Silvercrest Asset Management Group Inc.

Good morning and welcome to the Silvercrest Asset Management Group, Inc. fourth quarter and year-end 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Before we begin, let me remind you that during today's call, certain statements made regarding our future performance are forward-looking statements. They are based on our current expectations and projections, which are subject to a number of risks and uncertainties, and many factors could cause actual results to differ materially from the statements that are made. Those factors are disclosed in our filings with the SEC under the caption risk factors. For all such forward-looking statements, We claim that the protection is provided by the Litigation Reform Act of 1995. All forward-looking statements made on this call are made as the date hereof, and Silvercrest assumes no obligation to update them. I would now like to turn the conference over to Rick Huff, Chairman and CEO of Silvercrest. Please go ahead.

Good morning. Thank you, and welcome to our fourth quarter in year-end results for 2020. Silvercrest ended the fourth quarter of 2020 and the year on a high note, paving the way for a very good start to 2021 with a potential new high revenue run rate. Silvercrest's discretionary assets under management, which drive revenue, increased 15% during the fourth quarter to reach $20.6 billion due to both organic as well as market growth. The firm's total assets under management grew to $27.8 billion by the end of the fourth quarter. These new AUM high watermarks for the firm represent increases of 10.8% in total AUM and 9.6% in discretionary AUM year over year from the end of 2019 to the end of 2020. The firm's financial measurements all meaningfully improved for fiscal year 2020 over 2019. Revenue increased 5.7% to $108 million from $102 million. The firm's adjusted EBITDA increased 6%. to 30 million and adjusted diluted earnings per share increased 9.4% to $1.28 per share from $1.17 per share. The firm's full 2020 adjusted EBITDA margin was 28.1%. Our outsourced chief investment officer initiative won its first OCIO clients during the third quarter of 2019 and we ended 2019 with 300 million in OCIO AUM That business has more than doubled during 2020 to over 700 million, and we hope to cross the important $1 billion AUM threshold during 2021. We're proud of building our OCIO capability organically from scratch, and our team and performance track record remains strong. The OCIO new business pipeline has grown, and we expect continued success in the OCIO business during 2021. With strong relative performance, Silvercrest's institutional equity new business opportunities are rebuilding across the product suite. We expect new sub-advisory relationships to continue adding new AUM and for search activity to pick up during 2021. We've hired new high net worth portfolio management professionals during 2020 and will continue to add new talent, both to maintain a high level of client service and to grow the business. Silvercrest has a track record of growing new talent and will continue to do so. especially with the current M&A environment for wealth management firms remaining active and expensive. We believe our brand, culture, capabilities, and technological innovation make Silvercrest a premier partner for select businesses and professionals. Regardless of the environment, Silvercrest will continue to seek to effectively deploy capital to complement our organic growth. I'll be asking for questions after Scott Trard's presentation, our CFO.

