Greetings and welcome to the AMG Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Jeff Parker, Vice President, Investor Relations for AMG. Thank you. You may begin.

Thank you for joining AMG to discuss our results for the fourth quarter of 2018. In this conference call, certain matters discussed will constitute forward-looking statements. Actual results could differ materially from those projected due to a number of factors, including but not limited to, those referenced in the company’s Form 10-K and other filings we make with the SEC from time-to-time. We assume no obligation to update any forward-looking statements made during the call. AMG will provide on the Investor Relations section of its website at www.amg.com, a replay of the call, a copy of our announcement of our results for the quarter and a reconciliation of any non-GAAP financial measures to the most directly comparable GAAP financial measures, including a reconciliation of any estimate of the company’s economic earnings per share for future periods that are announced on this call. As a reminder, we have also included an updated investor presentation on this section of our website. AMG encourages investors to consult the Investor Relations section of its website regularly for updated information. With us on the line to discuss the company’s results for the quarter are Nate Dalton, Chief Executive Officer and Jay Horgen, President and Chief Financial Officer. With that, I will turn the call over to Nate.

Thanks, Jeff and good morning everyone. As we all know, the fourth quarter of 2018 was challenging for asset managers due to broadly negative returns across asset classes as well as the resulting client risk aversion, which impacted industry wide flows. In addition, the quarter had several extraordinary items, so I wanted to briefly put into context our results and forward outlook. First, while net client cash flows were negative due to both heightened client risk aversion as well as the fourth quarter seasonality we discussed on our last call, our organic growth outlook is already improving in 2019. Second, our business is structured differently from other asset management firms. This includes not only diversity of our business and the quality of our affiliates, but also importantly, our investment structure, which limits our exposure to operating leverage at the affiliate level providing earnings stability. Third, we are actively positioning our business to focus on the highest growth opportunities ahead. And finally, because we have been disciplined in managing our balance sheet, we have the flexibility to execute on the opportunities this volatility will inevitably create. Now, turning to the quarter, AMG reported economic earnings per share of $3.53 for the fourth quarter and $14.50 for the full year. While Q4 was down versus the year ago quarter primarily because of lower performance fees, our results for 2018 were in line with those for the full year 2017. The combination of the timing of the market declines at the very end of the year with the breadth of the declines across asset classes meant that while a number of our alternative strategies generated good relative performance, they still had low or negative absolute returns and therefore we realized lower performance fees than we expected. As we look forward, our performance fee…

Good morning and thank you Nate for your kind comments. I echo the sentiment and I look forward to contributing in my new expanded role. And as Nate discussed, AMG’s fourth quarter results were impacted by client risk aversion and declining markets, especially in the last 2 months of the year as reflected in both our net client cash flows for the quarter as well as our annual earnings contribution from performance fees. We also had a number of one-time items in the quarter, which I will describe in a moment. In contrast to December, we have seen a marked improvement in both client cash flows and markets in January. Additionally, we are beginning to realize the benefits from expense management actions taken in the fourth quarter. And finally with an uplift in markets in a new calendar year, we expect material growth in the contribution of performance fees to our earnings in 2019. On flows generally, we experienced a higher level of redemptions from seasonality in the fourth quarter than in prior years, which included tax loss harvesting and selling ahead of year end mutual fund distributions in the retail channel as well as the expiration of annual liquidity lockups in single and multi-year vehicles in both the institutional and high net worth channel. Taken together in the fourth quarter, we estimate the effect of seasonality in our quarterly flows, which was exacerbated by the market environment to be between $7 billion and $9 billion. In addition, elevated volatility in the fourth quarter increased industry-wide client risk aversion, which led to slowing sales activity and delayed fundings, especially in the institutional channel. Looking ahead, the first quarter typically brings a reversal to positive seasonal factors in our net client cash flows. Additionally, improvement in our fundamental equity performance is…

Thank you. [Operator Instructions] Our first question comes from the line of Bill Katz with Citigroup. Please proceed with your question.

Thank you very much. Maybe Jay congratulations first of all on the promotion, maybe we could start there. Given the promotion, I was wondering what if any change in strategy there might be or maybe just tick off the top 2 or 3 incremental things you’re looking as we think about 2019 and beyond?

Thank you, Bill. Yes, so look, you know this, and I think most everyone on the phone, I’ve been at AMG for 12 years now. I’ve been involved in the strategic decisions across multiple aspects of our business for some time, including distribution and so this new role is simply an evolution of my responsibilities. It’s not a change or major change for our business I’ve been working closely with the head of our new or the Head of our Global Distribution, Hugh Cutler, has been with us for a couple of years now on a number of projects he is doing a nice job he is got a great team and I look forward to helping him grow our business in this area in addition to my new responsibilities in distribution, I’ll continue to be involved in all aspects of our business as a senior member of the team.

And maybe, Bill, I’ll add something to that, which is look, we have this we talked about this, I think, a couple of calls ago, but we’ve got this an excellent senior team with a really good balanced mix of people who have been with us for a long time, like Jay, obviously, and also newer perspectives and people we brought in across different functional areas and a lot of people have stepped up over this past year as we’ve had some transition but it’s clear we’re better positioned than ever before in terms of the breadth and depth of the team we’ve got and then finally, I’d say also this is a good environment to attract new talent as well so look, we’ve built a really strong senior management team, and it’s great to watch how that team continues to evolve as we execute against our strategy.

[Operator Instructions] Our next question comes from the line of Robert Lee with KBW.

Great thanks. Good morning guys. Thanks for taking my question. I guess, I’m just you touched on the capital management, which always been I’m just kind of curious I mean, just how do you think of your kind of deal capacity right now? And within that, understanding one of the key dry powder and but have you changed at all how you’re thinking about ultimate kind of leverage that you’re willing to run at if you find the right transaction? I mean, I guess, historically, in the past, you’ve, at times, gone 3x or more, but do you, has that changed at all? I mean, given the environment that there’s more of a governor on kind of the amount of leverage you’d add per transaction?

Yes thanks, Rob. Let me start here. