DigitalBridge Group, Inc.

Greetings and welcome to the Digital Bridge Group third quarter 2023 on your call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kevin Wright, please go ahead.

Good morning, everyone, and welcome to DigitalBridge's third quarter 2023 earnings conference call. Speaking on the call today from the company is Mark Gansey, our CEO, and Jackie Wu, our CFO. I'll quickly cover the safe harbor, and then we can get started. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking, and such statements involve a number of risks and uncertainties that could cause actual results to differ materially. All information discussed on this call is as of today, November 1, 2023, and DigitalBridge does not intend and undertakes no duty to update it for future events or circumstances. For more information, please refer to the risk factors discussed in our most recent Form 10-K filed with the SEC for the year ending December 31, 2022, and our Form 10-Q to be filed with the SEC for the quarter ending September 30, 2023. Great. Let's get started with Mark providing an update on our key objectives for 2023. Jackie will outline our financial results and turn it back over to Mark to talk about the opportunities we are capitalizing on at DigitalBridge Credit. With that, I'll turn the call over to Mark Gansey, our CEO. Mark?

Thanks, Devin. I'm pleased to share our results for 3Q 2023 as we posted some very strong financial performance that was a function of both the steady progress we've made building a predictable fee income earning stream and the one-time benefits we realized from our simplification initiatives. So first, let's start by covering our top three priorities for 2023, beginning with fundraising. In Q3, we generated strong year-over-year growth in our investment management platform, with fee income of 57% and segment level FRE of 36%, both slightly higher than last quarter's already strong growth, powered by higher FEM from core, credit, and co-investment, along with our second full quarter of contribution from InfraBridge. New capital formation came in at $2 billion, with our flagship DigitalBridge partner series leading the way, and the balance from new strategies, including credit, which I'll cover in Section 3 today. LP interest in digital infrastructure is robust. On the back of AI-driven demand, I'm pleased to confirm we are on track to achieve our fundraising goals for the year. On the simplification front, we completed the databank recap in September. which resulted in another $50 million back to you, DigiBridge shareholders, bringing our total proceeds to $471 million and generating a 32% internal rate of return to DigiBridge shareholders. Our balance sheet also got a lot simpler, with $2.3 billion of debt deconsolidated in connection with the data bank closing, as we brought our ownership in that asset under 10%. We're also advancing our simplification objective by rolling out additional disclosures on fund performance, consistent with our alternative asset management peers. Investors have consistently asked for this, and we're delivering. On that point, portfolio performance, our third key priority. We demonstrated strong results, particularly in the data center vertical, with monthly recurring revenue of 20%, and the other three verticals all delivering mid to high single-digit growth. Let's detail fundraising and our simplification progress before we get into the financials. Next slide, please. On new capital formation, I'm pleased to report we raised $2 billion since last quarter's earnings, bringing us to a total of $5.4 billion year to date. The majority of that, around $1 billion, came from continuing commitments to our flagship DigiBridge partner series, which will start generating fee income today, triggered by the strategy's first closing. We've also completed additional co-invest syndications and brought in more capital in our liquid and credit strategies during Q3. We believe this progress puts us on track to hit our fundraising targets as we come into the fourth quarter, which has been seasonally very strong for us given our fundraising cadence. Look, it's been a tough year for capital formation. It's been one of the toughest that I can remember. But the key here is perseverance. Perseverance of the team and persistent interest in data center infrastructure spurred by advances in generative AI has put us in a good position to deliver on our goals. Again, I want to reaffirm our guidance and our belief that we'll hit our fundraising goals for 2023. Next page, please. So as you can see here, we continue to generate solid year-over-year growth in both FIEM and AUM. We ended last quarter with about $30 billion in FIEM, up almost $10 billion over the prior year. That's 46% annual growth driven by equal measures of organic capital formation and contribution from the infra-bridge acquisition we closed earlier this year. On the right, asset center management which tracks the NAV of the assets that we manage, was up to $75 billion last quarter. Again, 48% higher over the prior year.

Next slide, please.

So on the simplification front, it's quite simple. We deconsolidated DataBank. I can't tell you how thrilled I am to use the past tense here for a couple of reasons. One, the recap was a huge success for DigitalBridge. We doubled our money in only a few years, generating a 32% IRR for DigiBridge shareholders. Just this last quarter, we added another $50 million in proceeds, including $28 million in carried interest, bringing the total monetized value to DigiBridge to $471 million. This was a smart use of our balance sheet. And look, we're retaining a stake in the business. The stake is worth $434 million at the price we just transacted. DataBank, as most of you know, is experiencing explosive strong growth led by edge AI leasing. So we're excited to be retaining a meaningful stake in the business. We don't anticipate any additional sell down here in the near term as we're excited about the future prospects. We're delighted to continue to support Raul and the DataBank team. The other reason I'm pleased to finalize the process is the closing resulted in the deconsolidation of DataBank from our financial statements. Most notably, the transformation of our balance sheet. As of September 14th, 2023, 2.3 billion of consolidated debt comes off the books, a reduction of 42%. While most of this debt at share was not really attributable to DigiBridge, it did create a lot of unnecessary complexity for investors that were new to evaluating our business. So it's a big milestone in our drive to simplify the DigiBridge story. One to go. Vantage SDC is next, and I remain confident the next time we report earnings, there'll be some more good news, if not sooner.

Next slide, please.

As we complete our transition to a pure play alternative asset manager, a second facet of our simplification initiative has to be improved and amplify our financial reporting. This quarter, I'm pleased to announce we're introducing fund performance metrics into our quarterly 10K and Q reporting, further aligning with our peer set. This has probably been the most requested data set in recent quarters, so we're pleased to provide shareholders with insight into the performance of our platforms. A couple of important notes here. First, these include solely the commingled funds we've managed for over one year, so our core and credit platforms will be incorporated and 2024 as these are new products on our platform. And because it just includes commingled funds, it does not incorporate returns from the SPVs or continuation funds that were formed in the original DB Holdings investments or from GTP, the tower company that I built and sold to American Tower. These returns will always be out of the perimeter. Second, as you know, our long-dated funds are early in their life cycle, and in some cases, multiple uninvested capital calculations, or MOICs, include recent investments that have not benefited from the compounding effects of our value-add investment strategy. Third, we've incorporated the InfraBridge funds, which we acquired earlier this year, into our reporting framework. With the investment and asset management teams now fully integrated, we expect this to further strengthen the JIF fund performance over time. as we overlay our asset management framework and our value-add cookbook to enhance the performance of those assets. So, stepping back, these fund performance metrics highlight how we're delivering for our LPs, generating steady, risk-adjusted returns consistent with their expectations and with the broader infrastructure sector.

