Michael Cyprys

Michael Cyprys sought further details on MIAX's strategy for making the Bloomberg 100 and B 500 index options appealing to retail investors, specifically addressing commission structures and the economic split with brokers. He also asked about the initial and long-term product suite, including zero DTE options, and MIAX's go-to-market strategy for brand building and investor education.

Answer

Thomas Gallagher, Chairman and CEO, and Shelly Brown, CEO of MIAX Futures and Chief Strategy Officer, emphasized the goal of achieving high retail engagement through extremely low execution costs, similar to the options market. Ms. Brown clarified that futures would launch first in Q2, followed by options, with plans for short-dated options and all products clearing at the Options Clearing Corporation. Mr. Gallagher and Ms. Brown stated MIAX would collaborate closely with Bloomberg and retail firms on co-education, promoting a better-constructed product with appealing fees.

Michael Cyprys from Morgan Stanley further inquired about the initial and future product suite for the Bloomberg derivatives, including the potential for zero DTE options, and MIAX's go-to-market strategy for brand building, awareness, and investor education.

Answer

Shelly Brown, CEO of MIAX Futures and Chief Strategy Officer, clarified that futures would launch first in Q2 2026, followed by options, with plans for short-dated options and a similar product suite to existing offerings, all clearing at OCC. Thomas Gallagher, Chairman and CEO, noted collaboration with Bloomberg and retail firms for investor education.

Michael Cyprys followed up on the expense outlook, asking about the anticipated pace of expense growth, its flexibility with volumes and revenues, and details on stock-based compensation in the quarter, distinguishing recurring from non-recurring elements.

Answer

Thomas Gallagher, Chairman and CEO, MIAX Exchange Group, deferred to Lance Emmons, EVP and CFO, MIAX Exchange Group. Lance Emmons noted a slight uplift in Q3 expenses due to being the first public quarter (D&O, board fees) and expected less expense growth going forward as major build-outs (Sapphire, Onyx Futures) are complete. Regarding stock-based comp, he explained noise from RSAs vesting at IPO and over the lockup period, suggesting that option expense is more recurring, and referred to slide 23 for a detailed breakout.

Michael Cyprys followed up on the expense outlook, asking about the anticipated pace of expense growth, how it might flex with volumes and revenues, and for more details on the recurring portion of stock-based compensation in the quarter.

Answer

Lance Emmons, Executive Vice President and Chief Financial Officer, noted a slight uplift in Q3 expenses due to public company status and expected less expense growth going forward after completing build-outs like Sapphire and Onyx Futures. For share-based compensation, he mentioned noise due to IPO-related vesting of RSAs and suggested that the option expense component is more recurring, referring to slide 23 of the deck for further details.

Michael Cyprys asked for the outlook on carried interest (Carry) into 2026, comparing it to 2025 performance.

Answer

Nick Goodman (President, Brookfield Corporation) noted 2025 was ahead of plan and the 2026 monetization pipeline is strong, particularly in infra, real estate, and Oaktree funds. He expects carried interest realizations to accelerate in H2 2026 and scale into 2027-2028.

Michael Cyprys first asked for an elaboration on Brookfield Wealth Solutions' growth strategy and pipeline in Asia, and their approach to capturing opportunities in Europe post-Just deal. He then inquired about the outlook for carried interest realizations in 2026 compared to 2025.

Answer

Sachin Shah, CEO of Brookfield Wealth Solutions, detailed their three-year effort in Japan for reinsurance partnerships and exploring other Asian markets, while noting regulatory challenges for annuities in Europe. Nick Goodman, President of Brookfield Corporation, indicated a strong monetization pipeline for 2026, expecting carried interest to accelerate in the second half of the year and scale into 2027-2028.

Michael Cyprys asked about how Brookfield views humanoids and AI broadly as a potential new growth pillar, referencing the partnership with Figure and the components of the 2030 DE guide related to capital allocation. He also inquired about the first reinsurance agreement in Japan, global ambitions for Wealth Solutions, and the U.K. transaction.

Answer

President and CFO Nick Goodman explained that current capital deployment focuses on building AI infrastructure (compute capacity, power supply) where Brookfield has a unique position. The Figure partnership is a defensive investment to learn and stay ahead, not necessarily a new growth pillar. For Wealth Solutions, Goodman noted the U.K. transaction (Just Group acquisition) is a significant step, and the Japan reinsurance is a flow agreement with potential to scale, focusing on continued growth in both markets outside North America.

Michael Cyprys asked about the potential for humanoids and AI to become a new pillar of Brookfield's business, seeking clarification on how these partnerships, like with Figure, contribute to the 2030 Distributed Earnings (DE) guide from capital allocation. He also inquired about the first reinsurance agreement in Japan, its contribution, and Brookfield's broader global ambitions for Wealth Solutions, including the U.K. transaction.

Answer

Nick Goodman, President of Brookfield Corporation, explained that the primary focus is on building backbone infrastructure for AI, including compute capacity and power, where Brookfield has a unique position in renewable energy, nuclear, and data centers. He described the Figure transaction as a strategic, defensive investment to learn and stay at the forefront of technological advancements for the broader organization. Regarding Wealth Solutions, Mr. Goodman highlighted the U.K. Just Group acquisition as a significant step for scaling PRT and accessing long-duration liabilities. He noted the Japan reinsurance agreement is a flow agreement with potential to scale and partner with other local players, with the U.K. and Japan being the main international growth markets outside North America.

Michael Cyprys asked for details on the expected ramp-up to achieve the $25 billion target for the Wealth Solutions business, focusing on the drivers of growth and the evolution of distribution channels and product sets. He also questioned the approach to monetizing the real estate portfolio amid market volatility.

Answer

Sachin Shah, CEO of Wealth Solutions, attributed the expected ramp-up to the typical slowness of Q1, with growth anticipated from U.K. pension deals, scaling the U.S. pension business, and expanding retail annuity distribution into large bank channels. Nicholas Goodman, an executive, addressed the real estate question by highlighting strong underlying fundamentals like high tenant demand and tight supply, noting that constructive capital markets are creating the building blocks for increased transaction activity, with some asset sales already underway.

Michael Cyprys asked for elaboration on the optimistic outlook for real estate monetizations in 2025 and inquired about the drivers of organic growth in the Wealth Solutions business, including distribution expansion plans.

Answer

President Nick Goodman attributed confidence in real estate monetizations to improving fundamentals and deepening capital market liquidity. For Wealth Solutions, he highlighted strong demographic tailwinds, expansion of distribution channels and products, and significant recent annuity origination, noting the business is already highly rated and well-capitalized.

Michael Cyprys inquired about Ridgepost Capital's broader capital management strategy, specifically the allocation between share buybacks and debt paydown post-Stellus acquisition, and the M&A outlook regarding any remaining strategic gaps in the business.

Answer

Amanda Coussens, EVP and CFO, stated that Ridgepost Capital intends to buy back stock to offset dilution but will prioritize debt paydown after the Stellus acquisition, mindful of leverage ratios. Luke A. Sarsfield III, Chairman and CEO, reiterated the unchanged M&A roadmap from Investor Day, focusing on international analogs of U.S. strategies (like Qualitas), private credit beyond direct lending (e.g., asset-based lending), and pure white space in real assets (infrastructure, real estate equity/debt), noting strong client inquiry in these areas.

Michael Cyprys asked for elaboration on Stellus's sourcing funnel and origination edge, as well as the steps Ridgepost Capital plans to take to accelerate Stellus's growth and its potential to be a faster-growing part of the Ridgepost family. He also inquired about Ridgepost's broader capital management strategy, including allocation between buybacks, debt paydown post-Stellus close, and future M&A opportunities, specifically asking about any remaining gaps in the business.

Answer

CEO Luke Sarsfield explained that Stellus has a strong sourcing engine primarily focused on the middle and lower middle market GP sponsor ecosystem for direct lending. He highlighted Ridgepost's ability to amplify this sourcing by leveraging its broad sponsor ecosystem (RCP, Hark, Five Points, Bonaccord, Qualitas), expecting to increase the sourcing funnel significantly. He noted that this potential synergy is not yet factored into financial analysis. Regarding capital management, CFO Amanda Coussens stated that Ridgepost intends to buy back stock to offset dilution but will prioritize paying down debt after the Stellus acquisition closes. Mr. Sarsfield then outlined unchanged M&A strategic focus areas: international analogs of U.S. strategies (like Qualitas), private credit (beyond direct lending, e.g., asset-based lending), and pure white space in real assets (infrastructure, real estate equity/debt) to address client inquiries.

Speaking for Michael Cyprys of Morgan Stanley, Stephanie Ma requested an update on the Qualitas acquisition, focusing on integration synergies and cross-selling, and also asked about the potential timing and scale for the Bonaccord III fund.

Answer

CEO Luke A. Sarsfield expressed strong enthusiasm for the Qualitas partnership, highlighting immediate synergies from combining data platforms and leveraging Qualitas's expertise in European product wrappers and distribution. For the long term, he sees a significant opportunity in NAV lending in Europe. Regarding Bonaccord, Sarsfield acknowledged the strong momentum and robust opportunity set, confirming the team is excited about the prospects for BCP III and expects to share more details later in 2025.

Michael Cyprys asked for an update on Robinhood's stablecoin partnership and 2026 milestones for tokenization, as well as the steps being taken for tokenization of real-world assets, including private markets, their contribution to the U.S. business, and key adoption hurdles.

Answer

CEO Vlad Tenev expressed confidence in tokenization of private markets, especially outside the U.S., and its potential in the U.S. pending accreditation hurdles. He cited positive customer response to OpenAI and SpaceX stock token giveaways in the E.U., indicating a hunger for private company exposure. The focus for 2026 is offering compelling private market products (Robinhood Ventures in U.S., tokenization overseas) safely with regulators, aiming for a differentiated offering.

Michael Cyprys from Morgan Stanley asked about tokenization, specifically the stablecoin partnership's ramp-up and milestones, real-world asset tokenization (including private markets and the U.S.), and key hurdles to adoption.

Answer

Vlad Tenev, CEO, expressed confidence in private market tokenization's power outside the U.S. and its potential in the U.S., pending accreditation hurdles. He noted customer demand for private company exposure (e.g., OpenAI/SpaceX giveaways) and stated that 2026 will focus on offering compelling private market products (Robinhood Ventures in the U.S., tokenization overseas) while working with regulators.

Michael Cyprys from Morgan Stanley asked about the uptake of the Legend platform, the volume seen in the 24/5 overnight session, and the contract mix in prediction markets between sports and other categories.

Answer

CFO Jason Warnick shared that prediction markets are nearing $2 billion in cumulative contracts, with a large percentage being in sports, but also over 100 million economic contracts traded since launch. CEO Vlad Tenev added that overnight volumes on Legend continue to grow nicely, though specific numbers were not shared, and that the team is rolling out improvements weekly.

Michael Cyprys of Morgan Stanley asked about the traction of 24/5 markets, steps being taken to drive uptake, and the long-term vision for its contribution to trading volumes.

Answer

CEO Vladimir Tenev stated that 24-hour trading is continuing to grow, with engagement spiking during after-hours macro events. He believes it will become 'table stakes' for all platforms within five years. He also noted that as Robinhood expands internationally into Europe and Asia, the feature will become even more imperative and will be a tailwind for volume growth, with the long-term trend being 24/7 trading for every asset.

Michael Cyprys asked about the potential hurdles Robinhood faces in its goal to become #1 in wallet share for the next generation, how the company plans to overcome them, and the expected progress in 2025.

Answer

CEO Vladimir Tenev acknowledged the competitive landscape and emphasized the need for continuous innovation, particularly in AI and crypto technology. He stated that Robinhood is well-positioned with the right team and culture to capture the significant intergenerational wealth transfer, and that investors should expect an acceleration of new products to further this goal.

Michael Cyprys asked about Apollo's strong fundraising in 2025 ($180B organic inflows vs. $150B target), potential areas of slower flows, confidence in 2026 (especially Athene), and any upcoming new initiatives or products.

Answer

President Jim Zelter expressed confidence in continued strong growth for Apollo Asset Management, driven by global wealth, Fund 11, and asset-backed/hybrid ecosystems, expecting it to be a record year. For Athene, he anticipates replicating strong numbers across its four channels. Combined, he expects inflows solidly north of $150 billion, driven by grabbing market share in various asset classes, particularly in the $40 trillion investment-grade private credit market, which he sees as the primary opportunity.

Michael Cyprys asked about Apollo's strong 2025 fundraising, exceeding the $150 billion organic inflow target, and the confidence in 2026 potentially being even better, especially for Athene. He also inquired about new initiatives.

