Kyle Voigt

Kyle Voigt requested an update on the Google-related investment spend for 2025 and its expected trend into 2026, along with any other notable puts and takes on the expense side for 2026.

Answer

Lynne Fitzpatrick, CFO, CME Group, stated that Google-related expenses were $27 million in Q3 and $71 million year-to-date. The 2025 guidance embeds $100 million, down from an initial $115 million due to identified savings and increased internal support. She indicated that while 2025's lower cost growth provides a baseline, some savings are not annual, and more detailed 2026 guidance would be provided in February.

Kyle Voigt of Keefe, Bruyette & Woods asked for an update on the FX Spot Plus offering, including client uptake since its Q2 launch and its contribution to the broader FX franchise.

Answer

Tim McCourt, Senior Managing Director, reported that the rollout has gone "exceedingly well," reaching a single-day volume of $2.7 billion. He noted that nearly 50 entities have traded, including dozens of banks new to CME's FX futures markets. The offering is seen as significantly additive to volume and is improving market quality in certain currency pairs by combining spot and futures liquidity pools.

Kyle Voigt of Keefe, Bruyette & Woods (KBW) requested an update on the FX Spot Plus offering, asking about client uptake and its contribution to the broader FX franchise since its launch in Q2.

Answer

Senior Managing Director Tim McCourt reported that the rollout has gone "exceedingly well," reaching a single-day volume of $2.7 billion. He noted that nearly 50 entities have traded on the new marketplace, including dozens of banks that had not previously used CME's FX futures. McCourt stated the offering is improving market quality and is seen as significantly additive to the FX complex by attracting new participants.

Kyle Voigt of Keefe, Bruyette & Woods asked about the current operating environment, questioning why broad-based deleveraging hasn't occurred despite high volatility and margin increases, and what is causing open interest declines in specific pockets like agricultural futures.

Answer

Derek Sammann, Senior Managing Director of Global Head of Commodities, Metals, & Options, explained that in agricultural products, a pullback in futures open interest was more than offset by record options open interest, indicating a risk-on environment. Terrence Duffy, Chairman and CEO, added that the lack of broad deleveraging is due to unprecedented uncertainty from factors like tariffs and national debt, making it too risky for participants not to hedge.

Asked for more detail on the trend of multi-strat hedge funds trading commodities, whether it's cyclical or secular, and sought further clarification on the aggregate pricing changes and the new collateral fee.

Answer

The increased activity from buy-side funds in commodities is viewed as a secular trend that has been building for 12-18 months. The 2-2.5% pretax income impact from fee changes is an aggregate figure. They could not provide a precise percentage of non-cash collateral that the new fee would apply to, as it depends on individual firm decisions, but noted total cash as a percentage of total collateral is in the high 20s.

Kyle Voigt asked about the medium-term outlook for pricing, questioning if the 2024 price change level is a good baseline for 2025. He also requested an update on the expense trajectory, specifically the cloud migration spending for 2024 and the outlook for 2025 and 2026.

Answer

CEO Terrence Duffy stated that pricing is evaluated throughout the year and is tied to value-add, not a set pattern. CFO Lynne Fitzpatrick clarified the 2024 pricing impact was 2.5-3% on total revenue, not just the 1.5-2% on transaction fees. On expenses, she confirmed the cloud migration spend is on track and that incremental costs are expected next year (year 4 of the project), which are already factored into the overall expense guidance.

Kyle Voigt asked about the 401(k) market opportunity and how TPG plans to address it as it potentially opens up more to private investments, leveraging its new semi-liquid products.

Answer

CFO Jack Weingart identified the 401(k) market as a natural focus. He believes the best entry point for alternatives is through commingling in target-date funds. He confirmed TPG is in active discussions to partner with managers of these funds, positioning itself as a key source for alternative asset investments, especially private equity.

Kyle Voigt requested an update on TPG's insurance strategy, specifically regarding the evaluation of control versus capital-light partnerships and the key criteria for selecting a potential strategic partner.

Answer

CEO Jon Winkelried described a multi-pronged strategy that includes expanding asset management services to insurers. For a strategic transaction, he emphasized that key criteria are the partner's quality, organic growth capability, and market position. He noted TPG is mindful of structure and size, aiming to secure long-dated capital while remaining FRE-centric and being prudent with its balance sheet.

