Sculptor Capital Management Inc (SCU) 2014 Q2 法說會逐字稿

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

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

Thanks, Darren. Good morning, everyone, and thanks for joining us today. With 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 views 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.

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 at 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 fund.

Today's call is being recorded and is copyrighted material of the 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, I'm going to turn the call over to Dan.

Thanks, Tina. Good morning, everyone. This morning, I'll update you on our year-to-date performance and the growth in our assets under management. The momentum across our business is strong and we continue to see new opportunities to invest and grow our franchise globally.

Year-to-date through July 31, our performance reflected our ability to actively manage our capital allocations across strategies and geographies, as well as our highly opportunistic approach to investing. This was particularly evident during July, as geopolitical and macro-economic uncertainty increased, causing market conditions to become more difficult globally.

The consistency of our performance and our ability to protect investor capital are hallmarks of our approach to investing and managing risk, and are at the core of the value that we deliver to the investors in our funds. We believe that we are well positioned to create significant incremental value as we continue to execute on our strategy, diversifying our product offerings.

Our year-to-date net inflows and growth in assets under management through August 1 resulted from growth across our products and investor interest in our platforms remains high.

Globally, we believe that pension funds and other institutions will continue to increase their allocations to alternative asset managers, and that we will be a substantial beneficiary of this secular trend, as we further expand and diversify our business.

Now, let me turn to our assets under management. As we announced yesterday morning, our assets under management as of August 1 totaled $45.7 billion, increasing approximately $5.5 billion or 14% from $40.2 billion on December 31 of last year. This increase was due to approximately $4.5 billion of net inflows, including $1.5 billion of CLO assets, and $894 million of performance-related appreciation.

Our assets under management have grown rapidly, with organic net inflows year-to-date through August 1 exceeding our full year 2013 total by 46%. Private bank platforms and pension funds remain the primary drivers of these flows. But we also saw an increase from corporate, institutional and other sources.

The OZ Master Fund has experienced strong growth, with organic net inflows of approximately $1.5 billion year-to-date, coming from a diverse range of investors globally. And saw a substantial acceleration in net inflows in the second quarter compared to the first quarter.

We completed two additional closings totaling $225 million in our third real estate fund here in June, bringing that fund to a current total of $1.2 billion. The growth of our real estate business is contributing to the diversification of our assets under management. And we see a number of interesting opportunities to grow this business further, both in the US and Europe.

Our credit products have also experienced strong growth year-to-date, increasing 17% or $760 million since December 31. We completed two additional CLOs during the second quarter and have now raised approximately $4.1 billion since we initiated this business 2 years ago.

This has been an important source of diversification for us. We continue to evaluate additional opportunities to expand our credit offerings globally, both in opportunistic credit and on the long-only side.

Now, let me turn to our fund investment performance. Year-to-date through July 31, our Master Fund had a net return of 2%, while our Asia and Europe Master Funds had net returns of minus 4.4% and minus 1.7% respectively.

Our credit strategies were the primary driver of the year-to-date performance of the Master Fund, which remained fully invested during the second quarter. The positive performance of the credit strategies in our Asia and Europe Master Funds was offset by negative performance of the long/short equity strategies.

The investment landscape benefited from a recovery in the equity markets globally during the second quarter, combined with a strong increase in M&A activity. We believe this has created a substantial opportunity set in venture investing. We are also remaining active in our credit strategies, although we are incrementally more cautious in US structured credit.

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 review our 2014 second quarter results and provide some color on how we are thinking about expenses for the third quarter. For the 2014 second quarter, we reported GAAP net income of $11 million, or $0.06 per basic and $0.05 per diluted Class A share. As always, our press release includes a discussion of our GAAP results.

Now, turning to the details behind our 2014 second quarter Economic Income, beginning with revenues. Management fees totaled $160 million, 3% higher than the 2014 first quarter, reflective of the asset growth and diversification we have achieved as our business has expanded.

From January 1 to April 1, our assets under management grew by approximately $2.1 billion or 5% to $42.7 billion. From April 1 to July 1, our assets under management grew another $2.8 billion or nearly 7% to approximately $45.5 billion.