Answer

President Jim Zelter expressed strong confidence in continued robust fundraising for both Apollo Asset Management (driven by global wealth, Fund 11, asset-backed, hybrid, and Sports Capital) and Athene, expecting to exceed $150 billion again. He highlighted Apollo's increasing market share across various asset classes, particularly in the $40 trillion investment-grade private credit market, distinguishing it from the smaller non-investment-grade software lending market.

Michael Cyprys inquired about the anticipated evolution of Apollo's partnerships with traditional asset managers, including the possibility of acquisitions, and sought insights into Apollo's aspirations and ongoing steps in market-making to support marketplace development.

Answer

President Jim Zelter reiterated that the partnerships are an evolving, open-architecture approach, similar to the development of direct lending, focusing on product solutions rather than just distributing funds. He emphasized that increased transparency, information, and price discovery, supported by market-making efforts, will lead to asset class growth, with Apollo aiming to be a leading voice in this evolution.

Michael Cyprys from Morgan Stanley asked for more details on Apollo's strategy for the 401(k) market, including anticipated regulatory changes and the steps being taken to secure a leading position.

Answer

CEO Marc Rowan clarified that the main barrier has been litigation risk for plan sponsors, not a prohibition on private assets. He anticipates regulatory changes will provide needed clarity. Rowan noted that Apollo's primary access point will be indirect, through partnerships with traditional asset managers and inclusion in target-date funds, which are already generating billions in inflows. He stressed that origination capacity is the ultimate key to success.

Michael Cyprys asked for an update on the use of the ADIP sidecar vehicle, its participation rate in new funds, and the circumstances under which the dividend from Athene might be increased.

Answer

CFO Martin Kelly stated that ADIP's participation rate is a lever for managing growth but should average in the mid-to-high 30s or 40% range over time. CEO Marc Rowan added that the $750 million annual dividend from Athene is expected to remain stable, as capital is needed to fund substantial growth. He also emphasized Apollo's responsible, well-capitalized approach compared to riskier industry practices.

Michael Cyprys inquired about MarketAxess's ambitions and vision for embedding artificial intelligence more broadly across its business, including the potential for automating client flows, the role of execution outcome feedback in AI models, and whether this creates a unique flywheel effect.

Answer

CEO Chris Concannon discussed the positive impact of AI funding on bond market growth and MarketAxess's internal use of AI for productivity. He emphasized leveraging the company's proprietary dataset for commercial AI applications, such as creating transparency in local EM markets, portfolio construction, generating trading signals, revealing depth of liquidity, predicting spread movements, and developing AI-powered chat functionality for clients. He reiterated the strategic decision to retain data for these AI-driven trading solutions.

Michael Cyprys asked about MarketAxess's ambitions for embedding AI across its business, the potential for client flow automation, and how execution outcome feedback could create a unique flywheel effect.

Answer

CEO Chris Concannon highlighted MarketAxess's ongoing investment in AI, noting its positive impact on the bond market through funding needs and internal productivity. He emphasized leveraging the company's growing proprietary dataset (e.g., $5.3 trillion in inquiry volume in 2025) for commercial AI applications, including creating transparency in local EM markets, portfolio construction, generating trading signals, assessing depth of liquidity, and predicting spread movements. He also mentioned exploring AI for basic chat functionality, underscoring the strategic decision to use data for trading solutions rather than selling it raw.

In a follow-up, Michael Cyprys of Morgan Stanley asked about the year-over-year decline in U.S. Credit portfolio trading share in July, the macro environment needed for share expansion, and what success in this area would look like over time.

Answer

CEO Christopher Concannon explained that monthly portfolio trading share can be volatile and client-specific, often influenced by a few very large trades. He noted that future growth will be driven by product enhancements, such as embedding proprietary pre-trade analytics into the tool. Success will also involve developing new solutions for dealers to show large baskets of bonds to clients, an emerging area of the portfolio market.

Michael Cyprys asked about the key factors driving the strength in MarketAxess's portfolio trading (PT) solution and inquired about the scope for continued innovation in this area over the next one to two years.

Answer

CEO Christopher Concannon attributed the success to significant investments in the new X-Pro platform, which now handles 92% of PT volume. He highlighted its superior workflow, pre-trade analytics, and features like net hedging. Looking forward, he stated that innovation will focus heavily on enhancing data and analytics to help clients optimize portfolio construction and execution timing, which is a constant source of client demand.

Michael Cyprys requested an update on the rates platform, including initiatives to scale the business, long-term ambitions, and the uptake of the net hedging tool.

Answer

CEO Christopher Concannon acknowledged the rates market is dominated by traditional RFQ and lacks access to alternative liquidity. He highlighted MarketAxess's innovation through its algo solutions, which are being migrated to Pragma technology to help clients work large orders with low market impact. He confirmed the net hedging tool continues to see growing adoption. The 2025 plan includes launching a traditional RFQ solution to create a hybrid offering that combines algorithmic and standard RFQ protocols.

Michael Cyprys asked about the growth trajectory for the automation suite, potential hurdles to adoption, and details on the next-generation Adaptive Auto-X offering.

Answer

CEO Christopher Concannon highlighted the suite's strong 32% YoY growth and noted clients are using it for larger trade sizes across all products. He described the next-gen solution, built on Pragma technology, as a smart order router that seeks alternative liquidity before initiating a standard RFQ. He sees automation as a key workflow solution, especially in fragmented markets like municipal bonds.

Michael Cyprys asked about the steps Carlyle is taking to enhance originations and expand its sourcing funnel in the credit business, and what actions might be taken in 2026.

Answer

CFO Justin Plouffe detailed recent hires like Alex Chi and Mike Mayer, and the expansion of the origination team, which led to a record almost $30 billion in originations in 2025. He emphasized the broad-based and durable nature of the credit business, ready for various market conditions. CEO Harvey Schwartz added that the resource buildout is mostly done, but more strategy details would be shared at the 2026 update.

Michael Cyprys questioned Carlyle's credit business on the specific steps taken to enhance originations and expand its sourcing funnel, and what further actions might be planned for 2026.

Answer

CFO Justin Plouffe detailed recent hires like Alex Chi and Mike Mayer, and the build-out of the origination team, which led to a record $30 billion in originations in 2025. He emphasized the broad-based and durable nature of the credit business, noting that the resource build-out is mostly complete, with more strategic details to follow at the shareholder update.

Michael Cyprys of Morgan Stanley followed up on private wealth, asking how Carlyle plans to leverage its success into a broader product suite, including potential hybrid products and expansion into the 401(k) channel.

Answer

CEO Harvey Schwartz reiterated a client-centric approach, emphasizing the need to develop solutions that meet fundamental needs, particularly in the retirement channel. He stressed the importance of working with regulators to "get it right" by creating consistent, long-term products. While many product permutations are possible, the focus is on building what is right for the client, not just building for the sake of it.

Michael Cyprys of Morgan Stanley followed up on the private wealth channel, asking about future product development, including hybrid products, partnerships, and the potential scope in the 401(k) channel.

Answer

CEO Harvey Schwartz stated that the key to future product development is putting the client at the center of the discussion and developing solutions that consistently deliver over the long term. He emphasized the need for the industry to 'get it right' for the retirement channel. While acknowledging numerous permutations are possible, he said the firm's focus is not on building for the sake of building, but on creating the right products that meet fundamental client needs, leveraging capabilities like its hyperscaler secondaries business.

Michael Cyprys asked for an elaboration on the opportunity set Carlyle sees in Japan across its Buyout, Fortitude (insurance), and Credit businesses, given the dynamic macro environment in the country.

Answer

CEO Harvey Schwartz highlighted Carlyle's 20-year history in Japan, which has built an 'exceptionally strong' franchise. He sees continued growth in the Japan buyout fund, strong demand on wealth platforms, and a leading position in insurance reinsurance via the Fortitude partnership. Key drivers include evolving corporate stewardship and a push by local institutions to extend asset management capabilities.

Michael Cyprys asked about the expected pace of deployment and realization activity in Global Private Equity for 2025, considering factors like market volatility, higher interest rates, and potential tariff impacts.

Answer

CFO John Redett stated that the firm remains positive on the activity outlook for 2025. He cited several positive catalysts, including open IPO markets, attractive all-in financing costs due to tight credit spreads, and the re-engagement of strategic buyers. He expressed optimism for a 'busy, busy year' on the realization front.

Michael Cyprys requested an update on Carlyle's asset-based finance business, asking about its current AUM, growth trends, and strategic plans to accelerate growth and expand capabilities in 2025.

Answer

CFO John Redett described asset-based finance as an "enormous opportunity" and a key future driver of credit growth. He noted that the business, started organically a few years ago, has already grown to roughly $7 billion in AUM. The growth strategy involves a mix of one-off portfolio purchases, like the recent Discover transaction, and expanding flow arrangements with partners such as Monogram, Triad, and Unison.

Michael Cyprys, a Managing Director at Morgan Stanley, asked for Cboe's updated thoughts on extending trading hours to 24/7 across its markets, including the path, hurdles, and strategies to overcome liquidity fragmentation and ensure real price discovery, particularly in overnight hours. He followed up by asking why multi-listed options would only extend until 4:15 PM, the hurdles, and the timeline for 24x5 or 24x7 trading.

Answer

COO Chris Isaacson noted Cboe already trades 23.5x5 in futures, index options, and FX, with GTH volume growing significantly. He mentioned U.S. equities will move to 23x5 in late November, pending infrastructure readiness, and 24x7 capabilities are in planning for appropriate market demand. Global Head of Derivatives Rob Hocking added that multi-listed options will extend to a morning session (7:30 AM-9:25 AM ET) and a post-close session (4:00 PM-4:15 PM ET) for 25 high-cap names, pending regulatory approval for Q3. He explained the deliberate, phased expansion to avoid burdening liquidity providers in lower-volume hours, using SPX as a guide.

Michael Cyprys asked for Cboe's updated thoughts on extending trading hours to 24/7 across its markets, outlining the path, hurdles, and strategies to overcome liquidity fragmentation, particularly for multi-listed options.

Answer

Chris Isaacson, COO, noted Cboe already trades 23.5x5 in futures, index options, and FX, with GTH volume up 34% year-over-year. U.S. equities will go 23x5 in late November. Rob Hocking, Global Head of Derivatives, added that multi-listed extended hours (Q3 launch pending regulatory approval) will start with specific morning and post-close sessions for 25 high-cap, liquid names, expanding slowly to avoid burdening liquidity providers.

Michael Cyprys asked about Cboe's appetite for intraday options, the next product innovations for retail investors, and the company's interest in prediction markets.

Answer

Global President David Howson stated that intraday options are not an active focus. He is most excited about the disciplined retail use of the full product suite and the growth of the crypto ecosystem (ETFs, options, futures). Regarding prediction markets, he said Cboe is led by customer demand and regulatory dialogue, viewing the space as nascent.

Michael Cyprys of Morgan Stanley asked about the plan for 24x5 U.S. equities trading, inquiring about the opportunity set, potential hurdles, the rationale for not pursuing 24/7, and the choice of the EDGX exchange.

Answer

Global President David Howson and COO Christopher Isaacson explained the initiative is driven by customer demand, especially from Asia Pacific. They noted that EDGX was chosen for its existing extended-hours market share and retail focus. Key hurdles include regulatory approvals and industry infrastructure readiness (the SIP), with a potential launch in late 2025 or early 2026. They view 24/7 trading as a more substantial industry-wide infrastructure challenge for a later date.

Michael Cyprys of Morgan Stanley followed up by asking what specific steps General Partners (GPs) can take to minimize AI disruption risk in their software portfolios, and how StepStone Group integrates these insights into its own portfolio construction and mitigation strategies.

Answer

Scott Hart, Partner and CEO, identified two key strategies for General Partners to minimize AI disruption risk: actively managing existing portfolios by divesting vulnerable companies and retaining well-positioned ones, and rigorous new investment selection to avoid companies susceptible to future disruption.

Michael Cyprys asked about StepStone Group's approach to assessing and sizing AI disruption risks across private market managers and funds, inquiring about portfolio construction strategies and insights from their datasets. He followed up by asking what specific steps General Partners (GPs) can take to minimize AI disruption risk in their portfolios, particularly regarding managing existing investments and new investment selection.

Answer

Scott Hart (Partner and CEO) provided context, noting that StepStone's data suggests 27% of private equity investments (2020-2025) were in IT, with over 20% in software, and highlighted that AI disruption has been a long-standing diligence question. He identified two broad categories for GPs to minimize risk: managing existing portfolios (e.g., divesting vulnerable companies) and new investment selection (diligence to avoid companies likely to be disrupted).