Kyle Voigt of KBW asked about the potential for GPE management fees to reach an inflection point in 2026 and questioned LP receptivity to U.S. Buyout strategies ahead of the CP9 fundraising launch.

Answer

CEO Harvey Schwartz addressed LP sentiment, stating that engagement is high due to Carlyle being an outlier in returning capital—at three times the industry average. He noted that while some fund IRRs need improvement, LPs appreciate the liquidity and performance momentum. He also characterized the current macro environment under the new administration as pro-growth, which is creating a friendly market.

Kyle Voigt of Keefe, Bruyette & Woods (KBW) asked about the potential for GPE management fees to reach an inflection point and return to growth in 2026, and also inquired about LP receptivity to U.S. Buyout.

Answer

CEO Harvey Schwartz stated that LP engagement is high, driven by the firm's strong track record of returning capital—three times the industry average in corporate private equity. He acknowledged that while some net IRRs need improvement, the momentum is strong and feedback is positive. Schwartz also noted that the current administration's pro-growth policies are creating a friendly market backdrop, which supports the positive momentum across the entire platform, including the buyout side.

Kyle Voigt asked about the real estate fund CRP X, which activated in April, inquiring about its potential final size and the expected management fee step-up for the Global Private Equity segment in Q2.

Answer

CFO John Redett confirmed that the activation of CRP X on April 1 will lead to management fee growth in the second quarter, following a step-down from the prior fund in Q1. While he could not comment on the ultimate fund size as fundraising is ongoing, he reiterated the firm's expectation that it will be larger than its predecessor.

Kyle Voigt followed up on Global Private Equity, asking for more specific timing on the launch and potential fee activation for the next U.S. buyout fund (CP 9) and how its size might compare to the predecessor fund.

Answer

CFO John Redett indicated that Carlyle anticipates launching its next U.S. buyout fund 'towards the back end of 2025.' He stated that a fee activation would likely occur at some point in 2026, serving as the catalyst for the corporate private equity segment to return to growth. He declined to comment on the potential fund size.

Kyle Voigt from KBW requested an update on the municipal bond business, asking about market share progress, what new capabilities are needed for the next phase of growth, and any trends in the implied fee capture for that segment.

Answer

CEO Christopher Concannon expressed excitement for the muni business, highlighting record ADV in Q2 and strong growth in the tax-exempt segment, which was up 34%. He attributed the growth to electronification, the rollout of portfolio trading, the all-to-all solution, and strong feedback on the new CP+ for munis data product. He also noted that fee per million in the segment was up in July.

Kyle Voigt questioned the dynamics of fee capture, asking for details on the drivers behind the year-over-year and sequential declines, particularly in U.S. high-grade, and why higher Open Trading share didn't provide a stronger offset.

Answer

CEO Christopher Concannon and CFO Ilene Sazel Bieler clarified that the decline is primarily due to a strategic product mix shift. Growth in lower-fee-per-million protocols like portfolio trading and dealer-to-dealer pressures the overall average, but these are high-margin, incremental revenue opportunities. Bieler detailed that in April, positive impacts from high-yield mix and Open Trading were partially offset by the growth in portfolio trading, illustrating the mix-driven nature of the metric.

Kyle Voigt asked for a deeper analysis of the high-yield business, specifically the reasons for market share declines over the past two years and which client segments are growing versus pulling back.

Answer

CEO Christopher Concannon explained that the challenging macro environment of tight spreads and low volatility negatively impacted ETF arbitrage players, leading some to exit the market. However, he noted that systematic funds continue to invest for the long term, and traditional buy-side clients are still attracted by high yields. He pointed to growth in high-yield portfolio trading and expressed optimism that the new block trading solution will be particularly beneficial for this information-sensitive market.

Kyle Voigt asked about the key drivers behind the increased velocity of trade in 2024, seeking to distinguish between new issuance impacts and more secular trends.

Answer

CEO Christopher Concannon identified several drivers for higher velocity: attractive yields boosting fund inflows, the efficiency of electronic tools like portfolio trading, and a robust new issue calendar. He noted that while rates volatility is high, an increase in credit spread volatility, which has not yet occurred, would provide a further tailwind. He described the overall macro environment as a 'wind at our back.'