Thanks, Rick. As disclosed in our earnings release for the fourth quarter, discretionary AUM as of December 31st, 2020 was $20.6 billion, and total AUM as of the end of 2020 was $27.8 billion. Revenue for the quarter was $28.4 million, and reported consolidated net income for the quarter was $3.5 million. Looking further into the quarter, again, revenue was $28.4 million, which represented approximately a 2 percent increase over revenue of $27.8 million for the same period last year. This increase was driven by net client inflows and market appreciation in discretionary AUM. Expenses for the fourth quarter were $25.1 million, representing approximately a 6 percent increase from expenses of $23.7 million for the same period last year. This increase was primarily attributable to an increase in compensation and benefits expense of 0.6 million and an increase in G&A of 0.8 million. Comp and benefits increased by 0.6 million or approximately 3% to 18.2 million for the three months ended December 31st, 2020 from 17.6 million for the quarter ended in the prior year. The increase is primarily attributable to increases in the accrual for bonuses, salary and benefits expense primarily as a result of merit-based increases in newly hired staff, and equity-based compensation expense due to an increase in the number of unvested restricted stock units and unvested non-qualified stock options. G&A expenses increased by 0.8 million or approximately 13 percent to 6.9 million for the fourth quarter of 2020 from 6.1 million for the fourth quarter of 2019. This was primarily attributable to increases in the fair value of contingent consideration related to the Cortina acquisition and occupancy and related expenses partially offset by decreases in professional fees, travel and entertainment expenses as a result of the pandemic, and lower portfolio and systems expense. Reported consolidated net income was $3.5 million for the quarter. This compared to $4.2 million in the same period last year. Reported net income attributable to Silvercrest or the Class A shareholders for the fourth quarter of 2020 was approximately $1.9 million or 20 cents per basic and diluted Class A share. Adjusted EBITDA, which we define as EBITDA without giving effect to equity-based compensation expense and non-core, non-recurring items, was approximately 7.3 million, or 25.7% of revenue for the fourth quarter of 2020, compared to 7.3 million, or 26.3% of revenue for the same period in 2019. Adjusted net income, which we define as net income without giving effect to non-core and non-recurring items, and income tax expense assuming a corporate rate of 26% was approximately $4.4 million for the quarter, or $0.31 per adjusted basic and diluted earnings per share. Adjusted earnings per share is equal to adjusted net income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic adjusted EPS, and to the extent dilutive, we add unvested restricted stock units and non-qualified stock options to the total shares outstanding to compute diluted adjusted earnings per share. Looking at the full year, revenue for 2020 was approximately $108 million, representing approximately a 6 percent increase over a revenue of $102 million for the same period in 2019. This increase was primarily driven by net client inflows and market appreciation in discretionary assets under management, including $1.7 billion in assets under management acquired on July 1st of 2019 in connection with the Cortina acquisition. Expenses for the year ended December 31st, 2020 were $85.1 $7 million, representing approximately a 3% increase from expenses of $83.3 million in 2019. Compensation and benefits expense increased approximately $2.3 million during the year ended 2020 compared to the same period in 2019. G&A expenses increased by approximately $0.1 million during 2020 compared to 2019. Looking further into compensation and benefits, it increased by $2.3 million, or approximately 4%, to $62.4 million for 2020 from $60 million for 2019. The increase was primarily attributable to an increase in the accrual for bonuses, salaries expense primarily as a result of merit-based increases, and newly hired staff, including the addition of Cortina staff. and benefits costs partially offset by a decrease in equity-based compensation expense due to a decrease in the number of unvested restricted stock units and unvested non-qualified stock options. G&A expenses basically remain flat at $23.3 million for 2020. The increase was attributable to increases in the fair value of contingent consideration related to the Cortina, Neosho, and Capicelli acquisitions. Depreciation and amortization expense related mainly to the amortization of intangible assets related to the Cortina acquisition and to the renovation of our office space in New York City. We saw increases in occupancy and related expenses, primarily due to additional cleaning due to the pandemic. for increased portfolio and systems expense and insurance costs. These increases were partially offset by decreases in the fair value of contingent consideration related to the Jameson acquisition, lower travel and entertainment expense as a result of the pandemic, in addition to lower professional fees, office expenses, and storage and moving expenses. Reported consolidated net income was approximately $17.5 million for 2020, compared to $15.4 million for 2019. Reported net income attributable to Silvercrest, or again the Class A shareholders for 2020, was approximately $10 million, or $1.05 per basic and diluted Class A share. Adjusted EBITDA was approximately $30.3 million, or 28.1% of revenue for 2020 compared to 28.6 million or 28% of revenue for 2019. Adjusted net income was approximately 18.6 million for 2020 or $1.29 and $1.28 per adjusted basic and diluted earnings per share respectively. Looking quickly at the balance sheet, total assets as of the end of 2020 were approximately 213 This compared to $214.2 million at the end of 2019. Cash and cash equivalents at the end of 2020 were approximately $62.5 million, which compared to $52.8 million at the end of 2019. As of December 31st, 2020, total borrowings were $12.6 million. And as of the end of 2020, total Class A stockholders' equity was approximately $70.7 million. That concludes my remarks, and I'll turn it over to Rick for Q&A.