Michael Cyprys asked about the opportunity in the 401(k) retirement space following a recent executive order, inquiring about the potential timeline, the role of target-date funds, and StepStone's partnership strategy. He also asked if existing target-date assets could be reallocated or if growth would come from new flows.

Answer

Jason Ment, President & Co-COO, expressed optimism that the executive order will lead to rulemaking that clarifies fiduciary duties, though he noted adoption will take time. He sees the primary entry point as custom target-date funds and confirmed StepStone plans to partner with existing retirement ecosystem players. Ment believes market adoption will involve a mix of reallocating assets within existing funds and creating new fund series.

Michael Cyprys of Morgan Stanley asked about the secondaries marketplace, StepStone's role amid potential LP liquidity constraints, and the path for real estate and infrastructure secondaries funds to scale to the size of private equity funds. He also inquired about the future evolution of the private wealth platform.

Answer

Scott Hart, Chief Executive Officer, stated they expect increased selling in the secondaries market and are an active buyer across all private markets. He noted their large real estate secondaries fund is primarily GP-led, and the less active LP secondary market currently limits its ability to scale like PE funds. Jason Ment, President and Co-COO, explained that the private wealth platform will likely evolve toward more specialized products as individual investor allocations grow, mirroring the institutional market's history.

Michael Cyprys from Morgan Stanley asked about StepStone's strategy regarding the blending of public and private assets, including potential partnerships for products like target-date funds. He also requested an update on the company's outlook for the retirement space and expectations for how it might evolve.

Answer

Jason Ment, President and Co-Chief Operating Officer, responded that conversations around public-private blended products are increasing and that StepStone views these as partnering opportunities. He emphasized the focus is on solving client needs rather than just pushing products. Regarding the retirement market, Ment stated that while regulatory action isn't necessary for success, it would be welcome. He noted that conversations with plan sponsors and managers have gained a greater sense of urgency post-election.

Michael Cyprys inquired about StepStone's M&A strategy, asking where there might be opportunities to expand the platform further over the next five years. He also asked about the potential for alternative investments to penetrate the 401(k) channel, particularly in a potentially more supportive regulatory environment, and how StepStone is positioned for this.

Answer

Head of Strategy Mike McCabe responded that the platform is largely built out, and future M&A would likely focus on accelerating or enhancing existing capabilities, with the primary focus being the accretive buy-in of the NCI. President and Co-COO Jason Ment addressed the 401(k) opportunity, stating that the most likely path is through target-date funds rather than direct menu options. He noted that regulatory action is not required, as adoption is already occurring in private real estate, and emphasized StepStone's ongoing educational efforts in the defined contribution market.

Michael Cyprys asked about TPG's initiatives and steps for accelerating growth in the wealth channel in 2026, particularly for TPOP, and the scope for new product development and partnerships to enhance retail access.

Answer

CFO Jack Weingart emphasized that TPOP's successful launch as a top-performing private equity evergreen product is key to broadening TPG's brand. He expects TPOP inflows to more than double in 2026 through existing and new channel partners. TCAP is also expected to continue growing as a direct lending option. TPG is actively developing new products, including a multi-strategy credit interval fund (the "TPOP of credit") and a non-traded REIT, and is engaged in discussions for bundled public-private solutions and partnerships to access mass affluent and 401k markets.

Michael Cyprys inquired about TPG's initiatives and steps planned for 2026 to accelerate growth in the wealth channel for existing vehicles like TPOP, and the scope for new product development and partnerships to enhance retail access.

Answer

Jack Weingart, CFO at TPG, stated that the primary focus is on expanding TPOP, which is a top-performing private equity evergreen product, expecting it to more than double in 2026 through existing and new channel partners. He also mentioned plans to expand the product set with a multi-strategy credit interval fund and a non-traded REIT, and to explore bundled solutions and partnerships for broader market access, including mass affluent and 401k markets.

Michael Cyprys requested elaboration on the 'cross-platform strategic partnership discussions,' asking about TPG's aspirations and how these partnerships might contribute to growth.

Answer

CEO Jon Winkelried and CFO Jack Weingart explained that as large LPs consolidate GP relationships, TPG is creating bespoke, long-term, multi-asset class partnerships. These arrangements provide capital commitment certainty, help anchor new strategies, and solidify TPG's position as a core partner.

Michael Cyprys asked TPG to elaborate on clients evaluating geographic diversification, how the firm is positioning for this trend, and to provide an update on its investment and LP capital exposure to China.

Answer

CEO Jon Winkelried confirmed that clients are re-evaluating geographic exposure amid U.S. policy uncertainty, creating opportunities for TPG to partner on deals in regions like Europe and Asia. He stated that China represents less than 2% of the firm's total AUM and is not a current focus for new capital deployment, although TPG maintains a presence there for regional economic insight.

Michael Cyprys sought clarification on the timeline for doubling AUM to $500 billion, asking about the expected split between organic and inorganic growth and the specific criteria for M&A in areas like infrastructure and geographic expansion.

Answer

CEO Jon Winkelried confirmed a timeline of 'several years' is a fair characterization for the AUM goal. He estimated that organic growth could increase AUM from roughly $250 billion to $400 billion, with inorganic levers like strategic acquisitions and an insurance partnership providing the path to $500 billion. He expressed confidence in TPG's integration capabilities, citing the success of the Angelo Gordon transaction.

Michael Cyprys asked for an update on TPG's initiatives in the private wealth channel, including the status of the Twin Brook offering, details on the new TPOP private equity product, and the firm's differentiation strategy.

Answer

Executive Chairman Jim Coulter detailed a strategy of expanding distribution and creating new products, confirming the TPOP semi-liquid PE vehicle will launch in Q1 with a seeded portfolio. He also mentioned potential future products in climate and yield. CEO Jon Winkelried emphasized the strong demand from channel partners and TPG's active brand-building efforts in the private wealth space.

Michael Cyprys asked for more details on Ares Management's software exposure, specifically how the 9% of private credit AUM translates to the direct lending book, the performance trends of software credits, and the firm's underwriting discipline, including the portion of software deals passed on versus participated in over the last five years.

Answer

CEO Michael Arougheti clarified that software exposure is approximately 12% of the direct lending book. He stated that Ares' 'yes rate' for investments across the entire portfolio generally ranges between 3%-5% over 30 years, implying a high selectivity rate for software deals as well. Arougheti also noted the firm's near avoidance of ARR (Annual Recurring Revenue) exposures, which represent less than 1% of its global direct lending portfolio.

Michael Cyprys asked about Ares Management's strategy for scaling its asset-based finance (ABF) market opportunity, including expanding its sourcing funnel through partnerships, flow agreements, and acquisitions, and how this funnel might evolve over the next three to five years.

Answer

Mike Arougheti, Co-Founder, CEO, and Director, stated that Ares has one of the largest ABF businesses in the non-rated market, balancing it with the IG segment. He described a team of nearly 100 people sourcing through direct calls on specialty finance companies, bank relationships for flow agreements, and selective acquisitions of asset aggregation platforms. He noted a significant uptick in gross deployment, nearly doubling Q3 over Q2, and a strong pipeline for Q4 and Q1, with a new vintage fund launching early next year.

Michael Cyprys asked about Ares' strategy for scaling its asset-based finance (ABF) market opportunity, including how it expands its sourcing funnel through partnerships, flow agreements, and acquisitions, and how this funnel might evolve over the next three to five years.

Answer

Mike Arougheti, Co-Founder, CEO, and Director of Ares Management Corporation, highlighted Ares' leadership in the non-rated ABF market, balancing it with the rated side. He described sourcing through direct engagement with specialty finance companies, aggregators, bank relationships for flow agreements, and selective acquisitions of asset aggregation platforms. He noted that gross deployment trends in ABF showed a significant uptick, nearly doubling Q3 over Q2 and exceeding 30% year-over-year, with a strong pipeline for Q4 and Q1.

Michael Cyprys requested an update on the alternative credit (ABF) business, focusing on the expansion of its sourcing funnel and the firm's appetite for growing its presence in the investment-grade segment of the market.

Answer

CEO Michael Arougheti highlighted that ABF is a fast-growing business with a large, specialized team. He explained that the strategy is balanced between higher-fee, non-rated assets and lower-fee, investment-grade assets. He noted that while the focus is on FRE growth, not just AUM, the investment-grade capabilities are valuable for providing full solutions and enhancing origination for the entire platform.

Michael Cyprys asked for an update on the alternative credit (ABF) business, specifically on the expansion of its sourcing funnel and the firm's appetite for growing its presence in the investment-grade, fixed-income replacement segment.

Answer

Michael Arougheti, Co-Founder, CEO & Director, described the ABF business as a fast-growing area with a large, specialized global team. He explained that the business is balanced about 50/50 between non-rated (higher fee) and rated (lower fee) assets, with the mix driven by a focus on FRE growth and profitability rather than just AUM. He affirmed that Ares is focused on growing both segments, as the investment-grade capabilities can enhance origination for the higher-return, non-rated side.

Michael Cyprys asked for an elaboration on the opportunity set in asset-based finance (ABF), its expected evolution, and the firm's progress in expanding origination, including through bank partnerships.

Answer

CEO Michael Arougheti emphasized that success in ABF requires scale, experienced teams, and strong bank relationships, areas where Ares has a competitive advantage. He confirmed that bank partnerships are a significant opportunity, driven by regulation and capital needs. He cited examples of Ares's activity, including portfolio purchases like a $1.3 billion loan portfolio from a European bank, forward flow agreements, and SRTs, highlighting the need for flexible and creative solutions to be a valued partner to banks.

Michael Cyprys inquired about the data center investment opportunity in light of potential AI efficiency gains and asked for details on the traction and distribution strategy for the private wealth business overseas.

Answer

CEO Michael Arougheti affirmed his confidence in the data center thesis, stating demand for compute continues to grow and the near-term pipeline is de-risked. He noted that over 35% of wealth capital came from Europe and Asia, where the distribution strategy relies more on bank and wealth partnerships compared to the wirehouse and RIA focus in the U.S.

Michael Cyprys asked for more detail on the new core infrastructure strategy in the private wealth channel and the drivers of the record October inflows. He also requested commentary on improving real estate transaction activity and where Ares is deploying capital.

Answer

CEO Michael Arougheti highlighted that the record $1.2 billion in October inflows were broad-based and that the new core infra fund offers a unique tax-advantaged structure. An unnamed executive added that real estate activity is picking up quarterly, with a continued focus on high-conviction sectors like industrial and multifamily in the U.S. and Europe, as well as student and single-family housing.

Michael Cyprys asked for an update on how KKR is deploying AI across the firm and its portfolio companies, the evolving opportunities and benefits harnessed, and how portfolio construction is optimized around AI infrastructure.

Answer

Partner and Head of Investor Relations Craig Larson highlighted KKR's over 400 engineers and two cross-functional teams focused on leveraging AI for portfolio companies (sharing best practices across 200+ companies) and internal firm efficiency. Co-CEO Scott Nuttall added that portfolio companies serve as '200 different labs' for AI, driving EBITDA uplift and value creation. KKR has also consistently invested in AI infrastructure themes like data centers and power, with these investments performing well.

Michael Cyprys inquired about KKR's deployment of AI across the firm and within its portfolio companies, asking how it's evolving, the benefits harnessed, and how portfolio construction is optimized around AI infrastructure.

Answer

Partner and Head of Investor Relations Craig Larson highlighted KKR's over 400 engineers and two cross-functional teams: one focused on sharing AI best practices across its 200+ portfolio companies, and another on enhancing KKR's internal efficiency. Co-CEO Scott Nuttall added that portfolio companies serve as '200 different labs' for AI, driving efficiencies and EBITDA uplift, which also contributes to KKR's operating leverage. He reaffirmed KKR's long-standing investment in AI infrastructure, such as data centers and power, noting these investments are performing well.

Michael Cyprys asked how the ongoing changes to KKR's insurance business enhance its position as a partner for insurance clients and expand its competitive advantage over the next three to five years.

Answer

Co-CEO Scott Nuttall explained that owning Global Atlantic provides a principal's perspective, leading to a higher quality of dialogue and true partnership with insurance CIOs and CEOs. KKR can now bring deal flow specifically originated for insurers, structuring it for its own balance sheet and comparing notes on how it works for third parties. This has led to a dramatic increase in engagement and intimacy of relationships, resulting in significant growth in third-party insurance AUM from $25 billion to $80-85 billion since the Global Atlantic transaction.

