All right, for important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. Note that taking of photographs and the use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. All right, with that out of the way, good afternoon, everyone. Thanks for sticking with us here into the home stretch on day two of the Morgan Stanley Financials Conference. I'm Mike Cyprys, equity analyst, covering brokers, asset managers, and exchanges for Morgan Stanley Research. And for our next session, I'm thrilled to welcome John Winkelried, the CEO of TPG. As many of you know, TPG is a leading global alternative asset manager with about $224 billion of assets under management. John, thanks so much for joining us today.
Thanks, Mike. Appreciate it, and looks like I will have to be here in the morning next time, right? I'm going to work on my slot.
So let's kick off with the Angelo Gordon acquisition. It's been about six months or so since you guys closed in on the transaction. That significantly diversifies the business, brings you into the private credit space and size. It scales your real estate platform in a meaningful way. It's been six months since you closed the deal. Let me just update us on the integration. What are your priorities now? And have your views evolved with respect to revenue and expense synergies there?
Yeah, well, I think first of all, integration is going, I think exactly as we hoped it would go. I think in terms of bringing the businesses together, identifying structurally, particularly from a operations and sort of services perspective, all of those decisions have effectively been made, and so the businesses are operating pretty seamlessly now. And I think I had mentioned to you that that had started frankly, prior to us actually closing the deal. So that's been in progress really for probably the better part of a year.
On the business side, though, I think what our focus is and what our priorities are have been really trying to accelerate capital formation for the businesses, because I think we've mentioned before that if you look at the strategies on the credit side at Angelo Gordon, all of them are essentially undercapitalized versus what their origination capacity is. So they're out originating basically the underlying capital base. And I think as we mentioned when we made the acquisition, one of the clear opportunities for synergies and value creation was the fact that we could really lever our client relationships, our LP relationships, we could lever those relationships into the Angelo Gordon franchise. And so we've been hard at work at that.
Just to give you some perspective, and because this has been a major priority of mine personally, I asked our team to add up the number of meetings that I've personally had traveling around the world with our credit portfolio managers, and I'm basically sort of clocking at 100 meetings now. So I've spent a lot, considerable amount of time, Asia, Canada, the U.S. I just came back from Australia. A month ago, I was in the Middle East.
And I would say that, you know, the good news and the high level is that our LP relationships are very receptive to number one, understanding why we acquired the platform, what we saw in the platform, and I think that they are very receptive to thinking of it as now part of the overall TPG family. And when you look at the strategies that AG has on the credit side, the strategies are all very, very on point with respect to the opportunities in the market right now. So, you know, with respect to on the Direct Lending side, we have a special focus on lower middle market Direct Lending through our Twin Brook business.
One of the things that's happening right now in the market is as people are thinking about their exposures to the Direct Lending side of the business, we talked about this earlier when we were standing, waiting to start, clients are getting more sophisticated with respect to distribution of exposure from upper middle market to lower middle market, and our business really is one of the best-in-class platforms on the lower middle market side. The distinction is that on the lower middle market side, we're not competing with banks. We're usually the only lender financing a sponsor, a sponsor-backed buyout. We control the revolver. We do not lend unless we have two financial covenants.
So a lot of the restructuring dynamics that you're seeing start to take place in the market right now, where some companies are hitting that maturity wall or are thinking about refinancing, we're not really experiencing that down in that part of the market. So more sophisticated clients are looking at it and saying, "I want some exposure to that part of the market." We have a Credit Solutions business, which also, again, is very much suited for this environment that we're going into, because our Credit Solutions business is really focused on bespoke solutions-based opportunities within capital structures that need help refinancing, and where we can bring together our private equity expertise with our Credit Solutions expertise.
And the pace of opportunities there is probably at an all-time high, and I would expect it to stay high. And one metric that we use to measure that is the number of signed NDAs that we have with sponsors is at an all-time high. So far this year, we've signed 120 NDAs to look at different specific opportunities where we can come in and provide some kind of creative solution on the financing side, which creates a pretty interesting exposure. So we have that piece of it. And then obviously, the last piece is the Structured Credit business, which is what we describe as the non-EBITDA credit opportunity. So think of, you know, asset-based finance.
financing non-bank lenders, that, you know, some of the regional banks used to finance that maybe are not financing as much anymore, resi mortgages, things like that. I think one of the, one of the things that we're seeing from the clients, from the client side, is that, again, as people think about moving some of their fixed income exposure into the private markets, this area of non-EBITDA credit is one of the fastest-growing areas and one an area that a lot of clients have a lot of interest in. So, it's not surprising, frankly, that it's resonating with our clients, but as I've said before, I think that this process of bringing AG businesses to our clients, really getting traction, getting commitments, we're already beginning to get the first commitments to those businesses.