Great. Thanks. We're ready to take questions at this time about the quarter and the year.

We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing T. To withdraw your question, please press star, then 2.

At this time, we will pause momentarily to assemble our roster. The first question is from Sumit Mahdi with Piper Sandler.

Please go ahead.

Thanks. Good morning, guys. Good morning. Good morning. Wanted to start on the institutional business. Maybe you could provide an update on the current six-month actionable pipeline between value and growth. You know, I know performance levels have remained strong across the board. Just kind of wondering where you're seeing the demand kind of most.

Yeah, right. So... The pipeline is rebuilding, which is nice. Our total six-month kind of institutional pipeline is currently at about $1.34 billion. It should be noted, that's not a dream pipeline. That is where we've been invited or in finals and have pretty good prospects. So that's looking strong and it seems to be growing. As you would expect, given the bulk of our assets in value and the fact that it has long been established in the marketplace at Silvercrest, we have more assets there than in growth, but the growth pipeline is growing, which is nice to report, as is the OCIO pipeline. In fact, the OCIO pipeline is getting close to 345 million, and as I mentioned in my opening remarks, the total OCIO AUM is now over 700 million. So, you know, we get some of those wins as that pipeline grows, and we will cross the billion-dollar threshold, which we view as really important for establishing ourselves in the marketplace and growing that business. The growth strategies had absolutely incredible performance. We are just so proud of that team. They did extremely well relative to benchmarks. As you noted, all of our strategies are doing very well, and we've spent a lot of time introducing those strategies, and it can take some time, but that pipeline is building, and we're excited about the possibilities now that they've got some performance at Silvercrest under their belts.

Great. Thanks, Rick.

So, you know, and that's, you know, I'm not exactly sure what that pipeline is, but I think it's definitely grown. It's probably closer to 150 right now.

Okay, great. Thanks for that, caller. I just wanted to shift focus to the kind of inorganic growth front. You know, saw the commentary around prices remaining elevated for targets, but can you talk about You know, what kind of growth you're looking for on the asset management side? Is it more scale-focused, and are there certain products you're looking for in particular that you're trying to diversify into? And would it be fair to assume on kind of the high net worth side of the business it would be more kind of individual hiring or team lift-outs as opposed to acquisitions?

Yeah, we pivoted, and I talked about this on the call, really more to looking at and potentially hiring talent to drive organic growth rather than acquired growth at the firm. We've done that successfully. We care a tremendous amount about our culture. We know how to cultivate talent and bring them in. It's also really helpful to dealing with potential transitions, whether that's with the family or folks who have been at the firm a long time. So it's an important emphasis. is a little harder in some respects because it affects your earnings and EBITDA right away. There's no tax benefits, but it's worked for us and we're excited about the possibilities there. On the acquisition front, I'm not really looking to add to my product suite. What we were able to do in 2019 with the growth colleagues was to balance out our value equity exposure and to grow in another direction in a way that was desirable for the clients as well as the firm. We're not looking to be a financial supermarket, and I think we've got enough to grow there with a lot of runway. I'm actually very excited about what we can do with the growth in institutional assets. Not really looking for much in that space. With regards to firms, it's a very expensive market driven by a lot of factors. I don't need to comment on it here. We're going to put a premium on not just desirable firms that have a good business, but on the professionals and how they fit into this firm, their geography, and more than one way that we can see growing them organically. We don't think it's good enough just to merge with another firm to get size. We want to be accretive as early as we can and have a vision and path for how to grow it. We are always in different discussions with folks, and because I think this is such a desirable firm in a variety of ways, I mentioned that in my early remarks, we're going to get good looks at some of the premier properties that we're most interested in.