Our average management fee for the second quarter was approximately 1.48% compared to 1.51% in the first quarter. The sequential decline was due to the effect of the growth in our credit assets during the quarter.

This excludes the effect of the $1.2 billion of capital raised for our third real estate fund, the majority of which did not begin to earn management fees until July 1. 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 $14 million during the second quarter. This amount was primarily due to incentive income crystalized in certain longer term credit assets.

Now, let me turn to our operating expenses. Comp and benefits totaled $30 million during the 2014 second quarter. Of this amount, salaries and benefits were $25 million, essentially unchanged from the first quarter. Second quarter comp and benefits also included approximately $5 million of bonus expense.

Salaries and benefits were 16% of management fees in the second quarter. We expect this ratio to continue to be approximately 16% to 18% of management fees for the third quarter.

Non-comp expenses totaled approximately $31 million in the 2014 second quarter, an 8% increase from the first quarter. The first quarter included recovery of expenses we incurred to launch our third real estate fund, which was the main driver of the sequential increase.

Non-comp expenses totaled 19% of management fees in the second quarter. We expect this ratio to remain in the range of 19% to 21% for the third quarter.

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

Our 2014 second quarter Distributable Earnings were $90 million, or $0.18 per adjusted Class A share. As you saw in our press release this morning, our dividend for the 2014 second quarter is $0.17 per Class A share.

In closing, I'd like to re-emphasize the linkage between the growth in assets under management that we have achieved year-to-date from both organic net flows and performance-related appreciation. As Dan mentioned, our assets have increased nearly 14% since the beginning of the year, and approximately 24% from August 1 of last year.

As we expand our product platforms, our ability to grow assets increases, as does the diversification and stability of our revenues. As our assets increase, our management fees grow, and that growth compounds over time. This is a key driver of the expansion and stability of our revenues and in turn, of our Distributable Earnings and dividend.

We also earn incentive income annually on that expanded base of assets. Although there is some variability to our returns year-to-year, our investment performance has historically been consistent. We believe that these factors, when combined with an expense base that is scalable, as our assets grow, will drive powerful earnings growth over time.

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

(Operator Instructions) Bill Katz, Citi.

Just wondering on the real estate fund, when you turn on in the third quarter, how to think about the incremental revenue opportunity on that fund?

Then Dan, you mentioned that you continue to see opportunities globally, both hedge funds and others. Can you talk a little bit about -- so the second question will be just talk about third quarter flows were a little soft so far. So where are you in terms of incremental opportunity as it relates to that?

Bill, on the fee, that's why in the speech I said it was 1.48% because that actually excluded the effect of real estate assets which weren't earning fees. But if you use that 1.48%, that should get you where you want to be in terms of your model.

Okay.

Bill, in terms of the flows, we feel really good about the numbers and everything below the numbers. Our strategic plan has been to become a multi-product alternative asset manager by excelling in each area individually. And then making the combined package even more attractive to investors through not only the flexibility that provides, but everything else that exists at Och-Ziff in terms of operations, transparency, disclosure, etc.

We think that plan is working very well. It's all about solutions for clients; it's all about giving clients comfort and opportunity. And we believe as long as we continue to do that, we'll continue to do well.

Just one last one for me. Thanks for taking my questions. Just to play devil's advocate for a second, your year-to-date performance, up a couple of percentage points. Is that becoming any kind of focal point for investors as they start thinking about allocations into hedge funds more broadly? How is your performance stacking up relative to competition?

Our investors take a long-term approach and clearly, in the spring, we had a couple of months where the performance wasn't what we want this to be. You heard from the detail on the call today, it's Asia and Europe where we've underperformed. It's on the equity long/short side in Asia and Europe where we've underperformed.

We feel that we have very strong teams; that we've got very long histories there, over 10 years in both cases. We're very committed to the international operations. I think that as you see from the numbers, the investors are very comfortable with our long-term capabilities and how we deal with short-term issues that don't quite measure up to our expectations.