Michael Cyprys asked how the changes KKR is making to its insurance business enhance its position as a partner for insurance clients and expand its competitive advantage over the next three to five years.

Answer

Scott Nuttall, Co-Chief Executive Officer, explained that owning Global Atlantic provides a principal-to-principal dialogue with insurance clients, offering a deeper understanding of their investment needs and challenges. He noted that KKR brings deal flow specifically originated for insurers and structures it for its own balance sheet, fostering a different quality of engagement. Nuttall highlighted that third-party insurance AUM has grown from $25 billion to $80-85 billion since the Global Atlantic transaction, indicating a positive synergy. Rob Lewin, Chief Financial Officer, added that KKR has formed a dedicated group to deliver the firm's capabilities to insurance clients globally, including reinsurance opportunities.

Michael Cyprys of Morgan Stanley posed a big-picture question on how AI and blockchain might evolve the asset management industry and how KKR is adapting its business model in response.

Answer

Craig Larson, Partner & Head of IR, and Scott Nuttall, Co-CEO, acknowledged it's still early. Larson noted KKR's focus is on building smarter solutions at portfolio companies, increasing productivity, and identifying new investment opportunities like digital infrastructure. He also pointed to KKR's 2022 tokenized interest in a fund as a sign of innovation. Nuttall added that AI will help scale the firm and make teams more productive, especially in areas like private wealth and insurance, but the specific applications are still being developed.

Michael Cyprys from Morgan Stanley asked for elaboration on the 10% of AUM with first-order tariff impact, the mitigation steps being taken, and how KKR is assessing second or third-order effects.

Answer

CFO Rob Lewin clarified the 90% 'no material exposure' figure applied to the global private equity portfolio, and the remaining 10% does not yet account for mitigation strategies. Co-CEO Scott Nuttall added this favorable positioning is a result of a multi-year strategy focused on acquiring companies with durable demand drivers that can maintain margins. The firm's macro and public policy teams are actively assessing broader impacts.

Michael Cyprys requested an update on the asset-based finance (ABF) platform, its progress over the past year, and plans for expanding its sourcing funnel and bank partnerships.

Answer

Executive Craig Larson reported that ABF AUM has grown to approximately $70 billion, up over 40% year-over-year. He described ABF as a massive market with high barriers to entry where KKR finds attractive risk-reward. He noted that as banks focus on ROE and shed non-core business lines, it creates significant opportunities for KKR to partner and acquire assets.

Michael Cyprys of Morgan Stanley requested an update on KKR's climate strategy, asking about the steps being taken to build it out, the types of investments being made, return targets, and long-term expansion plans.

Answer

Executive Craig Larson described the climate initiative as a major focus, targeting the "sweet spot" between mature renewables and early-stage tech, leveraging KKR's infrastructure expertise. He highlighted the massive capital need ($7 trillion annually) and noted KKR has raised $2.5 billion for the strategy, which it believes can become a needle-moving opportunity for the firm over time.

Michael Cyprys from Morgan Stanley asked about the impact of the U.S. administration's push for new data centers to generate their own power on bottlenecks, and how Brookfield Asset Management integrates its greenfield power capabilities to expand capacity in its data center investments.

Answer

Conor Teskey, Chief Executive Officer of Brookfield Asset Management, identified electricity supply as the primary bottleneck for AI growth, stating that grids cannot keep up with demand. He highlighted Brookfield's unique solutions, including quick-to-deliver power (Bloom Energy), nuclear solutions (Westinghouse), and behind-the-meter energy storage and renewable solutions, to overcome grid limitations and capture demand.

Michael Cyprys asked about the impact of the US administration's desire for new data centers to stand up their own power generation on bottlenecks, and how Brookfield Asset Management is integrating its greenfield power capabilities to expand capacity.

Answer

Conor Teskey, CEO, stated that electricity supply is the primary bottleneck for AI growth, and Brookfield's ability to provide unique solutions beyond grid power is a key differentiator. He mentioned leveraging investments in Bloom Energy for quick-to-deliver power, Westinghouse for nuclear solutions, and behind-the-meter energy storage and renewables to directly connect to data centers, thereby overcoming grid limitations and capturing significant demand.

Michael Cyprys asked about the potential for building a capital markets business to monetize credit origination and sought clarity on the multi-year dividend policy and approach to share buybacks, given the Q1 payout ratio.

Answer

An Unknown Executive confirmed that building a capital markets business is now part of the plan and could add low-hundreds of millions in fee revenue over 4-5 years, noting this is upside to the Investor Day forecast. They also explained the dividend payout is expected to be north of 90% of distributable earnings, and the Q1 level reflects confidence in future earnings growth. Buybacks will remain opportunistic, deployed when the firm sees value in its shares.

Michael Cyprys of Morgan Stanley asked for details on the EUR 20 billion data center announcement in France, the broader deployment opportunity around AI, and how Brookfield is using AI internally to drive productivity.

Answer

CEO James Flatt explained the French deal highlights significant sovereign and corporate demand for AI infrastructure, an opportunity available to few firms with Brookfield's scale across real estate, infrastructure, and power. He noted deployment occurs across the capital stack and value chain. Regarding internal use, Flatt described it as early days but with meaningful efficiency gains, leveraging knowledge from across the entire portfolio to trial functions and share best practices, initially focusing on cost savings.

Michael Cyprys from Morgan Stanley inquired about CME Group's perspective on tokenized collateral, including its potential benefits, the advantages and disadvantages of stablecoin versus tokenized deposits or money funds, and the criteria for acceptance, along with steps being taken to tokenize collateral this year.

Answer

Chairman and CEO Terry Duffy explained that CME Group is rolling out an initiative with Google for tokenized cash this year, in partnership with a depository bank. He stated that acceptance of tokens for margin would depend on the issuer's credibility (e.g., a systemically important financial institution versus a third-tier bank) and the associated risk, including potential haircuts. He also mentioned exploring different forms of margin and initiatives with their own coin on a decentralized network to create client efficiencies without introducing additional risk.

Michael Cyprys inquired about CME Group's perspective on the role and benefits of tokenized collateral, specifically asking about the advantages and disadvantages of stablecoins, tokenized deposits, and tokenized money funds, and whether CME Group would accept all three, treating them differently, while also seeking details on steps to tokenize collateral this year.

Answer

Chairman and CEO Terry Duffy explained CME Group's initiative to roll out tokenized cash with Google and a depository bank this year. He clarified that acceptance of tokens for margin would depend on the issuer's credibility and the associated risk, with a preference for tokens from systemically important financial institutions.

Michael Cyprys followed up on credit futures, asking about their progress, use cases versus alternatives, steps to broaden user engagement, and the potential for connectivity with cash credit markets to enhance client value and growth.

Answer

Mike Dennis, Global Head of Fixed Income, reported strong growth and record open interest in credit futures, with positive client feedback on liquidity and margin offsets. He mentioned 300 sales opportunities in the pipeline. Tim McCourt, Senior Managing Director, highlighted FX Spot Plus as another example of combining cash and futures markets to meet client needs. Terry Duffy, Chairman and CEO, commented on the interesting dynamic between U.S. corporate and government debt markets, expecting both to be active.

Michael Cyprys asked about the progress of credit futures, their use cases compared to alternatives, steps to broaden user engagement, and the potential for connectivity with cash credit markets to enhance client value and growth.

Answer

Mike Dennis, Global Head of Fixed Income, CME Group, reported strong growth and record open interest in credit futures, with a diverse client mix and a liquid central limit order book. He highlighted their value for managing credit exposure and margin offsets, noting 300 sales opportunities. Tim McCourt, Senior Managing Director, CME Group, cited FX Spot+ as another example of combining cash and futures markets, with over 70 entities trading. Terry Duffy, Chairman and CEO, CME Group, discussed the active dynamics between U.S. corporate and government debt markets, anticipating continued activity in credit markets.

Michael Cyprys from Morgan Stanley inquired about the major hurdles to implementing 24/7 trading, the potential role of stablecoins in enabling it, the expected timeframe, and the potential demand for such an offering.

Answer

Chairman & CEO Terrence Duffy identified the primary roadblock as the cost for firms to staff 24/7 operations, which must be justified by sufficient client demand. He believes 24/7 trading will eventually happen but will be asset-class specific, with crypto being the most likely candidate to lead the way. He noted that other asset classes like interest rates or energy would face more complex considerations involving central banks and other key constituents.

Michael Cyprys from Morgan Stanley inquired about the major hurdles to implementing 24/7 trading, the potential role of stablecoins in enabling it, and the likely timeframe and demand for such an offering.

Answer

Terrence Duffy, Chairman & CEO, identified the significant operational cost for member firms to staff 24/7 as a primary hurdle. He believes 24/7 trading will eventually happen but will be asset-class specific and that the timing is uncertain. He suggested crypto products are the most likely to move in that direction first, given the cash market already operates around the clock, while noting potential reluctance from central banks for other asset classes like rates and FX.

Stephanie, on behalf of Michael Cyprys of Morgan Stanley, asked about the cross-margining benefits CME currently provides and what further steps could be taken to enhance these efficiencies, particularly with the FICC program.

Answer

Suzanne Sprague, Senior Managing Director, reported that the FICC cross-margining program now has 15 participating accounts and that CME plans to be operationally ready to support end-user customers by year-end. Terrence Duffy, Chairman and CEO, contextualized this by noting that CME already provides immense savings, with total daily offsets of $60 billion across all asset classes.

Asked about product development opportunities related to managing risks from climate events and severe weather, and the potential for capital markets to provide solutions for the insurance industry.

Answer

The market is already using existing CME products (Ag, Energy, Metals, Weather derivatives) to manage climate-related risks. They are seeing significant participation and growth in these areas. They are also exploring more tailored products for the insurance industry, acknowledging the growing challenges in that sector, such as obtaining insurance for mortgages in high-risk areas.

Michael Cyprys asked about the receptivity from regulators to CME's arguments against clearing U.S. Treasury futures abroad and the feasibility of a competitor accessing netting benefits from London if they opened a U.S. clearinghouse. He also requested details on the growth and strategy for CME's interest rate swap clearing business.

Answer

CEO Terrence Duffy said he is gaining traction with regulators and legislators as they better understand the derivatives market's size and the risks related to resolution authority. Global Head of Clearing Suzanne Sprague added that achieving cross-border netting benefits is historically difficult and expensive due to regulatory capital requirements. On swaps, she noted 75-80% of margin is from USD swaps, and Head of Rates Products Mike Dennis added that they are seeing renewed client interest in the platform's capital efficiencies amid Basel III concerns.

Michael Cyprys inquired about T. Rowe Price's experimentation with tokenization and blockchain, identifying the most compelling use cases, the expected timeline for impact (12-24 months vs. longer term), and potential for differentiation.

Answer

Head of Global Investments Eric Veiel stated that T. Rowe Price has been investing in digitization since 2022, focusing on three vectors: efficiency (middle/back office savings), product (moving traditional assets on-chain for fractionalization and customization), and distribution (reaching mobile/crypto-native investors). He mentioned ongoing work on end-to-end processes for cost savings and the registration of an active crypto ETF with the SEC for a potential 2026 launch, utilizing a blend of fundamental and quantitative analysis.

Michael Cyprys asked about T. Rowe Price's experimentation with tokenization and blockchain, identifying the most compelling use cases, the expected timeline for impact (12-24 months vs. longer term), and potential for differentiation.

Answer

Head of Global Investments Eric Veiel detailed T. Rowe Price's three vectors for tokenization: efficiency in middle/back office, product opportunities (e.g., public-private convergence, fractionalization), and distribution to new investor generations. He mentioned ongoing work on end-to-end processes, the registered active crypto ETF for 2026, and exploring partnerships for distribution.

Michael Cyprys of Morgan Stanley asked about the evolution of T. Rowe Price's business model over the next decade in light of technological advancements like AI and blockchain, and how these technologies underpin the firm's expense reduction initiatives.

Answer

President, CEO & Chair Robert Sharps explained the firm's multi-year plan to drive efficiencies to fund investment while keeping expense growth in the low single digits. He highlighted AI's potential for productivity, cost savings, and growth through customized client solutions. Head of Global Investments & CIO Eric Veiel added that AI is a "game changer" for alpha generation and productivity in research. Veiel also noted the firm's ongoing work in tokenization, having participated in several proofs of concept.

Michael Cyprys asked for an update on T. Rowe Price's ETF business, including the key drivers of its recent success, the growth strategy for the next 1-2 years, and the firm's view on offering an ETF share class for existing mutual funds.