Kyle Voigt of Keefe, Bruyette & Woods (KBW) asked for more detail on the growth of the Apollo Aligned Alternatives (AAA) fund, particularly the surprising strength in institutional demand for it as an equity replacement.

Answer

CEO Marc Rowan confirmed AAA is on track to exceed $25 billion by year-end. He expressed surprise at the strong institutional demand for what was initially conceived as a retail product. He noted that in response to institutional requests, Apollo created a levered share class for AAA, allowing clients to target private equity-like returns with the lower volatility of a diversified portfolio. This has attracted several large institutional commitments.

Kyle Voigt inquired about the investments Ares is making in its retail distribution network, the potential for further expansion, and whether the proportion of international retail flows is expected to grow.

Answer

CEO Michael Arougheti confirmed significant ongoing investment in products, a global team of roughly 175 people, and educational content. He highlighted accelerating momentum with record monthly inflows and noted that the firm is expanding partnerships globally, particularly in Asia, suggesting the international proportion of flows has room to grow.

Kyle Voigt inquired about the investments Ares is making in its retail distribution network, the potential for adding more partnerships, and whether the international share of retail flows could grow beyond the current one-third.

Answer

Michael Arougheti, Co-Founder, CEO & Director, confirmed significant ongoing investment in product, people, and educational content for the global wealth business. He highlighted accelerating momentum, with July being a record fundraising month and August projected to be even stronger. He sees substantial room for growth by deepening penetration on major platforms and expanding internationally, particularly in Asia, suggesting the international flow proportion can indeed increase.

Kyle Voigt followed up on the GCP acquisition, asking about the 2025 fee-paying AUM growth trajectory and whether the synergized 2026 FRE target of $245 million remains valid considering current FX rates and the macro environment.

Answer

CFO Jarrod Phillips confirmed the initial fee-paying AUM variance was FX-driven and projected approximately $7 billion in GCP fundraising over the next few quarters, which would immediately contribute to fee-paying AUM. He stated that the financial targets are still in line. CEO Michael Arougheti added that GCP's non-U.S. product set could be a net beneficiary of the current investor shift away from U.S. markets, potentially strengthening its fundraising.

Kyle Voigt asked about Ares' M&A appetite following the GCP deal and the outlook for the gross-to-net deployment ratio in the credit business for 2025.

Answer

CEO Michael Arougheti stated that the bar for M&A is now higher, with the near-term focus on organic growth. He noted that while Q4 saw strong deployment, the overall environment is gradually improving, and Ares' deployment growth has outpaced the broader M&A market due to its diverse strategies and incumbent relationships.

Kyle Voigt of Keefe, Bruyette & Woods (KBW) asked about the drivers of the volatility in sweep cash balances during the quarter, whether it was due to yield-seeking behavior, and requested an update on cash levels for July.

Answer

President & CFO Matt Audette attributed the quarterly cash decline primarily to typical seasonality, including tax payments in April, and the denominator effect of strong AUM growth. He reported that July cash balances also saw a seasonal decline of about $1.8 billion due to advisory fees. He projected July's organic growth to be around 4%, reflecting a slowdown in advisor movement but in line with expectations for the first month of a quarter.

Kyle Voigt of KBW inquired about the pacing of synergy realization from the Atria acquisition, asking for the expected split between revenue and costs and how much was already baked into the 2025 core G&A guidance.

Answer

Executive Matthew Audette explained that the realization of the $150 million EBITDA run-rate synergy is not a gradual build but is instead centered around the advisor onboarding event, which is expected around mid-year 2025. He did not provide a specific breakdown of revenue versus cost synergies but noted that more clarity would be given as the onboarding occurs.

Kyle Voigt from Keefe, Bruyette & Woods (KBW) sought clarification on recent comments about M&A in the secondaries space and asked for a broader update on Blue Owl's overall M&A appetite and strategy.

