Earnings Call: Q1 2021

Aug 4, 2020

Ladies and gentlemen, thank you for standing by and welcome to the Hamilton Lane Incorporated First Quarter Fiscal Year twenty twenty one Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. I would now like to hand the conference over to your speaker today, John Oh, Investor Relations Manager. Thank you. Please go ahead, sir. Thank you, Lisa. Good morning and welcome to the Hamilton Lane Q1 fiscal twenty twenty one earnings call. Today, I will be virtually joined by Mario Giannini, CEO Eric Hirsch, Vice Chairman and Atul Varma, CFO as we continue to work remotely from our Pennsylvania headquarters. Before we discuss the quarter's results, we want to remind you that we will be making forward looking statements based on our current expectations for the business. These statements are subject to risks and uncertainties that may cause the actual results to differ materially. For a discussion of these risks, please review the risk factors included in the Hamilton Lane fiscal twenty twenty ten ks and subsequent reports we file with the SEC. We will also be referring to non GAAP measures that we view as important in assessing the performance of our business. Reconciliation of those non GAAP measures to GAAP can be found in the earnings presentation materials made available on the public Investor Relations section of the Hamilton Lane website. Our detailed financial results will be made available when our 10 Q is filed. Please note that nothing on this call represents an offer to sell or a solicitation of purchase interest in any of Hamilton Lane's products. Beginning on Slide three. For the quarter, our management and advisory fee revenue grew by over 11%, while our fee related earnings also grew by over 11% versus the prior year period. This translated into non GAAP EPS of $0.13 based on approximately $6,800,000 of adjusted net income and GAAP EPS of $0.11 based on approximately $3,200,000 of GAAP net income. We have also declared a dividend of $0.03 $1.02 $5 per share this quarter, which keeps us on track for the 13.6% increase over last fiscal year, equating to the targeted $1.25 per share for fiscal year twenty twenty one. With that, I'll now turn the call over to Mario. Thanks, John, and good morning. Let me begin as I did on our last call by simply saying thank you. We are grateful for the sacrifices and extraordinary efforts that all frontline workers and volunteers have put forth during this trying period. Let me also again say thanks to our clients, many of whose members and families are on those frontlines. Lastly, a thank you to the Hamilton Lane team for continuing to step up and deliver their very best for our clients. We had a very solid quarter and that's directly attributable to their hard work and dedication. A quick update on our various offices. As of today, we have begun to see some positive migration back to the office and back to a more normal operating environment. While all of our offices in The U. S. Remain closed, there are a number of our offices outside The U. S. That have safely reopened and resumed a limited set of in person activities. These include Seoul, Tokyo, Hong Kong and Sydney. And while we are in the early days and even in these locations, the situation remains fluid, it is nonetheless encouraging. But as this remote world continues for the majority of our clients, we are working hard to find new ways to engage and add value. We've ramped up production of thought pieces centered around our data and we've begun hosting a series of virtual events. One new series is something we call In the Know, where we showcase data and unique perspectives on various topics. Hamilton Lane innovation and creativity is alive and well and we continue to lean heavily on our technology and data. Let me now turn to some results for the quarter. Beginning on Slide four, here we highlight our total asset footprint, which we define as the sum of our AUM, assets under management, and AUA, assets under advisement. Total asset footprint for the quarter stood at approximately $516,000,000,000 and represents a 9% increase to our footprint year over year, continuing our long term growth trend. Consistent with prior quarters, AUM growth year over year, which was approximately $4,000,000,000 or 6%, came from both our specialized funds and customized separate accounts and continues to be diversified across client type, size of client and geographic region. Our focus remains simply growing and winning across both lines of business and we are pleased with the continued success. As for our AUA, similar to what we've seen with our AUM, growth year over year, which came in at US38 billion or approximately 9 percent, was from across client type and geographic region. As we had mentioned on prior earnings call, AUA can fluctuate quarter to quarter for a variety of reasons, but the revenue associated with AUA does not necessarily move in lockstep with those changes. And while this quarter saw an increase in AUA dollars relative to the previous quarter, we will continue to emphasize that no direct correlation exists between the scale of AUA dollars and revenue generation. Let me now turn it over to Eric. Thank you, Mario, and good morning. Moving on to Slide five, here we highlight our fee earning AUM. As a reminder, fee earning AUM is the combination of our customized separate accounts and our specialized funds with basis point driven management fees. We will continue to emphasize that this is the most significant driver of our business as it makes up over 80% of our management and advisory fees. Relative to the prior year period, total fee earning AUM grew $4,200,000,000 or 12% stemming from positive fund flows across both our specialized funds and our customized separate accounts. Taken separately, nearly $1,800,000,000 of net fee earning AUM came from our