Next slide, please.

I want to highlight the portfolio company performance that ultimately underpins and drives those investment returns over time, specifically our discounted cash flows. Monthly reoccurring revenue across the portfolio is up again in all four of our verticals. This is driven by organic and investment-led growth. I want to highlight data centers inside the quarter. They were really the standout. With monthly reoccurring revenue up over 20%, and the rest of our verticals performing well. Towers up 6.6%, fueled principally by 5G overlays and 5G amendment traffic. As we then calibrate in the next three to seven years into densification across the four geographies we serve, we expect towers to be a consistent performer in organic growth. Fiber is up 10%. This is really driven by the fact that folks are returning back to office and we're seeing steady contributions in enterprise fiber, long-haul fiber, and data center connectivity, including recent performance at Xeo. And small cells, up 5.5%, as we've seen a nice turn in leasing activity, driven by mobile carriers moving from 5G overlays and amendments into 5G densification. We're really excited about what's happening in small cells because it's not just the mobile carriers that are driving traffic. It's private enterprises, it's IoT networks, and even cable companies. So we remain really optimistic about what's going to happen in the small cell segment in the coming years. Look, take a step back. Distill this at 50,000 feet. It's really simple. The demand for compute and connectivity continues to grow steadily, and our ability to deliver for customers continues to expand along with our portfolio. DigitalBridge's unique ability to show up anywhere at any time for a customer across the planet is true differentiation.

With that, I'd like to turn it over to Jackie to cover the financials. Jackie.

Thank you, Mark, and good morning, everyone. As a reminder, in addition to the release of our third quarter earnings, we filed a supplemental financial report this morning, which is available within the shareholder section of our website. Starting on page 15, all of our quarterly key operating and financial metrics increased significantly year over year, driven by our robust fundraising efforts and acquisition of InfraBridge platform. We anticipate the strong momentum to continue as we progress in the fourth quarter. Turning to page 16, total company distributable earnings was $35 million, or 20 cents per share, including $28 million of carried interest realized from the final closing of DataBank's recapitalization. Assets under management increased to $75 billion in the third quarter, which grew by 48% from the same period last year. And fee-earning equity under management increased to $30 billion, a 46% increase from the same period last year. AUM and VUM growth were primarily driven by the InfraBridge acquisition and capital raised in our new strategies and fee-paying co-investments. Our fundraising pipeline remains robust, and we look forward to closing out the year with a strong fourth quarter, principally from commitments to our latest flagship fund, Digital Bridge Partners III, or DBP III. I would also like to highlight that effective today, we will begin generating management fees coinciding with the first closing in DBP3. Moving to page 17, the company achieved healthy year-over-year growth propelled by the expansion of the investment management business and further enhanced by our streamlined corporate structure. For the third quarter, consolidated revenues were $477 million, which represents an 11% increase from the same period last year. As a reminder, consolidated revenues include realized and unrealized carried interest. Total company adjusted EBITDA was $34 million, up 15% from the same period last year. This growth is primarily attributable to an increase in investment management fee revenues, offset partially by the reduced ownership in operating assets, which we will cover in more detail on the following pages. Moving to page 18. The company continues to grow its investment management earnings and fee earning equity under management, generated by additional fundraising and deployments in our flagship funds, new strategies, fee-paying co-investments, and contributions from intra-bridge funds. Fee income, excluding incentive fees, was $66 million, and fee-related earnings was $29 million. representing 57% and 36% increases from the same period last year, respectively. Investment management segment distributable earnings increased by 51% to $53 million from the same period last year, benefiting primarily from carried interest recognized as part of the recapitalization of data bank, which closed on September 14th. It is also important to note that as a result of the deconsolidation of DataBank, the company's leverage profile and balance sheet continue to improve and become materially simpler and more asset-light. As Mark and I had previewed, was our corporate strategy and mission going forward? Turning to page 19, last quarter we began including new disclosures designed to provide additional detail on carried interest allocations and expenses. For the third quarter, net carried interest income before non-controlling interest was $96 million. Due to the fair value of our managed funds increasing at a rate that exceeds the preferred return hurdles in our investment vehicles, which generates carried interest to DigitalBridge as the manager. Moving to page 20, the company's share of digital operating revenues and earnings have continued to decline due to lower ownership interests. On September 14th, we announced the completion of the recapitalization of our interest in DataBank, reducing our ownership to 9.9%. This transaction generated nearly $50 million in proceeds, inclusive of $28 million in carried interest for DigitalBridge. Going forward, our remaining interest in the DataBank platform will be treated as an equity method investment. and we expect to sell a portion of our ownership interest in Vantage SDC in the near future, which would complete our planned deconsolidation of the operating segment. Turning to page 21, fee revenues in our high margin investment management segment continue to grow, partially offset by the realization of two assets within the InfraBridge platform. Since the third quarter of 2022, our annualized fee revenues increased from $182 million to $264 million, and fee-related earnings increased from $100 million to $125 million. We expect fee-related earnings to grow materially as we continue to raise capital for DBP3, and as mentioned earlier, effective today, the commencement of DBP3 management fee billings. Looking at the right side of the page, run rate annual fee revenues are $276 million. we are on track to meet our previously provided fee revenue and FRA guidance ranges. Turning to page 22, our balance sheet has significantly changed following the deconsolidation of data banks, highlighted by the substantial reduction in investment-level debt. And upon the deconsolidation of Vantage SDC, in the near future, our debt profile will be similar to those of our peers in the alternative investment management space. especially as we continue to monitor the capital markets and consider further opportunistic optimization of our leverage profile through both preferred and common equity redemptions and distributions. Turning to page 23, as we have completed another milestone in our progress to simplify our capital structure, we have almost reached our target corporate debt level with no near-term debt maturities. And with approximately $530 million in liquidity, including the full $300 million available from our securitization revolver, our balance sheet and liquidity remain strong and poised for our creative uses. In summary, Mark and I are proud of the substantial strides we've taken this year to simplify the business and solidify DigitalBridge's position as a preferred partner of choice in the digital infrastructure space. Our financial performance continues to show marked improvement despite a difficult fundraising environment. And we remain committed to generating long-term shareholder success by scaling new products in our dynamic investment management platform led by our robust fundraising abilities. We look forward to closing out the year strong, already highlighted by the completion of a first close in our flagship fund, DBP3. and continued progress in deconsolidating our balance sheet interest in Vantage SDC. And with that, I will turn it back to Mark. Thank you.

