U.S. Financial Services Conference. I guess this is day one, or if you're enjoying things, day two. We have a great schedule. Thanks for being here and if you're in this room, you're here for the session on W. R. Berkley. I have lots of questions, but you can absolutely ask a question at any time, and I'll try and get the mic to you. Just raise your hand and let me know. We're really pleased here to have President and CEO Rob Berkley here, who I think is in his 28th year at the company. I was trying to do the math. Interestingly enough, Rob was a Merrill Lynch investment banker prior to joining W. R. Berkley, so I think that there's a good pedigree there.
You know.
And so he's also a chairman of NCCI Holdings, the nation's largest repository of workers' comp information, and chairman of the board of Greenwich Hospital, doing good work for lots of people who are not running W. R. Berkley. Thank you for being here, Rob.
Thank you, Josh. Appreciate the invitation and grateful for everyone's time this morning as well.
You know, look, I think that you've been very fulsome over time with information to direct investors, how to think about the company and how to think about the industry. Sometimes maybe you give too much information, and one of the.
I haven't been accused. Well, I'm accused of that at home, but not usually in the workplace.
Recently, some investors would argue that you gave guidance about growth for the company of 10%-15%, and you have not been meeting that guidance recently. And there's some talk: is that long-term guidance, short-term guidance? If it's real-time guidance, what's preventing Berkley from going? There's a lot of places here, but what should we think about growth of the company and where we are and, I guess, the cycle and Berkley's opportunities?
So maybe to clarify or bring into sharper focus, at least my perception of the conversations that we've had in the past around growth, they've really been more directional, if you will, as to what we think should be achievable. That having been said, nobody knows what tomorrow is going to bring. Market conditions, market cycles have changed a little bit. While the fundamental of the cyclical industry is still alive and well, the decoupling of product lines, and they are at different points in the cycle, adds an additional wrinkle or complexity from our perspective. So it's not that all the ships are rising or coming down simultaneously because of this decoupling.
So long story short, from our perspective, we're in the market every day looking at the marketplace in a very granular manner, trying to assess where are the opportunities, where should we be maintaining more of an offensive posture, where we should be maintaining more of a defensive posture. When we looked out at the marketplace, give or take, call it a year ago or so, we thought that the momentum in some of the product lines was going to have more staying power than it proved to. And there are certain product lines where we've drawn lines in the sand and said, you know, we're not going to chase beyond that. Because for us, yes, we care about how much we grow, but that is not the priority. The priority for us as an organization is good risk-adjusted returns.
And that means in a cyclical industry, one needs to be opportunistic. So what's the punchline going forward, Josh? Do I think that we should have an opportunity to be able to grow double-digit, even though there are some opportunities that are more attractive and others where we have a defensive posture? Yes, I think we should. Do I think that a big piece of what is going to get us there is rate? Yes, I do. So, you know, we'll have to see how this year unfolds. We see certainly parts of the market that offer great opportunity and other parts of the market that, you know, we're looking forward to when market conditions change.
You know, look, there's not one market, of course.
Yes.
Have things turned out better from a margin perspective than you thought a year ago? That's put a damper on the prospect for raising prices to some extent for the industry?
I think that clearly it appeared at the end of the year as though the property cycle had run its course, particularly cat-exposed, but even the risk business as well. And you could see that most pronounced in the retro market and the property cat reinsurance market. And one would assume that that would then trickle down into the insurance market over time. Obviously, the California fires are a bit of a wild card that has been introduced to the narrative at this stage. So as far as where has the market been peaking and losing steam, perhaps, or momentum, I think it's probably cat-exposed property, very visible on the reinsurance front. And the momentum, while still positive, is slowing on the insurance front, particularly E&S.
I think on the other hand, the issues around social inflation that you and I have talked about and everyone in this room is aware of, I think those realities continue to build momentum and will likely serve as a further catalyst for some of the liability lines and will likely put pressure on the standard market when it comes to liability product and push more into the E&S market over time.
I guess this could pivot. Although we had some nice price increases in 2020, 2021, 2022, the last real cycle turn was really over 20 years ago, you know, back in the 2000, 2001, 2002 period. And you had a lot of startups and a lot of people pushing into property lines. They abandoned confidence in liability after so many losses mounting from 1996 to 2001, and nobody wanted to take tail risk. Berkley, who had a lot of experience in that category, remained true to liability. Of course, you do write property also, but it's always been a smaller part of the book. Over the past few years, though, the mix has been changing at Berkley and your increasing exposure to property. How big can property get as part of Berkley's pie?