Answer

CEO Robert Sharps detailed the ETF business's momentum, driven by a growing lineup of 19 differentiated products, strong investment performance, and increasing placement on wealth platforms. He identified third-party asset allocation models and international expansion as future growth drivers. Regarding an ETF share class, Sharps stated it is a likely opportunity the firm will pursue thoughtfully, considering intellectual property and capacity constraints. Head of Global Investments Eric Veiel added that recent innovative launches like the Hedged Equity ETF are key differentiators and that a rich pipeline of new ETFs is planned.

Michael Cyprys inquired about the retirement market, asking for an update on the competitive landscape, growth strategies like the new lifetime managed payout product, and the potential size of the recently won custom glide path mandate.

Answer

CEO Rob Sharps detailed that the custom glide path win involves creating a bespoke allocation for a plan sponsor, with fees recognized as AUA. He highlighted momentum in new products like the Personalized Retirement Manager and Managed Lifetime Income, which are initially launching on T. Rowe's own recordkeeping platform with plans for broader distribution. CFO Jen Dardis added that their go-to-market strategy includes both their own platform and their DC investment-only (DCIO) channel, where they partner with other recordkeepers.

Michael Cyprys first inquired about the evolution of exit pathways across Hamilton Lane's platform and the broader industry, and the key factors that could accelerate distributions. He then followed up by asking about new opportunities arising from the Evergreen Platform's evolution into a multi-asset, multi-strategy offering, such as modeled portfolios or placements in target date funds.

Answer

Erik Hirsch, Co-Chief Executive Officer, stated that distribution activity is increasing as buyers and sellers reach equilibrium and assets mature, expecting 2026 to be a stronger exit environment than 2025. Regarding the Evergreen Platform, he described the current phase as 'wave three,' focusing on structuring and partnerships to utilize these products as versatile tools, with ongoing dialogues across various applications.

Michael Cyprys followed up on the Evergreen Platform's evolution into a multi-asset, multi-strategy engine, asking about new opportunities such as modeled portfolios, target date placement, or liquid fund partnerships.

Answer

Erik Hirsch, Co-Chief Executive Officer, outlined three phases of the Evergreen Platform's development: product introduction, client education, and now structuring and partnerships. He confirmed that Hamilton Lane is actively engaged in discussions across all these potential avenues.

Michael Cyprys of Morgan Stanley asked for details on how the firm is capitalizing on market volatility and inquired about the trade-offs and performance differences between evergreen and drawdown funds for institutional clients.

Answer

Co-CEO Erik Hirsch detailed that the firm is capitalizing on volatility through increased deal flow, talent acquisition, and strategic tech investments like 73 Strings. He explained that institutions are increasingly using evergreen funds as complementary tools alongside traditional drawdown funds, highlighting the early but significant trend of adoption by a growing number of institutional investors.

Michael Cyprys of Morgan Stanley asked about expense management, specifically how the firm is absorbing third-party commission costs while expanding margins, and what the outlook is for the Fee-Related Earnings (FRE) margin.

Answer

Co-CEO Erik Hirsch credited the firm's ability to manage costs to two key areas: efficiency gains from technology investments and cost savings from re-evaluating vendor relationships as the business scales. He guided towards margin stability in the near term, noting that holding the margin steady while absorbing significant growth-related costs is a positive outcome.

Michael Cyprys questioned how the recent change in the U.S. administration might impact private market access for retirement accounts, specifically 401(k)s, and asked about the key hurdles that need to be overcome.

Answer

Co-Chief Executive Officer Erik Hirsch noted that while it's too early to know the new administration's priorities, Hamilton Lane is well-positioned to participate if the 401(k) market opens up. He identified the primary hurdles as both regulatory and practical, including addressing daily valuation requirements for illiquid assets and rules limiting the proportion of such assets in funds. He emphasized that these challenges are 'real' and have historically prevented private market inclusion in 401(k)s.

Michael Cyprys asked about Franklin's strategic objectives for blockchain and tokenization over the next couple of years, steps to enhance positioning and adoption in 2026, and how blockchain contributes to improved efficiency and lower costs.

Answer

Jennifer Johnson, President and CEO, highlighted dramatic cost savings (e.g., money market fund transaction costs reduced from $1.50 to $1.13 per transaction on Stellar blockchain) and the elimination of reconciliation costs. She discussed the challenge of wallet adoption but noted increasing interest from crypto exchanges and traditional managers, detailing Benji's integration with stablecoins for yield.

Michael Cyprys inquired about Franklin Templeton's strategic objectives for blockchain and tokenization over the next couple of years, steps to enhance positioning and adoption in 2026, and how blockchain contributes to improved efficiency and cost savings.

Answer

Jennifer Johnson, President and CEO, highlighted dramatic cost savings from blockchain, citing a comparison where 50,000 transactions cost $1.50 on the old system versus $1.13 total on the Stellar blockchain. She explained that blockchain eliminates reconciliation costs and allows for lower minimum investments. She noted slow adoption due to the need for blockchain wallets and past regulatory uncertainty, but sees a shift with growing interest from crypto exchanges and traditional managers. Franklin Templeton aims to integrate Benji with stablecoins by end of March, allowing users to earn yield on stablecoin holdings and convert for payments, with daily yield payments.

Michael Cyprys asked about evolving client interest in non-US strategies amid geopolitical uncertainty and which of Franklin's strategies are best positioned to capture potential allocation shifts away from the US.

Answer

EVP & Head of Global Distribution Adam Spector confirmed seeing increased client interest in non-US markets. He characterized this not as a political move, but as an investment decision to rebalance away from US large-cap growth and capture opportunities abroad. He highlighted flows into emerging markets equity, international value, global bond, and EM high yield strategies. He also noted that non-US clients see growing upside in their own domestic markets.

Michael Cyprys from Morgan Stanley asked for more detail on Franklin Templeton's international business, including its contribution to flows, areas of traction, and initiatives to accelerate overseas growth.

Answer

Head of Global Distribution Adam Spector explained that the firm has positive gross sales momentum in every region. He noted regional preferences, such as alternatives in Australia and income in Asia. The Asia-Pacific region experienced some headwinds from institutional clients de-risking. Spector confirmed that approximately $470 billion in AUM is sourced from outside the U.S., and both the EMEA and Americas ex-U.S. regions were net flow positive for the quarter.

Michael Cyprys requested an update on the Putnam acquisition, focusing on its performance, synergy realization, flow trends, and accretion since the deal closed. He also asked about the progress of the strategic partnership with Great-West.

Answer

CFO Matthew Nicholls described the Putnam acquisition as a 'home run,' citing net flows of approximately $1 billion per month, strong performance, and financial accretion ahead of schedule. Head of Global Distribution Adam Spector attributed the success to combining Putnam's strong investment team with Franklin's scaled distribution, which has more than doubled gross sales. He also noted the partnership with the Power Group is progressing well with new product development.

Michael Cyprys from Morgan Stanley asked how the firm's five-year targets would translate into revenue, operating income, and EPS growth. He also requested a reminder of Western Asset's current contribution to AUM, revenue, and operating income.

Answer

CFO and COO Matthew Nicholls stated that Western Asset currently contributes about 8-9% of adjusted operating revenue. He explained the firm's long-term goal is to achieve low single-digit organic growth on average after normalizing for the Western situation. President and CEO Jennifer Johnson added that ex-Western, the organic growth rate is about 1.3%, and highlighted growth drivers like ETFs, a strong international footprint, and unique public-private market capabilities.

Michael Cyprys asked about the core G&A guide, which implies an acceleration to 4.5%-7% growth in 2026 from 4% in 2025, seeking elaboration on the drivers, investment areas, and priorities for expanding technology capabilities and broadening the platform.

Answer

President and CFO Matt Audette explained that the 2025 Core G&A growth of 4% was lower than the initial outlook due to cost efficiency. The 2026 guide of 4.5%-7% reflects continued investments in improving the offering, driving growth, and enhancing efficiency and scale through automation and AI. He emphasized that this range still represents one of the lowest growth rates in some time, reflecting significant opportunities for efficiency and client experience improvements.

Michael Cyprys questioned the acceleration in LPL Financial's core G&A growth guide for 2026 (4.5%-7% from 4% in 2025), asking for details on the driving factors, investment areas, and priorities for expanding technology capabilities and broadening the advisor platform.

Answer

President and CFO Matt Audette explained that the 2025 G&A growth was lower than expected due to cost efficiency work, making the 2026 guide appear as an acceleration. He emphasized continued investments in improving offerings, driving growth, and enhancing efficiency and scale through automation and AI, noting the wider range reflects the timing variability of these initiatives.

Michael Cyprys of Morgan Stanley asked about LPL's capital allocation priorities following the Commonwealth deal closing and requested an update on the progress and capital deployment pace for the Liquidity & Succession solution.

Answer

President & CFO Matt Audette reiterated the firm's capital allocation plan, prioritizing deleveraging from 2.25x post-close to approximately 2.0x by 2026, which involves pausing share repurchases. He confirmed that the Liquidity & Succession program continues to perform well, with a steady pace of about 10 small deals per quarter, and that this capital deployment fits within the broader deleveraging strategy.

Michael Cyprys of Morgan Stanley inquired about the recruiting pipeline, asking how it is shaping up amid market volatility and what the expectations are for adviser movement across LPL's various channels.

Answer

Executive Richard Steinmeier noted that adviser movement has settled into a 'new normal' around 5%, down from historical highs, but LPL's win rates continue to improve. He acknowledged that while some competitors are increasing transition assistance, LPL's value proposition remains strong across technology, service, and economics. Steinmeier cautioned that sustained market volatility could cause some advisers to delay their moves, potentially causing idiosyncratic quarterly results, but the long-term pipeline remains robust.

Michael Cyprys from Morgan Stanley asked for more details on enhanced asset monetization opportunities, specifically in banking, lending, and other asset management areas, and what to expect from LPL in 2025.

Answer

Executive Richard Steinmeier outlined a clear roadmap, stating that a cash management account will launch in the first half of the year. He also detailed plans to internalize the securities-based lending capability, fully integrating it into LPL's platforms to simplify the process for advisors and clients, with the long-term goal of achieving industry-leading penetration in these services.

Michael Cyprys inquired about the traction and capital deployment for LPL's liquidity and succession solution and asked for more detail on the specific steps being taken to achieve the strategic priority of driving operating leverage.

Answer

CEO Rich Steinmeier highlighted strong momentum for the liquidity and succession solution, noting its unique ability to ensure continuity for retiring advisors, and its expansion to external advisors. President and CFO Matthew Audette added that about 40 deals have been done internally at 6-8x EBITDA. On operating leverage, Audette pointed to investments in technology and robotics to lower the cost-to-serve, while Steinmeier noted the new organizational structure enhances this focus.

Michael Cyprys inquired about Blackstone's strategy for deploying AI across its portfolio companies, the learnings from this deployment, its impact, and the expected evolution over the next 12-24 months.

Answer

Jon Gray, President and COO, explained that AI is still in early days but showing real impact, particularly with software engineers for coding efficiency and cyber monitoring. He mentioned using AI for data summarization across 270 companies and 13,000 real estate assets, and at portfolio companies for customer engagement, content creation, and rules-based businesses, anticipating real productivity gains.

Michael Cyprys inquired about Blackstone's deployment of AI across its portfolio companies, seeking insights into learnings, observed impacts, and the expected evolution of AI integration over the next 12-24 months, beyond its significant investments in data centers and AI infrastructure.

Answer

Chairman and CEO Steve Schwarzman stated that while it's still early, AI is showing real impact, particularly with software engineers (doubling efficiency), cyber monitoring, and legal compliance (via Norm AI). He also highlighted its utility for data summarization across Blackstone's vast portfolio. At portfolio companies, AI is being used for customer engagement, content creation, and rules-based businesses, with early test cases showing positive productivity gains. He mentioned the hiring of Rodney Zemmel to lead AI initiatives.

Michael Cyprys asked about Blackstone's evolving brand strategy, marketing, and advertising approach as it expands into the global private wealth channel, referencing a recent TV advertisement in Japan.

Answer

Jon Gray, President and Chief Operating Officer, explained that Blackstone's advertising is targeted, with Japan being an important market due to its savings and investor pivot. He noted a broader footprint over time, focusing on financial advisors and appropriate customers, and confirmed that global expansion will involve more targeted advertising than historically.

Michael Cyprys asked about Blackstone's evolving brand strategy, marketing, and advertising approach for the private wealth channel globally, including recent TV advertisements in Japan.