Okay. Thanks for taking my questions.

Dan Fannon.

My questions are on credit. If you could talk about performance year-to-date in the core credit strategies. Then in terms of allocations from a growth perspective, are you taking -- are clients allocating to you from their credit bucket in terms of overall assets? Or is it from their alternative bucket in terms of the potential opportunity in that asset class?

In terms of the return numbers, as you know, we don't presently disclose those numbers, although that's something that we're in discussions about.

In terms of where clients are allocating from, it can come from different areas. I think that on the credit side, number one, we're a candidate for investment from what clients call their opportunistic bucket. But obviously, a very important part of our long-term growth strategy is to access both the fixed income buckets and the equity allocations of these institutions. These are very large and permanent allocations.

That's part of the reason to provide more than one product in each area. It's one of the reasons that on the credit side, in addition to opportunistic and longer term funds, we're also focused on the long-only side. We feel that as we create more products with the excellence that we require, institutions become more comfortable giving us larger allocations.

And we believe that process of capital being allocated from the fixed income allocation and from the [equity] long/short allocation is in its very early stages. And is a very long-term secular trend that we should benefit from.

Great. Then one more on just the CLO opportunity. Is the market still attractive? And is it reasonable to assume you will be active in that in the short to intermediate term? And is this still a way that you are viewing as an opportunity to expand your customer base from your legacy traditional stronghold?

We're going to continue to be very opportunistic in the CLO space. There are a lot of variables that have to line up -- the asset side, the liability side, what's going on in different trading markets. And we've put in place a structure that gives us the flexibility to do each of those pieces individually as we see the best opportunities and then put it together.

We feel very good about the fact -- as we said, it was only 2 years ago that we started the CLO business. We're up to about $4 billion in assets. That's moving us up in the ranks.

But most importantly, we believe we're moving up in the ranks in terms of performance and capability. We're very proud of the fact that at Och-Ziff, what drives our asset growth is the performance-driven nature of our funds. And the CLOs and the team involved there have clearly demonstrated that.

Great, Thank you.

Ken Worthington, JPMorgan.

First, with the new real estate funds getting turned on, are there any catchup fees in the new real estate fund? Or do they just start in whole on July 1?

They start in whole on July 1 for all committed capital.

Okay, great. Then on the Ziff Brothers, I believe they made some changes to their family office and their investments during the quarter. How does that flow through to impact Och-Ziff? Then how much do they own of Och-Ziff at this point? And are they invested in any of the products?

We can't really comment on what they're doing. But we don't think anything that they're doing is having an impact on our firm, our funds or the management of the firm.

Okay. Can you comment on how much they currently own of Och-Ziff?

We don't usually comment on that and so, we'll -- we believe that they make certain filings. And we don't think it's for us to comment beyond any filings that they make. But I do want to repeat that nothing that they're doing is having an impact on us internally.

Okay, great. Thank you very much.

Cynthia Mayer.

In terms of the new assets you're raising, how many have hurdle rates versus performance fees, which are based on absolute performance? I'm just thinking about overall, what is your mix there right now?

Some of our funds do have hurdle rates, but actually, fewer than most. And it depends on the product and what is relevant in a particular asset class. Real estate funds usually [blow up] hurdle rates. Some credit funds may have hurdle rates. But in general, the majority of our capital is not subject to a hurdle.

Okay. And in terms of the stronger flows to the Master Fund, is that primarily from the private bank channel or pension or other sources?

It's from all different sources. And it just shows you -- we talk a lot about how it's difficult to predict quarter-to-quarter. I think as long as our products are strong, our relationships are strong, it would position us to be the firm and product of choice when (inaudible) want to act. There's no specific reason why that's the product that was chosen. But it was from a broad mix, including a mix of current clients adding and new clients.

Okay. In terms of the Asia and the Europe funds, which are smaller though. It looks like the Asia fund is growing again. Is size at all an issue for that in terms of how they're invested or in terms of how you market them?

