Ryan Kruger

Ryan Kruger followed up on the expectation for performance fees in the fourth quarter, asking if anything had changed regarding their modesty.

Answer

Kamal Bhatia (President, Asset Management) stated that performance fees are still expected to be at similar levels to 2024, but noted a slight 10%-20% uptick in transaction and borrower fee activity year-over-year, though still below long-term potential. CEO Deanna Strable highlighted the 5% increase in management fees year-over-year as a key business momentum driver.

Ryan Kruger asked about changes in investor sentiment and appetite for Principal Asset Management's focus areas, the pipeline outlook, and whether performance fees are still expected to be modest in Q4.

Answer

President Kamal Bhatia reported strong positive net cash flow, particularly from non-affiliated long-term mandates in private markets, and noted growth across global institutions, U.S. retail, and active ETF businesses. He highlighted momentum in real estate and emerging market fixed income. Performance fees are expected to be similar to 2024 levels, with an uptick in transaction and borrower fees.