Ben Budish

Ben Budish at Barclays asked about Coinbase's 2026 spending plans, particularly how the company balances "need to spend" versus "want to spend" given varied top-line outcomes, and where the most flexibility exists in the cost base.

Answer

CFO Alesia Haas characterized 2025 as an investment year, with significant expense growth driven by sales and marketing (primarily USDC rewards) and M&A-related costs. For Q1 2026, she guided expenses to be flat compared to Q4 2025, stressing the company's commitment to being nimble and dynamically managing spending based on market opportunities.

Ben Budish from Barclays asked about Coinbase's 2026 spending plans, specifically how the company differentiates between essential and discretionary spending, and where the most flexibility exists within the cost base, such as marketing or moonshot investments.

Answer

CFO Alesia Haas acknowledged the "need to spend versus want to spend" framework, stating that 2025 was an investment year with the majority of year-over-year expense increases driven by sales and marketing (primarily USDC rewards) and M&A-related costs. For Q1 2026, she guided for flat expenses quarter-over-quarter, emphasizing a nimble approach to spending throughout the year given new product rollouts and dynamic market conditions, while keeping a close eye on opportunities versus expenses.

Ben Budish of Barclays asked for clarification on the payments monetization model, questioning if it relies solely on growing stablecoin balances or includes other revenue streams like transaction fees on Base or subscription fees.

Answer

CEO Brian Armstrong confirmed that while growing on-platform USDC balances is a benefit, payments will also be monetized directly. He outlined two primary methods: charging businesses fees that are substantially lower than traditional rails and earning sequencer fees for transactions that occur on the Base layer-2 network.

Ben Budish of Barclays inquired about the payments monetization model, asking if it is solely focused on proliferating stablecoins or if it includes other revenue streams like transaction-based fees on the Base layer or subscription fees.

Answer

CEO Brian Armstrong confirmed that while payments growth supports the stablecoin business, payments will also be monetized directly. He explained that Coinbase can charge businesses fees that are significantly lower than traditional options and still maintain a strong business model. Additionally, transactions on the Base layer generate sequencer fees, contributing another revenue stream. He stressed that the overall cost of payments is expected to decrease by orders of magnitude.

Ben Budish asked about the current mix between sports and non-sports prediction markets, and Robinhood's strategy for incentivizing new users given aggressive advertising from new competitors.

Answer

CEO Vlad Tenev noted efforts to diversify non-sports offerings with thousands of contracts and improve the experience with custom data and contextual surfacing. CFO Shiv Verma added that Robinhood leverages its 27 million customers for onboarding, experiments with referrals and 'Learn & Earn,' and focuses on ROI-driven promotions after product experience and economics are established.

Ben Budish from Barclays asked about the current mix between sports and non-sports prediction markets and Robinhood's strategy for incentivizing new users to the product.

Answer

Vlad Tenev, CEO, noted diversification into non-sports offerings with thousands of contracts, improving the experience with custom data and surfacing relevant contracts. Shiv Verma, CFO, added that Robinhood leverages its 27 million customers and explores new activation methods like referrals and 'learn and earns,' maintaining an ROI-driven approach to promotions and marketing.

Ben Budish from Barclays followed up on tokenized equities, asking how Robinhood ensures low execution costs and tight spreads for traders in Europe, consistent with its low-cost model elsewhere.

Answer

CEO Vlad Tenev stated that the number one piece of feedback from European customers is their love for the competitive prices on stock tokens. He clarified that the only fee is a very competitive 10 basis point foreign transaction fee, with no other spread that Robinhood benefits from, as the aim is to pass back the full value to the customer.

Ben Budish asked a two-part question on Athene: the expected contribution from the pension risk transfer (PRT) segment in 2026 given recent positive momentum, and Apollo's latest thoughts on competition in the retail side.

Answer

CEO Marc Rowan stated that 2026 volume targets are not dependent on PRT, as Apollo prioritizes profitability over volume. He noted that PRT spreads have been poor, and Apollo focuses on a principal's mindset to build a long-term book of business. Regarding competition, he observed 'interesting competition' in lower-quality broker channels, but emphasized Athene's competitive advantages in asset origination, low-cost liability factory, and efficient OpEx, which he believes most competitors lack, leading to unsustainable strategies.

Ben Budish asked about the dynamics at Athene, specifically the expected contribution from the pension risk transfer (PRT) segment in 2026 and the current state of competition in the retail side of the business.

Answer

CEO Marc Rowan stated that 2026 volume targets are not reliant on PRT, as Apollo prioritizes profitability over volume. He discussed competition, noting that many new entrants lack the necessary asset origination, low-cost liability factories, or efficient operations, leading to unsustainable practices. Rowan emphasized Athene's strong competitive position, built over 15 years, in meeting demand for retirement products at sensible margins.

Ben Budish requested further details on Apollo's 2026 Spread-Related Earnings (SRE) guidance, specifically regarding gross flows, outflows, anticipated spread levels, and ADAP utilization, noting the expectation of a much lower decline in spread compared to prior forecasts.