Thanks, Jackie. So this quarter in Section 3, where we always talk about executing the digital playbook, I want to talk about DigitalBridge Credit and how we've extended our platform organically into the private credit asset class. Let's start with some context for the strong growth the asset class is experiencing. Before I walk you through a case study that highlights how we're bringing skill capital to the game here, it's clear to most of you that private credit is a growing force in global capital markets. Since 2010, over $1.8 trillion in capital has been formed by alternative asset managers to fill a growing demand for credit that traditional lenders, hampered by tightening restrictions and regulations, have not been able to keep up with. On the right, You can see in just the last five years that private credit is taking share, filling the gap left by traditional lenders to meet growing demand from borrowers that need liquidity and growth capital. At the same time, institutional LPs are increasingly being drawn to the sector, attracted by better risk adjusted returns on the back of higher interest rates and the reliability of credit products in an uncertain macro. Next slide, please. As you can see here, credit's attractive risk-adjusted profile is driving increasing institutional interest in private credit. On the right side, over $1 trillion has been raised in private credit in the past five years alone. This is doubling AUM over that time period. The average fund size continues to increase, and it's expected that 2023 will generate another $200 billion plus of capital formation, the fourth year in a row exceeding that level. As you can see, this is not just a fad. It's sustainable. The best part is, as you can see on the left, DigitalBridge is at the intersection of the two asset classes with the highest intent to increase allocation among institutional investors. Private credit, one, infrastructure, two, are the only two asset classes where that intent is greater than 50%. The intention here is everything. We're talking to LPs on a global basis. and they want to be exposed to digital infrastructure, and they want great exposure to private credit. So why not give them both in the same product set? And this is where we've landed. This puts us in a real sweet spot in an already fast-growing market. Next slide, please. So what have we built so far? Over the past couple of years, we have organically grown a private credit business led by Dean Karras. dedicated to supporting the growth of companies across the digital infrastructure sector and ecosystem. We finished Q3 2023 with $1 billion in fee-paying capital, delivering private credit investment solutions to other financial sponsors. And in essence, we're providing the key skill capital that leverages our ecosystem. Those investment solutions span the full spectrum, from first lien senior secured debt all the way to preferred equity. Most of the lending is floating rate securities with check sizes in the $20 to $300 million range across all of the verticals inside of digital infrastructure, fiber, towers, data centers, and emerging infrastructures such as small cells and other parts of the ecosystem. It's important to note digital infrastructure is an incredibly capital-intensive sector. So we're just getting started in servicing a really big and growing TAM. As I mentioned in previous years on our earnings calls, that TAM grows approximately about $500 billion per year in terms of the total wall size. So on a reasonable loan to value equation, one could assume about $250 billion of new credit could be written every year. This is a sleeve that can become an evergreen source of growth for DigiBridge. We are really excited about the future prospects of this business. Let's cover a case study on the next couple of slides to give you a sense for how DigitalBridge Credit is financing the growth of the digital economy.

Next slide, please.

This summer, DigitalBridge Credit participated in a financing for CoreWeave, a company many of you are familiar with. CoreWeave is a leading next-generation specialized cloud provider focused on servicing AI workloads at scale with the latest technology. They fit alongside the large cloud service providers within the infrastructure layer of the AI tech stack you see on the left, but with a business purpose built for artificial intelligence. That means access to thousands of the latest generation GPUs, a specialized networking fabric built to reduce latency and boost chip utilization, and value-add software and technical resources. To distill it, simply put, this is GPU as a service serving rapidly growing AI workloads. CoreWeave represents an incredibly compelling customer value prop focused on delivering first, the best pound for pound AI compute. Second, a very fast and flexible and cost effective service. Three, it's incredibly scalable. And then four, they're targeting a large and growing market. estimated to reach $160 billion by 2027. Just recently, CoreWeave unveiled the world's fastest AI supercomputer built in partnership with one of their equity investors, NVIDIA. This is a terrific company with a terrific CEO that was seeking capital to finance the incredible growth they're experiencing. So let's turn to the next slide to cover the financing and how we leveraged our DigiBridge ecosystem. As you can see on the left, in July of 2023, DigitalBridge Credit participated in a $2.3 billion financing for CoreWeave alongside Blackstone, Magnetar, and Co2. CoreWeave was looking to fund a significant amount of growth capex ramp to be contracted AI compute demand, including the purchase of thousands of the latest generation GPUs, securing significant new data center capacity, as well as continued working capital investment in their platform. It's a financing backed ultimately by Cori's high-quality investment-grade counterparties and supported by a durable asset-backed collateral. This, at the end of the day, really is in parallel with how we underwrite our investments at DigitalBridge. We're always focused on long-term contracts, investment-grade counterparties, and asset-backed collateral. This is seminal to our investment thesis in DigitalBridge Credit. Over the course of the financing, DigiBridge levered its ecosystem in unique ways to source, vet, and accelerate the transaction, highlighting the strategic value of our platform. So let's start with the source. Here, our significant market intelligence and tangible value prop attracted CoreWeave to working with DigiBridge. Given the breadth of our data center assets and industry expertise, CoreWeave actively sought to work with DigiBridge. Next, vet. In terms of vetting, the ability to de-risk transactions is always really important to us in the underwriting process. In this case, our credit underwriting process was enhanced by access to DigitalBridge's data center portfolio companies and the long-term relationships we maintain with leading global technology companies. Basically, in a nutshell, we talked to the logos. Finally, accelerate. Here, we already actively were supporting CoreWeave's time to market advantage. leveraging DigitalBridge's global data center footprint, including Switch, Vantage, DataBank, Scala, AIMS, and Atlas Edge. The Quarry transaction is a great example of the next-gen digital infrastructure we're financing at DigitalBridge Credit and how our team and portfolio companies can both benefit from what we call the power of the platform. With that, I'll turn now to the CEO checklist for the quarter before we wrap it up and open it up the line for Q&A. Next slide, please. Great. As always, let's wrap it up with the review from the CEO's checklist. First, on fundraising, our number one KPI, $5.4 billion year-to-date, and we remain, again, on target to hit our fundraising targets for the year. The last quarter will be busy. I can promise you that. And I'm confident we're going to get the job done. Also, the DigiBridge Partner Series VM kicks in this quarter, so we'll start to see the flow through from our fundraising efforts. which is really important. Next up, on simplification, we closed databank, generating a great return for our shareholders while reducing complexity in our financial statements and de-levering our balance sheet. VantageFTC is up next, and we'll get it done. We've also introduced fund performance metrics, further aligning our profile with other alternative asset management peers. This is an important step. It's delivering on something that you, our investors, have been asking for, and now we're presenting it to you. We're pleased with our performance, and we're excited about the future of our funds in our flagship series. Finally, and most importantly, down in the trenches, at the portfolio level, we've continued to support the growing compute and connectivity needs for the most powerful investment-grade logos in the world, including for our growing credit franchise that benefits from the power of the Digital Bridge platform. Thank you for your support as we continue to execute on the final stage of our transition to a fast-growing alternative asset management levered towards the powerful tailwinds and digital infrastructure. I look forward to updating you next quarter on our continued progress. With that, I'll hand it over to the operator to begin the Q&A section. Thank you.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the questioning queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star key. And our first question comes from Michael Elias with Colon & Company. Please go ahead.

