differentiated access, and consistent execution, as well as growth. Said simply, Kayne Anderson Real Estate is the ECP of real estate for Bridgepoint. We represent a fifth pillar with strong alignment to Bridgepoint's strategic priorities. Let me show you what that track record actually looks like across our flagship value-added equity series.
We have raised seven flagship funds since 2007. The story is one of unbroken growth from GBP 136 million in our first fund to GBP 5.12 billion in our latest vintage. That is almost 40 times growth in fund size over the series. We've grown through every market environment along the way. The returns have been every bit as consistent, a 15% realized net IRR across the flagship fund since inception, with net multiples in the 1.3x-1.6x range. Fund after fund, through multiple cycles, we have delivered first or second quartile performance. That kind of consistency is very rare in our industry. Growth and scale, consistency of returns, and top quartile performance. That is the foundation of everything we do. It's not just a flagship series.
That same discipline runs right through the rest of the platform across our core open-ended funds and our debt strategies. On the open-ended side, both of our core vehicles have consistently beaten their benchmarks. K Core, our core equity fund, now at around GBP 3.3 billion of NAV, and K Cred, our core debt fund, at roughly GBP 1.9 billion of NAV. In closed-ended debt, our K Red funds have delivered net IRRs of between 10%-12%, with strong multiples and a steady return of capital to investors. Our opportunistic credit strategy, K Rod, has performed even more strongly at around a 17% net IRR. What ties all of this together is that same discipline, directly originated, sector-focused credit, top quartile returns, and a loss ratio of under 2 basis points across the debt platform since inception. Whether it's equity or debt, core or opportunistic, the message is the same.
Consistent top quartile performance built on specialist expertise. In summary, we are thrilled to be joining the Bridgepoint family. We're excited about the growth ahead for Kayne Bridgepoint Real Estate, and equally excited to contribute to the next phase of growth for the Bridgepoint platform itself. This combination makes both businesses stronger and gives us a much bigger opportunity set for our investors, our people, and the platform. We're joining from a position of real momentum. We've just closed our latest flagship fund at GBP 5.12 billion, surpassing our GBP 3 billion target and our initial GBP 4 billion hard cap handily. We believe the real estate market is at a true inflection point, offering tremendous opportunity in our sectors. We have spent almost 20 years building a specialist, operator-oriented real estate platform, and we are excited about how Bridgepoint accelerates what we can do next.
Bridgepoint partnership gives us global reach, deeper relationships, and real scale benefits without changing what makes Kayne Anderson Real Estate special. Together with ECP, we believe Bridgepoint has the best-in-class real assets platform in America, focused on two of the most powerful structural trends in the market, power and AI on the one side, and mission-critical demographics-driven real estate on the other. That is a very exciting place to be.
Thanks, Al. I agree. It's really exciting. Look, I'm going to take a few minutes to run through the details of the transaction, its impact on the group, and our guidance. Turning first to the transaction structure. We are buying all of Kayne's FRE, 15% of the carry in historic funds, and up to 35% of the carry in future funds, starting with KAREP VIII. The consideration is 55% in cash and 45% in stock. The cash component will be funded by a combination of existing cash on the balance sheet and a new Bridge facility, which we will refinance with the new USPP. Our leverage will increase to around two times net debt to EBITDA by the end of this year, and quickly de-lever to return to less than one turn of leverage by mid-2028.
As we did for the ECP transaction, we will issue most of the stock component through our Up-C structure to be held in the form of OP units until exchanged into London listed shares. On closing, shares and OP units equivalent to 189 million shares will be issued. There's a staggered lockup, which will expire in thirds over three years on the anniversary of closing, each year from 2027- 2029. Additionally, up to 102.5 million shares may be issued in 2030, depending on the quantum of run rate fees achieved by the end of 2029. Delivering the midpoint of the guidance case would trigger the earn-out award in full. As with ECP, a proportion of both the initial consideration and the earn-out will be used to incentivize members of the broader team at Kayne Bridgepoint, who will become shareholders for the first time.
We are paying less than nine times EBITDA for mid-single digit EPS accretion in 2027 and a mid-single digit EBITDA multiple for EPS accretion of over 20% in 2028. Today we have shared many metrics to showcase the strength of the Kayne Bridgepoint business and explained why it warrants becoming our fifth pillar. Consistent with the other verticals in the group, Kayne Bridgepoint's excellent track record of fund performance has resulted in material growth in the size of their funds across both equity and debt, with the most recent fund in each increasing by over 80% compared to their predecessors. With KAREP VII closing recently on June the 15th, for us, the best proof point of a strong performing business. With that, we are confident this transaction will add to our track record of successful and accretive M&A.