Answer

CEO Marc Rowan (initially) and CFO Martin Kelly explained that previous headwinds (rates, prepays, COVID-era business roll-off) are dissipating, leading to a more predictable SRE outlook. Martin Kelly added that 2025's outperformance provides a strong run-rate benefit into 2026, with base assumptions for ADAP utilization and flows remaining unchanged, and further details to be provided on November 24th.

Ben Budish of Barclays followed up on an earlier question, asking for more clarity on the expected timing of the runoff of profitable COVID-era business and whether aggregate spreads would normalize back to 130 basis points.

Answer

CFO Martin Kelly explained that the runoff is expected to continue through the next year. This will cause reported net spreads to decline slightly through the remainder of the current year before stabilizing. He emphasized that this dynamic is predictable and is being actively managed alongside top-line growth to achieve the firm's overall ambitions for the business.

Ben Budish inquired about Carlyle's expected management fee growth for 2026, considering the launch of large flagship funds later in the year and the potential headwind from realizations on fee-earning AUM in private equity. He also asked about the realization trajectory for CP7 and CP8.

Answer

CFO Justin Plouffe stated that a comprehensive overview of the strategy and financial outlook would be provided at the upcoming shareholder update. He reiterated pride in the team's deliberate strategic decision to drive monetizations, taking advantage of an attractive market environment globally.

Ben Budish asked about expectations for management fee growth in 2026, considering potential headwinds from large flagships coming to market later and increased realizations, and the trajectory of performance revenues given the appreciation in CP7 and CP8.

Answer

CEO Harvey Schwartz apologized for deferring detailed forward-looking information to the 2026 shareholder update. He reiterated pride in the team's strategic decision to drive monetizations, taking advantage of attractive market environments globally and leading in IPO assets.

Ben Budish of Barclays inquired about the near-term outlook for the Alpinvest and Solutions business, asking if its growth cadence was becoming more consistent and what the medium-term trajectory might look like.

Answer

CFO John Redett confirmed the business is evolving from historical "step function" growth to more consistent expansion, driven by CAPM, larger successor funds, and strategic partnerships like the one with UBS. He noted the current secondary fund is 65% committed, which will smooth the fundraising cycle. While not forecasting another doubling of FRE, he expects a continued attractive growth rate.

Ben Budish of Barclays asked about the near-term outlook for the Alpinvest and Solutions business, questioning if its FRE could continue its rapid growth and what the medium-term trajectory looks like given strong fundraising.

Answer

CFO John Redett stated that Alpinvest's growth has evolved from a 'step function' to a more consistent trajectory, driven by vehicles like CAPM, larger successor funds, and the UBS partnership. While not committing to the recent exceptional growth rate of over 40%, he expressed confidence that the business has 'tremendous growth attributes' and would continue to grow at a 'very attractive' rate going forward, noting the current secondary fund will be followed by another in the near term.

Ben Budish, a Director at Barclays, asked for an update on Cboe's prediction markets initiative, including product design, discussions with distribution partners, market makers, and any other shareable details.

Answer

Global Head of Derivatives Rob Hocking expressed excitement for event prediction markets as a logical extension of Cboe's strengths, focusing on financial and economic-style securities products. He noted initial offerings will align with the SPX options ecosystem, leveraging existing liquidity and market structure experience. Hocking mentioned regulatory clarity is increasing confidence, and Cboe is targeting a Q2 launch for all-or-none style contracts, pending regulatory approval and partner readiness, with a steady rollout of more traditional contracts as market adoption occurs.

Ben Budish asked for an update on Cboe's prediction markets initiative, including product design, discussions with distribution partners, and the anticipated launch timeline.

Answer

Rob Hocking, Global Head of Derivatives, expressed excitement, viewing it as a logical extension of Cboe's strengths. Initial offerings will be securities products focused on financial and economic events, aligning with the SPX options ecosystem. Cboe is targeting a Q2 launch, pending regulatory approval and partner readiness.

Ben Budish of Barclays inquired about the initial performance of the Robinhood partnership, asking about the product mix between SPX and XSP options and future initiatives to drive education and adoption.

Answer

Global President David Howson reported that the Robinhood rollout exceeded expectations in both speed and volume uptake, which he described as largely additive. He noted that customers are using the full suite of volatility products (SPX, VIX, XSP) and that future plans include more joint marketing and education to capitalize on the significant growth runway.

Ben Budish inquired about the significant increase in transaction fees during the quarter, the structural step-up in capital markets, and how to project revenues for 2026 given the growing dry powder and accelerated deployment.

Answer

CFO Jack Weingart stated that the growth in transaction fees is driven by increased deployment and the broadening of their capital markets business across all platforms, not just TPG Capital. He noted that Q4 transaction fees came from 26 different transactions across various platforms, indicating that while lumpy, capital markets remain a long-term growth opportunity.

Ben Budish inquired about the significant increase in transaction fees during the quarter, the structural drivers behind this trend, and how TPG anticipates these revenues will evolve in 2026 given growing dry powder and deployment activity.

Answer

Jack Weingart, CFO at TPG, stated that the growth in transaction fees is driven by the expansion and diversification of TPG's capital markets business across all platforms (impact, capital, growth, credit). He noted that Q4 fees were spread across 26 transactions and, while lumpy, capital markets remain a long-term growth opportunity.

Ben Budish questioned the expected impact of recent market shocks on near-term equity flows, how advisors and retail customers typically respond to such disruptions, and T. Rowe Price's equity franchise mix, particularly its exposure to software and services amid AI disruption risks.

Answer

CEO Rob Sharps stated that the net effect of market drawdowns on flows over longer periods is not substantial, with varied client reactions. He noted T. Rowe Price's ability to adapt as an active manager and that its overall mix is no more exposed than the market. Head of Global Investments Eric Veiel added that the firm has deep research on AI disruption risks and has been positioned for such events in many portfolios.

Ben Budish from Barclays inquired about T. Rowe Price's view on future opportunities in blockchain and tokenization, such as launching crypto asset ETFs or tokenized funds, as the regulatory environment evolves.

Answer

Head of Global Investments & CIO Eric Veiel responded that the firm believes active management will be important in digital assets over time. He stated that T. Rowe Price would prefer to see a broader investable universe beyond just Bitcoin and Ethereum before launching retail products. Veiel emphasized the firm's commitment to a research-led approach and will continue to monitor the space for opportunities consistent with its core culture.

Ben Budish asked for more details on LPL Financial's increased win rate among advisors from wirehouses and regional employee channels, seeking to understand the drivers of this success, the importance of new capabilities like securities-backed lending and the ALTS platform, and the competitive landscape.

Answer

CEO Rich Steinmeier attributed the success to a macro tailwind of W2 advisors moving to independence, LPL's diverse affiliation models (Strategic Wealth, Linsco), and steadily closing capability gaps in product sets, lending, and high-net-worth offerings. He also noted the positive impact of LPL's national brand campaign and the validating effect of the Commonwealth acquisition.

Ben Budish inquired about the increased win rate of advisors from wirehouses, asking what factors are driving this success, the importance of new capabilities like securities-backed lending and the ALTS platform, and the state of competition with this specific group of competitors.

Answer

CEO Rich Steinmeier attributed the improved capture rates to a macro tailwind of W-2 advisors moving to independence, LPL's multiple affiliation models (Strategic Wealth, Linsco), steadily closing capability gaps (product, lending, high net worth), a national brand campaign, and the validating effect of the Commonwealth acquisition. He noted that LPL offers more affiliation landing spots than any other firm.

Ben Budish followed up on the exit environment, specifically asking about the outlook for financial and strategic sponsor-backed M&A, its implications for the near-term pipeline, and how it complements the firm's optimism around the IPO cycle.

Answer

President and COO Jon Gray noted that the strong stock market is aiding strategic sales, citing the recent sale of a defense contracting business (ARKA) to a strategic buyer. He observed that the regulatory environment is more conducive to M&A, leading to increased confidence. He expects a mix of IPOs and strategic sales, with M&A activity improving, including a 21% increase in real estate M&A. He also anticipates continued financial buyer interest for certain assets, particularly as momentum builds in the real estate sector later in the year.

Ben Budish followed up on the exit environment, asking about the outlook for financial and strategic sponsor-backed M&A, its implications for the near-term pipeline, and expectations for the next couple of quarters.

Answer

Jon Gray, President and COO, noted that strength in the stock market and a more conducive regulatory environment are helping strategic M&A. He cited recent sales to strategics and an improving M&A environment reflected in stake sales. He also mentioned a 21% increase in overall real estate M&A activity, particularly in logistics, expecting a pickup in the latter half of the year, with a mix of IPOs, strategic sales, and financial buyers.

Ben Budish asked about Blackstone's data center investing strategy, specifically addressing concerns about a potential bubble and clarifying the key drivers of returns, including cash flow, valuations, and supply/demand dynamics.

Answer

Jon Gray, President and Chief Operating Officer, explained that returns primarily come from building, developing, and leasing data centers to investment-grade counterparties with long-term leases. He highlighted the differential between project costs and stabilized asset values, noting strong demand driven by AI and a doubling of the leasing pipeline in Q3 versus Q2, all managed with a disciplined approach.

Ben Budish inquired about potential 'bubble' concerns in Blackstone's data center investing strategy and the key drivers of returns, including cash flow, valuations, supply/demand dynamics, and cap rates.

Answer

President and COO Jon Gray explained that the majority of returns come from building, developing, and leasing data centers with investment-grade counterparties and long-term leases (15-20 years). He highlighted returns from the differential between project costs and stabilized asset values, noting strong demand acceleration and disciplined investment practices.

Ben Budish asked for details on the drivers of fee-related performance revenues (FRPR), noting the outperformance from private equity, and requested color on the outlook for the next couple of quarters.

