Carlyle Group Inc (CG) 2019 Q1 法說會逐字稿

Good day, ladies and gentlemen, welcome to The Carlyle Group First Quarter 2019 Earnings Conference Call.

(Operator Instructions) As a reminder, today's conference is being recorded.

I would now like to turn the conference over to Daniel Harris, Head of Investor Relations.

Sir, you may begin.

Thank you, Shannon.

Good morning, and welcome to Carlyle's First Quarter 2019 Earnings Call.

With me on the call today are our Co-Chief Executive Officers, Kewsong Lee and Glenn Youngkin; and our Chief Financial Officer, Curt Buser.

This call is being webcast, and a replay will be available on our website.

We will refer to certain non-GAAP financial measures during today's call.

These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles.

We provided reconciliations of these measures to GAAP in our earnings release.

Any forward-looking statements made today do not guarantee future performance, and undue reliance should not be placed on them.

These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated.

Carlyle assumes no obligation to update any forward-looking statements at any time.

Earlier this morning, we issued a press release and a detailed earnings presentation with our first quarter results, a copy of which is available on our Investor Relations website.

Let me summarize our results.

We generated $103 million in fee-related earnings and $101 million in distributable earnings with DE per common unit of $0.25.

Our distribution based on first quarter results will be $0.19 per common unit.

Today, Glenn's going to update you on several key focus areas, and Kew will provide a deeper dive on investment performance and realizations.

And then Curt will go through our results, after which we'll take your questions.

(Operator Instructions)

With that, let me turn it over to our Co-CEO, Glenn Youngkin.

Thank you, Dan, and thank you, everyone, for joining us this morning.

Carlyle's first quarter results reflect good momentum across the entire business.

The macro environment remains good.

The private capital industry is thriving.

Carlyle is meeting or exceeding the key objectives that Kew and I established for the year.

And although our first quarter realized net performance revenues were down due to timing factors, our funds continue to perform well.

We are pleased with how the Carlyle team is performing.

And this quarter's results reflect everyone's focus.

Let me hit on a few specifics.

Fee-related earnings for the quarter and their growth continue on track towards our goal of reaching $400 million in annual FRE, which we laid out for you last quarter.

That would represent nearly a 15% growth rate over 2018.

In addition, we are confident we can continue to grow FRE over the next few years by scaling new initiatives, carefully managing our global expense base and raising capital for established fund families.

Along that same theme, our FRE margin continues to improve.

We reached 26% this quarter, higher than the 22% margin for 2018 we discussed last quarter, and on target to reach or exceed our expectation for a full year 25% margin.

Kew and I remain focused on improving operating efficiency, and there is still work to do over the coming years.

We raised $6.9 billion in new capital this quarter.

Our fund investors continue to entrust us with significant capital commitments across the platform.

This is a strong start to 2019 and follows 2 record-setting years.

With $97 billion raised across the platform and against our $100 billion target, we have effectively reached our goal early, with the rest of 2019 fundraising providing upside to that goal.

Our funds performed well in the quarter, appreciating 3%.

Our net accrued carry balance grew to $1.8 billion and equates to over $5 in value per unit.

As we discussed last quarter, while we are currently generating a lower level of exit realizations and realized performance revenue than we have in the past, we believe this is nothing more than an issue of timing.

On the deployment front, we invested $3.4 billion in the first quarter.

And as of the end of the quarter, we had approximately $6 billion in our pipeline of signed transactions which will close in the coming quarters.

Growth in our Global Credit segment continues to accelerate.

Management fees grew 27% year-over-year and annualized management fees are closing in on $300 million per year compared to less than $200 million annualized just 2 years ago.

We continue to invest in this segment.

And even with the high level of investment, Global Credit FRE was up 36% year-over-year with an FRE margin that continues to move higher.

And our strategic initiatives are right on track.

Our investments in Fortitude Re and the associated investment management agreement as well as our acquisition of Carlyle Aviation Partners are performing as anticipated.

Newer organic growth initiatives like global infrastructure, credit opportunities and core-plus real estate have good momentum.

The combination of these efforts generated solid asset growth, with our fee-earning AUM growing 27% and our AUM growing 10%.

We are on track with the important Q1 milestone achieved.

We remain focused on driving results, taking advantage of market opportunities and growing the platform.

Let me turn it over to Kew.

Thanks, Glenn.

I'm going to spend a few minutes on our investment platform and how we expect realizations would trend over time.