This is the latest in a series of transactions through which we have successfully grown the platform and diversified into private credit, infrastructure, and secondaries. Since acquisition, credit has almost doubled its EBITDA margin and increased the size of its flagship fund by 117%, from direct lending II to direct lending IV. ECP has delivered a 12-point increase in EBITDA margins to 64%, while the flagship fund growth from ECP IV to the hard cap for ECP VI would represent growth of 126%. Additionally, actual EPS accretion from ECP has been more than double what we told you to expect at announcement. With this transaction and the organic growth being delivered across the platform, we are well on our way towards achieving the next growth milestone of GBP 200 billion of AUM by 2029 or 2030, as set out at our 2024 capital markets day.
The enlarged group will be even better diversified across product, geography, and sectors, offering our LPs 13 strategies across our five investment verticals. The investment teams across the group will total over 350 professionals, and our office network will grow to 18 offices around the world. In an environment of higher inflation, it increases the proportion of real assets in our AUM to almost 50%, and balances our geographic footprint with nearly half of AUM in U.S. and half across Europe. Quality of earnings will be further enhanced with the largest vertical private equity at just over 1/3 of combined AUM, and the largest single fund at 16% of total management fees, a number which will decrease further over time. Turning to the breadth of product, we now have four of five flagships at or above GBP 5 billion in size.
In addition to our closed-ended funds, we also raise additional capital from evergreen vehicles in wealth, infrastructure, and real estate, and the continuous warehousing and issuance of CLOs. Our exposure to the wealth channel is currently small, but offers long-term upside. The addition of Bridgepoint to the group gives us a platform which can support sustained growth through the next fundraising cycle and beyond. In a world where fundraising generally has been tough, we are doing well across all our strategies as our performance, particularly DPI, middle market focus, and disciplined investment approach resonates with the world's largest LPs. Our IR platform has delivered impressive flagship fundraisers across all strategies simultaneously with new investors and cross-sell within the current group accounting for roughly a third to a half of the capital raised.
With less than 20% overlap between our LP bases, there is lots of potential to cross-sell as we share just five of the top 50 LPs globally, and Bridgepoint brings over 115 LP relationships, which are new to the group. In the near term, the clearest opportunity is to cross-sell into LPs who have an allocation to real assets, which is split between infrastructure and real estate, but currently only invest in one or the other, and to develop ancillary funds in each strategy and between strategies. What does the combination do for our financial profile? If we combine our financial results for 2025 as the latest available full year, the enlarged group would have generated management fees nearly one quarter larger at over half a billion GBP.
Fee-paying AUM and the management fees they generate would've been more diversified and more balanced geographically, with a share of fees coming from funds domiciled in the U.S. increasing from 28%- 43%. Together, we grow faster and with a higher quality of earnings, greater FRE centricity, and increasing margins. Turning to guidance. First to the detailed guidance for Bridgepoint, then an update on the existing perimeter. Without going through every line, the key guidance points are: Fund VII was raised at $5.1 billion, closing on June the 15th this year. We expect Bridgepoint to raise over $15 billion over the next three years with an average fund cycle of two to three years. Management fees in 2025 totaled GBP 141 million, with fees expected to grow between 20%-30% per year in the medium term.
The catch-up fees for Fund VII will be paid before the transaction closes. We expect the average fee rate on capital raised in the next three years to average just over 1%. Fee income from evergreen and open-ended vehicles is expected to be approximately 30% of total fees. We expect PRE to represent 5%-10% of total income in 2027, then to grow to 20%-30% of total income in the medium term. The operating leverage from increasing fund sizes is expected to drive FRE margin to between 60%-70% in the medium term, resulting in an EBITDA margin of around 65%-70% in 2027, then growing further to 70%+ in the medium term. As ever, Adam will be very happy to talk you through any of the assumptions over the next week.
Turning to the existing perimeter of the group, as Raoul said earlier, we are increasing our fundraising guidance again from €24 billion by the end of the year to €28 billion. This is now 40% higher than our initial guidance of €20 billion for this round of fundraising. BE8 activated on the 9th of June and has currently closed €6.7 billion. Final close will be by Q1 2027. We think the right fund size is somewhere between €8 billion and €8.5 billion. BDL IV has closed €4.8 billion and is expected to close next month around €5 billion. CLO 11 priced last week. ECP Six has closed $4.8 billion with a further large close of up to $2 billion expected sometime this week. Its impact may or may not be in the first half.
It is expected to conclude its fundraising in the second half of the year and is moving towards the hard cap of $7.5 billion. If it reaches its hard cap, the successor fund, ECP VII, is likely to start paying fees in 2029 as a larger fund will take longer to deploy well. We expect consistent growth in management fees inclusive of inorganic growth initiatives of 13%-16% on a rolling three-year basis. FRE margin is expected to be 40%-45% in 2026 and 2027, depending on when BE8 holds its final close.