Answer

Vice Chairman & CFO Michael Chae specified that the Blackstone Infrastructure Partners (BIP) strategy contributed nearly $100 million in FRPR in Q2. He provided forward guidance, expecting about half that amount in Q3 from a scheduled crystallization in the institutional funds, with nothing expected in Q4 from that source. However, he noted that the private wealth infrastructure product (BXIN) is expected to have its first modest crystallization in Q4, which will then become quarterly.

Ben Budish inquired about the increasing competitive intensity in net new assets (NNA), particularly from private equity-backed roll-ups, and whether the current 8% growth rate is sustainable. He also asked for a near-term outlook on the Capital Markets segment, given the strong pipeline but unpredictable revenue swings.

Answer

Paul Shoukry, CEO of Raymond James Financial, acknowledged increased competition but emphasized Raymond James' differentiation through its long-term, stable approach, commitment to independence, and significant investment in technology ($1 billion annually). He stated that the Capital Markets pipeline remains very strong due to pent-up demand from financial sponsors, but timing of deal closures is difficult to predict.

Ben Budish followed up on net new assets, asking about the sustainability of the solid NNA growth given increasing competitive intensity, particularly from private equity-backed roll-ups, and whether any unusual factors contributed to this quarter's performance.

Answer

CEO Paul Shoukry acknowledged the competitive environment, particularly the entry of private equity roll-ups, but framed Raymond James as a long-term, stable destination for advisors seeking a permanent home without future disruptions. He emphasized the firm's strong balance sheet, commitment to independence, 'Power of Personal' focus, and $1 billion annual technology investment as key differentiators that reduce effective competition. In a follow-up on the capital markets outlook, Shoukry reiterated a very strong pipeline with pent-up demand from financial sponsors but cautioned that timing of deal closures remains unpredictable.

Ben Budish sought more color on BlackRock's expectations for the wealth channel in 2026, including advisor sentiment on HLEND, any challenges with GIP product launches, and details on upcoming model portfolios incorporating private markets.

Answer

CFO Martin Small reiterated the target of $400 billion in gross private markets fundraising by 2030, with $40 billion raised in 2025. He detailed current private wealth products like HLEND and semi-liquid strategies, and announced the upcoming 'H-Series' of vehicles for private wealth in 2026, aiming for $60 billion AUM by 2030, with real asset and European direct lending strategies launching soon.

Ben Budish sought further insight into BlackRock's expectations for the wealth channel in 2026, including advisor feedback, any challenges with a GIP product, and details on planned model portfolios incorporating private markets, including product types and timing.

Answer

CFO Martin Small outlined BlackRock's target of $400 billion in gross private markets fundraising from 2025-2030, with $40 billion raised in 2025. He detailed existing private wealth products like HLEND and semi-liquid strategies, and announced plans for an 'H-series' of vehicles for private wealth and retail channels in 2026. These will offer access to direct lending, junior capital, real assets, triple-net lease, and private equity solutions, aiming for $60 billion in AUM by 2030.

Ben Budish asked for modeling details regarding credit inflows and the private equity management fee rate, inquiring about any impacts outside of catch-up fees for the current and upcoming quarters.

Answer

Rob Lewin, Chief Financial Officer, highlighted the strong management fee growth across KKR, up 19% year-on-year, or 16% excluding catch-up fees. He clarified that while the Americas 12 fund had a formulaic fee rate step-down in Q3, there's no overall fee degradation, citing comparable fee rates for the North America 14 fund versus Americas 13. Craig Larson, Head of Investor Relations, added color on the record $27 billion in credit and liquid strategies raised in Q3, with $15 billion from Global Atlantic, including $6 billion from FABN activity and the Japan Post Strategic Partnership. He noted strong growth in the private IG and third-party Asset-Based Finance (ABF) segments, with total ABF AUM at $84 billion.

Ben Budish asked for modeling details regarding credit inflows and private equity management fee rates, specifically if any factors beyond catch-up fees impacted the fee rate in the current quarter and how to project the next couple of quarters.

Answer

CFO Rob Lewin highlighted strong management fee growth (up 19% year-over-year, 16% excluding catch-up fees), noting catch-up fees were mainly in real assets. Regarding private equity fee rates, he explained that Americas 12 fund had a formulaic step-down due to age, but emphasized that fee rates for new funds like North America 14 are consistent with previous vintages (Americas 13), indicating no fee degradation. Head of Investor Relations Craig Larson added that credit inflows were a record $27 billion, with GA contributing $15 billion (including $6 billion from FABN activity and Japan Post partnership), and third-party ABF mandates totaling $5 billion, with a strong pipeline.

Ben Budish of Barclays asked about Global Atlantic's Q2 performance, which beat guidance. He sought to understand the drivers of the outperformance and the long-term strategy for elongating the liability profile.