But this is really, in my view, a 2024-2025 exercise to complete that process. But we feel very good about it, and we're working hard on it.
Any particular sort of figures you've shared with folks just on revenue or expense synergies as you kind of work out here?
Well, I guess on the revenue synergy side, what I would say is that we're identifying opportunities where the combination of the platforms can do some interesting things. So one specific opportunity is that because of what's going on in the markets right now, and this compression of returns between equity and fixed income or equity and credit, one of the parts of the capital structure where we're seeing opportunities with sponsors having some trouble returning capital to LPs is this middle of the capital structure opportunity. We call that sort of the hybrid part of the market. And so what we're doing right now is we've essentially come together between the PE business and the credit business, and we've launched a hybrid opportunity strategy. We're trying to raise about $1 billion-$1.5 billion for the opportunity.
We've already secured our first anchor in terms of an LP. We've already done our first deal. We think that from a opportunity perspective, that sort of mid to high teens return in the middle of the capital structure, sitting on top of a lot of, a lot of sponsor equity, is a very good risk-reward part of the market right now. And when we go around and we talk to LPs, one of the things that we're hearing from LPs is a question: "In this environment, where do you see interesting returns? And if I have capital," the mindset is sort of solutions capital.
Like, "How can I use my capital to benefit from the fact that sponsors need to find creative ways of returning capital, or sponsors need to find creative ways of financing their companies?" So this middle of the capital structure opportunity, we think, is a very interesting one, and we see a lot of flow, either from other sponsors, who want it—who have that need, and we're seeing that through both the PE side and the credit side. So we've come together, we've created this strategy. It's basically off the ground and going, and we expect that to be obviously a, you know, an interesting revenue opportunity for us as a result of coming together. And importantly, we're doing it with no incremental team.
We're doing it with the existing teams coming together, so we're getting all the leverage out of, out of our franchises that way. On the cost side, I would say that, I think we mentioned this before. I think, you know, I guess back when we, after Q1 earnings, we had gone through an exercise. We had identified a bit of an ability to find efficiencies. We had about $9 million of savings coming out of that. On an ongoing basis, we've continued to find opportunities for efficiencies, as you would expect. I mean, as we bring these businesses closer together, there are certain things that obviously drop out that just. y ou know, there are areas where, you know, we don't need two people doing the same function, et cetera, so we have found.
But I would say that if I were to put a number on that, I would say overall, that's probably in the order of magnitude of kind of like $30 million. But we're reinvesting quite a bit of that back into the business in areas where I think it's important for us to create growth. So for instance, the whole capital formation area, as an example, if there was one area that I would cite where having brought the two teams together, trying to you know continue the process of raising a bunch of money institutionally, building our private wealth capabilities and our private wealth team, that's an area where I think we feel like we need to invest, and so we are reinvesting in the business.
Maybe just coming back to a comment you made around needing two financial covenants within your Direct Lending business that's focused more on the lower middle market. Maybe kind of picking up on our conversation we had just before we came up here on the stage, maybe you could just talk a little bit about how your structures maybe differ from what you see happening at the larger end of the marketplace, where we are starting to see some cracks, whether it's a software LBO transaction that's been in the news and topical amongst investors.
Right.
What do you see happening there, and how are you guys positioned?
Yeah. Well, I mean, first of all, what you're seeing at the top of the market is not very unusual, where you've had a very, frothy market with respect to capital to be deployed, lending, against, LBOs, essentially. And what you've had is an environment where basically, private lenders have accumulated a lot of capital. Naturally, they want to put it to work. You have the banks essentially doing what they have historically done, which is, at times they come in, and they're aggressive about trying to essentially do these deals and lend, and at other times, they back off because they may be sort of stuffed with paper that they've, they haven't been able to syndicate or distribute, and they need to do so. So you have these sort of like, cycles in the market.