Great. Thanks. And then just one last one for me before I kind of hop back in the queue, but recurring cash comp ratio end of the year, 56.7%. It's about 120 base points above last year or the prior year. Can you talk about the drivers of that increase? And that kind of leads into the EBITDA margin a little bit. Revenues hit a record in the quarter, but you guys are sort of managing to the low end of that range on 25% EBITDA margin. So Is that kind of due to the pickup and hiring in the quarter? Or do you think, you know, if you do pick up hiring from here, where do you see that margin kind of going throughout 2021?

Yeah, really, really good question. I think it's an important one. I wouldn't look at our EBITDA margins on a quarterly basis when you're talking about the comp ratio. Yeah, we did push it down, but really what's happening in the fourth quarter, and if you look at our history, the fourth quarter tends to be a little more volatile than So you're getting something of a true-up with regards to comp once all the performance is in for the year and how that affects the firm. So on an annual basis, it was just over 28%, which is in line with our high EBITDA margins. I've often said in these calls that once we're hitting 29, 30, maybe even a little over, we're probably not investing in the business enough. The other thing I pointed out a previous cause is that when we do aggressively grow the business, we could get down to that 25, even 24% of EVA dot because we're investing in future growth. And when we have done that, we have successfully grown the business. The fact is we made some hires in 2020, pretty early in 2020, which means we had a full year of comp and we came out with 28. So I intend to do more. We could hit that EBITDA. To what extent? Honestly, I don't know, because you have to keep in mind that the people we hire also grow the business, which grows the top line. Second thing, that ratio, that 28%, is also on very substantially lower revenue that we experienced previously. for Q2 due to the sell-off in the markets in the early part of the year. So a lot of the year was digging out of that hole. And of course, you know where we ended up. So even though we did some hiring, a substantial effect there wasn't the hires. It was top-line revenue that we faced in the early part of the year that drove that margin down a bit. The final point is that Compensation for the growth equity team was much higher than expected. Super high class problem. We didn't mind that at all. They're very performance oriented. They're paid on performance. And that's a really great thing because they did so well. A bit unexpected, but the kind of happy thing to happen that's only good for our clients, the investors as well as shareholders. So, you know, that's a A bit of a complicated mix, but that's how it works out. And I would say on a steady state basis, we're either at or below kind of our general target of 55%. But I have to say, we've got to invest in the business to grow it, and I'm not afraid to hit it to do that.

Great. Thanks, Rick. You're welcome.

The next question is from Sandy Mehta with Evaluate Research. Please go ahead.

Yes, good morning, and congratulations on the strong AUM and investment performance. Just following up on the previous question, most of my questions were answered, but so for modeling purposes, I mean, you explained how the comp, you know, at 64% of revenue was slightly, I mean, similar to the 63% last year. But for modeling purposes, the other quarters of the year, I think you said that we should still use 55% to 56% of revenues as sort of the targeted level of comp to revenues.

Yeah, I think, go ahead, Scott. Yeah, hi, Sandy. Yeah, so we've talked about 55% as being somewhat of a target, and of course it depends on the climate. As we've discussed previously, to the extent that you know, we're making investments in a business where individuals will be hired and revenue will follow later on as they're, you know, integrating and building up, you know, their respective books of business, that may drive the compensation ratio higher. Look, in prior periods, we've also come in under as opposed to, you know, just saying, all right, let's just, we're under, but, you know, we've talked about a 55% target. So in addition, as Rick mentioned, with the lower revenue in Q2, that obviously put pressure on the, you know, comp ratio as a whole. So we will, it's something that we think about. Again, the fourth quarter usually represents a true up because certain things don't crystallize till the end of the year. And so it's something that we will, you know, continue to evaluate as the business grows and changes and the mix of compensation changes. But, you know, like I said, we'll continue to use that as somewhat of a soft tool, but it is subject to change depending on what happens. So again, we ended the year at 56.7%. The fourth quarter ratio is artificially higher because of the true-up we made. So you really have to look at it on a full year basis to get a fair comparison.

I want to add one thing to this. I don't think it's productive to focus too much on a quarter, especially that last one for comp purposes. This is a business where we make investments and we may not have growth right away, and then it catches up. But if we don't make the investment, we could be well under 55%. it's important to look at it on a rolling basis over time. It was, despite the investments, a pretty good year.

Yeah. Great. And one other question. As you mentioned, your small cap performance was just sort of out of the ballpark, very good. Are there any thoughts of launching some more small cap strategies organically? And then the other thing, too, is that small cap performance in general, small cap equity markets have been very strong since December. And you talked about your institutional pipeline, but are you seeing more interest in your strategies just because there's more interest? And, you know, small cap equity indices have done really well, particularly in the last few months. Thanks.

Yeah, the pipeline is growing for the institutional business, and we do have an expertise in small cap. I don't see us launching additional small cap strategies. This firm has remained disciplined about where it focuses and how it pursues growth. We want to be successful at the things we've started and not try to over-diversify our efforts. that's a sure way to kind of tamp growth and perhaps lose our focus on what we're doing here. So we're going to stick with what we have and make what we have work. The turn towards small cap, which is helpful indeed, only provides a bit of a tailwind for us growing that pipeline and succeeding. So that's really how we view it.

Great. Thank you. You're welcome. Thanks.

Again, if you have a question, please press star then one. The next question comes from Christopher Maranath with Danny Montgomery Scott. Please go ahead.

Hey, thanks. Good morning. I wanted to ask about the AUM growth excluding market appreciation. So it was about 6.5% year over year. And I was curious, Rick or Scott, if that is a reasonable goal

in general for this coming year or you know looking out in the future and is that something that you manage to as well yeah we don't manage to it because on the high net worth side which is 75 from the business it's it's really lumpy and and hard to predict and you have uh multiple leaks in the bucket that you're you're trying to overcome uh one big one that we face every year of course are taxes and and that can vary quite a bit uh we were hit last uh for the third quarter of last year with very significant taxes because they were double whammies. There were people who were playing in the third quarter, but also, as you know, taxes were delayed from their normal period due to coronavirus earlier in the year. So what we really do is try to manage the company and looking at potential growth from a very high level and make sure our professionals have the tools to grow and see where it falls out, to be honest. On the institutional side, again, I'm quite bullish, as you could tell from my commentary earlier on. I think the wealth side produced quite well in 2020. The organic growth X markets for the year was one of our better recent years, just as an example, just on new accounts alone before additional cash into those accounts, but just opening, day one opening. We had $614 million in new open accounts in 2020. In 2018, it was 396 or so. In 2017, it was 360. It was a little higher in 2016, about the same. So it was the best kind of new account opening organic growth year in four years. And overall, a very good year, once you count in some of the closed accounts and outflows. It was pretty moderate compared to past years. For example, outflows, net outflows, that is, you know, the additions minus the subtract or plus the subtractions of existing accounts was a negative $70 million for the year. Well, you know, that was... That was $625 million in 2018. It was negative $306 million in 2019, negative $173 in 2016, negative $245 in 2015. So quite strong. That shows a lot of additional inflows despite the natural leak in the bucket at a firm like ours. So pretty strong organically. And 6% is, if you look at a lot of firms like ours, that's strong. It may even be on the high side, but I think we can do that. It's just hard to assess on the high network side, which is 70% of the assets.

That's all very helpful. Thank you for the color. Just two quick follow-ups. As the OCIO business grows, is the margin on that business going to be different than the overall firm? I'm just curious how that will shape up over time.

Yeah, too early to say. The way we run it, it's looking pretty similar. But we made investments in that team, and we've got to reach a certain level of AUM as we organize that group to make sure it's profitable. We were talking about comp. We made the investments to grow that team over other prior years and really finished it out by 2019. And so we're set there, but our modeling shows that it will be similar in profitability to the rest of the firm.

Great. Thanks, Rick. And then the last one is just on G&A. Does the ratio of G&A kind of fall further over time with scale, or is this latest quarter kind of a good benchmark?