customized separate accounts and over the same time period, 2,400,000,000.0 came from our specialized funds. Growth in these two segments continue to be driven by four key components that we have highlighted in the past. One, re ups from our existing clients two, winning and adding new clients three, growing our existing fund platforms and four, raising new specialized funds. What you also see here is that our fee rates have remained steady. Moving to Slide six, fee earning AUM from our customized separate accounts stood at $24,300,000,000 growing approximately 8% over the past twelve months. We continue to see the growth coming from a variety of avenues that include type, size and geographic location of the clients. What you also see here is that over the last twelve months, more than 80% of the gross inflows into customized separate accounts came from existing clients. You've heard us say in the past that re ups from our existing client base remains a key component of the growth we've achieved in this segment of fee earning AUM. In addition to re ups, we continue to expand our client base by winning and adding brand new relationships, which in turn provide a growing base for future re up opportunities. Worth noting, in this quarter, we once again closed separate account business from both existing as well as brand new relationships. Moving to our specialized funds, growth here continues to be strong. We are executing well across our product suite and demand remains robust coming like the rest of our business from a diversified set of investors around the globe. Over the past twelve months, we achieved positive inflows of nearly $2,400,000,000 resulting in a nearly 20% increase in fee earning AUM. Much of this growth over the last twelve months is attributed to our current secondary fund still in market. We continue to be pleased with the results we've achieved thus far. During this recent quarter, we held additional closes that totaled $486,000,000 of LP commitments and now bring the total dollars raised for this product to approximately $2,200,000,000 At this level, we have surpassed the size of our previous secondary fund, which was approximately $1,900,000,000 and it is already the single largest commingled fund we've ever raised. And as we noted before, we have until October to complete the fundraising of this current fund and we remain optimistic on our ability to continue to add capital. We find the current environment serving up some interesting opportunities for secondary deployment. Last point here, given that the fees on this fund started in the prior quarter, this closing did generate retro fees of $3,800,000 in the quarter. The next largest drivers of AUM inflows were the continued fundraising by our credit fund along with continued success across our various white label initiatives as well as positive net inflows for our semi liquid Evergreen product. I will end here by highlighting an announcement that you may have seen reported in the press, that being the closing of a brand new fund offering, the Hamilton Lane Impact Fund. This fund targets investments that have a positive social and or environmental impact. And while the total amount of capital raised was modest at just over $95,000,000 We think more importantly, it speaks to our ability to recognize what the market wants, to quickly respond to that and to use the power of our platform to deliver positive results for clients. We believe interest in this space will grow over time and we think by establishing a presence early on, we are well positioned. Before I turn the call over to Atul to cover the financials, I wanted to quickly highlight the impact on movement in unrealized valuations and to provide an important reminder. First, the reminder, we report our unrealized carried interest and our investments made alongside our clients on a one quarter lagged basis. And so the results for this quarter reflect valuations as of March 31. Further, for most of the industry, the valuations follow a point in time methodology. It is the best estimate of what the asset would be worth were it to be sold that day. Given this, we view these drops in valuations and the related drops in unrealized carried interest to be temporary and not reflecting the ultimate value of the assets. Additionally, several of our large pools of capital are quite young. You will also note that due to our significant diversity across our asset base and underlying company positions, our volatility in marks was less than many of the other traditional fund managers. With that, I will turn it over to Atul to cover the specifics and the rest of the financial update. Thank you, Eric, and good morning, everyone. Slide eight of the presentation shows the financial highlights for the first quarter of fiscal twenty twenty one. We continue to see solid growth in our business with management and advisory fee up 11% versus the prior year period. Our specialized funds revenue increased $5,300,000 or 20% compared to the prior year period driven by over $1,600,000,000 in fee earning AUM added from our latest secondary fund between periods. We recognized $3,800,000 in retro fees from the secondary fund in the current year period compared to $2,800,000 from our latest co investment fund in the prior year period. As many of you are likely aware, investors had come into later closes with the fundraise for many of our products paid retroactive fees dating back to the fund's first close. Therefore, you typically see a spike in management fee related to that fund for the quarter in which subsequent closings occur. Revenue from our customized separate accounts increased approximately $1,600,000 compared to the prior year period due to the addition of several new accounts and re ups from existing clients. Revenue from our advisory and reporting offerings increased CAD1.2 million compared