When they're both going at it together, trying to basically compete for deals, what you now have is you have an environment where bank-syndicated loans are not looking that different than what's happening on the private credit side, where you have club deals, where a number of private lenders are coming together, and they're also syndicating that risk beyond that club. So you've got a very competitive market. As a result of that, you generally end up with very, very permissive terms with respect to covenant protections, and you also have aggressive pricing. We see that from our position as a private equity investor, where we have a capital markets capability embedded in our business.
Every time we basically either buy a company or make an investment in a company, we're then going out and trying to attract financing, and we're doing exactly what you would expect, which is we're going to the direct lenders, we're going to the banks, we're trying to find the best terms. So as a result of that, it's a very competitive market.
What you've seen happen as a result of that is that terms are very permissive, and capital structures and the asset base within a company can get moved around and adjusted, and as a result of that, lenders can find themselves in a position like the situation that you were talking about, you were referring to, where lenders find themselves in a position where they thought they were in a first lien position against all the assets, and all of a sudden they wake up, and they find they're no longer in that position because certain assets might get dropped out and financed against. And so this is not the first time this has happened.
We do have an environment right now that we're going into, where we've got a lot of financing, a lot of leverage finance that was done. When it was done, going back several years, it was done at zero, sort of zero interest rates, so very low interest rates. Coverages might have been 2x. Coverages are now maybe 1, 1.25, you know, 1, 1.2, something like that. Coverages have dropped way down. There's a backlog, obviously, within the sponsor world of selling these companies. So these financing, these capital structures are going to have to get refinanced.
So as a result of that, we're going to go through a period now where there's going to be a number of situations, maybe not exactly the same, but similar, in that there are going to be bespoke solutions that are going to be attempted, in terms of helping these companies refinance or give the sponsors more runway. In our business in Twin Brook, what happens in the lower middle market is, again, we're not, we're not competing with banks. Banks are not lending to that part of the market by and large, and to the extent they were, by the way, it might have been a regional bank that was doing it. That regional bank is having trouble doing that today. So there is a relatively small group of lenders that are serving that portion of the market.
That is somewhere in the kind of like, call it $5 million-$30 million of EBITDA, and it, and it's almost entirely sponsor backed. And what happens in that market is basically you become the only lender as the company or as the company or the sponsor does add-ons or makes acquisitions, you're financing those as it goes, so the company is growing as it goes, and you have a lot of control over the capital structure. So what we're financing, what we're doing there, is we're creating relatively tight financial covenants and restrictions on what can happen with the capital structure. So sponsors can't just show up someday and say, "Hey, I'm dropping out these assets," or whatever.
What's attractive about that, particularly now, is that to the extent that sponsors want to do something or sponsors are running into some covenant trouble based upon, you know, you know, being tighter with respect to coverages or whatever, they come back to the table, right? So we get an early warning system as a result of that. They come back to the table. If we have to make an amendment, we make an amendment. We get paid for that amendment. So the dynamic is entirely different down in that part of the market. So the risk-reward dynamic is different. We're financing smaller companies that are sponsor-backed companies versus larger companies, but the financing terms are different.
Perhaps different dynamic in the lower end of the market and maybe an opportunity for your Credit Solutions business.
Yes.
At the upper end.
At the upper end, yeah.
Since that there is a need for capital there. Maybe staying with credit here, right? So you have three platforms within credit. You have the Direct Lending , there are credit solutions, and also Structured Credit. Maybe just talk a little bit about your approach to sourcing. I believe you recently mentioned that you are out originating the sort of embedded capital base. So I guess what gives you conviction in that? How much origination capacity would you say the platform has today, and how do you think about expanding that over time?
Yeah. Well, I mean, to give you an example, at Twin Brook right now, the lower middle market lending platform is basically on a run rate that would be a historical high run rate in terms of originations. Through sort of the first half of the year, we're at about a $4 billion origination run rate. And, you know, if you look at, just to give you an example, the capital we've already raised up to now for the platform, based upon capital we've already raised and the origination opportunity we're seeing, the fee-paying AUM in the platform can grow approximately 20% year-over-year without raising another dollar. Okay, so embedded is, in this flow that we're seeing, is an opportunity to deploy capital in a way we believe is appropriate and significantly step up the fee-paying AUM.
