Sculptor Capital Management Inc (SCU) 2014 Q1 法說會逐字稿

Good morning, everyone, and welcome to the Och-Ziff Capital Management Group's 2014 first-quarter earnings conference call. My name is Janeda, and I will be your operator for today. At this time, all participants are in listen-only mode. (Operator Instructions).

I would now like to turn the call over to Tina Madon, Head of Investor Relations at Och-Ziff. Please proceed.

Thanks, Janeda. Good morning, everyone, and welcome to our call today. Joining me are Dan Och, our Chairman and CEO; and Joel Frank, our Chief Financial Officer and Senior Chief Operating Officer.

As a reminder, today's call may include forward-looking statements. Among other things, these statements reflect management's current view on assets under management, the capital flow environment, expense levels, financial performance, investment opportunities and strategic business priorities, many of which are inherently uncertain and outside of our control. Och-Ziff's actual financial results, investment performance, and assets under management may differ, possibly materially, from those indicated in these forward-looking statements.

Please see our 2013 Annual Report for a description of the risk factors that could affect our financial results and our business. The Company does not undertake any obligation to publicly update any forward-looking statement, whether due to new information, future developments or otherwise.

Today's call -- during today's call, we will be referring to economic income, distributable earnings, and other financial measures that are not prepared in accordance with US GAAP. Information about and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, which is posted on our website, www.ozcap.com. Furthermore, no statements made during this call should be construed as an offer to purchase shares of the Company or an interest in any Och-Ziff site.

Today's call is being recorded and is copyrighted material of Och-Ziff Capital Management Group LLC. Telephonic and webcast replays will be made available later today. You can find the details for both on our website.

With that, let me now turn the call over to Dan.

Thanks, Tina. Good morning, everyone, and thank you for joining us. This morning, I'll review our year-to-date performance and our assets under management. I will also update you on our capital flows, and what we are hearing from our fund investors. Lastly, I will touch on the investment environment we are seeing. After that, Joel will take you through our financial results, and then we will take your questions.

The first quarter of this year was marked by challenging equity market conditions and increased volatility globally. And these conditions persisted in April. An important contributing factor to the current environment has been the US Federal Reserve's tapering of its bond-buying program and related actions, which has reduced liquidity expectations in the broader market globally. Changes to liquidity expectations affect the equity markets in ways that can be difficult to anticipate. Early this year, we saw similar effects on the emerging markets.

Towards the end of the first quarter, and again in April, our long/short equity portfolios underperformed. We attribute this result to a widening of the basis, as our long positions underperformed, although short positions generally performed in line with the markets. However, there were no company-specific events or catalysts that drove this underperformance.

We used the dislocation in the market as an opportunity to adjust the positions within each portfolio, and we have begun to modestly reduce our exposures. We are confident that we are balancing the risks with the potential for returns on our long positions, and our outlook for the opportunity set in event-driven equities generally remains unchanged. Our performance and our credit strategies remain strong through April, and we continue to find interesting investments, although our overall positioning has gradually become more cautious.

As always, we actively managed our exposures as market conditions evolved. Our stringent and disciplined risk management and our investment processes are unchanged. We continue to maintain highly-diversified portfolios. We have a 20-year history of consistently protecting capital and generating profits for our fund investors. We view these attributes as key elements of our competitive differentiation, and we believe that we are well-positioned to create substantial incremental value for our fund investors.

We are pleased with the progress we have made towards our strategic objective of becoming a multiproduct alternative asset manager. We will continue to focus on developing solutions that help our clients meet their investment objectives. This enables us to grow and diversify our business in a way that is beneficial to our fund investors, shareholders, and employees. Our capital net inflows and growth in assets under management have been strong year-to-date, with solid momentum across all platforms.

The tone of the conversations we are having with investors continues to be very positive. We believe that investors view alternative asset managers as increasingly important to achieving their investment objectives in both their equity and fixed income portfolios. As a result, we think that demand will continue to grow for managers that have global reach, offer a diverse range of products, and can create customized solutions for their clients. We view this trend as a substantial growth opportunity for our business, and believe that it will result in meaningful new capital allocations to us over time from investors globally.

Now let me turn to our assets under management. As we announced this morning, our assets under management as of May 1 totaled $43.5 billion, increasing $3.3 billion or 8% from $40.2 billion on December 31 of last year. This increase was due to approximately $3.6 billion of net inflows, including $590 million of CLO assets, partially offset by $290 million of performance-related depreciation.