to the prior year period. The final component of our revenue is incentive fees. Incentive fees for the period were CAD2.5 million or approximately 3.6% of total revenue. Moving to Slide nine, we provide some additional detail on our unrealized carry balance. As Eric mentioned earlier, our unrealized carry balance reflects valuations on a one quarter lag basis. While the balance is down from the last quarter, reflecting valuations as of 03/31/2020, our carry continues to be well diversified across industry, geography and number of assets with a good portion of the balance still relatively early in the investment life. Turning to Slide 10, which profiles our earnings. Our fee related earnings were up 11% versus the prior year period as a result of the revenue growth we discussed earlier. With regard to our expenses, total expenses increased $3,200,000 compared with the prior year period. G and A decreased $3,000,000 due primarily to decreases in travel expense, consulting and professional fee and commissions. Total compensation benefits increased by $6,200,000 due to strong operating performance and an increase in headcount. We remain in growth mode and continue to selectively add talent including welcoming our newest class of analysts a few weeks ago. Moving to our balance sheet on Slide 11. Our largest asset on our balance sheet is investments alongside our clients in our customized separate accounts and specialized funds. And like our unrealized carry balance, these investments are valued on a one quarter lag basis and reflect valuations as of March 31. Over the long term, we view these investments as an important component of our continued growth and we'll continue to invest our balance sheet capital alongside our clients. We would expect our investment to generate solid returns and grow as our business grows. In regard to our liabilities, our senior debt is our largest liability and we continue to be modestly levered. And with that, we thank you for joining the call and are happy to open it up for questions. Thank you. And our first question today comes from the line of Ken Worthington from JPMorgan. Your line is open. Hi, good morning. Thank you for taking my questions. Maybe first on compensation and the growth outlook for comp. Base compensation was up pretty materially from last year, while incentive compensation was down. So how should we think about compensation in these different components? Does incentive comp continue to grow through the year to levels we've seen maybe to last year's level or the year before? And on base comp, I think it's at $27,000,000 right now. Is that the right run rate, for us to look forward? And how should that grow with hiring, over the next call it twelve months or so? Hey, Ken, it's Fattul. I can take that. So what you saw in the quarter was two things happening. One, we added people, employees from a year ago. So headcount was up about 10% year to year. But with the strong sort of revenue growth and because G and A was lower, as we talked about due to lower T and D and other expenses, we had a really strong operating quarter for this year. As a result, the bonus accrual was higher than we normally see. So what we would expect as the year goes on as T and D starts to come back a little bit and you'll recall, we talked about two quarters ago, we're moving to new headquarters, which will likely happen later in the year. We'll see G and A come back And with that the compensation and the bonus accrual will likely decrease. And so if you looked at it from a year to year perspective or an annualized basis, I think you'll find it to be in line with where we were a year ago. Okay. That's total comp or is that just base comp? That will be I think in terms of total comp, you'll see it'll be for the salaries and benefits are going to be higher because of the higher headcount. But the bonus accrual as a percentage of revenue will be in line with where it was a year ago. Got you. Okay. Thank you. And then I know this is a smaller line, but advisory and reporting, revenue came in at the highest level that we've seen. It looked like growth in advisory might have been up like 10% sequentially. So how should we think about this part of the business? Has it, for any reason, inflected to see better growth than you may have expected? And is there any flow through into, the customized separate accounts or the specialized funds? Like anything that we can read into the really nice growth we're seeing on the advisory side? Ken, it's Eric. Thanks for the question. I would say there's really nothing to read into it other than that business continues to perform well. And recall that that advisory line item has multiple components to it. One is the pure play consulting nature of the business that we've talked about in the past. The other is kind of back office distribution and then the other piece is technology. So part of that growth is you're beginning to see, Cobalt, after our acquisition of that continue to increase contributions, into that area as well as just adding on to the base advisory. But as we've also said in the past, this is not a hook them in advisory and then move them over into AUM. So I think this is simply a that business is doing well and the growth reflects that. All great. Thank you very much. And our next question comes from the line of Michael Cyprys from Morgan Stanley. Your line is open. Hey, good morning. Thanks for taking the question. Maybe just on the separate account side, it looked like distributions there were a bit elevated in the quarter about $1,100,000,000 of distributions coming out of the separate accounts. Anything particular to call out there? It looks meaningfully higher than the 500,000,000 or so that we saw a year ago on the separate account side? Sure, Mike. It's Eric. I'll take that. This is really a timing issue. So in this quarter