On PRE, we now expect to be at the top end of the guided range of 20%-25% of total income in 2026 and 2027, with the phasing in 2026 moving to 2/3 in the first half and 1/3 in the second half, driven by the early start of accruing carry from ECP V. The ECP funds sold some Constellation shares at the start of the month, having agreed an accelerated lockup. The shares which were sold represented 70% of the shares which were due to be unlocked in July this year, and were placed at a price of $281 per share. Cash proceeds to us were just over GBP 28 million. It is worth remembering that the proceeds flow through to us from a number of vehicles, some of which are already paying carry, and some of which are not yet paying carry.
The net impact is that this has de-risked our PRE guidance for 2026. In addition, we had the completion of the sale of Cornerstone earlier this month, which resulted in $1.5 billion being returned to fund investors. Given that standout result, as well as the continued strong performance of ProEnergy, ECP V has the potential to be a three times money multiple fund, an outstanding result in the infrastructure vertical. The business has performed well year to date. Fee-related earnings for the first half of the year are expected to be broadly in line with the company compiled consensus, which we published this morning, with potential upside if ECP VI's next close falls in this quarter. Guidance for performance-related earnings remains at the top of the range of 20%-25% of total income.
But as I've just said, with PRE phasing now expected to be around two thirds in the first half of the year. Together, this is expected to result in first half 2026 EBITDA above the current consensus. All other guidance that remains unchanged from March this year. Bringing that all together, here is an illustrative view of 2027 based on the ranges in our guidance, including the contribution we expect Kayne Bridgepoint to make to the group in 2027 in dollars in the right-hand column. Bridgepoint's current perimeter achieves a 33% EBITDA CAGR from 2018 to 2025, and grew its EBITDA margin to 53%. Kayne Bridgepoint is expected to achieve a similar EBITDA CAGR of over 30%, while increasing its EBITDA margin towards 60%. With guidance for management fee growth of 20%-25%, we expect management fees in 2027 of $200 million-$220 million.
If you then add PRE of $10 million-$20 million, we come to an expected 2027 EBITDA in the range of between $130 million-$160 million. If you then take an exchange rate of $1.35 to the pound, we expect EBITDA for the combined group to be in the range of GBP 475 million-GBP 570 million. With all flagship funds materially raised this year, 2027 FRE is locked in with a strong PRE pipeline. As you've heard me say before, we are becoming very cash generative over the next five years. As a result, we will de-lever quickly back to below one times net debt to EBITDA by mid 2028. As such, we will have the capacity to do further M&A and to enhance distributions to shareholders in line with the broader growth of the business in the short to medium term.
In conclusion, the business is in really good shape and continues to deliver both operationally and strategically. Over the last three years, we have successfully expanded into new verticals of infrastructure, secondaries and now real estate. The flywheel of capital deployment and realizations continues to turn in the middle market, with €17.8 billion invested in 2024 and 2025, and €16.6 billion of capital returned to fund investors, both record amounts for the Group. The operational leverage in the business has allowed us to grow management fees by 13% in 2024 and 2025, while increasing FRE by 21%, and we are guiding to future management fee growth of between 13% and 16% over a rolling three-year period. We continue to take share in fundraising and, as a result, have today increased our fundraising guidance for the cycle to the end of this year from €24 billion- €28 billion.
Lastly, our trading liquidity has improved materially over the last year, with the trailing three-month average daily traded volume increasing from GBP 2.6 million to GBP 7.2 million, or from 25 to 77 basis points of free float. With that, I will hand back to Raoul.
That's great. Thank you, Ruth, and thanks, Al. It's amazing. Okay. Following the unanimous recommendation of the board and with the support of insider shareholders, and including where they can, Blue Owl, 36% of the share capital have provided irrevocable undertakings to vote in favor of the transaction. We will now seek full shareholder approval at a general meeting in September, and a circular will be released in due course. There are some other conditions to the transaction in addition to shareholder approval, including typical antitrust clearances, consents from investors in certain KARE funds, and a reorganization to separate KARE from the wider Kayne Anderson mothership. Subject to satisfying these conditions, we expect the transaction to complete at the end of this year. A quick reminder on why this and why now. For a truly global mid-market alternatives manager, real estate is an important part of the product suite.
It is the third largest asset class after equities and fixed income, and a critical allocation for our core investor base, the world's largest institutional investors. As Al outlined, we are entering a once in a cycle moment at Kayne, benefiting from what we see as a super cycle. Ultimately, if you are going to move into value-added real estate, you want to be in the U.S. first, as it is a scaled market with deep opportunities. Why Kayne? Well, because we believe it is the best platform in the best part of the U.S. real estate market. It targets specialist real estate with a true middle-market DNA and a strong track record of delivering value-added returns, a category killer in its sectors, just like the rest of the Bridgepoint Group. A strong cultural fit and a highly complementary set of LP relationships. The case is compelling.