Our year-to-date net inflows through May 1 are the highest for this period that we have experienced since going public in 2007, and are reflective of the growing diversification of our platforms. We experienced strong net inflows into our multi-strategy funds, as well as into our dedicated credit and long/short platforms. Additionally, we successfully completed the first two closings of our third real estate fund, raising $950 million through May 1.

Across all our platforms, we have continued to experience high demand from current and prospective fund investors globally. Pension funds and private banks were the largest contributors of year-to-date net inflows, and we anticipate that the momentum we have of these and other investors, both current and prospective, will remain strong.

Now let me turn to our funds investment performance. Year-to-date through April 30, our Master Fund was down 0.9% net, our Europe Master Fund was down 1.3% net, and our Asian Master Fund was down 9.2% net. We are incrementally more cautious on investing in bonds globally, as macro economics and political uncertainties persist. However, as I mentioned previously, our outlook for the opportunity set in event-driven equities remains generally unchanged.

We are active in our credit-related strategies and see a number of new investment opportunities in real estate. Across all our products, we continue to adhere to our research-driven bottom-up investment process, and we made measured in our investments with a focus on protecting capital and generating consistent positive absolute returns.

With that, let me now turn the call over to Joel, who will take you through our financial results.

Thanks, Dan. This morning, I'll discuss our 2014 first-quarter results and provide some perspective on how we are thinking about expenses for the second quarter. For the 2014 first-quarter, we reported GAAP net income of $24 million, or $0.14 per basic and diluted Class A share. As always, a discussion of our GAAP results is included in our press release for your reference.

Now let's turn to the details behind our 2014 first-quarter economic income, beginning with revenues. Management fees totaled $155 million, 6% higher than the 2013 fourth-quarter. From October 1 to January 1, our assets under management grew by approximately $2.8 billion or 7% to $40.6 billion. From January 1 to April 1, our assets under management grew another $2.1 billion or 5% to approximately $42.7 billion. Our average management fee was approximately 1.51% for the quarter compared to 1.52% for the 2013 fourth-quarter. As a reminder, we anticipate that our average management fee will vary based on the mix of products that drive the growth in our assets under management, and therefore, will fluctuate over time.

Incentive income was approximately $59 million during the first quarter. This amount was primarily attributable to distributions to cover tax liabilities on incentive income that has been accrued but not realized by some of our funds, reflecting the strong investment performance in those funds. The remainder was mostly due to crystallization of incentives related to longer-term assets. I'd like to highlight that our recognition of incentive income during the first quarter is reflective of the expansion and evolution of our business from being a multi-strategy hedge fund manager to a multiproduct alternative asset manager.

Now let me turn to our operating expenses. Comp and benefits totaled $29 million during the first quarter. Of this amount, salaries and benefits are $26 million, a 7% increase from the 2013 fourth quarter, due to our hiring activities globally. First-quarter comp and benefits also included $4 million of bonus expense. Salaries and benefits were 70% of management fees in the first quarter. We expect this ratio to continue to be approximately 16% to 18% of management fees for the second quarter of this year.

Now turning to non-compensation expenses. Non-comp expenses totaled approximately $29 million in the first quarter, a 10% decrease from the 2013 fourth-quarter, mainly due to the recovery of expenses we incurred to launch our third real estate fund, as well as a net decline in professional service fees. Non-comp expenses totaled 19% of management fees in the first quarter. We expect this ratio to remain in the range of 19% to 21% for the second quarter of this year.

Our 2014 first-quarter effective tax rate was 21%. We estimate that this rate will be in the range of 20% to 25% for the second quarter of this year. As always, I want to remind you that these estimates are subject to many variables that won't be finalized until the fourth quarter of this year, and therefore, could change meaningfully.

Our 2014 first-quarter distributable earnings were $128 million, a $0.25 per adjusted Class A share. As you saw in our press release this morning, our dividend for the 2014 first-quarter is $0.23 per Class A share. As we typically do, we use cash to fund items related to the operation of our business.

In closing, I'd like to emphasize the repeatability of our returns over time and the value of the resulting strength of our performance track record. While our month-to-month returns may vary, we have a 20-year history of generating consistent positive absolute returns and creating significant profit and value for our fund investors. Our track record and the quality and consistency of our investment process for each of our platforms remains the single most important criteria to current and prospective fund investors in allocating capital to us.

We think these attributes create sustainable growth momentum in our assets under management, not only this year, but in subsequent years as well. Investors continue to demonstrate a high level of interest in our platforms, and we believe we are well-positioned for continued strong asset growth.

