Bridge Investment Group Holdings Inc.

Greetings. Welcome to the Bridge Investment Group's second quarter 2022 earnings call and webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to your host, Bonnie Rosen, head of shareholder relations. You may begin.

Good morning, everyone. Welcome to the Bridge Investment Group second quarter 2022 financial results conference call. Our prepared remarks include comments from our Executive Chairman, Robert Morse, Chief Executive Officer, Jonathan Swager, and Chief Financial Officer, Katie Elsmab. We will hold a Q&A session following the prepared remarks during which Dean Alera, Vice Chairman and Head of the Client Solutions Group, will join. During the call, we will discuss certain non-GAAP financial metrics. The reconciliation of the non-GAAP metrics are provided in the appendix of our supplemental slides. The supplemental materials are accessible on our IR website at ir.bridgeig.com. These slides can be found under the presentations portion of the site along with the second quarter earnings call event link. They are also available live during the webcast. It is now my pleasure to turn the call over to Bob.

Thank you, Bonnie, and welcome to all. Bridge reported excellent results for the second quarter. our best quarter ever for distributable earnings with strong growth across our key financial metrics. Distributable earnings per share increased 28% year over year to 32 cents a share, driven by the consistent growth in management fee revenue and one of our strongest quarters for realized performance fees. Fee-related earnings to the operating company increased 62% year over year to $40.5 million. Gross AUM is now $42 billion, and fee-earning AUM increased 44% year-over-year to $15.5 billion. In addition to the strong financial performance, Bridge strengthened its balance sheet via the private placement issuance of $150 million of senior notes, half with a 10-year tenor and half with a 12-year tenor. and we coupled that with an expanded senior secured revolving credit facility of $125 million with the potential to increase to $225 million in certain circumstances, giving Bridge enhanced liquidity and flexibility. The market environment has become more turbulent recently with markets impacted globally by concerns around numerous macro issues, including high inflation, aggressive Fed actions, and continuing geopolitical risks. The impact of these factors on various markets differs, although all markets, including those in which Bridge participates, have been affected. For the most part, many of our specialized investment strategies are resilient and in the past have proven to be recession resistant. Residential rental investments in the U.S., which underpin our multifamily workforce and affordable housing, single family for rent, and debt strategies, investment theses, and constitute approximately 85% of our gross AUM, continue to perform well. However, the market turmoil has begun to impact transaction volumes, which have slowed as both buyers and sellers seek price certainty, and higher interest rates have made financing more challenging. The U.S. labor market remains a bright spot for the economy, with the unemployment rate remaining near record lows. Importantly, nominal wage growth continues to hold up along with consumer balance sheets. For residential rental real estate in general, these strengths help to offset the challenges mentioned earlier. While acknowledging near-term challenges, we continue to have conviction in our views of the investment environment, and our strategies are designed to address and benefit from these themes. The U.S. is the preeminent investment destination and thematic-driven investing in real assets in the U.S. provides our limited partner base with exposure to and safety and flight-to-quality opportunities in these turbulent times. We see this reflected in the continued demand for U.S. exposure by numerous international investors, and we have continued to expand our abilities to access this capital. Second, housing is critically undersupplied. And new development is more difficult in the current environment, which should exacerbate the supply-demand imbalance over time. At Bridge, since 2018, we have invested significantly in our development capabilities, have grown a team of 42 professionals focused on this market, and are currently pursuing 76 development projects, virtually all in the multifamily sectors. The housing shortage in the U.S. impacts disproportionately the underserved middle-class and workforce cohorts in the U.S., and our significant investments in these sectors are expected to perform well as they are resilient and recession-resistant. For context, in our 112 multifamily investments in our current and predecessor funds, Bridges never lost a dollar of capital and has returned a 2.4x multiple of capital on realized investments. We are especially pleased to see our robust execution in multifamily continue through these past few years of market dislocation with a 3.1X multiple of capital since the first quarter of 2020. Third, the U.S. has substantial infrastructure needs to facilitate the sustained growth of e-commerce, onshoring, and the normalization of U.S. supply chains. And since the launch of our Logistics Value-Add Investment Program, Bridge has invested nearly $900 million into attractive assets in critical nodes of the U.S. infrastructure system. We have launched the second vintage of this fund and expect to continue to grow our exposure in this area. Some may have seen our recent press releases in which we detail some of the attractive assets we have been able to acquire, often in non-competitive situations. Last, notwithstanding recent and expected increases in interest rates, There is a global hunt for sustainable yield without a huge amount of risk, which increasingly is satisfied by alternative credit vehicles, as demonstrated by our strong final closing in debt strategies fund four of $2.9 billion. Ongoing carefully structured and hedged investments in AMBS, which generate attractive yield, and early successes in the bridge net lease income vehicles. Bridge has always focused our fundraising and investment in markets and properties underpinned by the long-tailed secular demand drivers I've just described. Subsequent to quarter end, Bridge launched two new strategies, Bridge Solar and Bridge Ventures, that we believe will complement our existing investment vehicles. The Bridge Solar strategy seeks to meet the growing demand for green energy while at the same time providing asset owners with a discount to market energy prices all while addressing the urgent need to accelerate the delivery of renewable energy. Bridge has partnered with Lumen Energy, a leader in clean energy software and energy project development process technology, to offer best-in-class design, procurement, construction, and operation of solar projects on properties owned by Bridge-managed funds and third-party assets. Our national footprint and local expertise combined with Lumen's data-driven technology will offer attractive efficiencies in the analysis and implementation of solar in a high-demand market that has been largely untapped. Additionally, we see demand from investors seeking ESG solutions for their real estate portfolio as regulators implement new rules. Our near-term goals include the development of 700 megawatts of clean energy, the equivalent of over 400,000 tons of coal usage, and the creation of a distributed network of power generation. Small-scale solar installations on commercial real estate have addressed only about 5% of potential, and we believe the market is ripe for further expansion while offering significant returns to investors. Our strategy and execution is the result of about two years of planning, and we are very excited about the launch. The Bridge Ventures strategy will target prop tech investment opportunities. Bridge is uniquely positioned as a forward integrated prop tech investor to leverage its platform and vast industry relationships to access and profitably invest in compelling prop tech companies. Our chief investment officer, Jeremy Ford, and the Bridge Ventures team bring over 25 years of relevant experience in technology, real estate investing, and building and operating high growth technology companies. With the recent retreat in venture pricing, we believe it is a great time to be entering this market. We're excited to expand into these segments where we see growth potential for our business and have already generated strong interest from new and existing investors. We believe that Bridge is well positioned in the current environment to continue to perform for our investors and for our shareholders with our resilient and recession-resistant investment strategies. Our forward integration into property management positions Bridge as a best-in-class operator, driving alpha and differentiated results across our existing portfolio. We have successfully raised capital in many of our investment vehicles to continue to invest in a buyer's market and have significant dry powder. In past downturns, Bridge has executed cautious but continued deployment to take advantage of opportunities as they arise in a turbulent market. Finally, as mentioned, we are in a strong position from a capital and balance sheet perspective to perform well while the broader markets work through challenges. With that, let me turn the call over to Jonathan to further detail our results and strategy.