And as Glenn noted, we're experiencing a short-term trough in realized performance revenue, and it's reasonable for investors to ask when will realizations accelerate.

There are 3 elements that ultimately determine the level and timing of realized performance revenue for the firm: first, the amount of capital our funds have at work; second, fund-by-fund investment performance; and third, the relative maturity of the investments in the fund.

Looking across these 3 elements today, we expect that realized performance revenue will ramp up starting sometime next year and accelerate significantly in the years thereafter.

A bit more color.

First, the asset base off of which we generate realizations is much bigger than it has ever been.

The deployment capacity of our organization around the world has been growing.

We have invested $62 billion over the last 3 full years.

This is more than 50% higher than the preceding 3-year period.

As a result, we are currently managing a record $222 billion of AUM.

Now a larger asset base is not meaningful if our funds don't perform, which brings me to the second driver.

Our funds are performing well and on track.

Historically, our carry funds have generated approximately a 2x multiple of their invested capital, depending on asset class and strategy.

At this point, our largest carry funds as well as our smaller but more focused fund strategies are on a trajectory to achieve multiples on invested capital in the same range as prior vintage funds.

For example, our 3 latest fully invested large buyout funds in aggregate are currently marked at 1.4x, and it's important to note that these current marks for each of the funds are in line or ahead of their predecessor fund when measured at the same point in time of that fund's life cycle.

To finish this point, let me just state that the predecessor funds for these 3 strategies are now marked at 2.1x.

So we believe there is substantial appreciation yet to come on the newer funds.

Finally, it's important to understand where our funds are currently in their life cycle.

Many of the investments in our largest fully invested funds are relatively young with an average duration of 2 to 3 years.

While the funds are performing well, they are not quite ready to generate realized carry as we typically hold most investments for 4 to 6 years.

Said differently, across our broad traditional carry fund portfolio of $80 billion of remaining fair value, investments that are 4 or more years old currently account for only 20 -- 26% of fair value, down from 41% 3 years ago.

This brings home the simple fact that our recent fund portfolios, while performing well, are not yet mature enough to generate significant realizations or performance revenue.

But in our view, it's only a matter of time.

So putting this all together, we have a larger invested asset base than we've ever had before.

The performance and appreciation of our carry funds is on track, but the average life of our investments is relatively immature.

While it is difficult to be accurate quarter-to-quarter, we expect realization activity to pick up next year and accelerate in the years thereafter.

Combining this future ramp in net realized performance revenues along with a growing FRE base gives us plenty of confidence that our future earnings will increase significantly, and we remain excited about Carlyle's future.

Before I turn it over to Curt, I think it's important to address our current thinking about Carlyle's corporate structure.

Over the past year, we've seen several firms in our peer group either announce or complete a conversion to a C corporation from their prior publicly traded partnership status.

At this point, we can say the following: we continue to seriously explore a conversion to a C corporation for Carlyle.

The benefits we've seen from the conversions have not gone unnoticed.

There are many complex operational moving parts in connection with the conversion, and we intend to conclude our thinking with a decision in the not-too-distant future.

With that, let me turn the call over to our Chief Financial Officer, Curt Buser.

Thanks, Kew.

I'm going to summarize our results and a few key metrics before we take your questions.

Fee-related earnings totaled $103 million in the first quarter, nearly 4x the $28 million in the first quarter of 2018 and up from the $90 million run rate in Q4 2018.

Over the past year, fee revenue grew $91 million, with expenses growing to only $16 million to produce the $75 million increase in fee-related earnings since the first quarter of 2018.

As a result, our fee-related earnings margin nearly tripled to 26% this quarter from 9% a year ago.

First quarter management fees of $382 million were up 33% over the past year as fee earning assets under management increased 27% to $160 billion.

During the first quarter, we benefited from $5 million in catch-up management fees consistent with the year ago level but down from the $16 million last quarter.

Transaction fees were $5 million this quarter, slightly better than a year ago but down from $25 million in the fourth quarter.

Cash compensation expense of $202 million increased 7% over the past year, reflecting in part the acquisition of Carlyle Aviation Partners.

While we expect cash compensation to trend higher as we invest in growth initiatives, we will remain focused on improving fee-related earnings and FRE margin.

G&A and other indirect expenses were $76 million in the first quarter consistent with the year ago and Q4 2018, exclusive of the insurance recoveries of $32 million in Q4.