As our assets under management grow and we generate consistent absolute returns, as we have done historically, our management fees and incentive income expand. As we expand our product platforms, our ability to grow assets increases, as does the diversification of our revenues. Because our fixed expenses have been low historically relevant to our revenues, our business has been highly profitable, with the majority of any revenue growth flowing through to our bottom-line. We firmly believe that this combination of factors will drive powerful earnings and dividend growth over time for our shareholders.

With that, we will be happy to take your questions.

(Operator Instructions). Dan Fannon, Jefferies.

I guess just, Dan, if you could talk about the interaction you're having with your clients today, following some of the more volatile performance. And is the frequency of communication picking up? Or are you getting more questions about kind of the strategies? So I just want your general thoughts in terms of that communication.

Sure. Look, we're quite open about the fact that over roughly a six-week period, we did underperform, particularly in the event-driven equities area. On the other hand, we've got a 20-year record of generating very strong, consistent absolute performance. Our clients know that we are very, very driven to do that.

The dialogue that I'm having with clients really hasn't -- has not changed dramatically. It continues to be about where do we see opportunities? What are the areas of Och-Ziff that they can utilize? We always say that one month and one quarter is not the key, but if you look at the flow numbers, whether it's for the -- what we announced this morning or since the beginning of the year, we think, more than ever, clients recognize what we provide; they understand the multiproduct nature and how that's creating opportunities today.

And I guess just thinking about the private bank channel, in particular, which has been a fast-growing area for you, it seems that's a bit more fragmented. Granted, you deal with the gatekeepers, but wondering how you view the stickiness of those assets over time versus, say, the traditional pensions or more institutional-like clients?

Well, historically, they have been very sticky. Don't forget, for anyone in our position, we look at the total. So we look at the total we have from a private bank. And what we care about is on a monthly, quarterly, and annual basis, what are those flows? If -- on an underlying basis, it's like a mutual fund. If on an underlying basis, two clients come out and four clients come in, we focus on the net.

But historically, they've have been quite sticky. They really understand -- that's very important to us. We will not participate with a private bank unless we think that the people doing the work at that bank really understand what we do, really do due diligence, really focus on our transparence reports, and communicate with their FA's. So, it's not -- look, it's relatively new; it's not as old as the institutional market, but we are very confident in that channel.

Great. And then just one more, if I could, please, on the real estate. I guess, is there a goal for the ultimate size of that fund? And a time period for which you think it might be fully closed?

No particular goal. Obviously, we are going to raise money and we'll limit it to what we think our capacity is and what we can invest in. But, obviously, there's growth in that business. And whether it's getting this fund to be bigger or future opportunities, we will continue to look at that and grow that business.

We look at real estate as a platform, as an investment platform, and as a key business, not just as a fund. So, obviously, real estate, Oz Real Estate III is in process right now. But number one, the real estate group is very important to a lot of what we're doing on the credit side. There's no doubt that both in the US and Europe, the synergies between our real estate group and our structured credit groups have been very important. And we think that will continue. And we think that there will be opportunities to do other things in those platforms.

Great, thank you.

Thank you.

Bill Katz, Citi.

Thanks very much for taking the questions. I guess the first one is just to sort of challenge a look back on performance. Look back over the last couple of months, I think the returns are a bit more choppy relative to your 20-year track record, which is quite notable. So I guess the question ultimately is, as you build out your size and your diversification, is there any risk to that value proposition a little bit, and maybe we are starting to see that? Or is it really just the volatility implied by some liquidity constraints?

We don't think that what occurred had anything to do with our size. And quite frankly, diversification is a good thing. At the end of the day, our longs underperformed, primarily in the event-driven long/short area in all three geographic regions. There were some substantial gyrations in the markets. And that's not an excuse; that's a statement of what occurred. And we did not do as well during that six-week period in that one area as we expect ourselves to do.

So, we are not okay with that. However, we are focused on turning that around and moving forward. And as we always do in our portfolios, we don't look at where were we yesterday and what might we have done; we look at where are we today and what's the opportunity going forward? And we do feel very good about what we have and how we are going to perform.

Okay. That's helpful. Second question is, there's been a lot of focus on some of the investigations that's going on right now in Libya and the Congo, the two areas of focus for investors. Can you sort of step back and walk us through maybe how we should be thinking about any regulatory concerns, what they might be focused in on? And what kind of process you have in place to that dissuasion that concerns this?