Do you make any different plans according to demand there in terms of how you market them? Are they as available as widely as, say, the Master Fund? So that their growth really just depends on investor demand, or do you market them somehow differently?

First of all, there's nothing that we're doing differently based on the size. It's one of the advantages to having a larger firm. We've got about 60 people in London; we've been there for over 15 years. We've got about 40 people in Asia; we've been there for over 10 years.

We don't have to dramatically reduce that or dramatically expand that as the funds in -- either the funds invested in either of those funds go up and down. We've got the franchise, we've got the firm. We can keep the stability. I think that's important to the investors. So nothing we're doing is based on the size.

The marketing is generally the same. It's the same thought process. It doesn't mean that each investor or each channel is interested in the same things. But the thought process is generally the same.

Okay. Then just lastly, I think in the past, you've said at times that you felt like you should grow your marketing a little bit. Where are you in terms of that? Do you feel like you're adequately staffed? And obviously, you're definitely bringing in the assets. Do you want to add more?

We feel very good about the team that's in place. And a lot of what we did was not so much change the team as much as change how they were interacting with the different clients in response to the growth of the different products that we had.

Our team, first of all, we don't refer to it as a marketing team. It's a client investor relations team. Our team is about building relationships with clients, understanding who they are and what they're looking to accomplish. Taking the time for them to understand who we are and what we're doing. We're not out pushing any one fund at one particular time. We don't expect any significant changes to the size or nature of the teams. But we feel very good about the job that they're doing.

The asset growth so far this year, aside from being what we think are very good numbers, as you can see, it's in different products. It was the multi-strategy fund. It was the real estate fund. It was the credit products. It's from different sources. It's diversified by geographic region. So the underlying depth is very strong to that growth.

Right. So no changes, it sounds like, to your -- as you put it -- your client relations?

No substantial changes to the size of the team, correct.

Great, all right. Thanks a lot.

Marc Irizarry, Goldman Sachs.

Dan, can you talk about the real estate business, how we should we think about how much opportunity there is there for fundraising over the near term? Then you mentioned US versus Europe. Maybe you can give some perspective on where you'd be putting most of that capital to work over that period of time.

Then for Joel, how should we think about the performance fees related to real estate in terms of the velocity of the investments that you're going to make? And how we should think about the performance fees associated with it?

We've announced that we've raised approximately $1.2 billion for OZ Real Estate Fund 3. So our primary focus on the real estate side is going to be performing for those investors and that fund. And using all of the resources of the real estate team, as well as the firm globally, to perform for the investors in that fund.

We've also talked about some of the areas where, because banks are doing some things differently than they used to do, there is what we believe to be a secular change in the opportunity. And one of those areas is the credit side of real estate. And that has created opportunities in the past, and we believe it will create opportunities going forward primarily in the US and Europe.

And to the extent that we see opportunities that fit what clients are looking to do, we will approach them aggressively. But at this point, our plans are let's execute on OZ Real Estate 3 for those investors who just entrusted their capital to us.

In terms of incentive fees, it's pretty much a private equity structure where you have a 3 to 5-year investment period. And then you harvest benefits and earned investments over time. And as I mentioned earlier, there's a hurdle rate and so on.

So as we start to wind down the investment period, let's say, in Real Estate Fund 2, and we're starting Real Estate [3], there will be some harvesting of this. It's a more difficult process to predict, but that's the way that basically it works, like most other private equity type structures.

Okay, great. Then just in terms of credit and some opportunities to extend your reach in credit. You mentioned opportunistic and the long-only side, that there's some opportunities there. Dan, can you elaborate on that somewhat, particularly given where we are in terms of credit spreads?

Then Joel, the fee structures on the long-only side, how should we think about what that might mean for credit, the management fees on the credit side? Thanks.

Credit spreads are tight globally. A number of the dislocations that had existed in the world have moved closer to balance. And interest rates globally are quite low. So clearly, that makes the opportunistic side more challenging than it had been.

On the other hand, as I think you see from the CLO business, it also shows you that investors are looking for opportunity. And with the 10-year interest rate in the US at 2.5% and interest rates around the globe roughly at that level, and in some cases, even lower. We think that there are places all across the spectrum from long-only and CLO to opportunistic, which generates hopefully, even more significant returns.