The right business at the right time with the right team. Finally, before taking questions, I wanted to conclude with what this transaction means for the enlarged group. We've always been clear about our ambition to build the leading global mid-market alternatives platform, focused on value-added investing, diversified across all major private asset classes and geographies, and united by a high-performance entrepreneurial culture. As we've demonstrated before, whether with EQT Credit, ECP, or Newbury Partners, we have a strong track record of identifying great businesses, partnering with their management teams, and creating value for all in the process. I see the same opportunity here with Kayne. The result is a stronger, more diversified, and more resilient Bridgepoint Group, now equally balanced across Europe and the U.S., and with 50% of AUM in real asset investing.
A group that is uniquely positioned to capture the opportunities we see across the alternatives landscape. Financial performance for shareholders remains compelling. Our earnings are growing materially while becoming increasingly FRE-centric, with high cash generation, and our EBITDA margin continues to trend above 60%. We have simple values at the firm. We do what we say we're going to do. That's exactly what today's announcement represents. Building the platform we said we will build. Growing in line with a clear strategy, and doing so while preserving the high-performing and entrepreneurial culture that has underpinned our success from the very beginning. I'm absolutely thrilled to welcome Al and the Kayne team to Bridgepoint, and incredibly excited about what we can do together. With that, we'll open for questions.
Ladies and gentlemen, we will now begin the question and answer session. Participants can submit questions in written format via the webcast page by clicking the Ask a Question button. If you are dialed into the call and wish to ask a question, please use the raise hand function at the bottom of your Zoom screen. If you are dialing in via phone, you can raise your hand using star nine and unmute yourself pressing star six. We will pause for a moment to assemble the queue. Our first question comes from Arnaud Giblat from BNP Paribas. Please unmute your line and ask your question.
Hi, hopefully you can hear me. I've got three questions, please. If you can start with fundraising schedule at Kayne Anderson. You talk about GBP 15 billion. I'm just wondering what we should pencil in terms of timing and potential sizing of funds. Equally, does that include fundraising from the wealth platform, or could this come on top? The second question is on carried interest rate expectations. There's a clear step up between carried interest, I think, from 2027 to 2028. Could you perhaps run through which funds into carry mode and so we can better understand that mechanism of carried interest step up? Finally, on Bridgepoint ECP, Fund V seems to be doing extremely well. You're talking about potentially three times more. I'm just wondering when we should be thinking about Fund ECP V entering carry mode. Thank you.
Okay, thanks, Arnaud. Morning. I guess Al should do the first one, and certainly, then Ruth second one, or Al second. I'll do the third, I guess.
Yep.
Good morning, Arnaud, and everyone else. From a fundraising timing perspective, we are well along on investing KAREP VII, which we just closed at $5.12 billion, so we're about 60% allocated. We would expect to start initial fundraising for KAREP VIII, which is likely to be a $7.5 billion plus or minus U.S. dollar fund early next year, with a close sometime in 2028. That's a closed-end fund. On the open-ended side, we are currently bringing in approximately $300 million- $350 million per quarter. We expect to bring in probably about $1.5 billion per annum for K Core. That is the open-ended equity fund, core equity fund that we have that currently sits at about $4 billion of net asset value.
On the debt side, we have an open-ended fund that's approximately $2 billion of NAV, and we expect to add approximately $200 million per quarter to that fund. We also have a number of other funds that are pending, which I'm not really at liberty to speak about at the moment. There will be additional funds that will be part of the platform going forward.
Touching on the start of that conversation, one of the things that perhaps we haven't brought out enough in our materials is the timing of KAREP VII and KAREP VIII, in that the nature of the opportunity in the market means that at the point you've reached the final close of KAREP VII, you're actually already what, 60-odd% committed within the fund?
Correct.
It's already a pretty well-invested and built portfolio sitting within it. When you're thinking, Arnaud, about modeling the likely sequencing of funds, I think KREP VIII will probably be a shorter period from VII to VIII than you might have anticipated in some of the existing ECP and Bridgepoint.
Yeah.
Whether KAREP IX will be quite as quick is another matter. That's certainly within the shorter term.
Also, Arnaud, that also explains your second question. We get 15% of carry from all of the historic KREP funds. We don't get the 35% until KREP VIII. Clearly, KREP VII is double the size of KAREP VI, so that's the first bit of carry you see in 2027. VII starts to kick in in 2028. That's what the step-up is, because actually the fund is so much bigger.
ECP.
Yeah
I think we've sort of alluded to this in the state. I think I made some comment in the presentation about ECP V is showing some of the hallmarks of BDC III. If you remember, BDC III was the standout fund for its type in the whole market in its vintage. They're performing phenomenally well. Long may it continue. It's performing really, really well. I think it will accelerate some of the carry recognition from it. Ruth, do you want to give any intimation about when?
