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spk01: Thank you for standing by and welcome to StepStone Group's Fiscal Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Seth Weiss, Head of Investor Relations. Please, go ahead.
spk06: Thank you and good afternoon. Joining me on today's call are Scott Hart, Chief Executive Officer, Jason Ment, President and Co-Chief Operating Officer, Mike McCabe, Head of Strategy, and David Park, Chief Financial Officer. During our prepared remarks, we will be referring to a presentation which is available on our Investor Relations website at .stepstonegroup.com. Before we begin, I'd like to remind everyone that this conference call, as well as the presentation, contains certain forward-looking statements regarding the company's expected operating and financial performance for future periods. Forward-looking statements reflect management's current plans, estimates, and expectations and are inherently uncertain and are subject to various risks, uncertainties, and assumptions. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to changes in circumstances or a number of risks or other factors that are described in the risk factors section of StepStone's periodic bilans. These forward-looking statements are made only as of today and accept as required. We undertake no obligation to update or revise any of them. Today's presentation contains references to non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures are included in our earnings release, our presentation, and our filings with the SEC. Turning to our financial results for the fourth quarter of fiscal 2024. Beginning with slide 3, we reported GAAP net income of $82.5 million. GAAP net income attributable to StepStone Group, Inc. was $30.8 million or 48 cents per share. Moving to slide 5, we generated fee-related earnings of $50.9 million, up 35% from the prior year quarter, and we generated an FRE margin of 33%. The quarter reflected retroactive fees primarily from an interim closing of StepStone's private equity secondaries fund. Retroactive fees contributed $5.4 million to revenue, which compares to retroactive fees of $0.5 million in the fourth quarter of fiscal 2023. Finally, we earned $37.7 million in adjusted net income for the quarter, or 33 cents per share. This is up from $27.1 million, or 24 cents per share, in the fourth fiscal quarter of last year, driven primarily by higher fee-related earnings. I'll now hand the call over to Scott.
spk03: Thanks, Seth. We finished our fiscal year on a high note. Earnings, fundraising, and fee-earning growth accelerated in the back half of the year, generating strong results and setting us up for continued success. As we enter our new fiscal year, StepStone is facing a much better market environment compared to the backdrop from 12 months ago. At that time, declines in public asset prices and cyclically low levels of investment realizations put pressure on some of our clients' near-term appetite for private market commitments. We expressed caution for more difficult fundraising conditions, but we characterized the impact as largely timing-related. Our investment performance was solid, and underlying demand for our solutions remained strong. But at that time, there was simply less urgency for our LPs to commit capital. This led to extended re-up discussions for our managed accounts and longer fundraising cycles for our commingled funds. Even against that backdrop, we delivered strong financial performance in fiscal 2024 and solid growth in our key performance indicators, which underscores the resilience of our business. Fast forward to today, the sentiment has shifted markedly. Public markets are at or near all-time highs, and despite a -for-longer interest rate In our current environment, expectations are that M&A activity will return to more normal levels. The improved sentiment is already translating to our results. In our fiscal fourth quarter, we generated gross new commitments of $6 billion, matching the very strong fundraising result from our third quarter. We raised nearly $4 billion in managed accounts, and we raised over $2 billion in commingled funds. Included in that figure are over $600 million in private wealth subscriptions, which is far and away our best quarter in the private wealth channel. The continued acceleration in private wealth is broad-based, with record subscriptions for each individual product and record gross inflows in both the U.S. and abroad. As a reminder, we currently have three private wealth funds in market, S-Prime, Spring, and Structure, with a collective net asset value of $3.4 billion, and we anticipate executing the first close of our private wealth credit product, CredEx, this coming quarter. For the full year, we raised $18.6 billion of new AUM commitments across the firm, which is a strong result for any year. Perhaps as encouraging as the strong nominal level of fundraising is the progression of those inflows. We doubled our pace of fundraising in the second half of the year, and we see strong momentum continuing. The pipeline in managed accounts remains very strong for both new and existing clients, and we have several large commingled funds in the market across our asset classes. Of note, after the end of the quarter, we closed on an additional $800 million in our Venture Capital Secondaries Fund, which takes the fund size to approximately $3.3 billion, or 25% bigger than our previous Venture Secondaries Fund. We anticipate a small final close of this fund in the coming weeks. Moving to slide 8, last year we hosted our first Investor