Yeah, Scott's got this. Yeah, on the G&A side, there's not a lot of variability within your G&A. This past year, there were some items that were like travel and entertainment expense and office expenses, which were artificially lower because of the pandemic. Our consumption is less, and obviously, people are not traveling for business. But, yeah, most of our G&A, there's not a lot of variability in it.

Got it. Thank you for all the color. I appreciate it.

Yeah, I want to address one other thing on the OCIO I should have mentioned and why I think that could be a business that's very similar in profitability to the rest of the business. A lot of OCIO offerings in the marketplace are consultancy. driven and are consultant-like relationships. And that's a perfectly fine way to approach the business and is very dominant in the marketplace. As a new entrant, what we are doing is offering our discretionary asset management capabilities in building portfolios for institutions as the OCIO. So it looks much more like one of our wealth management relationships in terms of how we are doing business and partnering with the clients we have on a discretionary basis. That tends to have different fee levels and has staffing requirements that looks more like wealth. So it's a distinguishing characteristic, but it also means that at least so far we see that being a business that looks similar to the rest of the business.

Great. Thanks again, Rick. Appreciate it.

Yeah, you're welcome.

The next question is from Robert Maltby with Singular Research. Please go ahead.

Good morning. Morning. I want to congratulate you on executing in a very difficult environment in terms of the year of COVID and the restrictions on face-to-face types of meetings that are probably very complicated conducive to growing relationships more quickly. So congratulations on a positive above industry average AUM growth. Thank you. Thank you. Regarding your dividend policy and your continued growth, do you see the prospects for increased dividends this year and next year? And secondly, On the M&A landscape, I know you have been involved with some acquisitions in the past, and I was wondering if you're finding it a fertile environment to look at targets, maybe from an evaluation perspective.

That's a funny phrasing, a fertile environment from an evaluation perspective. It's I think the market's expensive. I've said that for quite some time. A lot of the firms that are selling at multiples don't have the organic growth they should have, the transition plans they should have, and diversity of revenue that they should have, capital in the business that they should have in order to justify those things. And so, you know, I... I don't think it's great for a firm like ours for a use of shareholder capital. We always have had an organic growth strategy under what we're doing. I think you absolutely must. And we have been very successful not just at doing a deal accretively when we do them. I think that's very important. But we have an organic growth plan underneath everything we do. And when things change, you can't necessarily rely on acquired growth. So when that environment, if that environment changes, we'll be ready. That said, there are any number of premier type firms in geographies that we like, that we know extremely well and remain close to, and have conversations with. So you never know. But just speaking very broadly, those are my views. on the market. We've got capital to put to work, we're ready and willing, but it has to be the right partner and we have to have the right organic growth plan underneath it. And we've been successful at that. That is why we've been able to compound earnings per share even on a diluted basis for a sustained period of time and have organically, primarily organically grown this company. We're just looking for acquisitions to enhance that ability. Number two, you asked about dividends. Dividends are really important, especially for such a small company as ours, in order to pay shareholders and return some capital to them and have them realize a very steady yield on their investment. And as you know, we've got a pretty premier nice one. We did not choose to raise the dividend most recently, as you probably saw. We have been doing so consistently. We think it's very important to support it. We have obviously plenty of cash to do that generated by the business. And we have a posture of supporting that dividend and periodically raising it on a steady basis. We chose not to most recently because we think the yield is high enough and we're looking at other potential uses for our capital to enhance shareholder value and perhaps have a more rational balance sheet. So we're taking all those options into consideration, in particular, as you noted, because we did not raise the dividend.

Thank you. You're welcome.

The next question is a follow-up from Sumit Mahdi with Piper Sandler. Please go ahead.

Hi, Sumit. Hey. Thanks, guys. Just a couple quick cleanup questions here, but just a follow-up on the non-comp, maybe for Scott. I've seen a lot of peers take some lessons learned around kind of the non-comp ratio and trying to run a leaner business post-pandemic. I know you guys back out some of the costs and the adjusted number, but do you think you'll be able to run sort of a lower run rate after the pandemic from kind of what you learned once T&E kind of normalizes this?