You know, consistently and certainly in the first quarter of 2025, we'll see Berkley's exposure to catastrophe events has been a source of stability in the numbers compared to a lot of other companies that have more volatility because they do write a lot of property. What is the prospect for Berkley as a property and liability company versus a liability company that has a few irons in the fire, I guess, in the property space?
So maybe just going back in history, in that 2022, rather the 2002 and 2003 year, we did flex up a bit in property, particularly since we didn't have the platforms in place. You would have seen us grow through our efforts in Lloyd's, where we entered the marketplace and provided some significant capacity through qualifying quota shares through one syndicate in particular. And in addition to that, we bought about 20% of a Lloyd's managing agency. And that was our effort at that moment in time to step up. Since then, we have built out some of our own platforms, so we do not need to rent the opportunity, but we can actually, we own it. And yes, our property book has grown and our short tail portfolio overall has grown as well. Today, between the two, it's a hair under 20% of our overall portfolio.
I do not see us becoming a property shop per se and having the short tail overshadow the liability line. So could it flex up to 25%, maybe if the right circumstances came about, 30%? Yes, that's certainly possible. But when the day's all done, Josh, just going back to the point that we flagged earlier in this conversation, and we've had an opportunity to chat about in the past, is we're all about risk-adjusted return. We are not in the business of issuing insurance policies. We are in the business of making good returns. We are capital managers, and we basically deploy the capital based on selecting and pricing risk. From our perspective, we are going to be opportunistic when it comes to property. If we see a window of opportunity, we will lean into it.
If we think that window is closing, that we have no problems shrinking that.
Let's pivot to one particular property line, which maybe gets more attention than it should given its size. It's one of the fastest growing parts of the W. R. Berkley business model. I guess maybe in 2017 or 2016, you pivoted into high net worth homeowners. It's been growing at a very fast pace. You want to say from the outset, you don't write homeowners in California.
We do not write homeowners in California.
But what was necessary at Berkley in terms of capabilities to actually enter that market? And I guess partially the circumstances, but the ACE Chubb merger made it fortuitous at a time, not just you entered that market, but also Cincinnati Financial, PURE, Safeco. There was an opportunity for a number of companies who wanted to a piece that market. Is that market going to continue to grow as, I guess, appetite for that sort of risk needs to be shouldered by a more fragmented space? And will Berkley be much bigger in high net worth homeowners in the future?
I think maybe there are perhaps a few questions there. So maybe taking a half a step back, yes, we did get into the business, as you suggested, even before we entered the marketplace in 2017. We had been looking at that part of the market for, give or take, a decade. Why did we focus on that? We focused on it because, yes, while on the surface, you may view personal lines or the consumer space as a commodity, from our perspective, this niche within the personal line space is anything but a commodity. It is a part of the marketplace where you can differentiate yourself based on knowledge, expertise, skills, and that, quite frankly, allows you to provide a value proposition to both customer and capital that is not easily commoditized.
And it is a customer base that is willing to pay more for what they perceive is value and service and expertise. So long story short, yes, we've been in it for some time now. Yes, we were looking to get in for an extended period of time. Yes, the Chubb-ACE merger created a market opportunity, but even more so, it created a talent opportunity. Because from our perspective, if you want to be a player in the specialty lines, expertise makes a difference. And we needed to make sure that we had the right people with the right expertise to be able to put together and deliver the value proposition. And as a result of the Chubb-ACE merger, as you referenced, that created an opportunity for us to attract talent.
Essentially, many people from more established organizations that were disenfranchised by M&A activity created an opportunity for us to bring that talent to our organization, provide them the resources they needed to build the business that we have today.
Was there anything, I mean, anything's a very broad statement, but was most of it had to be acquired in terms of talent, or were there skill sets already at W. R. Berkley that were able to be applicable to this unique niche?
It was a combination of both, but primarily, it was people who joined the organization who had knowledge, expertise, and relationships in the immediate space. Of course, from a filings perspective, from an actuarial perspective, from a whole legal perspective, we had people on our existing team that were able to provide a supporting role, if you will. But the stars of the show were people that joined us who had been at other organizations, who had the knowledge, the expertise, and the experience to build a great business for our shareholders.