Day and set goals to at least double our fee-related earnings over the next five years and expand our FRE margins to the mid-30s. We'd like to take a moment to measure our progress since Investor Day. While the path to those targets may not be linear, we believe we are off to a very strong start despite what was a difficult backdrop when we articulated these goals. In the last year, we have grown our fee-earning AUM by 10%, we've grown fee-related earnings by over 20%, and we've expanded our FRE margins by over 100 basis points. Importantly, we've also grown our Undeployed Fee-Earning Capital, or UFIC, to more than $22 billion, our highest level ever, driven in large part by the $12 billion of gross AUM additions over the last six months. Included in the March 31st UFIC balance are commitments from our Venture Capital Secondaries Fund. We activated this fund after the end of the quarter, which will result in an approximate $3.3 billion addition to our Fearing AUM in our first fiscal quarter. Additionally, we are optimistic about our prospect for continued growth in the coming fiscal year, given the pipeline of managed account re-ups, our expectation for ongoing commingled fund raises, and continued progress in the private wealth channel. Furthermore, we've broadened our fund platform with the introduction of new commingled funds, including our Infrastructure Co-Investment Fund and our Infrastructure Secondaries Fund, and with the launch of new private wealth funds, including structure and credits. Strategically, as discussed last quarter, we entered into an agreement to buy in the non-controlling interests of our infrastructure, private debt, and real estate businesses over the coming years. The buy-ins will lead to a simpler ownership model and are being executed on an accretive basis. The first exchange is effective as of April 1st, with an anticipated closing by the end of June. We also executed on the sale of Greenspring Backoffice Solutions, the fund administration entity that formed part of our acquisition of Greenspring, and we believe this will result in net savings and improved efficiency. All this gives us a clear line of sight for even stronger growth in our operating earnings and KPIs in fiscal 2025. I'll now turn the call over to Mike, who will speak to our growth in the quarter and our plans for upcoming dividend distributions.
spk07: Thanks, Scott. Turning to slide 9, we generated over $18 billion of gross AUM inflows during the last 12 months, with over $11 billion coming from our separately managed accounts, and over $27 billion coming from our co-mingled funds. In the fourth quarter, our co-mingled fund additions included $350 million at our P.E. Secondaries Fund and approximately $900 million at our Venture Capital Secondaries Fund. Our P.E. Secondaries Fund has now raised over $3 billion, which is well above the level of the prior vintage. And as Scott mentioned, our Venture Capital Secondaries Fund has closed on approximately $3.3 billion, which includes more than $800 million raised after the end of the fiscal year. Slide 10 shows our fee-earning AUM by structure and asset class. For the quarter, we grew fee-earning assets by $4.4 billion, split evenly between managed accounts and co-mingled funds. This quarter's fee-earning AUM growth benefited from $900 million of capital that came off the holiday and our real estate secondaries fund. We continue to increase our undepoiied fee-earning capital, which represents funds that are contractually committed but are not yet earning fees. Our UFEC balance now sits at a record $22.6 billion. The combination of our fee-earning AUM and UFEC is the best representation of our future earnings power and now stands at over $116 billion, up 5% sequentially and up 15% in -over-year. Slide 11 shows the evolution of our management and advisory fees. We generated a blended management fee rate of 59 basis points for this fiscal year, higher than the 54 basis points from the prior year, as we benefited from a higher fee rate from our private wealth offerings as well as retroactive fees. We generated $5.09 per share in management advisory fees over the last 12 months, representing an annual growth rate of 21% since fiscal year 2019. Before handing the call to David, I'm pleased to announce that the Board of Directors declared a supplemental cash dividend of 15 cents per share. This is on top of our normal 21 cents per share quarterly cash dividend. As a reminder, we initiated a supplemental dividend last year, which we intend to pay out annually each June, subject to Board approval. Our supplemental dividend allows StepStone to take advantage of our capital-efficient business model and maximize distributions to our shareholders in a transparent manner. We plan to grow our base dividend generally in line with fee-related earnings, while our supplemental dividend will be driven by net realized performance fees, subject to any discretionary capital uses. Since the supplemental dividend is largely a function of performance fees, this year's dividend likely represents a cyclical low. When combined with our quarterly dividend, StepStone's payouts would have yielded investors .5% for the year, using an average share price over the last 12 months. We expect future supplemental dividends to increase as capital market activity normalizes and net realized performance fees improve. We think this is compelling value for a company with our resilient earnings and strong growth profile, and we would expect our total dividend distributions to grow over time. I'll now turn the call over to David.