Great. Thanks for taking the questions. To start, with the boom in data center leasing that we've seen, it also appears that there's been a boom in demand for debt capital to build new data centers. Mark, I'm just curious if you could share any observations related to the depth of the debt capital markets for data centers relative to the demand for debt. And as part of that, any observations around where spreads are going for data center debt? And then I have a follow-up.

Yeah, thanks. Thanks, Mike. Appreciate it. How are you? So, we think that the data center marketplace over the next, you know, call it next seven years is somewhere around 35 gigawatts of new leasing capacity that needs to be delivered. As you know, Michael, most of that will be Greenfield. So, when we contextualize that, it's, you know, it's literally, you know, hundreds of billions of dollars of new construction activity in the data center industry. It depends on what your metric is on the price per megawatt. And then obviously you can compute that to a price per gigawatt. So we think that the market is literally shaping up from a CapEx perspective somewhere in the 1.5, you know, billion dollar range just for, you know, for us just this year in terms of the stuff that we're financing. So if you contextualize that, and there's probably a trillion dollars of data center spend, and you assume a reasonable capital structure of a 50 percent loan to value, you can assume that there's $500 billion of data center, you know, financings coming up here in the next seven years. We think that most of that, as new construction loans will go, will be financed by private credit. You know, banks, obviously, given bank regulations, are somewhat hand-tied in terms of financing greenfield construction, as you know. And traditional real estate lenders are going through a significant amount of digestion and what to do with office space and other forms of commercial real estate that are under stress. So we are seeing a surge in interest, particularly in our credit side, in financing new data center builds. And keep in mind, our credit team finances for portfolio companies that don't belong to us. So there's a huge universe of potential folks that we're working with in terms of developers that we know well that we don't have the equity in, but certainly have the debt in. So contextually, you know, $500 billion TAM, and pretty expansive. On the pricing side, it really depends, Michael, on structure, whether it's a, you know, a holdco note to help finance a data center operator, whether it's actually a construction loan. But what we're seeing is, obviously, with base rates, you know, in the, you know, near five, and new construction loans certainly being riskier, which is where we're playing and, you know, old co-notes, which are above the senior, as you take the capital structure north of a 50% loan to value, you can obviously begin to see spreads with credit enhancements in those loans, entry fees, exit fees. You know, you could see total yields on those loans in the 12 to 14% range, you know, with coupons somewhere on the low side for the high quality assets and the sevens and the mediocre to perhaps less quality assets in the you know, eight and a half to nine and a half percent range. So we're seeing all kinds of opportunities in the data center space. And obviously it is driven by public cloud and private cloud and those AI workloads that you and I have talked about over the summer. So it's a big marketplace. We're very active. We've got a pipeline of over 60 loans that we're working on right now. We can't stress enough how big the private credit opportunity is in data centers, but also in fiber and towers as well, Michael.

Thank you. I appreciate the color there. And then just as a follow-up, you're talking about the 35 gigawatt incremental opportunity here. A two-parter question. First is, can you talk about how DigitalBridge is positioning itself to win more than its fair share of that opportunity? And then as part of that, perhaps at the portfolio company level, if you could just talk about the unlevered return targets across the data center platforms as you think about these large-scale AI workloads. Thank you, Mark.

Yeah, thanks. So we do think we're taking more than our market share. I mean, we've had a tremendous year of leasing and not quite sure where it all lands, but it's measured in the hundreds of megawatts, you know, across Switch, Vantage, Databank and Scala and Ames and Atlas Edge. So, as you know, we play the sector. in multiple different ways. We play it from a private cloud perspective up at Switch. We play it from a public cloud perspective at Vantage Europe and Vantage North America, Vantage Asia and Scala. And then we're playing the edge compute business at Ames and Data Bank and Atlas Edge. So we've got multiple platforms to go attack the different verticals and the different workloads. And I think you have to understand that AZ's availability zones, which are essentially the search rings of the data center sector, having localized teams, you know, from from some Paulo to, you know, to Europe, uh, to North America, to, uh, to Asia is really helpful. Um, and it allows us to, you know, obviously think globally with our big customers, but indeed act locally in terms of securing power and, uh, the ability to execute and, uh, and deliver for customers. So I think that, you know, we don't love to give out yields. It's, it's somewhat of a competitive advantage, but here's what I can share with you, Michael. I can tell you that, you know, cash on cash yields are up year over year. significantly, somewhere between 20 and 30 percent on average in terms of the CAGR growth of the yields. What I can also share with you is that rents are up. Rents are up 21 percent year over year on a global basis. When you distill the six portfolio companies that we own and operate and you look at their results year over year, we've seen rental rates come up significantly. This is really a function of supply and demand. And there's more demand than there's supply. And so our existing locations where we have land, where we have power, where we have entitlements Those are renting at a premium. So I think, look, the punchline is rents are up, development yields are up. We've got the biggest platform in the world to go attack this. Today we have just a little under 300 data centers and we have over 1.7 gigawatts of compute power to offer to our customers. So we do think on a global basis, you know, we are one of the largest, if not the largest operators of edge cloud, public cloud and private cloud data centers in the world. And, you know, just looking at absorption, if we end up leasing, you know, somewhere between 770 megawatts and 1.2 gigawatts this year, I think that's going to lead the league in leasing, certainly far bigger than DLR and far bigger than Equinix. So we think we're definitely taking more than our fair share of the market.

Awesome. Thank you, Mark. Thanks, Michael.

Our next question comes from Jay Ramami with KBW. Please go ahead.

Thank you very much. From your vantage point today, and I understand the lumpiness of fundraising and that these things have long cycle times given the complexity, is there anything today that would give you a read-through to 2024 as to whether fundraising is on pace or even could potentially accelerate? The second question would be, If we get past some of the macro uncertainties that are weighing on so many sectors, will that accelerate and provide more tailwinds to your fundraising efforts?