Answer

Co-CEO Marc Lipschultz clarified that while the specific comment was on secondaries, the firm's broader M&A strategy remains active but highly selective, focusing on culture fit and durable, protected strategies. On secondaries specifically, he highlighted Blue Owl's organic success in the GP-led space with its 'Bose' strategy, which he sees as a massive growth area. He affirmed they will evaluate all paths—organic, bolt-on, or large acquisitions—to enter attractive markets.

Kyle Voigt of KBW sought clarity on the management fee growth trajectory, asking if the 18% year-over-year growth in Q2 is a sustainable run-rate for the second half and inquiring about other notable fund activations.

Answer

CFO Robert Lewin noted that while the 18% growth was strong, a significant product like Americas XIV only contributed a relatively small $30 million to the quarterly total, indicating broad-based strength. He declined to give specific guidance for the back half of the year but expressed confidence in continued solid results due to fundraising momentum across the entire platform. Craig Larson, Partner & Head of IR, added that the diversification of management fees across PE, credit, and real assets provides multiple ways to win.

Kyle Voigt of KBW asked if investors should shift focus from the insurance segment's ROE to the 20%+ 'all-in' ROE target, and requested an update on the roadmap to grow insurance-related Capital Markets fees to 'several hundred million'.

Answer

CFO Rob Lewin advised that while the insurance segment's operating earnings are important, management's holistic view focuses on the 'all-in ROE,' which includes significant asset management economics. Regarding Capital Markets fees, he noted strong momentum, with ~$20 million generated in Q1 2025 versus $50 million for all of 2024. He reiterated that achieving hundreds of millions in annual revenue is 'well within achievability' over the long term.

Kyle Voigt of KBW asked for an update on Global Atlantic's path to its 14-15% pre-tax ROE target, questioning if 2026 is still the right timeframe given recent macro shifts and deployment timing.

Answer

Chief Financial Officer Rob Lewin affirmed that 14-15% remains the correct long-term ROE target but declined to give a specific timeline. He explained that near-term ROE is impacted by growth activities, like large block insurance deals that require a 12-18 month redeployment period, creating a temporary drag on operating earnings despite being underwritten to attractive long-term IRRs.

Kyle Voigt of Keefe, Bruyette & Woods (KBW) asked about the drivers of accelerating growth in the Fixed Income and Data Services segment, particularly in data and network technology, and the potential for the data and analytics business to return to 5-6% growth.

Answer

CFO Warren Gardiner and President of Fixed Income & Data Services Christopher Edmonds clarified the drivers. They pointed to strength in consolidated feeds and desktops. Gardiner noted the fixed income data and analytics business exited Q2 at a 5% ASV run-rate, with strong trends heading into the second half, positioning it well for future growth.

Kyle Voigt of KBW asked about the accelerating growth in the Fixed Income and Data Services segment, seeking to understand the specific drivers in 'data and network technology' and the potential path for 'fixed income data and analytics' to return to 5-6% growth.

Answer

President of Fixed Income & Data Services, Christopher Edmonds, attributed network growth to the consolidated feeds and desktop offerings. CFO Warren Gardiner added that the fixed income data and analytics business exited Q2 at a 5% Annual Subscription Value (ASV) run-rate, despite reported 4% growth being muted by market effects on the index business. He expressed confidence in the business's trajectory for the second half of the year.

Kyle Voigt inquired about ICE's updated M&A strategy, given its deleveraging and return to buybacks, and whether future capital deployment would favor Mortgage Tech or other segments.

Answer

Chair and CEO Jeffrey Sprecher emphasized a focus on deleveraging to a target of 3x EBITDA or less to free up cash for share repurchases. He stated that with all three business segments performing well, the company is leaning into buybacks. While ICE always evaluates M&A, opportunities are judged against the high-return alternative of repurchasing its own shares, noting the major pieces of the mortgage platform are now in place.

Kyle Voigt of KBW followed up on the Dutch TTF natural gas contract, asking about its sustained growth and how a potential restart of Russian gas imports to the EU might impact its use as a benchmark.

Answer

President Benjamin Jackson emphasized that ICE's global commodity business is built to handle evolving supply chains, noting that TTF's open interest remained strong even when the Ukraine war began, which supported its subsequent growth. Chair and CEO Jeffrey Sprecher added that the increasing trend of trading global gas contracts as spreads between geographies, with TTF as a key benchmark, would likely sustain robust volumes even if physical flows change.