In terms of?
When the ECP V carry might start getting
ECP V carry will start being recognized this year. I think it will clearly build from there into next year as well.
Yeah. We're sort of intimating again this morning that fund may be a three times your money fund as a whole, plus. For an infrastructure fund, it's just astonishing. It's tremendous.
Perfect. Could I get you to repeat the size of Fund VIII, please? I didn't catch that.
I think he said $7.5 billion , Arnaud.
$7.5 billion.
Thank you.
Dollars.
US.
Dollars.
US dollars.
Thank you. As a gentle reminder, if anyone would like to ask a question, please use the raise hand button at the bottom of your Zoom application. Our next question comes from Nicholas Herman from Citi. Please unmute your line and ask your question.
Hi, Nick.
Nick appears to have lowered his hand. One second, please.
That's very unlike you, Nick.
Did Arnaud Nick his question?
All right, Nick. Are you able to?
Can you hear me now? I obviously lowered my hand too quickly. I actually do have a bunch of questions. I'll start with three, please.
There you go.
Congrats on the deal, first of all, because this seems really compelling. Track record of the business is clearly very strong. As you said yourselves, the real estate cycle does appear to have turned, and I think Al said he's expecting a 10-year super cycle. I guess just, why were the sellers willing to sell at such multiples, especially as this business comprises or comprised half of their AUM, and the 28 multiple is even lower than Bridgepoint's own valuation. I think we'd all agree that your shares are pretty discounted. Just if you can-
Very.
Just help me to rationalize that, please.
Yeah.
Second question.
We're getting there. Okay.
On the growth, what is a usual deployment cycle for the KAREP funds? From the growth profile that you've guided to, what is it that drives the range in the management fee revenue growth profile? Also, just talk a little bit more about the growth profile between initial commitments for KAREP VIII, and thereafter. Finally, are you planning platform expansion as a result of this deal? You referenced the cross-opportunity with Al is pretty clear, but just wondering if you see any other synergies with this deal, such as adjacencies. I'll stop there for now. Thank you.
Okay. I think the first one's obviously for you, Al.
Yeah. As I've noted and as you noted, we think we're in front of a 10-year super cycle in our asset classes, that is going to require a significant amount of incremental capital. We're thrilled to be joining with Bridgepoint, who has a global distribution network. I think we are arguably together forming the best-in-class real assets platform in the U.S. with ECP and Kayne Anderson Real Estate. I think it positions us for growth going forward. We also have a very strong expectation that Bridgepoint's stock is going to rise materially in the future. Our view is that it is materially undervalued today, even before this transaction. We have a ton of synergies with the broader platform, and I think this positions us to really take advantage of what we see going forward.
Is it worth you two seconds on following that logic about why, about the structure of real estate within? Because you are the chief executive of the wider Kayne Group, you're coming across into this, maybe is it worth a minute on why from the rest of the group?
Well, for the rest of the group, I think it's really just singling out real estate and the opportunities in front of it. Obviously, you and I have known each other.
Well.
We've known each other for three years. This has obviously been in process for quite a while. I think beyond the economic synergies, there are incredible cultural synergies. I don't think it's an overstatement to say it's a unique opportunity to join two great platforms that are very synergistic, economically and culturally. Maybe not in that order. I think that there are huge benefits going forward. The rest of the Kayne platform, which is private credit and energy, obviously private credit and energy are in very different places today than real estate. So those businesses will continue operating as they have on a going forward basis. As I stated before, real estate is really in a position that we are desirous and need incremental capital.
I also think that the synergies between the platforms, which we really haven't addressed in our opening remarks, et cetera, I think there really are true synergies with the platform, particularly on the real asset side, that will benefit us in ways that are not actually put forward in the numbers today.
I think, Nick, it comes back to what we've been saying for a long time really, which is in an industry like ours, in a consolidating industry like ours, there are advantages in being a diversified platform that enables you to offer a range of different products to your institutional investors. They can pick which one they want to invest in, obviously, but a range of products. Enables you to invest in the sales force and a sales structure that gives you the ability to go out and sell to those investors. Ultimately, we're all people businesses, and we've all come from small cottage industries, and we've developed in a way. The culture and being part of the team together is a fundamental part of everything we do.
When you think about doing transactions like this one, and I've said this consistently, it's finding people that you want to work with. It's finding people you get on with, but you're finding businesses with a similar culture. That counts for an awful lot, really, in the choice of where you want to be, which home you want to be part of. This worked beautifully with ECP, and you think you talk to Doug and you talk to the wider ECP team, they've been able to come into Bridgepoint, but they'd be absolutely part of the Bridgepoint story. They've not just been lost in a room and forgotten about. That's obviously the same with Al . Al's joining our managing committee, part of the leadership team in the business going forward. It's a completely different offering for anybody wanting to join a wider platform.