Thanks, Jade. Appreciate it. Well, look, let's first start with the quarter, right? I mean, we raised, we formed $2 billion in new capital in the quarter. Really delighted with the $2.3 billion first close of our third fund. I think as you peer set that against other alternative asset managers, we definitely believe we've outkicked our coverage. We're having a very strong fourth quarter in fundraising. Historically, we've always performed well in the fourth quarter. I think one of the dynamics that's happened here, Jade, is that a lot of LPs have sat on their hands in Q2 and Q3. We got investors motivated and into our new flagship series. And that's why we're pretty happy to have the first closing yesterday. And we do have optimism around the fourth quarter. And we have even further optimism for next year. Asset allocators have already given us a sense of where they're allocating capital for next year. I just finished a three-week tour where I saw 80 of our LPs. Someone told me they thought I went around the world twice. I don't think that was exactly true, but definitely was in Asia and the Gulf and North America and pulsing all of our key accounts. And look, I think there's three takeaways from that trip, Jade, over the last three weeks. One, you know, investors want to be with the best of the best. They're generally shrinking their GP list. They want to be with less GPs, and they want to be with the best GP in credit. They want to be with the best GPs in private equity and infrastructure. And then most importantly, they want to be allocated to the best manager in digital and renewables. So we think we sit in a pretty protected place there, as we are the largest alternative asset manager in digital infrastructure. And that's why we had a good print in Q3, and while we'll have a very strong print in Q4, and I reaffirmed our guidance you know, for 2023 this year. I think next year will be very constructive. You know, we have over 200 investors still working in our flagship fund. We've had today, we've had 23 investors come into the first close. We believe this fund will attract anywhere from, you know, the low side of 80 investors to the high side of over 120 investors given our market intelligence. and we've had so far 100% re-up from Fund 2 to Fund 3. There hasn't been a Fund 2 investor that's told us they're not committing to Fund 3, and many of those investors haven't closed with us yet. So our calculus may be a little different than other folks. We have a lot of precision. I study the data every week. I'm coming out of Salesforce, and I'm, as most of you know, I'm somebody who really likes data, and I study the data, and we're hitting our points. And that's the key. But I am optimistic, Jade, about next year. And I think, you know, our guidance for next year will demonstrate that. But we're very pleased with the performance inside this quarter. And look, the key here is we just activated $25 million in fees. We literally start billing those fees as of yesterday. And all of those fees will get caught up in the fourth quarter, and there'll be more catch up in Q1 and Q2 next year. And so there'll be a profound impact to our earnings in fourth quarter. Because now that the closing has occurred, we finally get to start billing on Fund 3. That is absolutely important as investors think about what to look at these numbers and how to think about DigiBridge. The expenses always come in front of the revenues, unfortunately, when you're fundraising. So that's a little bit about what's happening today.

And the follow-up would just be, as it relates to macro, do you believe that that is one of the reasons why fundraising cycle times are a little extended?

Yeah, no doubt. I think the macro has forced investors to move with a little more what I would call patience. And I think investors are being incredibly thoughtful about how to deploy capital. And certainly, you know, certain pension systems want to cover their liabilities. So it's easier for them not to commit to funds and to make sure that they can cover their liabilities as pensioners take money out of the pension. So these are called outflows and inflows. And so In a market like this where investors get nervous, pensioners get nervous, they may elect to take money out of their pension, Jade. And so on that, you get more outflows than you get inflows, which is taxes and the percentage that gets taken from someone's paycheck that gets put into a pension system, like in places like Canada or places like Europe, you know, and even here in the U.S. where certain U.S. state pensions are definitely watching very carefully and taking a risk-off mentality. That being said, there's pockets of great optimism. We've done incredibly well in Asia. That's been a really good market for us. We had a brand new fundraising team we put in place last year. We're seeing terrific results out of that region. We've seen very good results out of the GCC region. And Europe's been a little slow. The U.S. is coming on right now. Canada's coming back on. So as I said, you know, the macro certainly makes people slow down a little bit and have some pause. But one thing we are seeing is the pension systems are being very cautious, Jade, just given that outflow-inflow dynamic. And that should stabilize next year is what our belief is. That's what we see and that's what, you know, fundraising consultants are telling us as well.

Thank you very much. Yeah, thanks, Jade.

Our next question comes from Rick Prentice with Raymond James. Please go ahead.

Thanks. Good morning, everybody. Hey, Rick. A couple questions. First, timing in life is everything. Obviously, you're working on the Vantage deconsolidation. Help us understand what are you trying to achieve? How much are you trying to sell down to? How many people are involved in the discussions? What's kind of the process as you think about either by next time you report earnings, if not sooner, I think you said that we could get this one done. So just help us understand the process to get to this next final deconsolidation simplification story?

Yeah, thanks, Rick. So, look, we're having good conversations with some of our biggest investors. I can't give you the exact color of who it is for confidentiality reasons, but rest assured, they're long-term core-type investors. There are pension systems generally that value these U.S. assets that are 97% investment grade, close to 6% yield, and offers investors incredible safety. Even in light of today's interest rate conditions, these are some of the best data centers in the world. I think our process is, obviously, we want to sell down $60 million of our position. We've made that perfectly clear to the investors we're talking to. We do have interest, and we do have ongoing negotiations with a couple of investors. And the key is also not just to sell down the 60, but to also to continue, Rick, to introduce new capital into Vantage STC, new third-party capital, as Vantage North America now has other data centers that they want to push into this long-term REIT that we own. We like the REIT. We want to own literally 9.9% of it. It's a good... uh it's the best of the best i think you cannot find a better set of us data center assets in the world and just the credit quality and the duration of the lease is being greater than 11 years it's a really unique set of assets so as you can imagine it's uh it's not been for lack of interest we have multiple parties looking at the position we're looking at ultimately who can provide us with the most capital who can join us in the fundraising of some primary capital as we're going to grow that sleeve of assets, Rick. I want to be clear about that. Vantage STC is a growth vehicle. As we continue to develop some of the best public cloud campuses in the U.S., we want Vantage STC to keep growing. It's attracting capital. Obviously, interest rate narrative has been a bit of a headwind. But the counter to that is we've got great customers, great leases, and we've got a great yield on this portfolio. So it pays a nice dividend, and there's a lot of interest from various pension fund clients of ours, and we will make a decision this quarter on what to do with it. So that's about as much granular detail as I can give you. And, oh, by the way, Vantage STC had great results this quarter. Revenue, NOI, and EBITDA in same-store sales growth, All four metrics beat our budget. So we're really happy with what's going on at Vantage SDC. And we do anticipate that that sleeve of assets, Rick, will grow next year as we look to go acquire more assets in that vehicle.