Kyle Voigt of KBW asked about M&A strategy, questioning if there are still opportunities for bolt-on acquisitions and whether the company would consider larger-scale M&A given its valuable currency.

Answer

CEO Vlad Tenev affirmed that the corp dev team is continuously and disciplinedly looking at opportunities that offer at least an 18-month acceleration over building in-house. While the increased market cap opens more opportunities, they will stick to their playbook. CFO Jason Warnick reiterated the disciplined approach, favoring smaller, efficient businesses they can scale, as part of a broader capital allocation strategy that also prioritizes organic growth.

Kyle Voigt of KBW asked for an update on the regulatory path for offering crypto staking and whether the proposed FIT21 bill would necessitate material changes to Robinhood's crypto operating model.

Answer

CEO Vladimir Tenev stated that the company sees nothing concerning in the proposed legislation regarding its current operating model. He identified the big opportunity as gaining clarity on listing crypto asset securities, which he believes would unlock significant economic value. He noted the shift away from a 'regulation by enforcement' posture has been a boon and the company is now working towards a clearer framework.

Kyle Voigt of Keefe, Bruyette & Woods (KBW) asked about the competitive environment for advisor recruiting, particularly regarding transition packages, and whether the observed acceleration in activity is an industry-wide trend or specific to Raymond James.

Answer

CEO Paul Shoukry described the recruiting environment as persistently competitive, especially from PE-backed firms, but noted a potential 'inflection point' as some question high valuations. He suggested the acceleration is partly driven by industry M&A catalysts but emphasized that Raymond James's success is broad-based and not tied to a single event.

Kyle Voigt from Keefe, Bruyette & Woods asked for an assessment of the competitive environment for advisor recruiting packages and whether the observed acceleration in activity is an industry-wide trend or specific to Raymond James.

Answer

CEO Paul Shoukry characterized the recruiting environment as persistently competitive, especially from PE-backed firms, though he senses a potential inflection point in their valuation multiples. He suggested that while industry M&A has been a catalyst for movement, Raymond James's success is broad-based and not tied to a single event.

Kyle Voigt asked about non-compensation expenses, noting the H1 run-rate was below the full-year guidance, and inquired about the quarter-on-quarter decline in PCG administrative compensation.

Answer

An executive, likely CFO Jonathan Oorlog, stated that non-comp expenses typically ramp in the second half of the year, especially in IT, and it was too early to revise the $2.1 billion guidance. Regarding PCG admin comp, he advised looking at the 5% year-to-date increase, which is consistent with growth, rather than a single quarter's fluctuation.

Kyle Voigt of KBW asked about non-compensation expenses, questioning the drivers for the expected second-half ramp-up toward the $2.1 billion full-year guide. He also asked about a seemingly off-trend decline in administrative compensation within the Private Client Group.

Answer

An executive, likely CFO Jonathan Oorlog, explained that a second-half expense ramp is typical, particularly in IT, and it was too early to revise the full-year guide. Regarding PCG admin comp, he advised looking at the 5% year-to-date growth, which is consistent with expectations, rather than focusing on a single quarter's fluctuation.

Kyle Voigt inquired about the adviser compensation ratio, noting it was around 74% for two consecutive quarters, below the historical 75-76% range, and asked if this represented a new run rate. He also asked what would be required to accelerate net new asset (NNA) growth back to the high single-digit rates seen in prior years.

Answer

President Paul Shoukry advised against calling the 74% comp ratio a new run rate based on just two quarters, pointing to the full-year 2024 figure of around 74.5% as a better reference. He noted that while mix shifts have an impact, there is also a scale advantage as production grows relative to transition assistance. On NNA growth, Chair and CEO Paul Reilly explained that recruiting can be lumpy and that the firm is coming off a record year. He stated the pipeline remains very healthy and expressed confidence in the long-term trend, despite industry-wide slowness.

Kyle Voigt from Keefe, Bruyette & Woods (KBW) inquired about the SEC's upcoming roundtable on Rule 611 (the order protection rule) and the potential implications for Nasdaq if the rule were to be repealed or significantly modified.