what you happen to have is a couple of large existing separate accounts have some tranches rollover. But we rarely get the fortune of having the rollover occur at the exact same time that the new contract gets inked and the new commitments begin to come online. So I think we've said in the past, looking at this quarter to quarter, we think is not particularly useful. I think when you look at this year over year that noise gets sort of taken away and muted. And I think that's exactly what you're going to see here. So timing mismatch on some of the re up activity. Got it. Okay. And then maybe just a bigger picture, as you think about your business model, maybe a little bit different from others out there, but one of the key aspects of the value prop to your clients is the diligence that you're offering and providing that service there on diligencing managers and funds. Maybe can you remind us how many new GPs and new funds that you diligence each year? Maybe talk about how your diligence approach and process is evolving here in this current environment given the limitations around travel and in person meetings. What do you have to do differently today to get conviction behind a new fund and a new manager? Hey, Mike, it's Mario. It's a good question. It's one of the things that we talk to clients and GPs and how they do it with portfolio companies. I think the first thing to know is from our perspective, that provides us an advantage in the sense of we have a lot of different offices where people can do things in places where if you have one office, it's very, very difficult to do that. I think the first thing is over this last short period of time, it's almost all been done remotely. You know, Zoom or Teams or whatever you're using has been a lot of that. But again, for us, given the depth of our relationships, a lot of the even new managers we're looking at are managers we have seen in the past. So it's not someone we don't know at all. For example, some of us were on meeting yesterday with a new fund with two people who we all knew over the last ten or fifteen years. So you're not generally talking to someone who you just have never met before or you don't know. So I think the way that the diligence is working is you try of You kind of leverage those kinds of things you have done. And then I think what we will evolve is you begin to see people in settings. You've heard the stories of how people go to parks and and they meet management teams or or managers in a in a socially distant setting, and you get creative. But I I think the core aspects of diligence remain the same. You know, a lot of it is is things that you can do on a Zoom call or online. And as I said, you figure out ways to either leverage the past relationships or meet them in new ways. But I think we're all going to be very creative over the next few months as we look at doing deals in that fashion. Great. Thank you. Our next question comes from the line of Alexander Blostein from Goldman Sachs. Your line is open. Thanks. Great. Thanks for taking the question. I wanted to ask you guys your thoughts around the secondaries market. So you're in the market right now, still fundraising a fund. It feels like that whole marketplace is going to get a lot more active over the next six to twelve months, which is what people are doing with their LP stake. So maybe a little bit more color around what the ultimate targets are on the fund that you're currently in the market with and any other secondary funds that could be interesting over the next kind of twelve to eighteen months for you? I don't know if I can give targets on where we're going on that. But I mean, in terms of that market, I've said it in past calls, the secondary market today is where some of the most interesting things are happening in private equity, in infrastructure, in private credit. I think what you're seeing are two separate paths in that market that are combining. One is you always have limited partners that wanna sell interest, and and that won't stop. And not because they're distressed, but because they're rebalancing portfolios, they wanna rethink about how they do things. And that's a very active market, always has been. The other part of it is, we've mentioned this, I think, in in prior conversations, the GP led market, where general partners are looking at an asset or a series of assets, a small number, and they're saying we want to keep these but in a different form and with different limited partners. And there are very creative structures being discussed and coming into the market around that. Both of those markets are very large. And so I think what you have is the confluence of a market developing and on the other side, a great deal of investor interest around both of those paths where you can buy secondary interest or you can buy single assets or two assets at a time where it's almost like a co investment. So as we look at that market as it develops, it's a market that we think will continue to grow down both of those separate avenues and will continue to grow with investor interest around having access to those kinds of transactions. Great. Thanks very much. Our next question comes from the line of Chris Harris from Wells Fargo. Your line is open. Thanks. Hey guys. I wanted to ask you a question on the expenses. Maybe can we be a little bit more precise here with where you're expecting G and A and other expenses to go from the Q1 level? And then maybe what is kind of like a reasonable run rate do you think once we get through kind of the COVID related situation whenever that may be? Chris, it's Atul. Let me take that. So I mean I don't know how much precise guidance we can give. But what I the way I would look at it is and I think we talked about it a quarter ago, T and D makes up a little less than 10% of our overall G and A. And as you might imagine