Obviously, the organic growth is as best it's ever been, so investors seem to be shrugging it off. Your LPs aren't, but the market is and some sort occurs has sort of trying to lay between those two dynamics.

Although we appreciate the question, we understand why you're asking. However, obviously, you know this is a continuing investigation, and we are limited in what we can say. However, with that said, our investors -- we have constant dialogues, as Dan says, with our investors, there are continued dialogues. Most of the focus is around what can you do for us, our performance, et cetera. And we are as transparent as we can be with them. So I think -- in terms of the investor front, again, continual dialogues, which we'll continue to do. And again, we are very limited in terms of what we can say in anything else.

Okay. So just one last one from me and also thank you for taking my questions. How do we think about now sort of the modeling aspect of performance fees? I guess part of it was other portfolios. And as you expand, any way to sort of think about now how locks play out or from a quarter-to-quarter perspective, to help us try and get our precision down in modeling?

Well, to the extent we can, you know we will always give you guidance on the longer-term assets and when there may be a maturity date and so on. In other cases, where we have longer-term assets, it's a little bit harder to predict. It's based on the end of the investment period and selling off some of those assets. So it's a little bit hard to predict. But like in any case, when I'm able to give you more guidance, I will try to do that and be helpful.

And in terms of our other businesses, we're always thinking about being more transparent. That's always a dialogue. And as we get bigger and as we think through that process, we'll try to give you more information.

Okay, thank you for taking my questions.

Ken Worthington, JPMorgan.

I think you'll probably see a theme to all these questions. So, Och-Ziff has a reputation of being able to effectively hedge the downside. I think in the past that you have effectively used cash to help manage risk. And I believe that you pursued some sort of risk overlays to help manage risk. How are you thinking about the use of those in the current market environment?

Obviously, you just reported cash; you still have a 0% cash position. But again, like in the past, you've used it more. And then any comment on sort of risk overlays and if they've been less effective and maybe why.

Our risk management process is a combination of a number of different things. And you did just refer to some of them. We do look at overall risk that we see in the world, overall risk that we see in financial markets; overall level of financial markets, credit spreads, volatility, expectations. And that's relevant from the top down in terms of our overall sense of overall exposures.

We are also very focused from a bottoms-up, what are the opportunities in each area? Where do we think we can drive performance? Where are the relative opportunities? And none of that has changed as a result of what we saw over the prior six weeks. And it's not going to change going forward. We did say that we are modestly more cautious on the investing environment, I know there are some things going on that are a little bit different than where the world was four to six months ago.

As a general matter, growth in the first four months of the year globally was a little bit slower than expectations, and we think that that's relevant. We did refer to the fact that with the Fed tapering, that is a reduction in expected liquidities in the market, and that's always something to be conscious and careful of. I think we saw emerging markets were the first thing to really be affected by that, and hence, that's a focus.

But we are not changing anything about our methodologies and process. Quite frankly, we think that they are working. Now in other words, we did underperform, and many sectors that we are involved in did get hit and did go down. And that can happen. The question -- when that happens, are they permanent losses of capital? Or do they give you opportunities to readjust? Do you think it's mistakes and what you've done, or creating opportunities?

And we balance those things. So sometimes these dislocations -- you have to remember, sometimes dislocations are what create the opportunities for us. But we do want to be clear. We did not do as well in that event-driven equities area during that roughly six-week period. And, if anything, that's -- that drives us a little bit harder.

Great. Sales. They were really good this quarter. In terms of the sales cycle, how long is it these days? And maybe how has the sales cycle changed from prior to the credit crisis? Is it taking eight months of dialogue to kind of close business in existing products? Is it taking two months? Is it a year-and-a-half? Like, you're driving really good sales. How long is it taking to actually close these -- this business?

Well, if you ask how long versus before the crisis, the number one difference is that a lot of our investments before the crisis came from fund to fund, as you know from the allocations. And so that was, for us, that was a shorter process, because they were investors with us, and then, hopefully, each month and each quarter they would add. And if that underlying investor took them one month or six months or two years, it didn't really make a difference to us.

These days, as you've seen from the numbers, which Joel can give you, if someone wants to get them, the allocations tend to be more direct. And that's -- we think, overall, that has benefits, but it means that our process -- however, let's remember -- those are constantly ongoing. So there are investors that take several months; there are investors the take several years.