Answer

Chair & CEO Adena Friedman stated that Nasdaq is looking forward to engaging with the SEC on the topic. She expressed confidence in Nasdaq's ability to compete successfully in any environment, noting their successful operations in markets like Europe and Canada which do not have an identical rule. She added that other parts of Reg NMS might need adjustment if the rule changes.

Kyle Voigt asked for an expansion on the enhanced AWS partnership, seeking to understand its potential impact on marketplace technology revenues, sales cycles, and the total addressable market.

Answer

CEO Adena Friedman described the AWS partnership as a long-term strategic move to offer market infrastructure clients a modern, hybrid cloud solution. This offering will enhance scalability, security, and data capabilities while respecting data sovereignty. The model shifts from deployed software to a managed service, which will take time to implement. Friedman announced that the Johannesburg Exchange and BMV are early adopters and that Nasdaq's own Nordic markets will migrate to this new infrastructure, signaling a collaborative financial model where 'everyone wins'.

Kyle Voigt asked for details on the international opportunity for AxiomSL, particularly in new markets like India and the Philippines, and whether growth comes from displacing competitors or in-house solutions.

Answer

CEO Adena Friedman explained that Nasdaq's existing relationships are helping AxiomSL expand into new geographies. She highlighted recent wins in India and the Philippines as key upsells for domestic reporting, which could open up significant new markets. She framed the strategy as a 'land and expand' opportunity within countries where Nasdaq has a strong presence.

Kyle Voigt of Keefe, Bruyette & Woods (KBW) questioned the specific drivers behind the significant increase in client credit balances in June. He also asked about trends in zero DTE options trading on IBKR's platform and the company's view on the potential rollout of zero DTE options for single stocks.

Answer

CFO Paul Brody attributed the June cash balance growth to a combination of strong new cash inflows and a risk-off sentiment in April that generated cash from sales. CEO Milan Galik noted that zero DTE trends were stable and pointed to strong engagement with their similar ForecastX products. He explained that rolling out zero DTE for single stocks is complex due to physical settlement and potential post-market exercise volatility.

Kyle Voigt inquired about the specific drivers for the June increase in client credit balances and asked for IBKR's perspective on the reacceleration of zero DTE options trading and the feasibility of single-stock zero DTE products.

Answer

CFO Paul Brody attributed the growth in client cash to a combination of strong new deposits and risk-off selling from earlier in the quarter. CEO Milan Galik stated that while 0DTE volumes were stable, their new ForecastX products are seeing significant engagement. He noted that single-stock 0DTE options are complicated by physical settlement issues, which could create post-market volatility not seen in cash-settled index products.

Kyle Voigt asked about the company's dividend policy, questioning if investors should expect annual increases or if there is a target payout ratio or yield. He also inquired about the drivers of the sequential decline in risk exposure fees within the 'Other fees and services' line.

Answer

Chairman Thomas Peterffy stated that the company targets a dividend yield between 0.5% and 1% of the stock price. CEO Milan Galik explained that risk exposure fees, which are based on client options and futures positions, are inherently more volatile than margin balances and fluctuate as nimble clients adjust their exposures in response to market movements.

Kyle Voigt asked whether core fixed expense growth in 2025 would accelerate or decelerate from the ~12% rate in 2024. He also asked Chairman Thomas Peterffy if he would consider stock sales to increase the public float, and if they would be in blocks.

Answer

CEO Milan Galik stated he would not expect expense growth to accelerate, assuming stable inflation. CFO Paul Brody noted advertising spend could be a driver. Chairman Thomas Peterffy confirmed he would consider selling stock to increase float, that it would be done in blocks, and would occur when the price reaches what he believes is the 'right price'.

Kyle Voigt of Keefe, Bruyette & Woods asked for clarification on the divergence between strong cleared futures volume growth and the more modest clearing commission revenue, particularly concerning the agricultural sector. He also questioned the company's current funding position following the $500 million notes issuance in May and its potential need for additional funding in 2026.

Answer

Executive Ian Lowitt attributed the clearing commission performance to a tough comparison with an unusually strong Q1 2024 in agricultural commodities like cocoa, and noted some clients are currently on the sidelines due to tariff uncertainty. Executive Crispin Robert Irvin clarified that the quarterly volume growth of 17% shown on Slide 6 was in line with revenue growth. Regarding funding, Ian Lowitt stated that the company feels very comfortable with its current liquidity, viewing the recent debt issuance as valuable insurance in an uncertain environment and fuel for future growth. He added that while there are no immediate plans for more issuance, they would consider it for the right growth opportunities.