You get the benefit of diversification, the benefit of the sales force, and the benefit of the scale, but you're not lost, and you're an integral part of the story and the family, and I think that's really quite Well, I think it's quite compelling.
Well, we are also the beneficiaries of the case study of ECP.
Yes.
Obviously Doug, Pete, and Tyler, and the entire team being thrilled with being part of Bridgepoint, and seeing how that's functioned has made it, I would say, materially easier for us.
Yeah
To understand how this is going to work, and I think it'll be a seamless integration and incredibly exciting.
Yeah. Deployment cycle was the second question.
Yeah, I'm not sure what additional we're looking for. As I said, we're 60% deployed on KAREP VII, and typically, we start fundraising at 75% deployment, which we will hit this year. We will be launching KAREP VIII in the first half of 2027. As I said, I think that'll be a $7.5 billion ± fund. What has transpired in our business is that we've been working in the verticals in which we invest for close to 20 years and have developed a best-in-class operating platform, as well as having unfettered access to capital, both equity and debt. While more money is coming into alternatives, our strategic advantages have actually gotten bigger and bigger. Our deal sizes have gotten bigger. Just referenced the $7 billion ± Welltower deal on the medical office side.
We also just acquired close to GBP 1.4 billion seniors housing. The deal sizes are bigger because we've become a first call, and most of our sourcing has truly been done on a proprietary basis. The capital requirements as alternatives become a bigger and bigger piece of the real estate industry have gotten bigger and bigger, and we're going to be the beneficiaries of a broader global distribution platform. Our deployment, we don't have deployment targets. We've been judicious when times have been difficult. We've leaned in when there have been big buying opportunities, and we've done that throughout our close to 20-year history.
As I've said and has been noted, we do think that we're in the very early innings of a 10-year super cycle in these alternative asset classes because demand is really not ending, in fact, escalating dramatically over the next 20 years. We are either uniquely positioned or in incredibly rarefied air where we sit in terms of our operating capabilities, our access to capital, our knowledge, and our relationships in these asset classes.
We're very bullish about very strong deployment, very strong fundraising, and also very strong deployment over the next three to five years.
Platform expansion, Nick, is that a sort of group question or a real estate question?
Maybe a Europe question.
Both?
Well, particularly on the real estate side.
Are you talking about going into Europe, Nick?
Well, I was partly that. I guess also combining it with secondaries.
Yes.
Yes.
Et cetera.
I think in terms of Europe, I think what Al has just said in terms of what the team in the U.S. have ahead of them, I think Europe would clearly make sense to have real estate. I think they're going to be a little bit like ECP. The U.S. has got such growth ahead of it. It may be that Europe won't come along as quickly as you might anticipate, just because Doug's got the same issue, he's got so much demand.
In the States.
in the U.S. Of course, across the rest of the platform, absolutely all of our strategies are linking up with the Newbury team now, looking at how we can sort of develop that business.
This acquisition gives the group scaled position in private equity, private credit, infrastructure, and now real estate sitting across a thematic of, however you define it, middle-market type investing. Of those product sets, two of them are predominantly European and two of them are predominantly U.S. I think we think there's still significant growth opportunities within each of the four legs across the group. With Newbury isn't yet scaled, we found a different way into secondaries, we do now have a secondaries platform. Strategically over the next few years, we're going to be building out that secondaries platform so it can sit as a sort of horizontal across the four verticals. In an ideal world, we'll have secondaries playing in all four of the main verticals that we're in.
There's plenty of room to continue to grow within these verticals within the business. We said we had a capital markets day, it's now probably sort of 18 months or so ago, where we came up with this sort of GBP 200 billion AUM number. I think we were around about GBP 50, GBP 70 odd about then, GBP 70 odd billion AUM at the time we sort of stood up and said that. This takes us to GBP 120 billion. We've not talked about the GBP 200 quite as much as we did in 2024. That's partly because that was always only ever a staging post. It was never an ultimate end game or an ultimate target.
I think there is, whilst remaining true to the sort of thematics of middle-market value-added investing, there's plenty of scope for this group to continue to grow and to grow well beyond the GBP 200 billion in time.
Thank you. Our next question comes from David McCann from Deutsche Bank. Please unmute your line and ask your question.
Yeah, morning team.
Good morning, David.
Morning.
Congratulations on the deal. Yeah, just two questions from me. A couple have already been answered already, but as you mentioned in the prepared remarks there, obviously, this does take the nexus of the group more towards a U.S. bias than you'd have had before. Question really is, was that a conscious decision? How much of this was driven by you just wanted to have a bigger U.S. presence as a business versus the actual product and the capabilities you're acquiring? Sort of what took precedent there?