spk02: Thanks, Mike. I'd like to turn your attention to slide 13 to speak to our financial highlights. For the quarter, we earned management and advisory fees of $154 million, up 16% from the prior year quarter. The increase was driven by growth in fee-earning AUM across commercial structures, as well as a favorable impact from retroactive fees and a higher blended fee rate. Fee-related earnings were $51 million for the quarter, up 35% from a year ago. We generated an FRE margin of 33% for the quarter, up 460 basis points versus the prior year quarter. Normalizing out retroactive fees, core FRE margins expanded approximately 300 basis points. Moving to expenses, cash-based compensation was $74 million, up 1% from the prior year quarter, up 7% from the prior year. In the current period, we benefited from an adjustment to our cash bonus accrual in connection with a shift to our annual compensation cycle, which we have moved from a calendar year to align with our fiscal year. This means that going forward, merit increases will take effect on April 1 rather than January 1. We have already adjusted base salary levels for calendar 2024, but the seasonal increase in bonus accruals will take effect in the first fiscal quarter of 2025. Quarter on quarter, compensation tied to business development revenue sharing was down slightly as retroactive fees were slightly lower. Equity-based compensation expense grew to $1.7 million from $1.4 million in the prior quarter. The increase reflects the layering of the third year's issuance of RSU awards in February 2024. As a reminder, our RSU awards best over four years, so you should expect to see a slight uptick in the first fiscal quarter of 2025 to approximately $2.3 million to account for a full quarter's worth of expense. General and administrative expenses were $27.2 million, up $2.7 million from a year ago, and up $0.4 million sequentially. Gross realized performance fees were $24 million for the quarter, up from last year's $20 million level, but down from $33 million in the prior quarter, which benefited from positive seasonal incentive fees. Net performance fees were $12 million after accounting for performance fee-related compensation. Our tax rate reflected in adjusted income was .3% for both the quarter and full fiscal year. We anticipate a similar .3% tax rate for fiscal 2025. Moving to slide 14, management and advisory fees per share grew 17% for the full year and by an annual growth rate of 21% over the long-term period since fiscal 2019. Gross realized performance fees per share were down 46% for the full year and up by an annual growth rate of 11% over the long-term period. Adjusted revenue per share was up 3% for the full year as growth in management and advisory fees more than offset the decline in performance fees. Over the long-term period, adjusted revenue per share is up by an annual growth rate of 20%. Shifting to profitability, on slide 15, we grew FRE per share by 21% for the full year. The increase was primarily driven by growth in management and advisory fees. Looking over the longer term, we have generated an annual growth rate in FRE per share of 29%. Full year ANI per share is down 2% relative to the prior year driven by lower performance fees, but it has grown at an annual rate of 24% over the long-term period. As Scott mentioned, our first acquisition of the non-controlling interest of the infrastructure, private debt, and real estate businesses has taken place effective April 1st and is expected to close by the end of June. We expect to issue 2.8 million shares plus use a small amount of cash in exchange for 10% of the outstanding equity interest in each of these businesses that we do not already own. As a reminder, we have hardwired these exchanges to be accreted earnings, so the acquired earnings purchased at a discount to StepStone's price to earnings multiple should more than offset the impact than the issued shares. Moving to key items on the balance sheet on slide 16, Net Accrued Carry finished the quarter at $635 million, up 12% from last quarter driven primarily by underlying fund valuation appreciation. As a reminder, our accrued carry balance is reported on a one-quarter lag. Our own investment portfolio ended the quarter at $205 million. Unfunded commitments to our investment programs were $116 million as a quarter end. As of March 31st, we had over $75 billion of performance-vehicle capital, which is widely diversified across multiple vintage years in over 200 programs. 74% of our net unrealized carry is tied to programs with vintages of 2018 or earlier, which means that these programs are largely out of their investment periods and in harvest mode. Of this amount, 56% is sourced from vehicles with -by-deal waterfalls, meaning realized that our accrued carry may be payable at the time of investment exit. This concludes our prepared remarks. I'll now turn it back over to the operator to open the line for any questions.
spk01: As a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ben Budish of Barclays.