Net realized performance revenues of $7 million in the quarter were low and are net of a $20 million clawback realization associated with our legacy energy funds, specifically Riverstone Fund IV.

This clawback obligation have been accrued for several years and is now being realized.

With this realization, the remaining exposure from our Legacy Energy Funds is immaterial.

As Kew outlined, lower realized proceeds from our carry funds during the quarter and a lower ratio of exits from funds currently realizing performance revenues also contributed to the quarter's results.

Given the first quarter results and what appears to be a slower start to the second quarter, we now expect 2019 realized performance revenues to come in below the 2018 level.

However, the longer-term prospects for realized performance revenues remain strong, and we fully expect to return to and then exceed our prior levels.

Because we realized fewer investments, first quarter 2019 realized investment income of $4 million was lower than the $19 million realized in the first quarter of 2018, which was one of our stronger recent quarters.

However, as realizations increase over time, we would also expect realized investment income to build as investments on our balance sheet have grown to $1.3 billion, materially higher compared to several prior years.

Finally, as I noted last quarter, limiting unit dilution and reducing equity-based compensation expense are important focus areas.

First quarter equity-based compensation expense of $39 million was lower than the 2018 quarterly average of $46 million, and we continue to expect 2019 annual equity-based compensation expense to be lower than 2018.

Units eligible for distributions for Q1 remain constant with year-end 2018 units.

In sum, fee-related earnings and FRE margin are improving on plan, our fundraising and deployment trends remain solid and the size of our platform continues to reach record levels.

With that, let me turn it over to the operator and we'll take your questions.

(Operator Instructions) Our first question comes from Bill Katz with Citi.

Maybe we could start with the commentary on the conversion potential.

Kew, Glenn, Curtis, your thoughts.

What are some of the remaining milestones or thoughts that are needed to sort of make that decision?

Number one.

And how is that changed with the Blackstone news?

And then underneath that, could you talk a little bit about the type of opportunity you might have under Section 754 in terms of limiting the tax implications for the first few years?

Bill, it's Kew.

Appreciate the question, obviously the interest.

Look, I'm going to stick to what we said, which is a tremendous amount of work is going on and the benefits of a conversion have not gone unnoticed by us.

We still have a little bit more work to do, but we do intend to get back to you in the not-too-distant future.

Our next question comes from Alex Blostein with Goldman Sachs.

This is Dan Jacoby filling in for Alex.

Just quickly on incentives, can you help us better understand the parameters around when current vintage carry funds are going to realize carry just like if there's a way to think about perhaps a percentage of capital returned or something like that?

Sure.

So let me give you a little bit of background.

About a year ago, I said that we expect the 2018 carry to be lower than 2017 but resume in 2019.

And essentially, what's happened is this is a timing issue.

Fully feel really good about the portfolio, and I think things will recover in 2020 from a realization perspective.

The portfolio remains in very good shape.

There's $1.8 billion of accrued carry.

And as Glenn said, that's about $5 per unit of value more than most of our peer set.

The funds are performing well; in fact, each of the big funds that are now fully invested are actually ahead -- or equal or ahead of the pace of the predecessor funds.

The thing that we focus on in when we choose to take carry, as you know, is looking at the return of capital in the current generation of funds.

And so we like to generally be at a place where about 50% or more of the capital has been returned.

And generally, in the big funds, they're approaching that but not quite there.

They generally end up 40%, a return on capital perspective, and so we still need some more realizations out of those funds as well as just the rest of that peer set to actually begin to take carry and to mitigate our risk of clawback on those.

We feel good about that.

And as Kew said, that portfolio is performing well.

It's just younger than really when it's right to take a good part of that, and that timing is going to come.

It's just going to take us a little bit of time.

I think 2020 second half will be a strong second half.

Got it.

That's very helpful color.

And then maybe just one last incentives-related question.

Just to clarify, when you talk about 2019 performance revenues being down year-over-year, that's for the full year as opposed to the balance of the year.

So we should think about full year 2019 performance revenues lower than full year 2018's $320 million as opposed to 2Q '19 through 4Q '19 lower than 2Q '18 through 4Q '18.

Is that the right way to think about that?

You got it correct, which is with this first quarter being low, second quarter off to a slow start.

And now we're in May, I think all of 2019, it will most likely be lower than 2018.

Our next question comes from Patrick Davitt with Autonomous Research.

I think you mentioned in the press release a negative mark in European private equity on the private side.

I'm curious if you could walk through maybe the drivers of that a little bit.