One of the things I want to highlight is, and it represents an adjustment that we disclosed, is part of our G&A on a GAAP basis includes the effect of the fair value of our various earn-out arrangements. So if you're looking at it on an actual reported basis, that tends to you know, artificially impact our GNA because that stuff is, you know, those valuation adjustments are non-cash. Now, there are some areas that, you know, we do a good job of trying to negotiate with a lot of our service providers where we negotiate annual fee cap increases so that we can, you know, make our GNA not only more predictable but also to align our you know, the benefits of these services with reasonable increases. So, but, you know, in any situation, because a lot of our G&A is fixed in periods where revenue might be lower, you know, your revenue is going to drop sooner than you can renegotiate some of your fixed costs. So, you know, some of our actual expenses, you know, will and I'm really focusing more now on a cash flow basis, you know, will go up as the pandemic ends. And, you know, such as travel and entertainment expense and office expenses, those will, you know, normalize more. But on a cash flow basis, there are other expenses that will go down. Primarily, you referred to the adjustments for COVID-19. you know, employees that normally you'd be able to hand documents to somebody on your floor, on another floor in your office, you're now FedExing between, you know, employees. So those type of costs will go down. But in general, you know, we've done a good job of controlling our G&A and, you know, absent some of those unusually lower items and then, you know, these extra FedEx costs or some extra equipment for individual homes, You know, that type of stuff will adjust out. And, you know, at the end of the day, the pandemic-related costs that we have added back have not been, you know, overly compelling or significant.

Samit, I want to add a non-financial color to this, but I think that paints a bit of a picture that we're interested in, which is, number one, our people are just raring to get back on the road, especially our institutional marketing folks. It's still a people business. Zoom is okay, but everyone's sick of it. So I expect T&E to go up. Will it ever be as high as it was before? I don't know. It remains to be seen. But all I know is it's important for us to be seeing our clients and getting out there. One thing I do think, and this is more of a long-term issue, but it's helpful to the company, is I do think that the need to expand into office space will be less important as we grow with personnel. This is a people business. The culture here is extremely important. We visit offices and meet and talk on the phone, of course, but I just feel there's a lot lost in a firm like this with a completely virtual environment. I think there will be a lot more flexibility, and in particular with some folks who currently have a footprint, physical footprint, I think they can become a lot more flexible, which means I can hire people and grow the business and not have to expand into space as quickly, which overall, as we grow over time, lowers that expense compared to the revenue as a whole.

Great. Thanks for that color, Rick. Um, and last one for me, just on the fee rate, you know, I saw it kind of a little bit volatile throughout the year, but ended up pretty much in line with 2019. Are there any considerations for 2021 between kind of the expected growth of the asset management and high net worth businesses?

Well, um, I would, I, you know, high net worth kind of took the, and OCIO really, OCIO brought in a couple of the two biggest accounts last year. Um, And that kind of, just in terms of the way it looks, sort of sits between pure equity institutional relationships and wealth relationships, given the nature of boards and the institutions you're dealing with. I don't have an expectation for one or the other, but I would suspect that institutional growth will outstrip our high net worth growth in the coming year just because of the size of the pipeline and its growth. And what I see is the opportunity. But there's really no way to, it'd be false precision for me to tell you what I actually expect for sure.

Okay, great. Thanks. You're welcome.

This concludes our question and answer session. I would like to turn the conference back over to Rick Haas for any closing remarks.

Great. Thank you very much. I appreciate everyone's support for taking the time to ask so many good questions today about our fourth quarter in the year 2020. It was a good year. We saw some higher than industry average organic growth, saw a great surge with the markets as well that really supported us coming into 2021 at an all-time high in discretionary assets and total assets with the with growing pipelines in the business. So we look forward to reporting to you about that first quarter as soon as that information is available. And I appreciate you joining us. Thanks so much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.