spk05: Hey, this is Nick Benoy on the call for Ben today. So I want to dig a little bit deeper into the private wealth platform. As inflows have picked up nicely, queue over queue, maybe like diving into a bit more in the mix of growth. Are you seeing inflows primarily driven by increasing the distribution RE channel, or are you seeing more so strength in client RE-UPS and client retention?
spk10: Hey, Nick. Jason here. Thanks for the question. In terms of the flows, it's been broad-based across the different channels. As a reminder, we kind of think about this in four different buckets. The RIA channel in the US, the broker-dealer channel in the US, the wirehouses in the US, and then non-US wealth as a fourth pillar. Flows across all four have been strong. Flows across all three funds currently in market have been strong. Redemption has been low across all the products. And so we feel right now that everything is firing pretty well.
spk05: Got it. And I want to ask a follow-up for Scott. In the prepared march, you seem very positive now. Look for fundraising across both co-mingled and SMAs. So maybe I want to dive a little bit deeper into about the cross-selling opportunities between LPs. Maybe where are you seeing the most conversions across funds and asset classes? And maybe how are you kind of strategically thinking? And where is the investments being made in terms of putting more LPs into more step-zone funds? Thanks.
spk03: Sure. No, thanks for the question. And you certainly get the sense from our comments as well as our results that we've seen a recovery in the fundraising market, although I don't want to necessarily suggest that it is a universally strong fundraising market. I think it's one that you'd often hear us characterize as being bifurcated between sort of the haves and the have-nots. The haves meaning if you've got a strategy, a track record, and a supportive LP base, you can certainly get successful fundraising done. If you don't have those things, it's still a challenging environment. Fortunately for us, we do have many of those things, a well-diversified platform, cross-asset classes and strategies with our secondary strategies in particular, making significant progress, our private wealth strategies, as you just heard from Jason, making significant progress. But as we commented on as well, in a separate account area, we continue to see a strong pipeline of both new and existing clients. If I look back over the last quarter or last year, it's probably been somewhere in the range of 20 to 25% of the AUM flows coming from new clients with the remainder coming from either re-ups or expansion of client relationships. If I look at where some of that, the activity has been concentrated from a geographic standpoint, it actually falls roughly in line with our current business mix, call it 35% or so in North America, with the remainder fairly balanced across the Middle East, Europe, Asia and Australia. And then from an asset class standpoint, if you look at the last quarter or the last 12 months, on the separate account side, real estate and private equity have probably led the way, whereas if I look forward a bit, I think we're seeing quite a bit of activity across our private equity infrastructure and private credit asset classes. So I know a lot there in the response, but I think the good news is there's a meaningful amount of activity across all parts of the business today.
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spk01: next question comes from the line of Michael Cypress of Morgan Stanley.
spk08: Hi, good afternoon. Thanks for taking the question. I wanted to dig in on private wealth. I was hoping maybe you could elaborate on how you're viewing the product pipeline looking out over the next couple of years. I know you mentioned the credit product that's on its way. And then more broadly, if you could just maybe update us on the product placements for the three existing products in the market just in terms of how well distributed and placed are those products on the platforms and how do you see that evolving as you look out over the next 12 months?
spk10: Thanks, Mike. Jason here. In terms of the product pipeline, I don't think we're in a position to announce another product beyond the credit presently. I think the same principles that I talked about before will guide any future product development as it relates to the retail channel. So that's going to be one where we believe that StepStone has something to offer both because of our in-house expertise and investment strategies, but also one where the multi-manager model makes sense. And so these four product families for now, but certainly stay tuned and we'll continue to think about those areas where it may make sense in the future. In terms of the distribution syndicate for the existing funds, S-Prime is on two wires in the US, both allocating now in addition to the IBD channel and high single hundreds numbers of RIAs, the non-US distribution is, we're spending quite a bit of time trying to build that syndicate now that the US syndicate we believe is relatively mature for S-Prime. And as we look at spring, we're on one wire in addition to probably about half the number of channels that we are with S-Prime. That syndicate will continue to get built out in the US and abroad, probably in parallel with the S-Prime distribution. And then structure, the infrastructure fund is not on a wire currently and is on probably half of the platforms or so that maybe even a bit less than half of the ones that S-Prime is on currently. So each is kind of following a pretty similar gestation. And if I look at, I think more importantly than the number of platforms or which platforms they're on, if I look at the fundraising trajectory kind of going back to zero day on each of the funds, which is probably the way we think about it most often, each of spring and structs are equal or ahead to where S-Prime was at a similar point in time. So we feel good about that for sure.