So what you might be referring to is in our realized investment income in corporate private equity.

There is a realized loss there of a couple million dollars.

That was a realization of a portfolio company at a loss.

Not a big deal of that overall fund, but it comes through as we pick up a loss.

I'm assuming that's what you're asking about.

Did I hit it right?

Yes.

Okay.

Our next question comes from Chris Kotowski with Oppenheimer & Co.

I wonder if you could talk a little bit about the performance.

You said that performance of the funds is good but -- and I realize that there's not always a direct correlation between what was in the public equity markets and your private equity marks.

But just given everything that's happened in the public markets in the first quarter, a 3% increase in the private portfolios doesn't seem that great.

And I kind of wonder if you can also put that into the context of the maturity of the funds and how you mark those because I noticed like in the fund table that you're carrying CEP VII slightly below the amount of total invested capital.

So how do you mark those early portfolios?

And how does it relate to the overall marks that we see versus the market?

Okay, Chris.

There are lots of questions in that question, but let me try to give you a sense to try to answer the spirit of what I think you're asking, which is you did note that our appreciation was about 3%, and you're trying to compare that to public markets.

I think taking a step back, understand that over the past 3 years, on average our funds have been up about 15% a year, which is tremendous performance.

More specifically, the maturity of our portfolio is quite young, and we've been adding a lot of investments recently to our portfolio.

So I just want to make sure you appreciate what that really means or the implication of that, which is the newer investments tend to be marked at cost or even below cost and the write-ups or the markups on the newer investments don't happen for sometimes a couple years as value creation builds.

And so whenever you have a lot of recent investing added to a portfolio, the overall effect is to bring down the amount of write-up and have a mollifying effect on overall appreciation, okay?

So it's important to understand beneath our results kind of what's happening, which is the recent level of significant deployment is bringing down our average maturity, and the recent marks being at cost or even below cost because that's the way we mark a brand new investment has the effect of dampening our appreciation.

Taking a step back, we do track each of our funds very, very, very closely and monitor our portfolios very closely.

And when we compare all of our current funds on the same time line as our historical performing funds, our biggest funds are right on or sometimes even ahead of the same marks -- of the marks that these historical funds had at the exact same point in time of their life cycle.

So hopefully, that gives you a little bit more color as it relates to the fact that we do believe our overall investment portfolio is performing.

It's on track.

And a large part of what you're seeing is reflective of the fact that the portfolio is relatively immature, and we had a recent spate of significant deployment which has the effect of dampening write-ups.

Two quick thoughts to add to Kew's comments.

First, if you were to combine Q4 and Q1, our portfolio appreciated better than the public indexes over these 2 quarters.

And that just shows you really the stability in terms of private mark.

Second, to just clarify on Kew's comments, often the new investments are marked slightly below cost that's fundamentally the transaction costs.

So if you take a basic example of you buy a house and you pay for closing costs and the broker costs and all of that, if you were to sell the house the next day, guess what, you're probably going to sell it at the same price you paid for it, but you're going to take a bit of a loss on those transaction costs.

Those costs are capitalized into the cost, and so that's why you end up with a day 1 mark kind of at 0.95 or something like that.

Sometimes it'll be a little bit different because it's obviously a fair value exercise.

Our next question comes from Mike Carrier with Bank of America.

Just one clarification, I think somebody asked on the CEP III like the European fund, and it sounded like that weighed on the performance a little bit.

I just didn't know if there was something specific in the portfolio that was like a one-off versus something broader.

And then the real main question is just for Curt.

You guys have done a good job of improving the FRE margin.

I know longer term, the growth in credit is the big driver there.

Just more curious, as you've been doing more and more work with the organization and with the different divisions, anything else that you guys have come up with to drive that over the next 2, 3 years higher besides credit.

So Mike, thanks for the question.

So first on CEP III, I'm not exactly sure what you're referring to.

It's -- the fund was marked at 2.3x on an overall MOIC.

It has a net IRR of 14%.

The fund is doing well.

CEP IV, which is the fund after it, and you can see this on Page 22, a 1.3 MOIC, 9% net IRR, both generally performing well, doing great.

We did have this one realization that I referred to you before.

But in the overall context of the portfolio, really not affecting the portfolio that much one way or the other.

With respect to -- please.

Yes.

No, just so you know, I was just looking at Page 4 where you guys say partially offset by depreciation in our third European buyout fund CEP III.

So maybe I misread or took it the wrong way, but that's the area that I was referring to the question.