We have investors, particularly internationally, who we first met before the financial crisis, and they've recently done things with us. That may be because they've changed the way they are looking at hedge funds; that may -- in a lot of cases, because it changed the way they are looking at Och-Ziff and what we do. So it can be all over.

I think the key is that, more than ever, investors understand what we do here, why it's a value to them, why this idea of being a multiproduct solutions provider is very good for them regardless of where we are. It strengthens all of our products and all of our capabilities, and the abilities of the areas to work together. If you never invest in any of our real estate products, you still benefit if you're in the multi-strategy funds.

If you never invest in our European products, you still benefit from the fact that we have it. We have something that's unique to our culture, and something that's very important in our multi-strategy funds for 20 years. And it's become very important as a multiproduct alternative manager over the past 5 to 7 years.

Yes. And I think that's a very important point in relation to a longer due diligence process gives them the ability to really understand everything Dan said -- from soup to nuts, who we are, how we do it, and what the capabilities that we have are. So I think that process being longer is actually a benefit to us.

Okay. Great. And then just lastly, in terms of the incentive income -- and this is for Joel -- you highlighted the tax distributions and also the longer-term investments. When we think about the tax side of it, I assume that's going to be a first-quarter thing that we'll see more often going forward. Was that the majority of it? Was it a smaller part? I'm just trying to size it so I can think about 1Q's and 2015, 2016 and 2017, and so on.

I mean, it's a combination of it, but most of it relates to the longer-term assets. What happens, obviously, over a period of time is we've generated a lot of earnings, and obviously, the distributions relate to the incentive generated from that. But it's more related to the diversification of our business, the growth in our business, timing changes. You know, obviously, the majority of the incentive is still year-end. However, what this shows you is different types of products, different structures.

So it's really more related to the longer-term asset. And as I said to Bill earlier, as we can, and if we can, give you more guidance than that, we will try to help you model that out.

Perfect, thanks. No, the comments are very helpful. Thank you very much.

Robert Lee, KBW.

First question is really on capital deployment -- excuse me -- capital management. I mean, understanding that the structure is very efficient for distributions, and clearly, that's what everyone and LPs are focused on. But I mean, to the extent your share count is growing at about a 5% rate in the last couple of years on each year, that is some headwind to kind of growth of the distribution. So how should we be -- what's the appetite or possibility of actually deploying some of the incremental cash generation into taking care of some of the share count growth? Or is that something you think could be a good use of cash?

You know, it's something that we talk about. We have no plans to do it. We think about, at all times, how to use cash. And we try to think what the most beneficial way is for our shareholders. And, of course, now obviously, that's a consideration, but that may not be the most optimal way to benefit our shareholders.

So it's a consideration; it's not something that we're going to do anything about at the moment. And we will continue our processes of thinking about what is best for our shareholders and how to use that cash.

Okay. And maybe this is really, I guess, another way of asking questions that some others have asked. If we think of the credit funds, the real estate funds or some of the longer-term assets where you've had good fundraising, and it looks like -- and, I think, good performance, is there a way of getting a sense of what's kind of the -- for lack of a better way, kind of the incentives that you've generated that clearly haven't passed through the P&L?

You know, maybe it's kind of almost an accrued incentive concept that some of your peers do have or disclosed. I mean, if I look at the credit funds with $4.8 billion of assets, which I assume is mostly kind of cost basis or investment capital basis, what's kind of the fair value of those funds right now?

It's obviously something that we don't disclose individually. As I said earlier, I will give you guidance as I can for these types of assets. We don't accrue it -- remember, our motto is cash flow, we're trying to tell you, hey, how much cash does this business generate, and what your distributions are going to be. So we'll give you guidance as we can. If disclosures change in the future based on our discussions, that will give you some help. But it will be more on a guidance basis than anything else.

Okay. And maybe one last question. The other multi-strat funds where the performance isn't disclosed, I mean, can you give us some color -- or has the performance on those in aggregate been similar to the others? Maybe a little bit below -- a little negative year-to-date type of thing? Or are they kind of a little bit below high-water marks? Or where do those stand overall?

Yes, the multi-strat funds perform pretty much in line with the Master Fund.

Great. Thanks for taking my questions.

Thank you.

Cynthia Mayer, Bank of America Merrill Lynch.

Maybe just if I could get a little more color on the flows. Your new products, like real estate, which are building really nicely, who are the new investors there? Are they primarily existing investors moving over, which I think you've mentioned in the past? Or are you reaching entirely new sets of investors because you have new products? Thanks.