Answer

CFO Robert Lewin clarified that the outperformance was driven by some variable investment income and that the prior guidance of around $250 million per quarter remains the correct number to model going forward. He outlined a multi-year strategy to elongate liabilities through various channels, not just FABNs, and methodically increase the allocation to alternatives from the current 1% toward the industry average of 5%.

Ben Budish asked about the impact of Pioneer assets on performance fees, inquiring if they might be structurally higher or different on a run-rate basis compared to Victory Capital's historical low single-digit amounts. He also sought Victory Capital's perspective on themes in the M&A and alternatives discussion, such as GP consolidation, LPs seeking more with less, and the need for massive sourcing capabilities in credit.

Answer

Michael Policarpo, President, CFO, and Chief Administrative Officer, clarified that Pioneer funds include fulcrum fees similar to legacy USA mutual funds, and performance fees remain largely immaterial, typically in the 1-2 basis point range on an annualized basis. He emphasized that the firm's focus is on maintaining strong margins, given its expense structure. David Brown, Chairman, CEO, and Director, stated that Victory Capital focuses on areas where it can effectively compete, not directly with large-cap alt managers. He affirmed that any alternative acquisitions would follow their established principles of being value-conscious, acquiring excellent products, and focusing on growth potential, positioning Victory Capital as an excellent partner.

Ben Budish questioned the impact of performance fees, particularly the outsized amount in Q2, on Victory Capital's fee rate, asking if Pioneer assets have structurally higher performance fees and what investors should expect for the run rate.

Answer

Michael Policarpo, President, CFO, and Chief Administrative Officer, clarified that the 46-47 basis point fee rate includes annualized performance-related fees, noting that Pioneer funds have some fulcrum fees but performance fees are generally immaterial (1-2 basis points annualized), with a primary focus on maintaining strong margins.

Ben Budish of Barclays requested more detail on the nature of the one-time fee event and asked about intra-quarter flow momentum and the outlook heading into the third quarter.

Answer

CFO Michael Policarpo specified the fee event related to the accounting recognition of certain annual fees, not performance fees, with a muted margin impact due to the variable cost structure. CEO David Brown described flow momentum as a continued ramp-up as sales teams integrate, expressing long-term optimism while declining to provide specific intra-quarter or Q3 guidance.

Ben Budish asked for more details on the quarter's deployment, specifically if the significant sequential step-up was unusual or repeatable, given the robust pipeline.

Answer

Mike Arougheti, Co-Founder, CEO, and Director of Ares Management Corporation, stated that the strong deployment was not unusual but rather a reflection of the transaction market returning to life, driven by strong economic fundamentals, declining rates, and a pro-business regulatory tone. He emphasized that the deployment was broad-based across all businesses and geographies, unlike previous quarters where direct lending might have carried more weight, and he expects this trend to continue.

Ben Budish asked for more details on the significant sequential step-up in deployment during the quarter, inquiring if any unusual factors contributed to it and whether this level of deployment is repeatable in upcoming quarters.

Answer

Mike Arougheti, Co-Founder, CEO, and Director, clarified that there were no unusual factors, but rather a broad-based resurgence in the transaction market driven by strong economic fundamentals, declining rates, and a pro-business regulatory tone. He emphasized that the deployment was well-distributed across all Ares' businesses and geographies, not concentrated in any single asset class, and he expects this broad-based momentum to continue.

Ben Budish asked about the guidance for flat year-over-year FRE margins, including the GCP acquisition's impact, and what the key swing factors are, such as credit fee-earning AUM growth.

Answer

CFO Jarrod Phillips described the guidance as 'all-weather' and confirmed that strong deployment would be a positive driver for margins. He also noted that the mix of fundraising, such as international flows that lack distribution fees, is a factor. He expressed confidence that GCP synergies and fundraising strength would help absorb the initial margin drag from the acquisition.

Ben Budish asked about the key variables influencing the full-year FRE margin guidance, which is expected to be flat year-over-year despite the dilutive impact of the GCP acquisition, particularly concerning credit AUM growth.

Answer

Jarrod Phillips, Partner & CFO, explained that the guidance is based on a normalized market environment. He identified strong deployment as a primary positive driver for margins. He also noted that the fundraising mix is a key factor, with international flows that lack distribution fees being accretive to margins. Phillips expressed confidence that fundraising strength and GCP synergies will offset the initial margin drag from the acquisition.

Ben Budish from Barclays sought further details on the Polymarket data licensing and redistribution arrangement, its potential P&L impact, ICE's longer-term plans for Polymarket, the possibility of listing event contracts, and the appeal of Polymarket's underlying blockchain technology.

Answer

Chris Edmonds, President of Fixed Income and Data Services, highlighted strong client demand for sentiment analysis data, seeing Polymarket as a complete ecosystem. Jeff Sprecher, Chairman and CEO, emphasized Polymarket's innovative blockchain-based settlement, which ICE aims to learn from to enhance its clearing infrastructure, reduce collateral requirements, and increase trading volumes. He also noted Polymarket's success in retail marketing.