Now, we're continuing to raise capital for it, obviously, because we see the opportunity continuing to expand. And, by the way, I think that because of just the general growth in market, what we're finding is that there are probably opportunities to go up a little higher in terms of the level of EBITDA for the company, for the borrowers, because the overall market is expanding just in terms of size. So I think that we have a pretty nice opportunity there. In credit solutions, to the point we were talking about before, in terms of this upper middle market opportunity, because of the breakdown in some of these capital structures and refinancing and the refinancing challenges, again, I mentioned we signed 120 NDAs.
Just to put it in perspective, these opportunities individually are somewhere ranging from, on the low end, you're talking about something like $200 million of required capital, to on the high end, about $3 billion of required capital. Now, these are very bespoke opportunities. They're not easy to get done, but when they get done, they're chunky. So one of the things that we're doing is we're in the market raising our Capital Solutions Fund III. We're also talking to a number of large LPs about sort of what I would describe as multi-strategy SMAs, where they want they might have an interest in, let's say, coming in and having some exposure to credit solutions, as well as maybe Structured Credit . So we put together a more customized SMA.
But even with that flow that we see in terms of what we expect to raise in Credit Solutions, we are going out and essentially having to either co-invest out some of these opportunities with LPs, and in some cases, we're inviting in other GPs to join us in these opportunities because they're fairly chunky and large. So again, there's an opportunity to deploy a lot more capital to the extent that we continue to grow our capital base. In Structured Credit , you know, I would say the same dynamic is evolving, which is I would say part of the focus of our business right now is stepping into where the regional banks have stepped out in financing a lot of the non-bank lenders and specialty finance companies around the country. That's a clear opportunity for us.
It's a big opportunity. The other opportunity that people have talked about is, will regional banks, because of deposit shrinkage or pressure on regional banks, will they have to sell assets? And we've seen pieces of that, but not wholesale selling of assets at this point. I don't know if that's consistent with what you're hearing from regional banks, but it hasn't yet really kicked in. We'll see how that evolves, you know, as things go forward. But the opportunity there, in terms of originating assets, we have a couple of flow partnerships with some financial institutions to help them finance.
So all of these opportunities, I think, are very large and scalable, and to the extent that we obviously can scale up our capital base, I think we can deploy right into it.
Great. Why don't we shift gears, move over to private equity? You've suggested that you're on track for a 3- to 4-year deployment cycle in private equity. Talk about the pipeline, the opportunity set that you see in the market, and what might help catalyze a more meaningful acceleration in deployment activity.
Yeah. Well, maybe before I answer that, I just also y ou and I had been talking about one other thing that I thought I would, as it relates to the private equity business, I would comment on, because one of the focus areas of the market in private equity is this question of these vintages that were basically or these investments that were made on the private equity side during sort of the 2020, 2021 period, where valuations were high, you know, rates have basically gone down. How are some of these vintages doing? And I just want to, I just want to give some kind of some texture on that because and particularly the focus also in the market has been tech and software, in particular.
In over 2020 and 2021, in our buyout business in TPG Capital, we made five investments during that period of time for a total of $4 billion of equity invested in software-related businesses, companies like Delinea, Boomi, Nintex, et cetera, Planview. And just to give you an idea, those companies basically, in aggregate today, are marked around 1.5x . I think it's 1.4x . And when we made those investments in those five companies, they were together generating about $400 million in EBITDA. Today, those same companies are generating $900 million in EBITDA.
Last 12 months, revenue growth in those companies has been basically around 11% revenue growth and about a little north of 30% EBITDA growth, because we've continued to find efficiencies in terms of how to run those businesses. So that book of business is doing very well for us. It's also notable that in 2020 and 2021, when we invested $4 billion of capital in software-related businesses, we actually sold $11 billion of portfolio companies during that same period. Companies like WellSky, McAfee, et cetera.
And that's actually been very important to our positioning on the private equity side, because the return of capital dynamic for us, we were ahead of the wave, and we returned a lot of capital to our LPs, which they appreciated, and has put us in a position where capital has cycled back to us. But our portfolio during that period of time, we were. We tried to be fairly tactical in terms of what we were buying versus what we were selling. And we did. We definitely felt we should take advantage of those valuation changes in the market at that time, and we did. So, the portfolio on the capital side is in good shape. In growth, in our growth equity business, very similar story.