Both. We have -- there are investors in this real estate fund who have invested in prior real estate products and prior Och-Ziff products. And there are investors who have never invested in an Och-Ziff product. And obviously, one of the things that we do whenever an investor comes into one of our products, we want to make sure, over time, that we can show them what the Firm is all about; the consistency of what we do in different products; and look to develop a deeper multiproduct relationship.

So, real estate benefits from other Och-Ziff investors seeing what real estate does, and other Och-Ziff products will hopefully benefit from real estate, new investors coming to real estate and seeing what Och-Ziff does. And obviously, what drives that is the client has more ways to benefit from the relationship with Och-Ziff.

And how are you positioning that fund versus other real estate funds out there?

Our real estate -- Och-Ziff real estate is similar in its plan to what we did in the prior real estate funds.

Okay. And then same thing, mix of geography. Is there any shift in terms of money coming in from clients in Europe or Asia? Or is it generally same proportion as before? Is the slowdown outside the US affecting that at all?

No, it's pretty similar. It's pretty much in line with what we told you in the past.

Okay. And then a question on expenses. Your guidance on non-comp as a percentage of revenues, I think went down a bit. And I'm just wondering, is that a function of the operating leverage in the model? Or are there some costs in there that are dropping in a sustainable way? Like, I think this quarter, you cited professional fees being a bit lower --?

Yes, I also mentioned that we did get reimbursed for some of the costs related to our real estate funds. So, I -- you know, Cynthia, just -- I think the guidance will direct you in terms of how to model that. And I'll say otherwise, it's going to be really no material changes in the near future.

Okay. Great. And lastly, I guess this is just circling back to the prior question. Have you given an amount recently on terms of the dollar amount of your three-year assets at this point?

I'll give you an idea of the longer-term multi-strat assets. That's about a little bit close to $3.4 billion in terms of the multi-strat assets. And then, obviously, you have real estate and other assets that are a little bit longer, sitting -- that runs -- that's approximately $9.5 billion excluding the CLL.

Okay, great. Thanks a lot.

Mark Irizarry, Goldman Sachs.

Today, this is Danielle Matsumoto for Mark Irizarry. Just to follow-up on the salaries and benefits, you gave some helpful color on what we should expect for 2Q. Just anything -- is that kind of a good run rate to use as a percent of management fees for the foreseeable future? Is there any other foreseeable headcount or other expense increase that we should expect this year? Is this a good run rate? Thanks.

Well, 16% to 18% is a good guidance for the second quarter. We don't expect material increases to headcount, although we will hire as we grow, as we always do. But you'll get a sense of that if I change guidance as we go forward. But right now, I think that's the right range.

Great. Thank you very much.

(Operator Instructions). Patrick Davitt, Autonomous.

I'm probably beating a dead horse here but I will try on the incentive fee again. To the extent that your credit portfolio continues to get larger, is there a meaningful portion of that now that you could consider more recurring or generated from yields, I guess, so to speak?

No. And certainly not yield-related. But I think the way you have to look at this, Patrick, is these are part of our longer-term assets. And as I said earlier, until we -- or if we change our disclosures, I'll give you more information. But until we get there, I'm going to try to give you as much guidance as I can in relation to that.

Okay. Fair enough. Thank you. And then just a follow-up on flows. If you adjust for the real estate closings and CLO's, it looks like at least the kind of core flow story around the hedge funds has been kind of tracking down pretty significantly from the first quarter, at least. I'm wondering if you are seeing a ramp-up in redemption conversations as a result of the recent volatility? Or if you think it's just normal kind of volatility that you would always see?

No. I think that's inaccurate. Because quite honestly, the real estate fund was, let's say, around $1 billion; CLO's are about $600 million. We brought in $3.6 billion in flows for the first quarter. So through May 1, that's $2 billion in our other multi-strat and other funds. So, there's no slowdown. We see inflows across all our products. And we have -- the conversations have been pretty static in terms of opportunities and people interested in investing in our products.

Patrick, the $915 million we mentioned in real estate is in the numbers for the first four months of the year, but it's not all in the number that was announced today. I think that might be the arithmetic differential.

Okay, perfect. Thank you.

That concludes the question-and-answer session for today. I will now turn the call over to Ms. Madden for any closing remarks.

Thanks, Janeda. Thank you, everyone, for joining us today and for your interest in Och-Ziff. If you have any questions, please don't hesitate to contact me at 212-719-7381. Media inquiries should be directed to Jonathan Gasthalter at 212-687-8080.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.