Ben Budish asked for more details on ICE's data licensing and redistribution arrangement with Polymarket, its potential P&L impact, longer-term plans, and whether ICE plans to list event contracts like competitors. He also questioned the appeal of Polymarket's underlying blockchain technology.

Answer

Chris Edmonds, President of Fixed Income and Data Services at Intercontinental Exchange, highlighted strong client demand for sentiment analysis data (Reddit, Dow Jones) and the complete ecosystem around Polymarket's data. Jeff Sprecher, Chairman and CEO of Intercontinental Exchange, emphasized Polymarket's innovative blockchain settlement, ICE's interest in learning about 24/7 collateral management to minimize requirements across its six clearinghouses, and the mutual educational exchange between ICE and Polymarket on traditional versus consumer finance.

Ben Budish of Barclays asked for an update on capital allocation priorities now that ICE has reached its 3x leverage target, and also sought comments on recent media speculation regarding potential M&A.

Answer

CFO Warren Gardiner confirmed reaching the leverage target ahead of schedule and stated that share repurchases would likely increase in the second half of the year. He reiterated that the primary focus remains on investing in the business and declined to comment on specific M&A rumors, emphasizing that the company is always evaluating opportunities.

Ben Budish from Barclays asked for an update on capital allocation priorities, given that ICE has reached its target leverage level of three times EBITDA, and also requested comments on recent media speculation regarding potential M&A.

Answer

CFO Warren Gardiner confirmed that ICE reached its leverage target ahead of schedule. He stated that share repurchases are expected to increase in the second half of the year, while the company continues to prioritize organic investment. Gardiner declined to comment on specific M&A rumors but affirmed that the company is always evaluating opportunities.

Ben Budish asked about the key drivers of strength in the ETF business, specifically whether it's the wrapper or the underlying strategies, and how this informs the future pipeline for new launches and potential rewrapping. He also inquired about updates on inorganic opportunities, including pipeline, timing, and how the current market environment (growth vs. momentum) influences acquisition interests.

Answer

George Aylward, President and CEO, explained that both the ETF wrapper's benefits (transparency, tax efficiency) and strong investment performance of specific strategies are driving growth. He highlighted opportunities for specific types of strategies and the focus on broadening access in key distribution channels. Regarding inorganic growth, Mr. Aylward reiterated that the environment remains active with attractive opportunities, focusing on adding differentiated capabilities, private market expansion, or increased client access outside the U.S., while maintaining a disciplined approach. He noted that the quality vs. momentum dynamic, while a current headwind, doesn't fundamentally alter long-term M&A strategy.

Ben Budish inquired about the key strategies driving Virtus's ETF growth, distinguishing between the wrapper's appeal and specific strategy demand, and how this informs the future pipeline and potential new offerings. He also sought an update on inorganic growth opportunities, including pipeline timing and how market dynamics like quality versus momentum influence acquisition interests.

Answer

George Aylward, President and CEO, explained that both the ETF wrapper's benefits (transparency, tax efficiency) and specific attractive strategies are driving growth, particularly in alternative and certain return pattern spaces. He highlighted efforts to broaden ETF access in key distribution channels and upcoming actively managed funds. Regarding inorganic growth, Aylward reiterated a disciplined approach focused on differentiated capabilities, private market expansion, or increased client access outside the U.S., noting that current market trends (quality vs. momentum) influence but don't dictate long-term M&A strategy.

Ben Budish from Barclays inquired about the significant increase in share repurchases in Q2, the firm's capital allocation priorities, and the M&A pipeline, particularly regarding private markets.

Answer

EVP & CFO Michael Angerthal stated the $30 million in Q2 share repurchases were opportunistic due to a compelling valuation and that capital allocation remains balanced. President & CEO George Aylward added that the M&A pipeline is at its highest level, with a focus on private markets where Virtus sees an opportunity for differentiated, boutique-style capabilities to diversify investor exposure away from large-scale players.

Ben Budish asked about the predictability of private markets fees, particularly from AB Private Credit Investors (ABPCI), and what factors contributed to the increased guidance for private performance fees. He also inquired about the sensitivity of these fees to floating rate debt. Additionally, he sought details on allocations to private and custom funds within target date solutions, their fee rate implications, and whether they serve as indicators for broader market trends.

Answer

Tom Simeone, CFO, confirmed ABPCI's stability and noted that other private products crystallize at year-end, contributing to variability. He mentioned performance fees from commercial real estate and Carlyle were included in the updated forecast. Onur Erzan, Global Head of Private Wealth, Alternatives and Distribution, discussed AB's decade-long experience in custom DC solutions, including alternatives. He predicted a slow market evolution starting with custom solutions due to litigation risk and continued fee sensitivity, resulting in lower fees than retail or defined benefit plans. Seth Bernstein, President and CEO, added that privates could eventually comprise 10% of these portfolios, but it's still very early in this evolution.

Ben Budish inquired about AllianceBernstein's target date fund discussions, specifically allocations to private and custom funds, fee rate implications, and whether these custom solutions indicate broader market trends.