We put out a fairly large report about a month ago. We were looking at performance of different homeowners' businesses, particularly in the face of catastrophe, and one of the surprises, I guess, we found high net worth homeowners' businesses have done particularly well in the face of coastal hurricane risk. You know, I think that you can pick and choose the quality of the houses that you insure, and they've done less well in the face of wildfire, and, you know, inland hurricane is, I guess, what I would call it, the places that aren't supposed to get those losses. Is the high net worth business a good business for, I guess, catastrophe-exposed locales?
Josh, I think it's like any part of this industry. Risks can be good. Risks can be lousy. It depends on how you price it, the terms and conditions you use. It all boils down to selection, pricing, knowledge, and expertise to make sure you're making the right decisions. Ultimately, I do think that there is a long list of examples where people could do things all over again. They would do it differently. I agree with your point that there are certain perils that both high net worth or private client, if you like, has been less impacted by than the mass market. But overall, I think when the day's all done, people just need to be very focused on understanding the risk that they're taking on, charging appropriately.
And when we talk about risk, it's not just the individual risk or a structure in this case or what have you. It also is the market risk. And, you know, perhaps that can lead us into a conversation around California that, you know, it's also the environment that you're choosing to write in from a regulatory perspective.
In terms of the California market, just your, I know you're not there certainly on homeowners, or you are there on other lines of business. Will the regulatory overhang in California, you think, lessen as the state needs more insurers to offer capacity, or are we still in the early days figuring out how the regulator will respond to a lot of these issues?
I think it's unclear how the California Department of Insurance is going to respond. As far as I know, they have not responded to State Farm with their emergency rate increase filing. And I think that's going to be very telling as to the mindset of the department. For us, we do participate on the commercial lines front. We have made a decision deliberately at this stage to focus on other parts of the country when it comes to our private client business. So it wasn't that we didn't get to it. It was a conscious decision that it is not a market for us today.
Switching gears a little bit, let's talk about reserving. I think that people associate the aphorism, the pig through the python, with you quite often. I think that we were talking about that pig. That's really the 2016-2019 pig, I guess, that people had focused on. There was some indigestion around it, and over time, you worked through it. Now the question isn't so much about 2016-2019. There's still some issues there. But obviously, the reemergence from the pandemic, the reopening, the inflation that occurred, it's created a lot of questions around 2022 and 2023, which is more recent. It hasn't quite seasoned to the same degree.
Do you have thoughts about how Berkley's thought about the loss picking of those years, what's been happening in those years, and more maybe some broad industry thoughts around how long the industry is going to be fighting and figuring out what happened in those post-pandemic years?
I think different market participants are in different places. Different organizations chose to focus on inflation, in this case, particularly social inflation at different moments in time, and different organizations took different steps to respond to that. We were one of the companies that identified the issue earlier and certainly started speaking about the issue in a very public manner early on as well. In addition to that, we tried to take action through rate, along with terms, conditions, selection, et cetera, in a timely way. Since, call it 2018 or so, we've taken in the aggregate ex comp about 75 points of rate for the portfolio. So long story short, for us as an organization, I think that we are in a good place. I think that we should not declare victory prematurely.
I think we should not be assuming that inflation, social inflation in particular, is not going to continue to be an issue. There's a lot of evidence that would point in the direction that it continues to be an issue. More specifically, around the 2022 and the 2023 year for us, I think we feel like we're in a reasonably good place. As far as just going to the macro again, I think the places that are going to create the biggest issue for the industry overall for the more recent years is going to prove to be auto, some components of professional liability, and excess and umbrella, particularly with the auto exposure feeding into that.
Particularly in auto, is that a frequency issue or a severity issue with nuclear verdicts and whatnot?
I would suggest it's a frequency of severity if I can merge your two points together into one. And that's just being turbocharged by a legal environment that is, quite frankly, just a reflection of a social mindset. And then if there's not enough pushing on that, then you have something called litigation funding, which is just dumping kerosene on a fire. I think that it's becoming more of an area of focus. And I think you're going to start to see more and more people start to have conversations around some type of tort reform.
I just want to remind everyone that if you want to ask Rob a question, you can just signal me and I'll call on you. But let's go to another corner, and that's not significant in the Berkley portfolio, but there's a lot of questions over the past few months or maybe a little longer than that. Voya, Everest Re, and Cigna have all announced adverse experience in medical stop loss.
Yes.