spk08: Great. Thanks. And just a follow up question on the EPRI margin. Just curious how you're seeing the path here on the margin profile in fiscal 25 compared to I think there's around 32% or so that you put up in fiscal 24. Just any sort of thoughts around any sort of intra quarter, intra-year volatility and anything on the retroactive fees that we should be keeping in mind over the next couple of
spk02: quarters. Sure. This is David. So as you know, in any given quarter, you're going to see variability in our margins just due to retroactive fees and timing of expenses. So I'd guide you to look at our full year margins. Right. We feel pretty good about the trajectory of our margins and reaching the mid thirties in the medium term. So for fiscal 2025, we would expect to see continued margin improvement generally in line with what we saw in fiscal 2024.
spk08: Great. Mike, anything on that? Retrofee?
spk02: Oh, and so retroactive fees, as you know, we do have continued fundraising going on with our communal funds. We have our PE secondaries fund, real estate secondaries fund, growth equity fund and infrastructure, co-investment fund that's in fundraising today. And as we have subsequent closes, you should expect to see retroactive fees.
spk03: Great. Thank you.
spk01: Thank you. Our next question comes from the line of Kenneth Worthington of JP Morgan.
spk09: Hi, this is Alex Bernstein, I'm for Ken. Thanks so much for taking the question and congratulations on the strong results. As you mentioned, the exchange transactions are due to take effect for the first time this June. I know you mentioned that they're expected to be a creative both when speaking now and when you first announced them. Are there any other details you could provide on the level of creations? That's the first part of my question. And speaking with the theme, we noticed that you owned 49 to 50 percent of most of these non-PE platforms. Now as you cross over that 50 percent control mark, do you expect any changes that you can or would enact to how these businesses operate? And similarly to that point, looking at the growth rate trajectory, notice that obviously different growth rates for all of them. Notice that credit perhaps grew a bit slower than I would have thought relative to some of the other platforms just given the robust environment for credit. I appreciate that there was not a private wealth product for credit. So now with one being in there, it would expect some of that gets dealt with naturally, which is curious as you're looking to the outlook for all three of them in terms of the growth. Do you expect to shift investment across the platforms now that you're going to be owning a control stake in all of them? Thank you.
spk03: Sure. So Alex, thanks for the questions there. Maybe I'll take a crack at each of them, but ask one of David or Mike to chime in if there's anything I missed as I just try to address really the three questions. One around accretion, two around flipping from 49 percent to greater than 50 percent ownership, and then third on sort of the mixed shift in the growth in private credit. On the accretion, there really isn't probably much more that we can add today. We guided towards quite modest accretion, but because of the structure of the transaction, buying at a discount to our prevailing multiple and with the true up, if one of the asset classes were to outperform or underperform, it sort of locks in the fact that these will be accretive transactions over time. And the more meaningful impact from an accretion standpoint is that you look at these exchanges on more of a cumulative basis over time, but any individual exchange, including this first one, will only be very modestly accretive. Look, in terms of going above 49 percent or above 50 percent ownership, no real change in terms of how we would plan to operate the businesses here. We've been working very closely with each of our asset class teams and the leaders of those businesses for many years now, and so we really think about this as maybe the lowest risk pipeline of accretive M&A opportunities that we could really think about pursuing here. We work closely with these teams. Each of the asset class heads continues to serve on the executive committee for the broader StepStone platform, and it won't be until later in the game as we move towards much more significant ownership that much would potentially change. But again, we look at these businesses as having operated successfully within StepStone for many years now at this point. On the credit side, just in terms of some of the growth, we continue to see good activity across our SMA business, and some of that kind of continues to be in the pipeline. I kind of referenced the strong activity we're seeing in each of private equity infrastructure and private credit today. I'd say there's certain geographies in particular where we are seeing strong interest areas like Asia and the Middle East, and we continue to make progress there. And then, obviously, Jason just spent a couple of minutes talking about the private wealth opportunity. Clearly, there's been much time and attention focused on the preparations for the product launch there, which we think will be an important driver going forward here. So look, in terms of how the mix of the asset class evolves over time, that's obviously going to be a function of sort of the relative growth rate. And I think the good news, if you look at the history of StepStone since we've been publicly traded, there have been different asset classes driving the growth during different periods of time. And as I referenced earlier, coming off a period where real estate has been a big contributor as private equity, I think as we look ahead, seeing good opportunities in areas like private credit and infrastructure as well.