Answer

Onur Erzan (Global Head of Private Wealth, Alternatives and Distribution) highlighted AB's decade-plus experience in custom DC solutions, including alternatives, but cautioned that the DC market moves slowly due to litigation risk. He predicted initial adoption through custom solutions and noted that fee sensitivity would likely result in lower fee levels compared to retail or defined benefit plans. Seth Bernstein (President and CEO) added that private assets could eventually constitute 10% of these portfolios, but the evolution is still in its early stages.

Ben Budish of Barclays sought more detail on the firm's inorganic growth strategy for its wealth management business, asking about the timing, specific ambitions like the ultra-high net worth focus, and the capital intensity involved.

Answer

Onur Erzan, Head of Global Client Group, clarified that the M&A focus isn't new but is an enabler of their existing strategy, not a standalone goal. He explained they are patiently looking at small to midsize RIAs to add geographical breadth or specialized capabilities (e.g., entertainers, global families), noting they can be selective as they don't face the same pressures as private equity-backed platforms.

Ben Budish asked about the operational aspects of event contracts, including potential structural differences, impact on operating margins, advertising needs, and the frequency of new contract listings compared to traditional products.

Answer

Terry Duffy, Chairman and CEO, CME Group, distinguished between prediction markets on financial markets (allowed) and sports (contested). Tim McCourt, Senior Managing Director, CME Group, highlighted CME Group's operational and technological scale to list frequent intraday event contracts, leveraging its existing options complex and retail distribution. Julie Winkler, Chief Commercial Officer, CME Group, noted that distribution partners handle client onboarding and KYC, and CME Group does not foresee a significant change in its marketing spend. Terry Duffy reiterated CME Group's readiness for sports events if federally approved.

Ben Budish questioned the operational aspects of event contracts, including potential structural differences requiring higher/lower operating margins, increased advertising, or more frequent contract listings compared to traditional products.

Answer

Terry Duffy, Chairman and CEO, differentiated between prediction markets on financial instruments and sports. Tim McCourt, Senior Managing Director, highlighted CME Group's existing scale and capabilities for listing hourly and multiple event contracts intraday across traditional and crypto markets. Julie Winkler, Chief Commercial Officer, noted that existing distribution partners handle client acquisition, minimizing the need for a demonstrable change in CME's marketing spend.

Ben Budish from Barclays asked about CME's cash treasury trading business, BrokerTec, noting a perceived decline in market share and inquiring about the competitive dynamics in that market.

Answer

Senior MD & Global Head - Fixed Income Mike Dennis clarified that while BrokerTec had an exceptional Q2 with ADV up 24%, market share comparisons can be misleading. He stated that when comparing to like-for-like central limit order books for on-the-run Treasuries, CME's market share is flat. He also highlighted the upcoming launch of BrokerTec Chicago, a second matching engine, which is expected to attract new client acquisition.

Ben Budish of Barclays asked about the performance of the BrokerTec cash treasury trading business, noting a perceived decline in market share and inquiring about competitive dynamics.

Answer

Mike Dennis, Senior MD & Global Head - Fixed Income, countered that BrokerTec had an exceptional Q2 with ADV up 24%. He argued that when comparing to like-for-like central limit order books for on-the-run Treasuries, market share is flat. He also highlighted the upcoming launch of BrokerTec Chicago, a new matching engine, as a key initiative to attract new clients and enhance competitiveness.

Ben Budish of Barclays asked about the sustainability of Marex's performance into Q3 amid softening exchange volumes, particularly in the securities business, and questioned the drivers behind the allocation of net interest expense across segments.

Answer

Group CEO Ian Lowitt expressed confidence in continued momentum, citing a strong July and noting that growth initiatives can offset modest headwinds from potential rate cuts. Group CFO Rob Irvin explained that the change in net interest allocation was a conscious decision to deploy excess liquidity raised from debt issuance to support growth in trading businesses, notably in Capital Markets and Prime services.

Ben Budish inquired about the strategic partnership with FTSE Russell, asking for details on the next steps for the private market indices and how to track progress. He also asked for a technical explanation of how foreign exchange (FX) fluctuations impact both fee-earning AUM and management fees.

Answer

Mike McCabe, Head of Strategy, explained that the FTSE Russell partnership will launch its first private market indices later in the year, with initial revenue coming from modest licensing fees. He noted longer-term potential for asset management products. David Park, CFO, clarified that while a weaker dollar provided an $800 million benefit to fee-earning AUM and a $2 million benefit to management fees, this was offset by a corresponding increase in expenses, making the net P&L impact minimal due to a natural hedge.

Ben Budish of Barclays sought clarification on the expected step-up in expenses for the second half of the year, particularly in compensation after the Qualitas acquisition. He also asked for confirmation on the full-year guidance for fee-paying AUM step-downs and expirations.