Kyle Voigt questioned the sustainability of the 20% adjusted margin and the potential for further expansion in 2025, particularly in Agency and Execution. He also asked about the drivers behind the increased capital requirement.

Answer

CEO Ian Lowitt projected 'slow margin expansion' going forward, noting that while scale provides leverage, diversified growth requires ongoing investment in support and control infrastructure. He identified the Agency and Execution segment as a key area for continued margin improvement. CFO Crispin Robert Irvin explained that the capital requirement is re-evaluated annually and the step-up reflects the firm's growth. Management added that the prime services business is low capital intensity, having a limited impact on this requirement.

Kyle Voigt of KBW inquired about the strategic rationale for the recent $600 million debt issuance, Marex's ideal long-term funding mix, and whether the new debt would impact the growth of the structured notes business within the Solutions segment.

Answer

CEO Ian Lowitt clarified that the debt issuance was a prudent measure to diversify funding sources and enhance flexibility, not due to any concerns with structured notes. He stated that Marex sees significant opportunities to deploy liquidity in clearing and prime brokerage and does not expect the new debt to 'crowd out' the structured notes business, which is still expected to grow.

Kyle Voigt questioned the relatively light share buyback activity in the quarter, asking if it was related to the CEO transition and what the updated capital return plans are.

Answer

CFO Jill Griebenow attributed the light buybacks to being in a blackout period for part of the quarter and the stock hitting all-time highs, reflecting an opportunistic strategy. She confirmed that with a low 1.0x leverage ratio and attractive debt rates, Cboe would prioritize share repurchases over further deleveraging.

Kyle Voigt of KBW asked if Cboe is considering introducing intraday or multiple daily expirations for SPX options, given the success of daily expirations, and what the potential operational challenges might be.

Answer

Global President David Howson stated that product development is customer-driven, and there is currently no compelling demand for intraday expirations. He explained that clients are seeking more precision in risk management, which is being addressed by new products like Variance Futures. While noting that cash settlement would make intraday expirations operationally easier than for physically-settled products, it is not a current priority.

Kyle Voigt asked about capital allocation, noting the rising cash balance and questioning if it was intended for M&A flexibility. He also inquired about the company's current M&A hurdles and appetite.

Answer

CEO Frederic Tomczyk confirmed that building cash provides valuable flexibility. He reiterated that while M&A has been de-emphasized, it is not off the table. He clarified that future M&A would be 'more selective' and 'more significant,' avoiding smaller deals that create significant technology integration work. Any potential deal would need to be larger, more targeted, and strategically aligned.

Kyle Voigt followed up on the Vanguard-Wellington partnership, asking about the proximity of the 401(k) market opportunity and how Blackstone is positioned to capitalize on it.

Answer

President and COO Jonathan Gray suggested that a large-scale 401(k) opportunity will likely require regulatory changes but called it a logical and significant future development. He asserted that Blackstone is 'extremely well positioned' due to its strong brand, high standards, and suite of perpetual products at scale, which are essential for the 401(k) market. The new alliance with liquid asset leaders further strengthens this position.

Kyle Voigt asked about the distribution runway for the BXPE private equity product and whether Blackstone is comfortable accelerating inflows beyond the recent $1-2 billion quarterly pace.

Answer

Jonathan Gray, President & COO, explained that growth is fundamentally driven by investment performance, where BXPE had a strong first year. He confirmed they are steadily expanding distribution partnerships, following the successful model of BREIT and BCRED. Gray expressed confidence in their ability to deploy more capital at scale if demand continues, underscoring the power of the Blackstone brand, which sees significant crossover investment from advisors across its perpetual products.

Kyle Voigt of Keefe, Bruyette & Woods inquired about Tradeweb's appetite for further M&A in 2025, the types of capabilities sought, and whether the focus is on bolt-on or larger-scale deals.