Answer

President and COO Jon Gray explained that advertising is targeted, focusing on key markets like Japan due to its savings and investment pivot. He noted the focus on financial advisors and appropriate customers, expecting a broader footprint over time while maintaining a targeted approach in specific markets and sectors.

Michael Cyprys inquired about the 401(k) and retirement market opportunity, asking how Blackstone sees the path for alternatives unfolding, particularly within target-date funds, and what steps the firm is taking.

Answer

President & COO Jonathan Gray advised patience, pending a potential executive order and rulemaking, but stated that providing individuals in defined contribution plans with access to alternatives is compelling. He agreed that target-date funds are the logical initial vehicle. Gray highlighted Blackstone's competitive advantage due to its scale, brand, and lineup of perpetual products, which he believes are better suited for this channel than complex drawdown funds, positioning the firm uniquely for this potentially significant opportunity.

Michael Cyprys inquired about Blackstone's deployment strategy for its nearly $180 billion in dry powder amidst a volatile and uncertain market, asking how the firm finds the confidence to invest and what the near-term cadence might look like.

Answer

President and COO Jonathan Gray explained that Blackstone initially targets dislocated public securities like leveraged loans and high-yield bonds. The firm then looks at public companies where stock price declines may increase board receptivity to offers. Gray emphasized that with $177 billion in dry powder, Blackstone views the current environment as a 'seed planting' opportunity, leaning into sectors with long-term conviction like digital infrastructure, energy, and life sciences.

Michael Cyprys questioned how Blackstone views the investment opportunity around AI, particularly in data centers and power, given developments suggesting AI models could become less capital and energy-intensive.

Answer

Jonathan Gray, President & COO, affirmed confidence in the sector, highlighting Blackstone's $80 billion long-term leased data center business, which is not built speculatively. He acknowledged that while the cost of compute is falling, this will spur greater usage and adoption. Citing commentary from major tech firms, Gray concluded that while the form of use may evolve, the vital need for physical infrastructure like data centers and power will persist and grow with overall demand.

Michael Cyprys inquired about the growth outlook for Blackstone's insurance platform, asking for details on both strategic partnerships and third-party separate managed accounts (SMAs).

Answer

President & COO Jonathan Gray highlighted the platform's $221 billion AUM, up 24% year-over-year. He noted that while new strategic partnerships are episodic, the dialogue with potential partners is strong. Gray emphasized significant momentum in SMAs as more insurers recognize the value of investment-grade private credit, which offers a substantial excess return (approx. 185 bps) compared to liquid markets, positioning the business for continued high growth.

Michael Cyprys asked about Nasdaq's proposal to tokenize equity securities, how it integrates with existing infrastructure, its differentiation from other proposals, and the potential migration to a fully on-chain environment, including hurdles and timeframe.

Answer

Adena Friedman, Chair and CEO, explained that the proposal aims for integration with existing infrastructure, prioritizing investor protection, issuer choice, and capital efficiency. She emphasized maintaining market integrity and working with infrastructure providers like DTCC. Friedman noted that while tokenization is an exciting technology, the focus is on a sustainable path forward, not a full migration to blockchain native trading of equities at current scale.

Michael Cyprys asked about Nasdaq's proposal to tokenize equity securities, specifically how it envisions integration with existing infrastructure and how its approach differs from other proposals. He also sought insights into the potential migration towards a fully on-chain environment, including the hurdles, timeframe, and likely path.

Answer

Adena Friedman, Chair and Chief Executive Officer of Nasdaq, emphasized that their proposal aims for integration into existing, highly liquid, and resilient market infrastructure. She acknowledged tokenization as a beneficial technology for moving money, managing collateral, and expanding retail access, but stressed the importance of investor protection, issuer choice, and market integrity. Nasdaq is collaborating with infrastructure providers like DTCC to enable CUSIP-level tokenization, investor choice in settlement, fungibility, and interoperability. Friedman noted that current technology is not yet capable of supporting fully on-chain equity trading at the scale, speed, and determinism required, and capital efficiency through netting remains a key consideration.

Michael Cyprys asked for more details on Nasdaq's tokenization proposal, specifically how tokenized securities would trade on exchanges, the key issues and hurdles, compelling use cases, and the mechanical process of token minting.

Answer

Adena Friedman, Chair and CEO, outlined that investors could flag orders for tokenized settlement into a digital wallet, with Nasdaq collaborating with DTCC on developing two settlement paths (traditional or digital wallet) using multiple blockchain technologies. She stressed maintaining the benefits of U.S. markets while offering investors choice, ensuring the underlying equity itself is tokenized, not a derivative, and initially keeping settlement cycles the same. Longer-term benefits include collateral mobility, reduced risk, and capital efficiencies through seamless payment infrastructure, implemented via a staged process.

Michael Cyprys inquired about Nasdaq's tokenization proposal for securities trading, seeking elaboration on its mechanics, key hurdles, compelling use cases, and the process for minting tokens.

Answer

Adena Friedman, Chair and CEO of Nasdaq, explained the vision for investors to flag orders for settlement in tokenized form into a digital wallet, working with DTCC on dual settlement paths. She stressed maintaining the efficiency of U.S. markets while offering investor choice. Longer-term benefits include collateral mobility, reduced systemic risk, and capital efficiencies through streamlined payment infrastructure.

Michael Cyprys of Morgan Stanley inquired about the opportunity set for Nasdaq's 'Adjentic AI' workforce, its broader application across the firm beyond Verifin, and the potential for significant efficiency gains.

Answer

Chair & CEO Adena Friedman detailed a dual strategy for AI, focusing on integration within products (like Calypso and financial crime tools) and application within the business to enhance efficiency in product development and client success. She noted that the 2025 efficiency program reflects early progress, with expectations for these efforts to scale further into 2026.

Michael Cyprys inquired about the impact of AI advancements on Nasdaq's business, including product innovation, cost efficiencies, the competitive landscape, and the strategic plan for generative AI in 2025.

Answer

Adena Friedman, Chair and CEO, described Nasdaq's platform approach, which leverages multiple AI models to deliver the best solutions cost-effectively. She provided examples like the GenAI Copilot for anti-financial crime and surveillance. Friedman also noted that AI is being used internally to drive efficiencies, which is reflected in the company's expanded cost synergy program.

Michael Cyprys asked for an update on the progress of cross-sell campaigns involving AxiomSL and Calypso and requested details on new campaigns planned for the fourth quarter.

Answer

CEO Adena Friedman reported 7 cross-sells year-to-date across the FinTech division. She detailed two new campaigns: one offering the Nasdaq Risk platform to Calypso's OTC-focused clients and another promoting AxiomSL's global shareholder disclosure solution to the broker-dealer community.

Michael Cyprys asked about the expansion of Raymond James' alternative investments (alts) platform, its current state versus desired state, and expected steps over the next 12-24 months. He also inquired about the firm's aspirations for AI, specifically the Rai operations agent, its expected usage and adoption, anticipated ROI, and the potential for additional agents and an agentic workforce.

Answer

Paul Shoukry, CEO of Raymond James Financial, described a 'quality over quantity' approach for the alts platform, emphasizing deliberate diligence, education, and avoiding using alts to create friction for advisors or solely as a profit driver. Regarding AI, Mr. Shoukry stated it's early innings, but over 10,000 associates regularly use AI, and 3 million lines of code are written monthly with AI. He sees significant opportunities for expansion and efficiency but no specific timeline or ROI yet.

Michael Cyprys asked for an update on Raymond James' alternative investments (alts) platform, including its expansion, current standing versus aspirations, and expected developments over the next 12-24 months.

Answer

CEO Paul Shoukry described a 'quality over quantity' approach to the alts platform, focusing on critical mass, thorough due diligence, and ongoing support for products. He emphasized significant investment in advisor education to ensure clients understand liquidity impacts and appropriate allocations, stressing that alts are not used to create advisor friction or as a primary profit driver. In a follow-up on AI, Shoukry stated it's still in early innings, but over 10,000 associates regularly use AI, and 3 million lines of code are written monthly with AI assistance, indicating significant penetration and future opportunities.

Michael Cyprys asked about the appetite for digital assets among Raymond James' advisors and clients, current access on the platform, and how this access might expand to include ETFs, futures, or spot products. He also inquired about the current level and future pace of investment spend in areas like AI and recruiting, asking if it would accelerate, remain stable, or decelerate.

Answer

CEO Paul Shoukry noted that Raymond James' clients are focused on long-term financial planning, but digital assets are increasingly part of the conversation, especially with evolving regulatory infrastructure. He confirmed limited access to Bitcoin ETFs for advisors and clients, with restrictions on account types and asset portions, and stated that this could be revisited as demand and the regulatory environment mature. Regarding investment spend, Shoukry indicated that AI investment is in early innings and is definitely increasing and accelerating substantially as a proportion of total IT spend, while overall IT spend remains high.

Michael Cyprys of Morgan Stanley asked for elaboration on the improved investment banking outlook and inquired about the firm's strategy and potential next steps regarding digital assets and stablecoins.

Answer

CEO Paul Shoukry attributed the improved investment banking outlook to fading market 'shock' from earlier tariff discussions and significant pent-up demand from private equity sponsors. On digital assets, he stated the firm is encouraged by regulatory progress but remains deliberate and focused on client protection, monitoring the space closely rather than being on the 'bleeding edge'.

Michael Cyprys from Morgan Stanley asked for more detail on the optimistic investment banking outlook and the firm's strategy regarding digital assets and stablecoins.

Answer

CEO Paul Shoukry attributed the improved investment banking outlook to reduced market shock over tariffs and significant pent-up demand, especially from private equity sponsors. Regarding digital assets, he stated the firm is encouraged by regulatory progress but remains deliberate and focused on client protection, avoiding a 'bleeding edge' approach until a clear framework exists.

Michael Cyprys asked about the new Chief AI Officer role, inquiring about its responsibilities, resources, ambitions, and metrics for success, as well as specific use cases and lessons learned.

Answer

CEO Paul Shoukry explained the new internal Chief AI Officer will lead a team to evaluate AI developments. He stressed the strategy is to use AI to empower financial advisers, not circumvent them, and mentioned a new proprietary AI search tool. Shoukry deferred specifics on use cases to the upcoming Analyst Investor Day.

Michael Cyprys from Morgan Stanley inquired about the newly created Chief AI Officer role, asking about its responsibilities, resources, and measures of success. He also asked for examples of AI use cases currently in production and any lessons learned.

Answer

CEO Paul Shoukry described the new role as a dedicated internal 'lookout function' to evaluate AI developments. He emphasized the goal is to use AI to empower advisers, not replace them, and mentioned a new proprietary AI search tool as an early example. He deferred more specific details on use cases to the upcoming Analyst Investor Day.

Michael Cyprys requested more detail on the $2.1 billion non-comp expense guidance, specifically asking about the major areas of investment like technology. He also asked about the firm's strategy and experimentation with Artificial Intelligence (AI), including learnings and potential impacts.

Answer

President Paul Shoukry identified technology as a major focus, aimed at saving advisers time and enabling more efficient client service. He highlighted that the firm's technology is often seen as an upgrade by recruits from larger firms and that the topic would be covered in more detail at the next Analyst Day. Regarding AI, Shoukry confirmed the firm is actively investing in a more formal process to monitor and deploy AI use cases. While acknowledging AI will bring substantial changes, he stated it's too early to know exactly how they will manifest, making proactive monitoring and piloting essential.

Michael Cyprys inquired about BlackRock's strategic priorities and initiatives across its Asian footprint, including partnerships in India and efforts in Japan, to accelerate growth and expand Asia's contribution to the firm.

Answer

Chairman and CEO Laurence Fink emphasized Asia's faster capital market growth, citing Japan's NISA accounts, wealth management in Hong Kong/Singapore, and the Jio BlackRock partnership in India for retirement. He highlighted BlackRock's platform building in each country as a foundational opportunity for future growth.

Michael Cyprys inquired about BlackRock's strategic priorities across its Asian footprint, including local partnerships in India and initiatives in Japan, and how the firm plans to accelerate growth and expand Asia's contribution over the next few years.

Answer

Chairman and CEO Larry Fink emphasized Asia's faster-growing capital markets, citing historical changes in Japan with NISA accounts and wealth entering capital markets. He highlighted the Jio BlackRock partnership in India as a foundational platform for growth and discussed developing capital markets in regions like Saudi Arabia and Latin America, underscoring BlackRock's role in these expanding global opportunities.

Michael Cyprys of Morgan Stanley inquired about the integration progress of the HPS and GIP acquisitions, particularly regarding insurance clients, and the traction of private market strategies in wealth and retirement channels.