R. Berkley is a participant in that market. Can you talk a little about what's going on and what your experience has been and why you think some are having problems and some may not be?
I think it's pretty straightforward that people underestimated loss cost trend, particularly around the medical piece, which is what they're obviously focused on. For us, we have been vigilant and trying to stay on top of that. A huge percentage of the medical stop loss business we write, we actually have a captive structure in place. So our alignment of interests with those that we're writing business on behalf of is different than the traditional model that you're referring to. Yes, we do write some traditional business, but last year, we were, quite frankly, shrinking that business a bit as far as exposure goes because we were not happy with the pricing. So I think what's also interesting here is how this is a leading indicator for perhaps other product lines. So we've talked about in the past that being workers' compensation.
And if you look at what the medical trend is that stop loss business is grappling with and how they have not kept up with this steepening trend, what does that mean for medical costs and other product lines as well? So when the day's all done, I think we're looking forward to a change in that marketplace. I think there are several market participants in the stop loss space that are licking their wounds, and this has not worked out as they expected, and that will likely create an opportunity for us to lean into.
All those companies I mentioned have said that they either are exiting or have raised prices significantly in entering the 2025 year.
We did see a firming in the stop loss market at one point.
Will this be an opportunity for Berkley to take some care of that market, and do you want more of it?
Under the right circumstances, we're very pleased to write more.
Okay. So away from the underwriting, let's move to investing. Obviously, you know, I would call W. R. Berkley something, I don't know, maybe you call it that, but I feel I've heard for myself, total return company. That it's not just.
We focus on total return.
Total return, and as that's the case, you've shaped the investment portfolio differently than some other companies. One of the things that is notable is that Berkley has a much shorter duration of its portfolio. In fact, I think even though this is probably a pejorative sort of sign, the mismatch between the liability duration at Berkley and the asset duration is wider probably than any other company I cover, which has obviously facilitated less mark-to-market losses for the company, but interest rates are going up and the curve is steepening. How does the portfolio feel in a higher interest rate environment, and how long would Berkley consider going in duration under the right circumstances?
So maybe just to throw some numbers out there to dovetail with your comments, Josh. So the short answer is it feels pretty good. That aside, the average duration of, or life, if you will, I shouldn't use duration because of the backing out of the interest rate impact, the average life of our loss reserves is just inside of four years. Our duration on our investment portfolio at the end of the fourth quarter sat at 2.6 years. So it was 2.4 at the end of Q3. So we've nudged that out. We continue to watch and opportunistically are very open to taking that duration out as we see the yield curve start to take more of a traditional shape. And from our perspective, it has been an opportunity for us as an organization and by extension for our shareholders. When the day's all done, it's pretty straightforward.
If you look at our investment portfolio and you think about the opportunity, the reality is that our domestic book yield is, call it 4.5% or so. We got a new money rate of about 5.25%. Our cash flow continues to be just inside of $4 billion for the 2024 year. And you can see that the new money rate, along with the strength of the cash flow growing the investment portfolio, that tells you where that's going. So why does it, how do we feel about it? We feel like the investment portfolio and how it's positioned and its prospects are likely going to continue to drive growth in investment income and ultimately profits.
In terms of the move where it's from 2.4-2.6, that's putting its new money being put at a higher point on the curve than the previous cash flows. Are you taking some gains and redeploying them? What's the math?
It's primarily putting new money to work, and, you know, obviously, the portfolio is constantly turning over, particularly getting out of short-duration is, so we always have it turning over along with the strength of the cash flow. I think we took a couple of gains, but in the scheme of the portfolio, it's not material, not consequential.
Additionally, in terms of differences with some of your peer companies, I mean, Berkley's over time allocated a much larger proportion of its portfolio to alternative strategies, which have paid off over time in book value growth, both from mark-to-markets and through realized gains over time. You said as interest rates went higher, your appetite for some alternative strategies might be less because you're making so much money on traditional bond yields. Has the market changed? I mean, we're in quite a bullish market for equities right now. Is there an opportunity out there for deploying more cash into alternative strategies?
You know, ultimately, it's risk and return, and right now, given what you can achieve in the public debt market, it's a pretty high hurdle from our perspective to really want to pivot or lean more into alternatives at this stage, so right now, we are very happy, very comfortable with the fixed income public security alternative. We are not a meaningful player in private credit, just to clarify, just want to make sure there's no misunderstanding there. We have a view on private credit, and there are a lot of question marks around that, so when the day's all done, Josh, to answer your question, we think at this stage, from a risk-adjusted return perspective, we are happy with the opportunity to participate more and more in the fixed income market.