It's just Innovation.

Mike, that's just Innovation Group, which is the one deal that I referred to.

That's all that is, okay?

On FRE margin, look, we've -- thanks for pointing out, we've made great progress, 9% margin to a 26% margin.

Our guidance remains this year at 25%.

We're very focused on it.

You can see the cost containment.

As you look at the numbers this quarter compared to last quarter, $16 million -- compared to a year ago, $16 million total increase; G&A, flat.

A lot of the comp increase is really due to Carlyle Aviation.

We're focused on it.

We're going to continue to focus really on further scale, on growing new initiatives and really expense reductions and some efficiencies.

I think over several years, we can make -- continue to make real improvement in both aggregate amounts and margin.

And I think the margins we can get to in the several years will be 30-ish percent.

I wouldn't go too high just yet, we got to actually get there, but you should see us creeping up to those numbers.

Our next question comes from Craig Siegenthaler with Credit Suisse.

I asked this question last quarter, but I want to see if I could get a little better color this quarter.

What are your plans for the Aviation Partners business?

Could you launch securitizations or long-dated funds with these assets as collateral?

And I'm thinking what client group here is really the target audience?

Is it insurance companies?

And then have you looked at any other solutions combining these assets with other products that are maybe getting a covariance benefit.

Craig, it's Kew.

Again, a lot of questions.

And let me try to address some of them, which is it's very early days, but we are pleased with not only what we bought but also the upside potential on this aviation and what I would call it a platform.

There are 2 funds that we're thinking about bringing to the market this year.

One is in early-life aircraft.

The second is more in line with what they've always done, which is mid-life aircraft.

I don't want to be specific about it because we're thinking about going into the market formally with these plans.

And I think suffice to say we're finding a lot of interest in what we can do with this platform, not only from our existing LPs but also new segments such as the insurance sector that you did quite correctly point out.

So I think it's early days.

Things are going well.

We do have a lot of plans to create a platform around this.

So I guess I should say to you be patient and stay tuned.

Our next question comes from Michael Cyprys with Morgan Stanley.

Just on FRE, it looks like that's slated to grow nicely this year.

It grew nicely last year.

I guess what sort of pace should we be thinking about as we look out beyond 2019 in terms of reasonable expectations for FRE growth?

And maybe you could flush out some of the drivers behind that in terms of new strategies versus existing.

And then just on the private equity appreciation, it looked like it's a little bit soft at an LTM basis, a little bit of a dichotomy versus the investment solutions, which has been having some very nice performance.

Just curious how to think about the dichotomy of returns and the slowdown in PE, and maybe you could talk a little about the EBITDA and revenue growth trends that you're seeing.

Michael, thanks for the questions.

So first, on the FRE margins, I'm not sure there's a whole lot more I can say in addition to what I've already said.

We're going to grow that.

I think we can get it up over several years to something approaching or slightly above 30%.

But so -- I would think that's a 2, 3, 4 kind of year cycle to kind of make that happen.

And a lot of that will be coming by further scale, expense reductions and then as we are able to find the right new initiatives to grow that.

From a scaling the business, we're in the process of wrapping up our major fundraising cycle.

We're essentially at the 100-year -- the $100 billion multiyear target.

97% of that's already been achieved.

This year, we're giving guidance of $20 billion, so we'll definitely be above that.

But I think that the pace will not be at the 2 past year record levels of fundraising given that we just raised our mega funds.

With respect to appreciation in corporate private equity, it's 3%.

Overall, this quarter, in our big buyout funds, they've done well.

But just as Kew said with a lot of the new investments that came in, especially here in the fourth quarter and the first quarter, that just kind of has a way of depressing some of those, especially when they come in at 95%, 97% of cost on day 1. But overall, feeling good about it.

Yes.

Hey, Mike.

Yes, just to answer the second -- okay, go ahead, Mike.

I'm sorry.

I was asking about the FRE.

Understood, I heard you earlier on the FRE margin.

I was just curious on the fee-related earnings, what sort of growth we should -- we could be expecting beyond 2019.

Sorry, that's what I was trying to get at.

Oh, sorry.

So we're -- we gave guidance for $400 million for this year.

We're not yet set to give guidance for out years.

As we continue to grow it, we'll be able to give you some further color.

But I think that we will be growing that over time.

And I think you can expect that, that number is going to be up and not down going forward.