I think that we've shown investors that we can excel on the opportunistic side. We've shown investors that we can excel on the CLO side. I think that they're going to see that our capabilities are going to be beneficial to them and they'll take advantage of it.

In terms of fees, Marc, the 1.48% that average management fee factors in lower fees and certain credit assets. And in terms of all our opportunistic credit, that's always going to have a 20% incentive. So the long-only have different type structures.

But as we move forward and as we start to talk more and more about our credit product and maybe disclose a little bit more, we'll give you a little bit more guidance. But for now, that's the way I look at it. The average management fee reflects where you need to be on management fees. And incentive is pretty much, especially on the opportunistic side, at that 20% level.

Marc, we're very focused in all our areas with our strategic plan on making sure that everything is additive to the firm and to the LPs. So if we raise long-only assets, the CLO assets were a good example. They were lower fees than our other assets. And if that mix changes, that can impact the average management fee. But it's additive and it diversifies.

So from the vantage point of a shareholder of the firm, it's beneficial. It builds resources; it diversifies. It's additive. From the vantage point of an LP, it's the same thing. It gives them the opportunity to choose different products. Whichever product they're in, we have more resources; we have more capability; we have more breadth.

So that whole concept of it being additive, accretive and beneficial to the firm, shareholders and its constituents, as well as to the LPs. That alignment of interests we think has been one of our firm's strengths for 20 years, and something that we focus on a lot, right? And then Dan mentioned earlier, being a solution provider to a client who's looking for different asset classes and different ways to invest, this gives us the opportunity to do that.

Great, thanks for the insight.

Craig Siegenthaler, Credit Suisse.

Dan, I just want to circle back to the comments you made around US structure credit, that you view the environment today as a little less attractive. First, how does that impact you from an investment perspective? Also, maybe what key points caused you to become less positive here?

The main factor there, I talked about some of the imbalances in the credit world that have moved towards more normalized. US structured credit would be one of those. So the sole issue there is that it is harder to find product.

I think if you look over the past 12 months at the differentiation between the product that our team and our firm has found, and been able to execute on, versus the product available in the market. It' s been a very, very wide differentiation.

Obviously, we want to continue that very wide differentiation. But just overall, the flow of distressed and dislocated structure credit product in the US has been slowing. And it looks like it's going to continue to slow.

Then just a follow-up here, and this was asked in a different way. But how should we think about future organic growth in the three Master Funds? Just given right now that a lot of the growth has been coming from some of these newer funds, these side funds. How should we think about growth in those three larger funds, the two regionals and the OZ Master Fund going forward?

We don't really know. The way you should think about it is -- I think what we're trying to match -- we're trying to match excellence in performance in risk management. We're trying to match resources that are differentiated from the market. We're trying to match the business model. And it's client solutions-driven. So a big factor in the organic growth in the regional funds is going to be to what extent are clients interested in that as a solution?

Our experience has been that when the world is uncertain and clients do not have a strong view on the individual geographic areas, they tend to put the capital in the multi-strategy, in the Master Fund. When clients have a strong view of one of the geographic regions, they go with the geographic funds. It's a little hard for us to predict when they'll get there. We just want to make sure that we're doing what they need us to do when they need us to do it.

Great, thanks for taking my questions.

Bulent Ozcan, Bank of Canada.

Just [following the] question and the comment that was made on basically uncertainty in the market and how it helps certain strategies more than others. If you look at the current market environment and the increase in volatility, does this overall help your business? What kinds of discussions are you having with your clients?

I'm not sure I can really say whether what's going on in any 1-month or 2-month period helps or hurts. Over time, to the extent that we continue to provide well thought-out, consistent performance with low risk, that they understand that is creating solutions for that.

A good example, as someone said, is the low interest rate -- the fact that interest rates are lower than we think most people expected them to be, is that helping your credit business, or is it hurting your credit business? In some ways, it helps and in some ways, it hurts.