Answer

Amanda Coussens, EVP & CFO, responded to both questions. She reiterated that despite some delayed expenses moving to the back half of the year, the company still expects peer-leading FRE margins in the mid-40s for the full year, including the impact of Qualitas. For AUM step-downs, she confirmed that P10 still expects to be at the upper end of the previously guided 5% to 7% range for the year.

Speaking for Ben Budish of Barclays, Nick Benoy asked for an update on progress with new investment vehicles like SMAs and different distribution channels, as well as the M&A pipeline, including attractive sectors and pricing.

Answer

Chairman and CEO Luke A. Sarsfield addressed the product strategy, stating that under Sarita Jairath's leadership, the company is exploring various wrappers like SMAs and rated feeder funds for different client channels. On M&A, Sarsfield and Arjay Jensen, EVP, Head of Strategy and M&A, confirmed a disciplined, programmatic approach is in place with an active pipeline. Jensen highlighted private credit, direct lending, and asset-backed strategies as key focus areas, particularly in Europe.

Ben Budish of Barclays asked for more details on the recent strategic hires, including Spencer Lee and Dean Barry, inquiring about their specific responsibilities, key performance indicators, and the expected timeline for their contributions to impact results.

Answer

CEO Christopher Concannon detailed that Spencer Lee is leading U.S. Credit product, leveraging his EMS and buy-side experience to enhance portfolio and block trading solutions. Dean Barry, joining in September, will bring broad expertise in markets, data, and M&A. Their impact is expected to accelerate product innovation, particularly for larger trade sizes and dealer solutions.

Ben Budish from Barclays asked for clarification on two modeling items: the outlook for transaction fees after a sequential increase and the key considerations for the full-year FRE margin.

Answer

CFO Alan Kirshenbaum addressed the questions by reiterating the full-year FRE margin guidance of 57% to 58%, stating they feel good about the 57% achieved in Q2. Regarding transaction fees, which are tied to gross originations, he suggested that the current quarter's level serves as a reasonable 'leaping off point' for modeling the rest of the year.

Ben Budish of Barclays inquired about the progress of cross-selling products to the ICD customer base and sought more detail on the impact of market volatility on ICD's cash balances during the quarter.

Answer

CFO Sara Furber explained that the dip in ICD balances was an episodic event where large-cap clients drew down cash to fund share buybacks and accelerate capital expenditures ahead of potential tariffs. She noted client retention remains high and balances are rebuilding. On cross-selling, Furber confirmed the T-Bills integration is complete, with the focus now shifting to driving client adoption. The next phase involves expanding into longer-dated U.S. Treasuries and leveraging Tradeweb's international sales network.

Ben Budish from Barclays asked for more details on the opportunity within the Index business related to annuities, inquiring about its current size and Nasdaq's ambitions in this area.

Answer

Chair & CEO Adena Friedman described the expansion into the insurance annuity space as being in its early stages, with a dedicated sales team established only in the last couple of years. The strategy is to increase the currently low institutional exposure to the Nasdaq-100 by creating specific annuity vehicles for insurance clients, with seven such products launched in the quarter.

Ben Budish of Barclays Capital inquired about Invesco's M&A strategy for private markets, asking about missing capabilities in the suite and the company's capacity for larger acquisitions to achieve scale.

Answer

President & CEO Andrew Schlossberg highlighted the strength of the existing $130 billion private markets platform. He stated that partnerships, such as the one with Barings and MassMutual, are the top priority for growth, and the bar for direct M&A remains very high. He also noted investments in specialized distribution and operations to scale the business profitably.

Ben Budish from Barclays inquired about Invesco's private markets strategy, asking about missing capabilities in its suite and its capacity and appetite for a large-scale acquisition versus other growth methods.

Answer

President, CEO & Director Andrew Schlossberg highlighted the existing $130 billion private markets platform as a strong base. He emphasized that partnerships, like the one with Barings and MassMutual, are "priority number one" for growth, though M&A remains an option with a high bar. He also noted investments in specialized distribution and operations to scale the business profitably.

Ben Budish questioned the drivers behind the rapid growth of overnight trading and asked for clarification on the change in the company's disclosed interest rate sensitivity.

Answer

CEO Milan Galik attributed strong overnight trading growth to demand from European and Asian clients trading during their daytime hours, a trend increasingly adopted by introducing brokers. CFO Paul Brody explained that the lower dollar sensitivity to rate changes is due to some non-USD currency rates approaching the zero-bound, which creates non-linear effects and compresses the impact of rate movements.

Ben Budish of Barclays inquired about the specific drivers behind the outsized growth in overnight trading, asking if it's due to a change in international client behavior or product availability. He also sought clarification on the firm's interest rate sensitivity, noting the lower dollar impact from a rate change despite a higher mix of non-USD cash.

Answer

CEO Milan Galik explained that overnight trading growth is driven by demand from European and Asian clients who can trade US markets during their daytime. CFO Paul Brody clarified that the lower interest rate sensitivity is due to some non-USD currencies approaching or crossing the zero-rate threshold, which creates non-linear effects on interest income calculations.