what's happening in the market, that's gone to pretty much zero. So that you've got that dynamic going on. And then, you know, anyone's guess when that comes back. So there's that going on. The second element I would mention is that we have a joint venture with IHS called PMC. And as we sort of get bigger with that JV, with the more funds we put on, we benefit from scale there. So there are some expenses we're benefiting from and efficiencies we're benefiting from. And that's probably a lower run rate going forward. The other stuff is there's a lot of timing going on to around in particular around fund expenses, how they come in. I would say they were a little bit lower than normal. They are often choppy. And the final piece would be the rent piece that I mentioned a little bit earlier. So two quarters ago, we gave the guidance on how that might increase later in the year. So I think there's a, you know, I would say that the G and A was lower than the run rate. But if you were to look at it for the full year, you know, or an annualized basis, we're probably not that far off from where we were a year ago. Okay. And you guys have been running kind of a flattish FRE margin for the last couple of years. Do you think that's kind of a reasonable assumption to be thinking about here over the next, you know, twelve to eighteen months? Yes, it's Eric. I'll jump in there. I think, you know, as you've heard us say, we're not we're in a growth mode. We view ourselves very clearly as a growth company. Atul mentioned the new analyst class coming in. We've continued to go open up new offices and add strategic hires. So I think for us the focus for management today is not on how can we get the margins higher. Certainly we've been maintaining and if you look over a long time period they have been kind of moving up into the right in small incremental basis. But our view right now is that the best thing we should be doing for shareholders and for our clients is continuing to reinvest aggressively back in the business to open up new areas for growth going forward and to maintain what's already a very high level of growth. Okay guys, thanks. And our next question comes from the line of Robert Lee from KBW. Your line is open. Great, thank you. Thanks for taking my questions. Hope everyone is doing well. Just wanted to go back to maybe the separate camp business. Couple of quick questions. First, possibly some color on the re ups and more really more interested in, there any kind of rule of thumb you're seeing that when a client does re up that there's the upsizing of their commitment, the 10%, fifteen %, twenty %? So just trying to get a sense for how you're seeing kind of your existing client base grow. And then maybe also with that, I think last quarter, understandably talked about some expectation that with COVID and difficulties you all have with travel and whatnot, the fundraising, it would be reasonable to expect some moderation in the pace of it. So are you starting to see that now that we're kind of maybe through the pipeline that was there early in the year? And kind of how you're thinking about the pace of it or the cadence of it over the next couple of quarters? Rob, it's Eric. Thanks for the question. Let me start with the latter part first, which is I would say this quarter sort of showed that results continue to be strong across the board. So to me, I think while we are concerned about COVID impact and while our sales team would certainly tell you if they were here today that they are working harder than they've ever had to work before, the fact that we are not only closing on existing products like the secondary fund but also able to create and raise and have a final close on a brand new fund offering, we think it's impressive. And we've clearly noted that we are also not only getting good re up activity, but we have added in this quarter, so in a post COVID world, brand new relationships. The pipeline continues to be strong. The team that is responsible for managing RFP responses would tell you that volume there feels very normal to them, if not slightly above normal. And so all that we think bodes well. To your first question, in terms of that dynamic, hard to answer because it really is client specific. So you have certain clients that are on a very consistent, commitment pacing where they are maintaining their target allocation amounts. And so as a tranche rolls off, a new tranche of an equal size rolls on. You have other clients who are in growth mode either because they're simply under allocated or because they are repositioning portfolios to be more aggressively tilted to the private markets. And so you might see, meaningful increases in size in subsequent tranches. Some cases, those were budgeted and expected. The client had sort of telegraphed that with their intention. And other cases, because as they've gone through it, as they continue to think about how they allocate capital, they've decided to increase allocations. Remember that those tranches, those separate account tranches are deployed as quickly as sort of in single year tranches and as long as over, you know, three plus years. So things certainly change in the interim between re ups. So hard to sort of make a finite statement across everything that does vary by customer. Thank you. And maybe as a quick follow-up, just kind of curious, maybe client type, maybe this also goes to Mario's comment about some interesting things in the secondary market. But are you starting to see some types of investors, maybe it's endowments, maybe there's some state pension, it's hard to say, where you are starting to see them because of their own liquidity needs or concerns, start to come to market, so to speak, or start to more proactively think about rebalancing or getting better more liquidity from their project and business allocation? Rob, it's