There's obviously legacy deployments. Not that it's been by any means terrible, but the performance of the alternative portfolios is weaker than the long-term history, especially relative to the market in 2024. Where are the investments generally concentrated that have had less response to what's been a pretty good take for risk-taking investors?
I think the piece that you're probably focusing on is, and I think we may have touched on this during our fourth quarter call, would be under the category or banner of our funds that we participated. And there was one private equity fund that took some marks, and that was just the reality of the situation. Do we see more of that coming based on what we examined? We don't see more of that coming. We think we're in a good place. Do I think the alternative opportunity for us outside of funds remains real and vibrant? Yes. Do I think that there will be gains that will be recognized over time? Yes.
Perhaps to answer the question that you asked on occasion, even though you didn't ask it this morning, do I think our balance sheet truly reflects the full value of some of the companies we hold? The answer is no, I do not think so.
We'll get to that. I want to touch just upon the arbitrage portfolio for a second.
Yes, sir.
So in terms of the alternatives, the broad categories, investment funds, arbitrage.
Yeah. I mean, I think that because of the name of the risk arbitrage fund, it can be a bit of a misunderstanding. What they do there is almost fully hedged and is really an alternative to short-term investments or cash. So it's really an alternative to short-term investments or cash.
And given, I mean.
But the IPO market seems to be maybe unfreezing and the interest rates are higher. Is that a better marketplace for the type of investing that the internal arbitrage portfolio team does?
Certainly, if we see an uptick in M&A, that is a good thing for arbitrage. And certainly, if we see an uptick in IPO activity and just an uptick in activity in the capital markets in general, but particularly IPOs, that is a very good thing for the D&O market. Obviously, the D&O market has been going through some challenging times on the heels of the flurry some number of years ago of a lot of activity on the IPO front, along with the SPACs and so on and so forth. That party came to a screeching halt, and that has put additional pressure on the D&O market.
So let's talk about the understated economics of the portfolio and mark-to-market. I mean, your chairman, certainly, this was, I think, a hobby horse for him for the people that the balance sheet does not reflect our economic value. I think he said that many, many times. There was to you, Josh.
Not just.
I've heard it too. In terms of thinking about the, obviously, there was a very large real estate transaction done a few years ago where Berkley was a sizable gain. That doesn't have to be the only one, but is the scale of the misvaluing because of the conventions of accounting similar to where it's been in the past? If it was understated 10 years ago, is it understated to the same degree now? Or have there been enough transactions where the magnitude of that mispricing of that accounting is doing for the book is different than it was today?
The answer is I'm not inclined to want to put out a specific number, but it is, in our opinion, consequential. Is it exactly what it was in the past? I'm not going to draw a specific comparison, but it is consequential. That having been said, as a percentage, the business has grown considerably since then. As a percentage, it may be a smaller percentage on a dollar basis. It's in a similar ballpark.
Largely, these mis-marks would be real estate transactions, I feel, which are difficult to mark unless you have an actual price in the marketplace. What is Berkley's appetite for deploying more capital into illiquid real estate currently?
You know, we invest in real estate over the past few years. It's been much more around multifamily in particular and a few other niche areas. But, you know, we don't have this target, if you will, that X% of the portfolio needs to be in this or that. It is truly opportunistic.
Someone comes to you or you find a unique investment opportunity to say, "We prefer to deploy into that"?
I'm not sure. I'm sorry.
Like, just a transaction comes that looks particularly attractive and say, "Well, this is unique. Let's put some money to work here.
We don't feel as though that we have any constraints. If we think it's a good risk-adjusted return and it makes sense for the organization, then we are very happy to entertain the conversation.
Let's talk about capital deployment. Obviously, Berkley has been a regular payer of special dividends and do a regular quarterly dividend. Also, the company buys back a lot of stock, sometimes just both at the same time. As a specialist, I've never completely been satisfied to understand the capital model.
I suspect you're not going to be satisfied.
But that might be the case. But in terms of what are the, you know, what are the things that this should be a time for buybacks, this should be a time for special dividends? How do you evaluate those two things? Obviously, the stock trades where it does, but some people argue it's expensive. Some people would say, "Look, the long-term return justifies it.