Okay. Second question. I think your stock buyback program maybe expired as far as the authorization program. Jackie alluded to looking at preferred stock, some other items out there. The public stock, common stock has been under pressure. Help us understand how you think about, as you are monetizing some of these interests, how you look at taking a look at the preferred, the common stock, et cetera.

Well, look, we're always looking to buy back our preferreds. I think we've made that no secret. We have a formula for how we use our cash. You know, as you know, we've got close to $590 million of cash and cash equivalents coming out of this quarter. We're well capitalized. You know, we're putting some money into our third fund. That capital won't be called until reasonably as we do new investments in the third fund until third or fourth or next year. But we do see an opportunity. When we do see an opportunity, Rick, we make those purchases. On the stock buybacks, we've been in a blackout period. We're hopeful to end that blackout period soon so that we can go back to buying some of our stock back when it makes sense. And then certainly we as the leadership on the team want to buy back our stock too. So we love our stock. We think it's a good value. Once that blackout period ends and we're unrestricted, we can go back to having that conversation. That's really it. I think, you know, in addition to that, Rick, we've always cited that there's four sources of cash, right? Share buybacks, debt pay down, and then certainly GP commitments into our new fund products. We really like where credit's going. We're really looking to build that credit strategy. I think that was really clear, you know, from my commentary earlier today. We like credit. We're growing our credit team. We want to grow credit assets under management, and we're You know, we're in flight and doing that, so we think that's a huge opportunity for us in terms of the TAM and our market positioning. The last thing I would say, Rick, is we do see other GPs from time to time that are adjacent to what we do, whether it's adjacencies in digital infrastructure, whether it's adjacencies in, you know, other verticals like infrastructure or private equity or renewable energy. We're constantly evaluating, like we did with AMP over a year ago, whether or not we put our balance sheet to work to acquire you know, other folks of our ilk that are subscale, that when you integrate them with us, like we do to the MP, you can see incredible margin, you know, enhancement, and you can see, obviously, revenue growth, FEM growth, and FRE growth. So we're measuring all of that, Rick, right? It's a box, right? There's four quadrants in that box, and we're carefully evaluating that literally every day as a management team.

And in the update, I know, I think, originally, Jackie might have been leaving at the end of the calendar year. Any update on... All that hard work he's been putting in, is there a replacement coming or what's the process of CFO?

Yeah, that process is ongoing. We've had really good success and some great conversations. I mean, I'd first tell you that, you know, Jackie is in place and he's extended with us through, I think, through the second quarter of next year. We'd like him to stay. He's happy here. He won't put words in his mouth. I'll let him tell you if he's happy or not. We're having a good time. He's worked really hard to get this company to where it is. So a lot of the effort and a lot of the success we're having is a function of Jackie's hard work. So I, for one, would like to see him stick around a little bit longer. He's got personal goals that he wants to achieve that I support fully, as does the board. And I'm not in a rush to hire the wrong CFO. I've got the right CFO in the chair right now. And so as, you know, we do feel confident we're going to announce the right candidate here and inside this quarter, hopefully. But in the meantime, I'm very happy with my partnership with Jackie as is Severin. We work well together. We're getting the results. We're delivering for shareholders. And I think he's pretty happy to be extended through and needed if we need him through to the end of June next year.

Great. Thanks, everybody.

Thanks, Rick. Appreciate it.

Our next question comes from Richard Cho with J.P. Morgan. Please go ahead.

Great. I just wanted to follow up on the capital formation. That's been strong through the year, but the flow through to FIEM has been a little bit volatile. How much of the $5.4 billion or target $8 billion should we expect to hit FIEM in this year?

Well, as I said, we're activating $25 million of FIEM. of fees officially yesterday. So that's going to flow through into the fourth quarter.

All of that 5.4 will now flow through because before we did not turn on the DBP3 fees closing.

Yep. And so the other key to that, Richard, is there's no expenses associated with that 5.4 billion of fees that we're turning on. So that is 100% pure profit. And the challenge in our business, Richard, as you know, is you spend six months raising the capital. You spend a lot of money. A lot of T&E, you've got a lot of people, you've got a sales team, and you have no revenue to show for that. And now we're through that period, and the fundraising has now got good escape velocity. And as I said, we're having a strong fourth quarter, and we anticipate having a very strong first and second quarter next year. So as we go forward, this now starts to move into pure profit. And as we've told you, our strategy for our third fund is an $8 billion strategy. We have every clear belief and conviction we'll hit that $8 billion. And we actually have some conviction that we're going to push through that and exceed the $8 billion target for this fund. So that's what the data suggests, but we're excited to turn on the $25 million in fees. as I said, 100% profit associated with that. And the fourth quarter, you'll see a pure flow through on that revenue. And we should anticipate the financial results in the fourth quarter to be incredibly strong, big on revenue, lower on expenses.

And candidly, some of that volatility is associated with just a geography flip between corporate expenses being now allocated to IM. So you'll see a almost a dollar per dollar flip between those two segments. But obviously, our district earnings is way up because that obviously gets neutralized, that geography.

Great. And then, thank you for the fund performance reporting slide. That is very helpful. The performance has been good so far, but can you give us a sense of how they're tracking? Granted, there's still a lot of time in the second one, but just overall,

how your current projections are panning out.

I'm not sure. Repeat the first part of that question, Richard.

Sorry.

Just how the gross MOIC is tracking for DP1 and DP2, DBP1 and 2.

Yeah, so this is our first quarter of reporting fund level performance, I think, is what you're indicating to Richard. But what I would tell you is gross moiks have been up quarter over quarter on fund one and fund two. Fund two, as you can tell from the vintage, is going through the J-curve phase. And so those moiks will catch up and we actually think fund two where it sits today vis-a-vis fund one is performing better than fund one. So we're pretty optimistic. You know, I know other firms and not that we stand around watching other firms, but we know from Q1 to Q2 and Q2 to three and three to four, you know, other, you know, financial sponsors, other GPs have had some challenges and there's been marked downs. We've, not suffered from that at all actually our marks have moved up through q1 through q2 and q3 um we anticipate both fund one and fund two at digital bridge to continue to perform as the discounted cash flows across all of our portfolios are up quarter of a quarter and year over year and then i think also with respect to gif1 and gif2 we've got very good solid performance in the infrabridge one fund as you can see from the from the table that's performing uh at our expectations and we're continuing to deliver DPI. We've made it very clear that we are in the process of unwinding and exiting out of GIF1, some of those assets. We've also had tremendous DPI across our first fund and some of the continuation vehicles. So returning capital right now is super important to LPs, Richard. If you want to go out and raise money right now, you've got to produce DPI. And we've done a very good job there. We've produced over cumulatively about $4.2 billion in DPI this year in the last 14 months for our LPs. Returning capital and raising capital.