Answer

CEO William Hult emphasized that the primary focus remains on strong organic growth but noted that successfully executing deals like r8fin and ICD builds credibility for future opportunities. He outlined the evaluation criteria as culture, network, and technology. CFO Sara Furber added that the company's ambition is not limited to bolt-ons but that they remain extremely disciplined financially, seeking acquisitions that are accretive and strategically amplifying.

Kyle Voigt from KBW asked about future capital deployment and M&A strategy, including the company's capacity for new deals while integrating ICD and what asset classes or client segments are of interest.

Answer

CEO Billy Hult and CFO Sara Furber reiterated that M&A remains the preferred use of cash after organic investment. They highlighted a strong track record of efficient integration with recent acquisitions like YieldBroker and r8fin. Furber confirmed they are actively exploring deals and have the bandwidth to pursue new opportunities alongside integration. The capital allocation philosophy remains unchanged: organic growth, M&A, followed by buybacks and dividends.

Kyle Voigt of Keefe, Bruyette & Woods inquired about the potential for the Corient subsidiary to issue its own debt and its leverage targets. He also asked if the company's total net leverage would increase in Q3 due to announced acquisitions, repurchases, and M&A obligation payments.

Answer

Executive Kurt MacAlpine explained that while Corient is now fully prepared to issue debt on a stand-alone basis, there is no immediate need. The company will choose the most financially attractive option for shareholders, whether at the Corient or CI level. Regarding overall leverage, he described their capital allocation as dynamic, noting that Q2's significant activities were funded while keeping leverage flat. He stated they will continue to dynamically sequence actions to maximize long-term shareholder value.

Kyle Voigt asked for clarification on the remaining steps and timing for the full separation of CI Financial's Canadian and U.S. businesses, as well as the target leverage for the U.S. business (Corient). He also inquired about the details of incremental investments in the Canadian wealth business and the potential for future cost or revenue synergies.

Answer

Executive Kurt MacAlpine explained that debt is the final piece for the full separation and that Corient is now essentially 'IPO-ready.' While not providing specific leverage targets for Corient, he noted its strong free cash flow and access to modest leverage would facilitate inorganic growth. Regarding the Canadian wealth business, Mr. MacAlpine detailed that the investments are to scale the custody platform from approximately $25 billion to over $100 billion, which includes temporary and permanent expenses for servicing and technology. He anticipates a positive revenue and earnings impact similar to past scaling efforts.

Kyle Voigt from KBW asked for the company's view on offering proprietary products and for clarification on its plan to review contracts, including those with market makers.

Answer

President & CEO Tim Hockey stated that building a proprietary product offering is not a current focus, as it requires massive scale and the company prefers its open architecture model. He confirmed the contract review is comprehensive, covering both expense-side third-party contracts (which represent about 50% of costs) and revenue-side agreements, as part of a broad effort to optimize the entire business ecosystem.

Kyle Voigt from KBW asked about the Bank Deposit Account (BDA) portfolio, specifically if the fixed/float mix or duration would change if balances were to grow more meaningfully.

Answer

EVP & CFO Stephen Boyle responded that he does not expect the fixed/float mix to change dramatically. He noted that duration has been kept short due to the flat yield curve but could be extended if the spread between 5- and 7-year rates widens.

Kyle Voigt of KBW asked if the company observed any unusual client cash outflows related to tax season due to tax reform. He also inquired about the minimum acceptable level of corporate cash on the balance sheet and the potential uses for the excess amount.

Answer

EVP and CFO Steve Boyle responded that while they monitor tax season outflows, this year did not appear to be an outlier compared to previous years. Regarding corporate cash, President and CEO Tim Hockey stated that they do not give out a specific minimum level but confirmed they have plenty of liquidity and will assess opportunities as they arise.

Kyle Voigt inquired about the potential impact of the SEC's transaction fee pilot on the business and order routing revenue, and asked if the recent slowdown in institutional inflows has continued.

Answer

CFO Steve Boyle assessed the impact of the SEC pilot as 'relatively immaterial' and President and CEO Tim Hockey stated it would not impact order routing revenue. Regarding institutional inflows, Hockey noted it was too early to tell for the current quarter but explained that a slowdown during volatility is a natural dynamic as RIAs focus on existing clients, with a pickup expected as markets stabilize.