It doesn't even matter.
I hope it's more.
I hope it's more about.
Related to that, is the U.K. still the right place for this group to be listed if you are sort of more consciously going the other side of the pond? The second question, again, you touched on this in one of the prior questions, but you've obviously filled the main four, arguably five buckets within private markets. If you were to do something else, M&A-wise, is it fair to say that that would be adding to an existing bucket, perhaps in a different geography or a different capability? Is there some other asset class you'd like to move into beyond what you've already now got?
Okay, I start with the U.S. We've spent quite a lot of time. We've had a strategy to be in all the verticals across alternatives. We've been thinking for a while that real estate's an obvious place for us to go. We spent quite a lot of time looking at various different opportunities to move into real estate. One thing that became quite clear to us a while ago is if you want to move into the added value real estate world, investing world, alternatives world, you want to do it at scale, which you need to do at scale. Secondaries are different, there's no point entering one of the main verticals unless you can enter it at scale.
If you're going to do that, you need to look into the U.S. because the opportunity set just doesn't exist for scaled players in Europe materially, really. It was a logical place to look. We found the best business. In a sense, it's because there's more likely to be the right businesses in the U.S. We found the best business there was, it was in the U.S. rather than say I think there is a very helpful byproduct for us of this in balancing out the group's positioning between the U.S. and Europe.
One of my sayings that I think I said to Al when we were first together is that I want the group to be more American without being less European, which is a complete oxymoron, is one of those sort of statements that I come out with every now and then. I think that is the case. We see a real advantage in we want to be more balanced across the transatlantic balance, we want the can-do go-get American feel within the business, which has definitely come with ECP and will continue to come now. A lot of Bridgepoint, its heritage is European. We only use the European nexus to it. Listing venue. We are a British headquartered business.
We took a decision when we IPO'd in 2021 that as a British business, we ought to be listed in London. We remain a British business. That's the first one. I didn't write the second question down, was it?
M&A.
M&A.
Geography versus.
Yeah. Geography. We now do have the four pillars. I think, therefore, I don't think there's anything outside what you'd define as one of those four pillars or secondaries that we want to go into. Within the four pillars that we've got, I think there's significant room to expand the opportunity set and the offering that we have, and that will be a combination of organic launches of new products, where we're having a conversation at the moment with investors in the early stages of effectively across ECP Bridgepoint product, a business called Connectivity, a product called Connectivity, which we'll invest in sort of infrastructure, energy transition, but from a services lens rather than a hard asset lens. We're talking to LPs about that at the moment. There will be product extensions within the geographies.
We are actively looking at further M&A opportunities to build out each of those verticals and whether that is ancillary products within them or in different geographies. I think there's still plenty of opportunity to do that.
We have one final question from Nicholas Herman from Citi, if you'd
God.
Like to unmute your line and ask your question.
Hello.
Hello, again. Two more for Al, please, then one for Raoul or Ruth. On growth, first of all, Al, could you please talk about and contrast the opportunities to grow across real estate equity and debt, and I guess more broadly, given Kayne's clear active approach, can you talk about the bottlenecks to scaling these strategies, particularly from a deployment perspective? I guess conceptually, how we should think about scaling these funds beyond KAREP VIII. Second one, on the open-ended vehicles, just a quick clarification. Do these vehicles fully, or do those NAVs fully translate into fee-paying AUM or is there a difference between what's fee-paying and the NAVs? Then a final one on ECP. ECP VI is going to now be invested over four years by the looks of it.
While that deployment, I guess, cycle would make sense normally, we've obviously talked in the past about how you would scale the deployments into the data center opportunities that you have through your joint ventures with the size of the fund. Given that opportunity as well, it seems like you're not scaling the deployment into the data center opportunity that you have through your joint ventures. Is that correct? Otherwise, it would seem that the four-year deployment cycle seems somewhat slower than what we were expected, size notwithstanding.
Shall I do the third one first?
Yes.
We've been cautious about how much capital we'd raise in ECP VI. The market opportunity is fantastic, the hard cap is a material step up from the previous fund size, and as you probably know about us by now, we like to sort of underpromise and overdeliver. We've been deliberately cautious about the scaling of it. We are absolutely confident now they're going to hit the hard cap of $7.5 billion. I think what we're basically thinking is that this is a materially bigger fund than the previous one, and it's a bigger fund than we were intimating to the market we would be raising, and therefore, we're being a bit more prudent about the assumptions and when the next fund after this starts. I don't think there's any statement about lack of investable opportunities and the pipeline of things they're doing.
We just think it's a bigger fund. We should be a bit more conservative about the timeframe.
Alongside the $7.5 billion, of course, there's a large SMA.