We made four investments in software-related businesses during that 2020, 2021 period. Those are marked collectively at 1.8 times. Those businesses are doing quite well. We actually monetized one of those companies already, which is Onfido. So the portfolio is in good shape. Portfolio is growing. I think the trends and one of the things that we're sort of seeing on the software side is customers are increasing budgets for AI-related strategies, and also increasing budgets for cyber to protect themselves. And those are the two themes that are clearly present in the portfolio. Overall, I think that on the private equity side, I think we feel very good about our business.
We feel very good about how we're positioned. As you know, we're very sort of theme and sector-oriented investors. For us, our pipeline and flow picked up probably a little bit before the rest of the market. Mid-2023, midpoint of last year, we saw a big pickup in our pipeline. Our deployment pace doubled second half of 2023 versus first half of 2023. Pipeline is still very robust in 2024, in the first half of 2024. Having said that, one of my, I guess one of the observations that we would make about the market is, it's gotten. It's kind of getting what feels like a little overheated in terms of valuations and what people are kind of thinking about paying for some of these companies.
So I would say that we're being pretty disciplined and measured, having made a bunch of investments in 2023, which we feel really good about, which also characterized our franchise. We did a bunch of carve-outs, a bunch of corporate partnerships, which, you know, we're kind of known for. The flow in 2024 has shifted much more to sponsor to sponsor, which is not surprising, given, again, the pressure that sponsors feel that they are under to monetize companies, to return capital. And given the increase in valuation in the public markets, people are sort of trying to ride that and see what they can do in terms of monetization of companies and the fact that financing is pretty available, right? Spreads are sort of back near all-time tights. So, you know, what we're seeing in the market right now is increase in competition.
The number of sponsors around each situation is kind of, you know, picking up. So, you know, I think that I'm sure we're y ou know, and if you look across the business, I would say this is true across the business in terms of how we're feeling about it. It's true in the U.S., it's true in Asia, in our private equity business there. I would say maybe the only exception to that is in our climate franchise, where I think our climate franchise is highly differentiated in terms of the amount of capital that we have. And as a result of that, I think we're, we're still seeing some pretty interesting opportunities to deploy. Our first climate, our TRC One, our first climate fund, is about 80%-85% deployed.
As you know, we're raising our Climate Two right now. Anyway, that's what we're seeing on the PE side.
Great. So it sounds like robust pipeline on the deployment side, even still this year, just kind of the composition or mixture is maybe shifting a little bit.
Yeah.
Appreciate the added data points on the portfolio health, particularly in capital and in the growth franchise, which it kind of lends itself to sort of a question just around the exit environment, right? You mentioned some valuations you see in the marketplace, maybe a little frothy, keeping you from maybe being more active on the deployment side, but does that make you more active on the realization on the exit side? How are you seeing that shape up?
Yeah, 100%. We are, we're, we're very focused in terms of taking opportunities when we think valuations are high and, you know, trying to put ourselves in a position where we're being strategic about exits. We're frankly looking at all the available paths to do that. One area that we've seen a real pickup on is the ability to try to exit through public markets. You probably saw that we did a pretty important IPO with in our capital portfolio, in the Viking cruise business, which was a sizable IPO.
We were able to have a reasonable amount of secondary that we're able to sell, and obviously, we'll continue to take the opportunity to monetize. We have done that in other parts of our business as well. In India, in our Asia franchise, I think in the last year and a half, I think we've, I think, done seven IPOs, I believe, if I've got it right. So we've been, we've been very focused on that. As a general matter, I would say that we try to be disciplined about looking at our business in terms of not only making great investments, but also being disciplined about what I think of as fund management.
How do we manage our funds in terms of making sure that we're preserving strong returns, we're using exits, we're focusing on exits when we can effectively do it at prices that we're happy with, we're very disciplined about trying to look at how do we use leverage in our funds, et cetera. So, but I would say that given the nature of sort of the market environment right now, your intuition about us being shifting over and focused on returning capital is clearly high on our priority.
Great. So we have about four minutes left. I want to combine the last two questions just to make sure we have time to get to them, and that is on private wealth and also insurance. On the insurance side, you've mentioned that you are exploring, thinking about some ways of sort of partnering. Just curious, any sort of updates, how you're thinking about the approach that you might take? Some have sort of acquired insurance companies, others have partnered and gone a capital light route. Is there room for a third way, a middle approach, or is there an approach that you guys are thinking about? And then the other piece, just more broadly on private wealth, just how you're seeing the opportunity set in terms of your product pipeline.