Answer

Chairman & CEO Laurence D. Fink explained that client feedback on the acquisitions is extremely strong, citing the oversubscribed GIP V fundraise ($25.2B) as proof. He noted that while the HPS integration is just beginning, flows remain robust. Fink emphasized the significant opportunity in retirement, where 50% of BlackRock's AUM resides, and highlighted the critical future role of analytics from Preqin and eFront in expanding private market access for wealth clients.

Michael Cyprys of Morgan Stanley inquired about the integration progress of the HPS and GIP acquisitions, focusing on engagement with insurance clients, new mandate wins, and traction in wealth and retirement channels for private market strategies.

Answer

Chairman & CEO Laurence D. Fink stated that client feedback has been extremely strong, highlighting the GIP V fund closing above its target and a robust pipeline for the AIP fund. Fink emphasized the growing opportunity in public-private financing due to government deficits and noted that HPS deal momentum did not slow during the acquisition process. He also pointed to the accelerating opportunities in wealth and retirement, underscoring the critical role of analytics and data from Preqin and Aladdin in capturing this growth.

Michael Cyprys asked about potential shifts in retail and institutional client allocations and their decision-making processes amid the current global backdrop.

Answer

Chairman and CEO Laurence Fink stated that BlackRock has not seen any client capitulation. Instead, there are elevated inflows into cash, signaling a large reserve of capital. Client conversations are focused on fixed income duration, private credit opportunities, and the right time to re-enter equities. Fink also highlighted strong, unabated demand for infrastructure and systematic equity strategies, while noting a potential long-term reallocation of capital from the U.S. to other regions like Europe.

Michael Cyprys questioned how client conversations have evolved since the HPS acquisition was announced, focusing on private credit opportunities in the insurance and private wealth channels.

Answer

Laurence Fink, an executive, stated that client feedback on the HPS deal has been 'extraordinarily positive,' particularly from insurance companies. He highlighted a significant opportunity to expand HPS's current $20 billion in wealth channel assets by leveraging BlackRock's extensive distribution network. Fink stressed that the acquisition is part of a larger strategy, combined with Preqin and eFront, to provide the data and analytics necessary to fuel the expansion of the entire private credit market.

Michael Cyprys asked about the pacing of investment spending into 2025, the key levers for driving margin expansion, and the progress on variabilizing the firm's expense base.

Answer

Executive Martin Small detailed BlackRock's 'financial rubric' for profitable growth, which involves disciplined investment, variabilizing expenses, and achieving fixed-cost scale via technology. He highlighted the 350 basis point year-over-year margin expansion and noted that AUM grew by $3 trillion since late 2022 while headcount remained flat, demonstrating significant operating leverage.

Michael Cyprys asked for an elaboration on Victory Capital's inorganic pipeline, including its current composition, size, quantity, and types of properties, and how it has evolved over the past three to six months. He also inquired about any potential risks that might prevent M&A execution over the next 12-18 months, specifically what might hold prospective targets back from transacting.

Answer

David Brown, Chairman, CEO, and Director, confirmed that Victory Capital's M&A pipeline is full, with active discussions ongoing. He noted that the acquisition environment has progressively improved over recent quarters, and with the Pioneer/Amundi integration nearing completion, Victory Capital is well-positioned to execute. Regarding risks, David Brown stated that they are unique to each acquisition and can often be mitigated through careful structuring, especially given Victory Capital's partnership-oriented approach rather than succession-type planning. He expressed confidence that the current environment is conducive to M&A.

Michael Cyprys asked for an update on Victory Capital's inorganic pipeline, including its composition, size, types of properties, and how it has evolved compared to three or six months prior, as well as any proximity to closing deals.

Answer

David Brown, Chairman, CEO, and Director, confirmed that the M&A pipeline is full with active discussions, noting that the environment has become more conducive due to industry changes. He emphasized that with the Pioneer/Amundi integration nearing completion, Victory Capital is ready to execute on opportunities.

Michael Cyprys asked where Victory Capital could be made 'better' through M&A, inquiring about the appetite for private markets and the types of deals being evaluated. He also asked about lessons learned from past transactions and observations of others' private market strategies.

Answer

David Brown, Chairman and CEO, responded that making Victory better involves increasing size and scale, expanding the product set in both traditional and private markets, and adhering to their proven operating model. He highlighted that lessons from past deals include being conservative, patient, and deliberate during integration. Regarding private markets, he said the company has observed others' approaches and will apply those lessons to its own unique strategy when the time is right.

Michael Cyprys of Morgan Stanley asked for an update on Victory's ETF strategy, including product launch plans, and sought clarity on capital management, particularly the sizing of the dividend versus buybacks and the nature of the current share repurchase restriction.

Answer

CEO David Brown explained that Victory is actively investing in its ETF platform with dedicated sales resources and partnerships, and is evaluating a full range of new products. On capital management, he stated there is no specific dividend payout target and that strategic M&A remains the primary use of capital. The restriction on share repurchases is related to the pending Amundi transaction, and buybacks will resume when permitted under the board's existing $100 million authorization.

Michael Cypress questioned what has changed to make doubling the capital base potentially double earnings, a shift from past statements. He asked about the top areas for capital allocation, their prioritization, and specific areas for hiring.

Answer

Co-President and Co-COO Joseph Molluso emphasized that the markets evolve, and Virtu Financial is now ready, with scaled infrastructure and a new CEO focused on growth. CEO Aaron Simon clarified that doubling earnings with more capital requires significant work, including more people, strategy development, and infrastructure expansion, not just a simple capital injection. Joseph Molluso added that capital allocation will be flexible, based on market opportunities and characteristics, with areas like cryptocurrency and ETF block trading being more capital-intensive due to market fragmentation. Hiring is aggressive across developers, quants, and traders.

Michael Cyprys of Morgan Stanley asked for more detail on the institutional use case for overnight trading and the magnitude of current retail activity. He also followed up on tokenized U.S. equity trading for overseas clients, asking about its ramp, challenges, and risks.

Answer

CEO Douglas Cifu explained that institutional adoption of overnight trading is currently minimal and will require greater liquidity and regularization before it grows, with initial use cases likely focused on risk mitigation. On tokenization, he reiterated that it is in very early days but represents a significant opportunity to expand the market to non-U.S. persons, fitting perfectly into Virtu's role as a liquidity provider for trusted partners like Robinhood and Fidelity.

Michael Cyprys of Morgan Stanley asked for an update on the build-out of Virtu's single-name options market-making capabilities and the firm's perspective on the potential for market-making in private credit.

Answer

CEO Douglas Cifu described the single-name options business as an incremental build, stating they are active in dozens of names and profitable, but "not even close" to the end state, with ongoing investments in technology. On private credit, he acknowledged the significant growth and interest from large asset managers. He sees an eventual path to making those assets tradable, likely starting with index-like products, and confirmed Virtu is in discussions with key players.

Michael Cyprys asked for the rationale behind selling a majority interest in the India business, elaborating on the partner selection (Hinduja Group) and how they will accelerate growth. He also inquired about the success factors and momentum drivers in the China JV, including demand for passive vs. active and the business complexion.

Answer

President and CEO Andrew Schlossberg explained the India sale as a strategic partnership with Hinduja Group to leverage local expertise, allowing Invesco to participate in growth and focus resources elsewhere. For China, he attributed success to 22 years of commitment, an established platform, and diverse AUM (30% equities, 30% bonds, 20% balanced, 20% money markets), with growth in both active and passive, especially ETFs.

Michael Cyprys inquired about the rationale behind selling a majority interest in the Indian business, given the market's long-term prospects, and sought elaboration on the success factors driving robust flows in the China JV, including demand for passive versus active.

Answer

President and CEO Andrew Schlossberg explained the India sale as a strategic partnership with Hinduja Group, a local financial institution, to leverage local expertise for growth while Invesco participates in profitability and potentially sub-advises global assets. For China, he attributed success to 22 years of commitment, an established $122 billion retail platform, and a diverse business (30% equities, 30% bonds, 20% balanced, 20% money markets), noting growth in both active and passive (ETFs) as the market develops.

Michael Cyprys of Morgan Stanley asked about other potential opportunities to unlock meaningful value across the platform, beyond recent announcements, touching on revenue, expenses, and capital allocation.

Answer

President & CEO Andrew Schlossberg focused on revenue growth from ETFs, SMAs, private markets, and improved retention in fundamental equities. CFO L. Allison Dukes added that opportunities exist on all fronts, including continued expense control, achieving scale benefits from technology platform consolidation, and flexible capital allocation for both deleveraging and reinvestment, describing it as a 'flywheel' for value creation.

Michael Cyprys inquired about the drivers of success for Invesco's SMA platform and asked for the cost cadence and benefit realization timeline for the Alpha platform implementation.

Answer

CEO Andrew Schlossberg attributed the SMA platform's 25% annualized growth to its differentiated fixed income offerings, which align with strong client demand for income strategies. CFO Allison Dukes reiterated the $10-15 million quarterly implementation cost for the Alpha platform through 2025, with benefits from reduced system redundancies expected to materialize around 2027.

Michael Cyprys asked for details on the India JV opportunity and lessons learned, as well as for an expense outlook, including the potential cost of the State Street Alpha platform and the amount of market beta needed to achieve positive operating leverage.

Answer

President and CEO Andrew Schlossberg described the India JV as a strategic partnership with a bank-oriented distributor that allows Invesco to participate in the market's growth. CFO Allison Dukes asserted that the firm can drive positive operating leverage without market beta through organic growth and expense discipline. She noted Alpha fees would be immaterial in Q4 and that overall expenses would see some seasonal increases.

Michael Cyprys from Morgan Stanley asked about further potential value-unlocking opportunities at Invesco, inquiring whether they would be focused on revenue, expenses, or capital allocation.

Answer

President, CEO & Director Andrew Schlossberg focused on revenue enhancement through ETFs, SMAs, private markets, and better retention in fundamental equities. Senior MD & CFO L. Allison Dukes added that opportunities exist on all three fronts, highlighting strong expense control, the path to realizing benefits from the Alpha/Aladdin platform implementation by late 2026, and continued progress on capital allocation and deleveraging to create a "flywheel" for growth.

Michael J. Cyprys asked about the current distribution breadth of Virtus's ETFs across various channels (wirehouses, IBDs, RIAs), the company's goals for expansion, and the steps being taken to achieve this, including contributions from models. He also sought elaboration on the types and size of properties being evaluated for inorganic activity, the sifting process, and the criteria/hurdle rates, including accretion expectations.

Answer

George Aylward, President and CEO, acknowledged that ETF distribution is not yet where they want it to be across all channels, particularly wirehouses and model providers, and emphasized increasing access and expanding offerings as key focus areas. He mentioned using their own ETFs for solution-oriented models. For inorganic activity, Aylward explained they evaluate a continuum from meaningful scale additions to new capabilities (including private markets) and joint ventures, prioritizing strategic fit, financial benefit, and long-term value creation, considering factors like accretion and growth rates, leveraging their strong liquidity.

Michael Cyprys inquired about the current distribution breadth of Virtus's ETFs across various channels (wirehouses, IBDs, RIAs) versus desired levels, and the steps being taken to expand this presence, including contributions from models. He also sought elaboration on the types and sizes of properties being evaluated for inorganic activity, the sifting process, and the criteria/hurdle rates, including day-one accretion expectations.

Answer

George Aylward, President and CEO, acknowledged that ETF distribution is not yet where they want it to be across all channels, particularly wirehouses and model providers. He emphasized increasing availability, scaling ETFs to meet channel requirements, and expanding offerings to provide more building blocks for models and individual investors. He also mentioned focusing on their own models for solution-oriented capabilities. For inorganic activity, Mr. Aylward stated they evaluate a continuum of opportunities, from meaningful scale to additive capabilities and private market expansion, including joint ventures. The focus is on strategic fit, financial benefit, and long-term value creation, considering factors like accretion and impact on growth rates, leveraging their strong liquidity.

Michael Cyprys of Morgan Stanley asked for details on the ETF platform's success, future growth initiatives, and sales incentives. He also inquired about how Virtus prioritizes M&A between private markets and traditional scale deals.

Answer

President & CEO George Aylward attributed ETF growth to building track records and expanding channel access, noting the sales force is vehicle-agnostic. Regarding M&A, he stated that opportunities are evaluated individually for strategic value and that partnership structures like JVs might be suitable for certain private market capabilities to ensure proper alignment and leverage Virtus's distribution infrastructure.

Michael Cyprys of Morgan Stanley posed several questions on M&A, asking about the time spent on deal evaluation, the nature of the pipeline, flexibility on deal structures like JVs, and the company's comfort with increasing leverage. He also asked how Virtus is investing in data science and AI to enhance its investment process.