And Mike, the only other aspect to your question which we should address was you were asking for a little bit of color from our portfolio in terms of broader trends related to the economy.

And what we can relay to you is based on what we're seeing in the first quarter, if you exclude the effect of FX, our portfolio's revenue growth and EBITDA growth is about in that 9% range.

So hopefully, that answers the last aspect of the question that you asked about.

Our next question comes from Glenn Schorr with Evercore ISI.

So back in September, you made a hire for -- to grow Carlyle Capital Solutions group.

Just curious on progress made and your thoughts on what we should be expecting over the course of, say, this year in things like structured levered loans, high-yield mezz debt, things like that.

Glenn, it's Kew.

Great question, thank you.

Again, early days.

We've hired some folks, and we're organically growing this capability.

It's -- it has not gone unnoticed by us that there are lots of different ways that having a broker dealer with committed capital can be very helpful in financings.

And to the extent that they can be a solutions provider in a lot of the transactions related to the activity that we have across our very broad platform, we think this is just opportunity for us.

It's early days, we are starting to ramp it up.

And as our progress develops on this front, we'll be sure to get back to you.

We've already started booking some transactions.

But given the fact that we just got this going and we're starting to build it, I think it's better for us to hang back a little bit and develop it.

And we'll -- at the right time, we'll share with you more on its progress.

Where will the revenue show up right now even though they're modest for now?

Transaction fees will be where most of the -- transaction-related fees off of that business.

Our next question comes from Robert Lee with KBW.

And so I was curious to get a sense of the LP base.

I mean you guys have always been pretty successful in cross-selling products for your LP base.

I'm just kind of curious, your current experience when you look at a new strategy kind of -- or a follow-on strategy.

Kind of what proportion of that is coming from kind of existing clients versus clients new to Carlyle?

And any updated color on your success in kind of migrating up, so to speak, the number of funds that a typical LP may be investing in.

Great.

Robert, this is Glenn.

Thanks for the question.

And I think the 3 big trends that we continue to see is that investors that comprise the vast majority of our committed capital continue to invest in more things that we do.

And in fact, you've seen the stats about investors that constitute nearly 70% of our capital commitments continue to invest in 6 or more funds.

And so that trend continues.

Just in the last 12 months, we are continuing to see growth in sovereign wealth funds, continue to see growth in high net worth investors.

The one area that, of course, has increased over the last 12 months is the participation of our insurance sector.

And that has a lot to do with the Fortitude Re deal, and so we're happy with that.

So as I said in my earlier comments, the industry is thriving.

I think that investors continue to want more and more and more private capital.

And while the whole industry is benefiting from that, we are getting more than our fair share.

So we're excited.

Our next question comes from Gerald O'Hara with Jefferies.

I hear the comments on the sort of 97% of the way through the $100 billion fundraising goal and the expectation to exceed $20 billion for this year.

But perhaps you could talk a little bit about what the fundraising looks like sort of x the main drawdown funds just kind of on a -- I don't know if run rate is the right word, but sort of what the complementary fundraising goals or expectations are outside of the kind of main fundraising cycle.

Yes.

So I'm not 100% sure what complementary is.

I think we love all the funds and put all of our effort behind every initiative that we have.

So let me just put a little color in what's in the market and see if that helps.

So we do expect over the course of the year to finish up our main European buyout fund, our latest generation of NGP.

We had a fabulous full close on our latest European technology funds, Fund IV, in the first quarter.

And we continue to make progress on our opportunistic credit fund.

We continue to make progress on our infrastructure fund, our next-generation international energy fund, And I think that all reflects what I mentioned earlier, which is the investor base that continues to really appreciate the breadth of what we do and support the new offerings that we bring.

Our outlook for the year continues to be at that $20 billion mark.

We had a great first quarter, as we said.

I think that puts us well in excess -- to about 10% in excess of where we expected to be at year-end with the $100 billion target.

And I think the best thing that's happening in the market for our investors is the continued strong performance of the funds and particularly the fact that our offering tends to meet many of their needs.

And so that all results in strong fundraising, and we'll continue to give you outlook as the year develops.

And I'm currently showing no further questions at this time.

I'd like to turn the call back over to Daniel Harris for closing remarks.

Thank you, everyone, for listening to our call today.

If you do have any follow-up questions, feel free to reach out to Investor Relations at any time.

Otherwise, we look forward to speaking to you again next quarter.

Ladies and gentlemen, this concludes today's conference.

Thank you for your participation and have a wonderful day.