I think the key for us is we didn't sit there and bet on one direction. We're not sitting there saying, okay, we were wrong about a substantial bet in one direction; therefore, we have a problem. Think about it. In that environment, we've done very well in opportunistic, done very well on the CLO side. Done very well on some of the other things that we're doing. And that's what we're going to continue to do.

Okay. You also made the comment that you're expecting an increase of allocations from pension funds. At the same time, there is news out there basically talk about the pension funds and how they're reviewing the allocations to hedge funds and thinking about reducing exposure. Can you help us separate the fact from fiction? What are you seeing in the real world?

If you look at our numbers, look over a 6-month period, a 12-month period, a 24-month period, they're all in the Q. you can see an increase in allocations from pension funds as a percentage of assets and an increase in terms of total dollar assets. Our focus is on what we're doing here at Och-Ziff and what our clients are thinking. And we feel very good about those relationships and where they're going.

But we also want to be clear, there are other areas -- private banks have also been growing. We think there are a number of areas, including some potential international sources, that we had commented had been quieter for reasons having to do with their environments that we think are looking more positive.

But we feel that if we continue to focus, drive and deliver what these clients want, and be very responsive to their needs and what they're looking for, that we're going to continue to do well.

Okay. Then maybe on the performance on these long/short underperformance, did the long side underperform or was it the short side that underperformed versus expectations?

I think during the second quarter, which was -- sorry -- during March and April, which were the months that we had the difficulty, we said it was primarily the long side that underperformed.

Okay. All right. Great, thank you much for taking my questions.

Robert Lee, KBW.

Just one question -- going back to the expansion of the business, and as you've expanded into real estate and more credit. I'm just trying to get a little bit of a sense, maybe some color, on the LP base. And presumably, the initial round of investors are people who -- no new guys from the multi-strat products and your capabilities there.

But can you talk a little bit about any success you've had of bringing new LPs into the mix with some of the newer strategies? Or do you think that's more on the come, so to speak? And at this stage, the LP base is pretty much people who've come out of the multi-strat, or know you from some other capacity?

The LP base continues to be fluid. Some of these products -- you are right -- that as a general matter, when we first start a new product, it's most likely that clients who've been with us, who know that team, who might have been the clients who asked us to do something in that area, are likely to be the early investors.

But let's take real estate as an example. This is Real Estate Fund 3. We've had two funds that have had excellent performance measured as standalone real estate funds against their respective vintages. So within that fund, within Real Estate Fund 3, there are investors who were initially Och-Ziff investors. And there are investors whose first relationship with Och-Ziff is on the real estate side.

We're seeing the same thing on the credit side. That goes back to the whole concept of alignment of interests and our internal culture and how we compensate people and how we treat people. The focus is what's in the best interest of the client. If the client indicates an interest in real estate versus multi-strategy, everyone's interest is to say, okay, let's do what's best for the client. There's no internal battling on these things.

And that's a big differentiating factor at our firm. We think it's something that it's very good for the clients. It aligns interests. We think it's helped us create a very strong internal culture. We think it helps us maintain people and build teams and build businesses.

And we haven't talked about that in a little while, but I can tell you that the investors really understand that. And they really see that and that's very important to them. They know that there are approximately 540 people whose sole focus is doing what's right for them all the time.

It doesn't mean we get everything right all the time. It doesn't mean there can't be a March or April where performance is a little lower than we'd like. Having said that, 20 years, nonstop focus on their interests across the board.

That leads to performance over time, which is why when you get to Real Estate Fund 3, you have people who are interested in getting there that weren't in the funds before. So to that point, all that leads to performance over a long period of time. That's what people are looking for.

Great, thanks for the added color.

Thank you. That concludes the question-and-answer session today. I'll now turn the call over to Ms. Madon.

Thanks, Darren. Thank you, everyone, for joining us today and for your interest in Och-Ziff. If you have any questions, please give me a call at 212-719-7381. Media inquiries should be directed to Jonathan Gasthalter at 212-687-8080.

Thank you. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.