That's the cycle.

Great. Thank you.

Thanks, Richard. Appreciate it.

Our next question comes from Eric Loveshaw with Wells Fargo. Please go ahead.

Great. Appreciate the question. Just wanted to touch on kind of the M&A landscape across the different digital infrastructure verticals you operate in. Are you seeing any traction on higher interest rates recently moving down multiples for private infrastructure? Or are they kind of still remaining in pretty elevated ranges? And does that shift at all your desire to just accelerate greenfield development versus M&A as you look at, you know, ways to deploy capital going forward?

Yeah, it's super interesting you should ask that question because I'm actually giving a speech later today where I'm going to talk exactly about this. It's, you know, So fiber has come down significantly. Eric, we've seen, you know, private market multiples move from the mid 20s into the low teens. We even think there's further compression in fiber multiples, particularly in residential fiber, where the investor is exposed exactly to the household where the cash flows are month to month, 30 days. And then certain aspects of fiber, you know, enterprise fiber, you know, wholesale transport fiber, you know, down a little bit, but not quite as heavily hit as fiber to the home. You know, data centers, actually, you could make the argument, Eric, that multiples have gone up in the good assets. And you know what the good assets are. Those are the hyperscale, you know, public cloud, you know, focused campuses where there's a lot of growth and there's a lot of opportunity and you've got a wallet that's growing. On the enterprise side, you've seen on the flip of that coin, which is older legacy data centers that are 20 plus years old, like Sixer have suffered and really don't have a growth story. So there's really not even a bid for those kinds of data centers. They're just so impaired. So know whether it's enterprise and then you've got databank which is doing edge and they're performing really well and there's been no degradation in the valuation of that equity so data centers are tricky i always tell investors that there's six different ways that you can invest eric in data centers there's six different sub industries in the data center sector you know what where are valuations holding they're holding in hyperscale and they're holding an edge where are they going down managed services hybrid cloud enterprise Those are the areas that are suffering. And then I would say private cloud, which is what Switch does, is performing quite well. So three good verticals, three probably less good verticals. And so there's a wide range of valuation there. You could see as high as 30 times EBITDA, and you could see all the way down in enterprise and managed services, you know, like six to seven times EBITDA, because in some instances, there's just no bid because of the debt. Towers have actually held in pretty well. On the private side, we've seen, you know, private transactions in Europe recently trade in the mid-20s 24 to 25 times. There hasn't been a material degradation in tower valuations. Maybe they've lost three to four turns in Europe. In the U.S., there just hasn't been any material M&A. And while the public multiples are down, you know, 20 to 30 percent, private multiples actually have hung in. And the smaller transactions that vertical bridge is chasing, they're still losing deals at 25 to 26 times. Now, those were the deals they were losing at 32 to 36 times a year ago. So there's probably been a, you know, six to eight turn compression in what I would call small ball M&A. But there hasn't been a material big M&A trade in the space to really see where those multiples are. And I think you could basically push, you know, private markets, small cell multiples into the same bucket as U.S. towers. And then in Southeast Asia and Latin America, we've seen you know, tower multiples trade in the high teens. And in some parts of Asia, Jackie, we've seen towers hang in at 20 to 21 times. So, you know, the market is still, you know, one that's really attractive from a tower multiple perspective. But again, digital infrastructure, sort of painting it with one paintbrush isn't fair. I think you got to sort of lay out the canvas and bring 12 paintbrushes to the canvas because you're going to have to paint it a lot of different ways right now, Eric.

Yeah, that makes sense. And just to follow up your comments on residential fiber, fiber to the home, there's obviously been some speculation about a big consolidation wave coming in that market. You kind of touched on this a little bit, but I guess given where cost of capital have gone for a lot of those overbuilders, is that an area that traditionally I know you've shied away from, but if we see an appropriate discount in evaluations here, is that an area we could see you potentially play in further going forward?

I think, look, right now we're very focused from a credit perspective and we're providing credit to some of those companies. So certainly, you know, up at the investment committee level, we're very supportive of residential fiber and there are certain management teams who really like and we're backing them and we're giving them capital in the form of credit. And the equity investment committees were not constructive on residential fiber right now. We haven't been. And I think we've been pretty vocal about that. We've had our reasons. Now that the valuations are moving in line, if we do find the right geography, the right management team, and the right set of competitive dynamics, we're happy to write an equity check behind a great management team in the residential fiber space. I mean, we're doing that now in Europe with Net Omnia. We're rolling up the tier two, tier three markets in the UK with a lot of success. We've got a great management team. He's building it 20% to 30% cheaper than his competitors. and his penetration is 20 to 30% higher and his ARPU is about the same. So that's the situation where we saw a very specific set of skills and a management team that had comparative advantage and they weren't just chasing homes in London. They were focused on the tier two and tier three markets where there's less competition. So the investment thesis stood up. Same thing in Chile. We have a wholesale residential fiber business, but we also have a business, that same business also sells directly to home, where we've seen under-penetrated homes, a lot of streets where we're going down the street and we're the only fiber carrier. And so we will play in residential fiber, Eric. We're just doing it through Mundo and through NetOmnia and doing it very carefully and very surgically. I think there's probably a little more pain left in residential fiber in Europe and the U.S., and we're going to watch it carefully and we'll play. I mean, Beanfield is our Canadian residential and enterprise fiber play. It's mostly focused on Toronto, Montreal, and it's done really well. We sold a third of that to Omers for an incredible multiple. They've been a great partner. They're providing a ton of primary capital. And we're going into Toronto and Montreal, and we're facing, you know, Rogers and Bell are very formidable, and we're taking market share. But it's hard. You know, it's a tougher business, Eric. It's not like signing a 15-year lease with Microsoft or a 25- or 30-year lease with Deutsche Telekom. You've got to wake up every day, get in the trenches, and you've got to fight. And that's the fight we're up for, but it's got to be priced correctly. The equity has to be priced correctly.

I appreciate it, Mark. Thank you. Thanks, Eric.

Our next question comes from John asking, with RBC, please go ahead.

Thanks. I wanted to ask you about the comments you made about small cells and the scripts, and maybe focusing on outdoor small cells. You sound a little bit more positive than you have in the past. What's driving that in terms of U.S. demand, and how capital-intensive is that for XTNET and maybe any of your other platforms? In other words, are you seeing... sort of same store lease up on existing plans, or are you having to kind of build to meet the demand?