Answer

President and CEO George Aylward stated that Virtus is as active as ever in evaluating M&A, particularly in private markets, and remains flexible on deal structures to find the right partner. He confirmed they would consider taking on higher leverage for a value-creating transaction but offered no timeline. On technology, Aylward explained that while Virtus provides IT infrastructure, each affiliate manager researches and applies advanced technologies like AI according to their own unique investment process.

Michael Cyprys of Morgan Stanley questioned how WisdomTree plans to accelerate growth at the newly acquired Cerus Partners, asking about specific steps and the expected evolution of its management fee revenue. He also delved into the digital assets strategy, seeking elaboration on the drivers behind the projected $3.7 trillion stablecoin market, the potential hurdles to adoption, and the key catalysts for growth.

Answer

CEO Jonathan Steinberg and President & COO R. Jarrett Lilien explained that growth will be driven by leveraging WisdomTree's established US distribution channels to bring Cerus's investment expertise to a broader client base. CFO Bryan Edmiston projected that the $750M AUM target would double base fees over five years. Head of Digital Assets Will Peck detailed the stablecoin opportunity, citing corporate treasury and cross-border payments as key use cases, and noted that WisdomTree's regulated, multi-chain approach positions it well for what he termed a 'land grab moment.'

Michael Cyprys from Morgan Stanley inquired about the depth of penetration within the existing 2,500 advisors using WisdomTree's models, the flow contribution from this business, and institutional feedback on the new Digital Funds.

Answer

CEO Jonathan Steinberg described the penetration as being in its 'early days,' with significant room for growth within the current advisor base. Executive Robert Lilien noted that models consistently contribute 10-12% of flows. Head of Digital Assets Will Peck highlighted strong initial demand for Digital Funds from the crypto-native community and confirmed active B2B2C partnership discussions are underway via WisdomTree Connect, with institutional customers already being onboarded.

Michael Cyprys from Morgan Stanley asked for a detailed breakdown of the record $13.8 billion in net flows, including contributing strategies and client breadth. He also inquired about new product initiatives and the firm's long-term operating leverage potential.

Answer

CEO Kelly Young attributed the record flows primarily to enhanced equity mandates and global core offerings, noting a single, outsized mandate from a non-U.S. client was a major driver. She cautioned this level of inflow is not a new quarterly run-rate but confirmed the pipeline is strong. CFO Scott Hynes highlighted the business's scalability, pointing to the improved operating margin and a lower expected full-year operating expense ratio as evidence of increasing operating leverage.

Michael Cyprys from Morgan Stanley inquired about the recruiting pipeline across different affiliation channels and questioned the multi-year rise in the wealth management distribution expense ratio, asking if the current level is a new sustainable run rate.

Answer

James Cracchiolo, Chairman & CEO, noted the recruiting pipeline is strong across various channels. Walter Berman, EVP & CFO, clarified that the distribution expense ratio fluctuates due to mark-to-market impacts on deferred compensation but should remain in the current 66-67% range, subject to those movements.

Michael Cyprys requested more color on the recruiting pipeline across different affiliation channels and asked about the multi-year rise in the wealth management distribution expense ratio and its expected future trajectory.

Answer

Chairman & CEO James Cracchiolo said they recruit broadly from independents, wires, and regionals, seeking advisors who fit their value proposition. EVP & CFO Walter Berman clarified that the distribution expense ratio is influenced by mark-to-market adjustments on deferred compensation but is expected to remain stable in the current 66-67% range, subject to that volatility.

Michael Cyprys of Morgan Stanley asked about the role of AI and generative AI in driving past and future expense efficiencies, inquiring about specific use cases and the potential for broader deployment.

Answer

Executive Jim Cracchiolo explained that Ameriprise has long used intelligent automation and robotics to drive efficiency. He noted that while the company is actively deploying generative AI for adviser productivity, client experience, and research, significant efficiencies are not yet realized but are expected to grow as they expand rollouts within their regulated environment.

Michael Cyprys asked about the priorities for deploying the $2 billion in excess capital, including the appetite for M&A. He also posed a broader question about how Ameriprise's products and client experience will evolve to address increasing client longevity.

Answer

CEO Jim Cracchiolo explained that the excess capital provides flexibility for 2025, with options including increased buybacks or inorganic opportunities, depending on the market. He also detailed that the company is actively developing new products and solutions focused on retirement income and longevity, which will be integrated into their advice-based model and launched over the next year.

Annalei Davis, on behalf of Michael Cyprys of Morgan Stanley, asked about the opportunity set for active management in the current uncertain environment and the steps Janus Henderson is taking to help its investment teams capitalize on it.

Answer

CEO Ali Dibadj described the market dislocation as a significant opportunity for an active manager to 'separate wheat from chaff' for clients. He emphasized that Janus Henderson's global footprint, strong balance sheet, and disciplined cost management provide a solid foundation. Dibadj noted that while some clients are cautious, many are looking to reallocate to active, global, and fixed income strategies, driving interest in the firm's technology, healthcare, small-cap, and absolute return products.

Michael Cyprys asked how Janus Henderson is investing in technology to enhance its investment engine and alpha generation. He also requested more detail on the use of generative AI, including specific use cases, production timelines, and potential financial impact.

Answer

CEO Ali Dibadj outlined a three-pronged tech investment strategy: improving the investment process, enhancing client service through data, and increasing employee productivity. Regarding generative AI, he said the firm is in the "early days" with a few use cases in production, highlighting an RFP tool that improves speed and accuracy for a capacity-constrained team and an AI-powered distribution intelligence platform. While he couldn't quantify the financial impact, he stressed the clear need for the productivity gains these tools provide.

Michael Cyprys asked for an update on the changes made to the distribution organization and which initiatives have been most impactful in driving the recent growth inflection.

Answer

Executive Ali Dibadj described a comprehensive overhaul of the distribution team focused on 'people, product, process, and pay.' He explained this framework was successfully implemented in the U.S. intermediary business, leading to five consecutive quarters of positive flows, and is now being rolled out globally. The ultimate goal of these changes is to deepen client relationships and deliver better outcomes.

Michael Cyprys asked about Tradeweb's strategy in digital assets, the most compelling use cases, and the primary hurdles limiting the adoption of tokenization and blockchain solutions today.

Answer

CEO William Hult described Tradeweb's approach as deliberate, focusing on investing in infrastructure and partnerships with 'smart money' clients like BlackRock and Goldman Sachs. He mentioned moving from a neutral 'Switzerland' stance to picking potential winners, particularly in areas like collateral management. CFO Sara Furber added that the company is not just investing but also getting its 'hands dirty' by building and integrating technology internally to ensure it works seamlessly with existing plumbing. Potential applications mentioned include the TBA mortgage and repo markets.

Michael Cyprys of Morgan Stanley asked for details on Tradeweb's emerging markets (EM) strategy, including initiatives to accelerate growth and the most promising products and regions.

Answer

CEO William Hult explained the strategy is to build a multi-product offering across rates and credit, starting from their strength in EM swaps. He stated the EM business is now run-rating at over $60 million annually, up 85% YoY. Hult sees significant potential, sizing the total EM wallet at over $1 billion, and highlighted a continued push into EM credit, where he sees an appetite for competition similar to the U.S. market.

Michael Cyprys of Morgan Stanley asked for details on the expected contribution from the ICD acquisition, including strategies to accelerate growth, near-term opportunities, and how to offset potentially slower demand for money funds in a lower rate environment.

Answer

CFO Sara Furber outlined a two-pronged strategy for ICD. The near-term opportunity is expanding ICD's global reach through Tradeweb's sales force. The longer-term plan involves cross-selling Tradeweb products, like U.S. Treasuries, on the ICD portal, which is expected in H1 2025. She also noted that demand for money market funds can actually increase as rates fall, as their yield premium over bank deposits often widens, and the fundamental driver remains healthy corporate cash balances.

Asked about the multifamily deployment environment, specifically the impact of different parts of the yield curve. Also requested current and forward-looking operating metrics (rent, NOI, occupancy) for their property sectors.

Answer

The company sees a positive deployment environment for multifamily, emphasizing that the shorter end of the yield curve and renewed liquidity in debt markets are more critical than long-end rates. They expect volumes to increase due to strong fundamentals. Operationally, multifamily/workforce saw 3.3% QoQ rent growth, and the forward outlook is strong due to declining new supply and robust absorption.

Michael Cyprys asked for details on the multifamily deployment backdrop, the impact of yield curve movements, and the potential implications of higher back-end yields. He followed up by requesting performance stats like rent, NOI growth, and occupancy across various sectors and the outlook for 2025.

Answer

CEO Jonathan Slager responded that the shorter end of the yield curve is most impactful for their value-add strategy and highlighted a resurgence in the CLO and securitization markets, which provides liquidity and should lead to tighter credit spreads. He expects volumes and values to increase regardless of the pace of rate changes. For the follow-up, CFO Katherine Elsnab reported 3.3% quarter-over-quarter rent growth in multifamily workforce housing. Mr. Slager added that multifamily absorption is now exceeding deliveries, which are declining, creating a favorable supply-demand outlook.

Michael Cyprys of Morgan Stanley asked for an update on the firm's access to financing markets and how that impacts deployment and realization strategies. He also requested color on key trends in the Multifamily market, including supply dynamics, rent growth, and portfolio management tactics.

Answer

CEO Jonathan Slager noted that financing markets are poised for more activity, with their internal debt capital markets team seeing tightening spreads and securing attractive capital. Regarding Multifamily, Slager acknowledged a current supply overhang but expects it to wane by year-end, with demand exceeding supply in 2025. He emphasized Bridge's operational focus on key performance drivers to outperform the market.

Michael Cyprys from Morgan Stanley asked for an update on the firm's access to financing markets and how that impacts deployment and realization strategies. He also requested commentary on key trends in the multifamily market, including new supply, rent growth, and portfolio navigation tactics.

Answer

CEO Jonathan Slager responded that financing markets are poised for more activity, noting that their internal debt capital markets team is seeing tightening spreads and has strong lender relationships. Regarding multifamily, he acknowledged a current supply overhang but expects it to wane by late 2024, with demand exceeding supply in 2025. He highlighted Bridge's operational focus as a key differentiator in navigating the current environment.

Questioned the rationale behind the new strategy, the potential for future strategic alternatives, the traction of recently launched products, and the expected capital allocation in 2025.

Answer

The executive clarified that the current moves are a continuation of the existing strategy, not a change, and the company remains open to strategic alternatives. New products are progressing as expected but require longer track records to see significant sales. Capital allocation in 2025 will continue to be an opportunistic split between buybacks and seeding new strategies.

Inquired about the drivers of the $2 billion in quarterly outflows, areas of strength in gross sales, the institutional pipeline for 2024, and the progress of the Systematic Credit and Equity Alts platforms.

Answer

Outflows were driven by pressure on managed volatility strategies and a large client reallocation. The sales pipeline is healthy but conversions are slow, with interest in ex-U.S. and small-cap strategies. The Equity Alts platform has a good one-year track record and client conversations are progressing. The newer Systematic Credit initiative is also progressing well since being seeded, with good client interest.

Michael Cyprys of Morgan Stanley requested an update on the progress of both expense and revenue synergies from the Scottrade acquisition.

Answer

President, CEO & Director Timothy Hockey confirmed that expense synergies have already been fully achieved, with recent branch closures being an additional benefit. On revenue synergies, he stated they are tracking ahead of schedule, about halfway to the 5-year goal in less than two years.

Michael Cyprys of Morgan Stanley inquired about the recent decision to sell or exit part of the retirement plan business, asking for specifics and plans for the proceeds. He also asked for an update on the stock plan business, including recent partnerships like with Certent and the opportunity set with private companies.

Answer

President and CEO Tim Hockey explained they sold the third-party administrator part of the retirement business to Broadridge to focus on their core RIA retirement plan offering, for which Broadridge will now provide back-end servicing. Regarding the stock plan business, Hockey noted it's a relatively small but growing area, and the new relationship with Certent opens up opportunities to work with private companies, which their previous system did not allow.

Michael Cyprys requested an update on the Asia business, asking about the client profile, overall strategy, and recent initiatives like the WeChat integration.

Answer

President and CEO Tim Hockey described the Asian client as highly active, mobile-first, and focused on U.S. markets, driving strong DARTs growth. He clarified the recent WeChat launch was for U.S. clients, while the broader Asia strategy is to use the region as a testbed for scalable, automated processes before deploying them in the U.S.