Guidance on Expenses and Putnam Integration
Q: What's the updated expense guidance post-Putnam acquisition?
A: Management expects expenses for fiscal year 2024 to be between $4.55 billion and $4.6 billion, including Putnam's addition and double rent expenses in New York City. - Excluding Putnam, expenses are up only 1% to 2%, while revenue is expected to rise 5%. - They anticipate realizing at least $150 million in expense savings from Putnam by the end of the fiscal year, contributing $150 million to $170 million in operating income. - -

Putnam's Operating Income Contribution
Q: Is the expected $150 million run rate from Putnam still on track?
A: Yes, Putnam is projected to contribute between $150 million and $170 million in operating income by fiscal year-end. - This translates to about 3% accretion for full year 2024, with the acquisition being slightly accretive in the second fiscal quarter. -

Alternatives Net Flow Trajectory
Q: How do you view net flows in alternatives amid flagship fundraises?
A: Over the last two years, they've raised $40 billion in private markets, offset by $12 billion in net outflows from liquid alternatives. - They anticipate fundraising between $10 billion and $15 billion in private markets this year, expecting mid-single-digit growth in alternative asset revenue. - In Q1, they raised $5 billion in private markets, including closings from Lexington and Benefit Street Partners. -

Capital Deployment and Share Buybacks
Q: How should we think about capital deployment and buybacks this year?
A: The company aims to maintain its dividend trajectory and invest in organic growth. - With M&A activity slowing, they plan to be more opportunistic with share repurchases, having increased buybacks over the last few quarters. - They also have $250 million in debt service coming up this year. -

Insurance Mandates with Great-West Life
Q: Can you update on the $25 billion insurance mandates from Great-West Life?
A: They expect the $25 billion mandate to come in throughout the year, across multiple strategies, with the bulk going to Western Asset. - Beyond this, they see opportunities to grow assets further with the Power group of companies. -

Fixed Income Demand and Flows
Q: What's the outlook for fixed income demand and Western's engagement?
A: Over half of their top ten gross-selling funds are in fixed income. - Fixed income gross sales are up 8%. - The institutional pipeline is strong in multisector credit, high-yield, and global income, with Western Asset being a significant contributor. - Putnam adds top-performing fixed income strategies, enhancing their offerings. -

Retirement Channel Growth with Putnam
Q: How will Putnam and Great-West accelerate growth in the retirement channel?
A: The Putnam acquisition provides capabilities in stable value (with $18 billion in assets), ultrashort, and target-date funds. - These products, coupled with an expanded sales force, position them better in retirement and insurance channels. - The partnership with Empower enables co-creation of custom products. -

Technology Integration and Cost Savings
Q: What's the plan for technology outsourcing and potential savings?
A: They're moving towards a single investment technology platform, with all specialist teams on board. - Implementation will take approximately three years. - Long-term savings are expected to be meaningful, but immediate investments in areas like AI and data are prioritized. -

Clarification on Lexington and BSP Fundraises
Q: Are there additional catch-up fees expected from Lexington's fundraise?
A: No more catch-up fees are expected; the fund had its last fundraising on December 31, and all is included in reported numbers. - Benefit Street Partners' fundraise is not yet included in assets under management as of December 31. -

Incremental Wins from Great-West
Q: Is the recent $5.5 billion win from Great-West part of the $25 billion mandate?
A: The $5.5 billion win is incremental and not part of the $25 billion mandate. - It comes from the retirement channel. -