Some would say it's a bargain.
Some would say it's a bargain too?
At least one. So I guess the answer, Josh, let me try and answer it to the best of my ability. The business today is generating capital more quickly than we're able to consume it. Our first choice is to put the capital to work in the business. We would love to find opportunities to put the capital to work. But going back to the conversation earlier, we're generating returns in excess these days of 20%, and we're not able to grow the business in a responsible way in order to consume that. So it's also not lost on us that the capital doesn't belong to us. It belongs to the shareholders.
So to the extent we have the capital we need, plus a cushion for the unforeseen event, whatever that may be, then anything above and beyond that, we're going to be looking for ways to return that in the most efficient way to shareholders. There are obviously three clear levers that we can pull on. One is share repurchase, two is debt repurchase, and three is through dividends. At this stage, given how the balance sheet has been structured, particularly around debt, trust preferred, et cetera, et cetera, we are not inclined to want to tinker with that part of the balance sheet. So that really leaves us with two. As far as share repurchase goes, we have a view as to what the true value of the business is, putting aside all the cockamamie stuff the accounting profession, no offense, Rich, requires.
And we also have a view as to what the earnings power of the business is over some period of time and how we think it's appropriate to discount that back. So that, in so many words, is how we think about or approach the conversation around share repurchase. And once we wrap our head around that, any surplus of capital beyond that, we're going to look to return through what we would define as a reasonably efficient manner, that being dividends. We are not inclined to dramatically shift our regular dividend level. We have for the past, seems like forever, raised it a penny at every annual meeting, but we're not going to take that through the roof because no one knows what tomorrow will bring. So our preference is to use the special dividend time to bless you.
There's actually a fourth lever. There's M&A, which Berkley has been very, very.
You know, we're cautious and cheap.
Right. That makes sense. But at the same time, also, when you want to start new businesses, you start them. You know, you acquire talent rather than acquiring businesses.
That has been our preferred approach, generally speaking, and it's very simple. We just think it's a much more well-controlled approach to growing your business. There are very few, in my opinion, one person's view, M&A transactions that occur in this industry where if you get the acquirer, you wake them up in the middle of the night, you put a spotlight in their face and say, "So you're happy you did the deal?" More often than not, if they could do it all over again, they wouldn't do it. There are exceptions, but they are the exception, not the norm, in my opinion. For us, if you subscribe to this whole concept of risk-adjusted return, if you're willing to be patient, our experience is building it from scratch is a much more controlled way to approach building a business.
Not that I do this on a regular basis, but if I go to your website and I go to look at the Berkley business, there's always about 50 or 60 Berkley businesses at any given time, and you're always starting new businesses, but the number stays around like 50 or 60 businesses. Are the businesses being sort of glommed together or something's you decide it wasn't the right thing and we.
We rarely will step away from something. Sometimes we'll say that, you know, these two businesses overlap and we have a change in leadership, and maybe it makes sense for them somehow to come together. But that is not the norm. That would be the exception. By and large, you know, our, if you will, count of companies, which sits at 59 today, has been gradually growing over time, and it's, again, more the exception that that would reverse course.
In terms of those 59, how many are in the greenfield sort of category where you, as an incubator of talents and ideas, at its early stages and you'll see where it goes?
So, you know, we have several businesses at this stage. I mean, I just to be very frank, as always, Josh, from my perspective, essentially every one of our businesses has meaningful opportunity under the right circumstances to grow and grow dramatically in scale. So do we have a handful of businesses that are earlier in their life cycle? Absolutely. Including probably I'll flag the business that we're truly just in the stages of rubbing two sticks together to try and get it going. And that is we just are in the process of opening a branch in India. But oftentimes the recent announcement of a new business is what gets the attention. But some of our most significant growth is coming from businesses that have been around for five, 10, 15 years or more. Every one of our businesses has a great opportunity if the market conditions present themselves.
None of our businesses within their respective markets have such market share or market penetration that there isn't opportunity for them to grow considerably again if the planets and stars line up. So I appreciate your question about some of the businesses that are earlier in their life cycle. That having been said, I think that the opportunity is really across the board, not just with the younger businesses.
I'm going to take it to please the crowd because nobody seemed to have a question. They were scribbling the whole time, but it would be the last chance if anyone has a question. I think that we're going to call it here then. Thank you, Rob.
Thank you, Josh.
Richard, Karen(uncertain)