Yeah, that's separate
Co-invest piece that is separate. Therefore, the deployment has to be around GBP 12 billion. I don't think we're saying deployment is any slower. I just think we've got more to deploy.
We felt certain analysts had got slightly over their skis on the timing of the next fund.
Yeah. Yes.
In their models.
Yeah.
Now what we're going to
Let's move on.
Should we go to the other questions?
Yeah, you go to the other questions. Yeah.
I'll continue in the last question first. I'll go to question two, which was fee-paying AUM, I think, on the open-ended side. When I'm referencing NAV, that is fee-paying AUM. We have a queue for both of our funds, the open-ended debt fund as well as the open-ended equity fund, which I will note is quite the exception, generally speaking, today, and that's been the case historically as well. There is more capital desirous of coming in, and we will deploy that capital. But fee-paying AUM in the open-ended fund. When I'm referencing NAV, it's all fee-paying AUM. Your first question, I wasn't exactly clear on context, but I think you were talking about debt and equity and barriers to entry possibly, or maybe you can give me some more context. Are you talking about fundraising or deployment, or both, and what that looks like?
Can you hear me?
Yeah.
Yes.
Yeah. Okay. Yeah, sure. I was just asking about the opportunity to grow these funds across the equity and debt sides and how you compare those. I was just wondering about how you think about the opportunity to scale the deployment. Therefore conceptually, how we should think about. Clearly a 50% step up in vintage between seven and eight is quite large. I guess just more broadly, should we be thinking about 20%-25% thereafter? Yeah, that was what I was trying to get at.
No. If you look at us historically, we've had a history of going 50%-100% bigger on subsequent funds on our opportunistic equity side. I think the fact that we were massively oversubscribed and raised $5.12 billion speaks to our historical discipline and track record. It also is, in large part, the fact that 60% of that fund is deployed shows you the opportunity set. What has happened, and what I said earlier is that the opportunity set has continued to get bigger and bigger for us because, while not casting aspersions, let's just say the majority of our competitors are not having the same kind of fundraising success that we have and also don't have the same access to debt capital that we have.
We've been able to set ourselves apart over the last three years, not just from a performance perspective in terms of returns, but also as a certainty of close buyer and a go-to player, which has led to a significant amount of proprietary sourcing, including the Welltower deal, which was close to a $7 billion deal from a publicly traded company on a proprietary basis. Almost unheard of. The majority of that 60% allocation has been done on a proprietary basis. We are not AUM gatherers. We do not seek to take all of the capital that we can garner. We've actually been oversubscribed on every fund that we've raised since our first fund on the opportunistic equity side. Every single, we have turned away a significant amount of capital.
What we see going forward, the estimate on $7.5 billion, is a guesstimate on the opportunity set in front of us. I think we're incredibly well-positioned to raise that capital and to deploy that capital very efficiently because despite the fact that there's more money coming into alternatives, we are getting more and more phone calls and are one of the very few that have the size, scale, certainty of close capabilities, equity and debt capabilities. When I say equity, debt capabilities, I'm talking about debt procurement on the equity side to close transactions of size and scale very quickly and very efficiently. We see massive deployment opportunities in front of us and actually, I think what you've seen historically is really the tip of the iceberg in terms of where this goes.
On the equity side, we are very sanguine about being able to both raise adequate capital as well as the deployment dynamics. On the debt side, we see a similar dynamic. The debt side is interesting. It is scalable quickly. While we've had bouts of illiquidity on the debt side, it has been a highly competitive market. We do think that the wall of maturities that we're looking at today and some of the dynamics in the overall economy present opportunities for us. We're currently investing an opportunistic closed-end debt fund, which is close to GBP 1.7 billion. We expect to have that deployed over the next 12 months. Our open-ended fund continues to see opportunities and has an inbound queue. We think that the deployment for both of those funds is going to accelerate over the next 12 months and probably over the next three years.
I think a hallmark of both sides, equity and debt and Bridgepoint as well, and this is where there are philosophical similarities, has been to be disciplined in our investment approach. As I said, we are judicious in times of liquidity or where pricing is close to peak pricing, and we lean in very significantly when we see closer to trough pricing or opportunities. We do see on the debt side that opportunity coming to us, but we are a top 5% performer on the debt side of the business over the last decade plus. We expect that to continue.
While we are incredibly bullish about deployment opportunities, both equity and debt, it's always in the context of investor returns and making sure that we are disciplined and that we are investing from the perspective of outsized or asymmetric return risk dynamics instead of asymmetric risk return dynamics.
Very helpful. Thank you very much.
Thank you.
Okay.
Thank you. That was our final question. I will hand back now to the management team for closing remarks.
Well, thank you very much. Hopefully, you've got the impression that we're all very excited about this and looking forward to the future. With that, thank you very much for your time.
Thank you.