Yeah. Well, on the insurance side, I think there's two sort of pieces of it. One is I would say that because of how the insurance market, particularly the life and annuity market, has evolved in terms of the business itself getting more competitive, and clearly, the realization that strong asset management can position life and annuity players more competitively in the market. The interesting thing that we're seeing is more insurance companies, both including, by the way, both public insurance companies as well as mutuals, engaging with firms like ours, and we're seeing it ourselves directly, in dialogue around what essentially just would be, you know, a GP-LP relationship.
But clearly a pickup in dialogue and an interest level from a number of those insurance companies in working with us and working with our franchise across a range of strategies, and credit is obviously one of them. So I would say that we have nice traction, and we've gotten a number of mandates, and we have nice traction building. And we've gotten a couple of calls recently that I think are really evident that, you know, for instance, we've gotten a couple of calls from some mutuals that otherwise I think have thought historically that their own capabilities on the asset management side are just fine, and I think that they're realizing that they can enhance their asset management capabilities by certain partnerships. So that's one area of opportunity that's clearly evolving, and we're seeing it change.
On the strategic side, we're still focused on it. We believe that it's important for us, and it's a priority for us to continue to find the right partner on the insurance side. I think, Mike, the answer to your question is I don't know whether or not there's any new technology that I would say, you know, in terms of this is how to do it, in terms of forming a partnership. But I would say that some of the priorities that we have are, if we find a more strategic partnership, we want to do it with a partner that has some level of critical mass, meaning it's not too small. Because we are wanting to make sure that whoever we partner with has the ability to generate organic growth, and is positioned well competitively in the market.
We have looked at a couple of smaller platforms that we decided to pass on, because either we didn't feel they were positioned well enough, we didn't feel that necessarily the team was strong enough, and so we decided that that wasn't the right fit. So some level of critical mass, quality of team, and then the other thing that we've been able as, you know, just being students of the market, I think one of the other things that we've been able to observe and learn is that making sure you find the right fit in terms of mindset and culture with respect to your partner on the insurance side, wanting to be connected and more integrated with your asset management capabilities, and it's not just an arm's length type of relationship.
That there is a connection that allows for the value of the partnership to manifest itself, and so that's another important priority for us. So we go into these dialogues with those as being sort of important priorities, that we're trying to make sure we solve for. So I think that it's ongoing. You know, would we put ourselves in a position, assuming it's the right size and the right, and the right relationship to control the, the insurance company? We might, okay? But it's got to be the right size in terms of the context of our firm. So that is how I would, I guess, talk about the insurance opportunity and where that is. On the private wealth side, private wealth side of the business, I think is very important to us, and it's evolving a lot.
You know, we have always been in the channel with a series of strategies, but what's happening in the channel, I think, is you probably, I know you're aware, is that the platforms are now beginning to reposition the product offerings in a way where what's becoming more important is continuously offered product. That could be perpetual product, essentially, or semi-liquid product, and it's true basically on the private equity side, it's true on the credit side. The channel partners want the ability to be able to offer their clients opportunities where when they come in and say, "I would like an exposure to private equity," as an example, they can allocate capital and get invested. So that's why these things like semi-liquid private equity products, I think, are becoming more important, and you're starting to see that technology spread a little bit.
So we're working on seeding our first semi-liquid private equity vehicle. We're trying to make it essentially distinctive to our franchise, so it's gonna include participation across a range of our private equity strategies, and we're starting to seed that now, and we're expecting to launch it in the first quarter of 2025. We've had a number of conversations with channel partners and we expect that we'll have strong support out of our channel partners. So we're focused on brand building in the channel. We're focused on product development and product structuring so that it fits the needs for the channel. And we're focused on whatever we do, trying to make it distinctive to who we are and what our style of investing is.
Eventually, I think there will be capacity for a certain number of players on that channel, and I think we'll be one of them, because of our global brand and because of our, you know, our track record of investing and doing it in a quality way. So, my expectation is that will continue to be an important source of capital for us, and will increase as a percentage of the total pie, will continue to increase over time.
Great, I'm afraid we'll have to leave it there. Please join me in thanking John Winkelried. Thank you for your time.