Thanks. Well, look, I think the reason we see optimism is because we're watching our pipelines at Boingo and Exinet and Freshwave. And also our Latin tower businesses like Highline and ATP, Edgepoint in Asia, all these businesses have small cell divisions. And we're not only seeing green shoots, we're seeing bookings. And, you know, we've seen a turn in the bookings at XNet. We've seen a really big turn in bookings in Boingo. Look, there's close to, as you know, Jonathan, there's a little under a half a million small cells today in the U.S. Depends on whose numbers you believe. And, Jonathan, what do you count as a node or what's not a node, right? What I can tell you is we believe the reforecast on small cell growth between now and 2030 is about 1.1 million to 1.2 million nodes. So we think there's about another 6,000 to 700,000 nodes that'll be built. And we're talking to our customers and look, yeah, some of it will be self-performed. But even now in this market where the cost of capital has gone up, our conversations with all four of the U.S. carriers have picked up significantly. I know at Exynet, for example, they just signed a new MLA with DISH and DISH now has capital and they're going to put some money to work in small cells. but all three of the major carriers are also putting money into small cells. Now, while CapEx has been curtailed, if we can come in and provide a good solution, the carriers are willing to listen, provided they don't fund the CapEx. So we're seeing more opportunity. We've seen our pipelines grow. I think you saw a little bit of that color from Crown. I think there was a competitor research paper out today. I think one of your competitors had a non-deal roadshow with Crown, and they were talking about the same thing. They've seen an increase in pipelines. I see a market that's growing. This is exactly what happened with 4G. We spent the first three years in LTE, basically doing macro overlays one for one. And then when ultimately when LTE moved into 2015, 2016 and moved into densification, it was all small cells and it was a little tougher on towers. We're probably another six to nine months away from hardcore densification ramping on 5G, but we're starting to see it. It's starting to happen. So I am very optimistic around small cell growth and we're looking forward to putting more capital work, raising more capital at these platforms and investors understand it. We've been out there talking to them about it and it's not just small cells for the carriers, but you have to think in other dimensions. You have to think about IoT networks, private 5G networks. And then of course, as generative AI starts to penetrate towards the edge and moves towards mobile edge, We've always talked about how generative AI ultimately is going to be dispersed in low-latency environments that are less than one-tenth of a millisecond. The only way you get there is through small cells. That's the only way that you're going to have true autonomous vehicles, true machine-to-machine learning, and true public safety that has true early responders getting in front of the threats is by having essentially a no-latency environment, and small cells take you there. We're very constructive on how AI is going to change the small cell space in the next five to six years.

Great. And then maybe just pivoting briefly, but anything you could elaborate on in terms of updating us on your venture strategy and things you're looking at?

Well, look, I mean, now that we've announced the closing of the third fund, the first closing, we can start to pull back the curtain on what we're doing. What I would tell you is we built a really good diversified fund one and diversified fund two. We did 10 investments, 13 investments. In this fund, same thing. We're targeting 12 to 16 investments. Probably check sizes a little smaller is what I would tell you. We're very constructive on Asia. We're a little less constructive on Europe. We're certainly constructive on the US and Canada and Latin America. So what I would tell you is our strategy is much of the same. But if we're thinking about that strategy, we're seeing a lot of positive things in Asia. We're seeing a lot of positive things here in our home market in North America. And there's a couple of interesting things in Latin America. And Europe's just going to be a tough road out. Those guys have a much tougher road. So as we're thinking strategically about where to deploy capital, you know, Europe is probably third or fourth on my list right now. The U.S. and Asia stand to be, you know, one and two. And then in terms of sectors, you know, we like, of course, we like data centers that face AI. We do like wholesale fiber that, again, faces AI. We do like private 5G networking. We do like small cells. That's a thematic that we like in our new strategy. And then, you know, if there's a right tower opportunity, if it's EM or if it's, In the primary world, we'll look at towers. We think we've got some great companies, but there's always room to further invest. And then the last thing I would say is we have spent some time thinking about how to grow the private cloud. We've had so much success at Switch. The question is, can we translate that success to Europe and Asia? So we're working on that really hard right now. Private cloud networking and owning private cloud infrastructure that's highly secure, there's a huge market for that, and no one's doing it. No one's doing it the way Switch does it. So now that we've owned that company for almost a year, we feel like we have the DNA to take that strategy forward. There's some other things we're working on that are proprietary. But now that we've got the third fund closed, the next strategy closed, we can deploy capital from that strategy. So you'll start to see some new deals announced here in this quarter. As I said, we've got a big pipeline. We're tracking over $30 billion of new ideas in our pipeline. Our pipeline has never been bigger in terms of new platform formation. So we're excited. This is a big call today. It was important for us to get the first close done. It was important for us to turn on the billing. and activate those fees. Everyone loves those fees. And then, of course, you know, go execute. And so what you'll see from us going forward is now new deals, new execution, and continued, you know, thinking around DPI and how we return capital back to our investors. So it'll be a busy fourth quarter for us, Jonathan, and we'll look forward to hosting you hopefully soon down in Florida.

Thanks very much. Thank you.

There are no further questions at this time. I would like to turn the floor back over to Mark then before closing comments. Please go ahead.

Yeah, thank you, operator. Well, first, I want to thank everyone for showing up on the call today. As I think you hear in my tone and my tenor, we're very optimistic. This was exciting to get to the first close of our new strategy. And we're, again, reaffirming our guide for fundraising this year. It's been a tough market out there, but we seem to be defying gravity in terms of fundraising. We've done a great job returning capital to LPs. We've done a very good job managing our assets and our portfolio companies. And the state of DigitalBridge is quite strong as we sit here today. As we move into the fourth quarter, you can expect more of the same. As I said before, we're pretty excited about the fact that now we convert into fees on our new strategy. You'll see a strong financial performance here in the fourth quarter. and that will persist into next year. We remain incredibly optimistic around the fundraising environment and exactly where we are in terms of our key accounts and where our fundraising is. And then in terms of capital deployment, as I said just a few moments ago, we're sitting on a $33 billion pipeline of new opportunity in terms of where to invest capital, and we will start deploying that capital in short order. So to sum it up, it's really about hitting the marks on capital formation, maintaining our portfolio, maintaining our competitive advantage, and, of course, raising more capital and deploying that capital in what we think are some of the best strategies in the world in digital infrastructure. It's a privilege to represent your capital. We appreciate your support, and we'll look forward to talking to most of you soon. Thank you.

Have a great weekend, and have a great rest of your week. Take care.

This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation, and have a great day.