Mario. Maybe surprisingly, we just have not seen that. And I think when we last talked three months ago, we didn't know. But as Eric pointed out, as the months have rolled along, people have been very active in the market. We hear anecdotally about endowments or foundations, particularly tied to universities that are pulling back, but we're not really seeing it. And I think part of it, you talked about municipalities, about government pensions and their budgets are generally two different things. And as they think about the need to pay beneficiaries, they tend to move into higher yielding or higher returning assets, which tends to be the private markets in some shape or form. So I would say that the combination of the need for more return, the public markets having stabilized has led to a fair amount of activity among investors looking for return. They may vary whether they want it to be in equity or the credit or infrastructure, but it hasn't changed their desire to have illiquid portions of their portfolio and for that to be an active and growing part of those portfolios. Great. Thank you very much. Thanks for taking my questions. Our next question comes from the line of Chris Shutler from William Blair. Your line is open. Hi, guys. Good morning. Beyond the specialized funds that you have today, would you please remind us what new areas are most of interest to Hamilton Lane? And do you already have most of the investment talent and capabilities in house to go after those? Yeah, Chris, it's Eric. So, you know, I think we've described before that we view ourselves as infants in the specialized fund area. I think while we are proud of ourselves for, you know, raising kind of the biggest thing we've ever had with the secondary product, If you look at our product suite, while we continue to selectively add new areas, there are still a lot of areas that untapped for us. And so we think that is encouraging. We think that that provides a lot of nice growth avenues going forward. The good news aside from that is on the talent front, if you looked at our product offerings in the past, we've not had to go off and bring in teams in order to successfully raise. And the reason for that is very simple which is that we are doing that activity already across separate accounts. So if you look at, you know, when we started in co investing, for example, raised our first product in kind of that 02/2005, '2 thousand and '6 timeframe. But we had a track record via the separate accounts that actually went back into the mid-90s. And so that to me is emblematic. Secondaries was the same. Credit was very similar. So it's emblematic of the fact that the flexibility in those separate accounts provides us mechanisms for building out expertise that may not have a specialized fund attached to it. But when we feel like the market wants and needs a product offering around that, we then have built out the capabilities, resources to do that without having to go and go hire or bring on brand new resources in order to raise. Okay. Got it. Can you maybe talk also about just the pace of deployment? Obviously, it's going to depend on the market environment. But is there a possibility in your view that what used to be a three- or four year cycle becomes a shorter cycle for some of these funds? I think it's possible. I think this is sort of depends on what the market serves up. Mario hit it earlier, which is the secondary space in particular is serving up an increasing amount of very interesting activity right now. And so does that potentially lead to faster deployment? It might, certainly if that activity level continues. On the fund side, you know, the question had come in earlier about the diligence that Mario answered, but on the volume there, you wouldn't know there's a pandemic going on. The number of managers seeking capital is at or near record levels. So our fund investment team is as busy, if not busier than they've ever been before, which we think is great. Remember, part of our value proposition is deal flow. Deal flow in this asset class is not equal. So everyone doesn't sort of benefit from the same flow of opportunity. And we think particularly in an environment like this, us showing extraordinarily high levels of deal flow is just a further differentiator for clients and certainly add the ability to potentially increase the pacing of investing. Okay. And then lastly, just to go back to expenses one more time. I don't know if it's possible, but could you clarify, like as we sit here today, are you thinking total expense growth this fiscal year is more like upper single digit growth, mid single digit growth? Any additional clarity you can give us? Hey, Chris, it's Atul. I can take that. So the way I would think about that our total expense, let me sort of frame it in those terms, I would say should be fairly similar to where our revenue growth ends up being. And that's just a factor of as the top line growth, we're continually investing in whether it's resources or things like that. And I mentioned the other part being sort of T and D is lower now, maybe it's lower for longer. Who knows, the market will sort of determine that, we have some other things that are either timing related or rent, which is going to start up later. So my sense is that from a total expense standpoint, there may be a little bit of interplay between comp and G and A, but total will be around the same sort of low double digit kind of growth rate in line with revenue. Okay. Thank you. Are there any more questions in the queue? We have no further questions at this time. I'll turn the call back to Eric Hirsch for closing remarks. Again we always appreciate the time and the interest and the thoughtful questions so thank you for that and wishing everyone to stay well. Thanks again for joining. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.