spk02: Thanks so much. Appreciate the response.
spk01: Thank you. Once again, to ask a question, please press star 1-1 on your telephone. Again, that's star 1-1 to ask a question. Our next question comes from the line of Adam Beatty of UBS.
spk04: Thank you and good afternoon. I wanted to dig into the separate account flows a little bit. It's obviously a very strong quarter, so that's good. It seems like maybe the trough there was a little bit more recent than in the coming old funds. So just given what you know now, the discussions that you're having and the outlook, I was wondering how we might think about the trajectory of those flows for the next few quarters, next fiscal year. Thank you.
spk03: Yeah, thank you, Adam. So on the SMA flows, and maybe I'll break it into sort of the gross AUM flows as well as the fee-earning AUM flows as well here. But starting with the gross AUM flows, again, this most recent quarter was one that was driven by a combination of real estate and private equity in particular. There was a very healthy mix of not only existing clients but new SMA clients. And if you think back to the COVID time period, that was really one of the challenges was developing new separate accounts. When we think about 20, 25% of the AUM flows there coming from new clients, we think that is quite healthy and starts to feed the pipeline of clients that can then re-up or expand with us over time. As we look out across the next few quarters, and again, these things tend to be somewhat episodic and can be a bit lumpy from quarter to quarter, but a very healthy pipeline of separate account opportunities with both new and existing clients across different strategies. Again, I would say they're concentrated at the moment in the private equity infrastructure and private credit space when I look forward. And from a geographic standpoint, looking forward, a lot of activity across different, in particular, -U.S. geographies at the moment. If I think about, just to add on to that, the fee-earning AUM flows, the one thing to add on is just deployment activity. And you heard us talk about the $22.6 billion of undeployed fee-earning capital. Of course, a portion of that is going to activate as our Venture Secondaries Fund has been activated. But we are seeing a slight pickup in new investment activity, which will help us continue to deploy that capital over the same sort of three- to five-year time period that we have continued to point to over time here.
spk04: That's great. Thank you, Scott. You anticipated my question about deployment, so I'll just ask a little follow-up. Would you expect, obviously, very strong, good growth there, would you expect the sort of proportion of undeployed fee AUM to kind of normalize as we look forward, or will it continue to kind of be a bigger portion? Thank you.
spk03: Yeah, look, I think you've obviously seen over the roughly four years since we've been public that at times it's increased, at times it is decreased. And so we would generally hope that over time you'd continue to see some modest growth in that number. But the way that we think about it is how successfully we can deploy that capital over, again, a roughly three- to five-year time period. So when you look at the portion of the $22.6 billion that needs to be deployed as opposed to activated, it's in the $20 billion range. And if you were to look at how much quarterly deployment we've had of our UFEC recently, or in this quarter, for example, we had $2.2 billion of UFEC deployment and activation. About $900 million of that was driven by the Real Estate Fund activation, so leaves you with about $1.3 billion of UFEC deployment. If you annualize that number, it's a bit over $5 billion from a run rate standpoint, despite the fact that deal flow has been, you know, started to recover, but is still somewhat depressed. But if you think about that over $5 billion of deployment and $20 billion of UFEC, you're still right in the range of a four-year deployment period, smack in the middle of the three- to five-years we've historically talked about. So that's how we kind of think about the health and the appropriate levels of undeployed fearing capital.
spk04: Makes perfect sense. Thanks for the math there, Scott. Appreciate it.
spk01: Thank you. I would now like to turn the conference back to Scott Hart for closing remarks. Sir?
spk03: Well, great. Well, thank you, everyone, for your time and attention. As you've certainly heard us talk about over the last several quarters, we have felt like we were laying the groundwork in setting ourselves up for strong growth this year. We're excited to see much of that growth come through this quarter and the momentum continue here in the fiscal 2025. So appreciate your time and attention. I look forward to connecting again next quarter. Thank you.
spk01: This concludes today's conference call. Thank you for participating. You may now go to your seats.
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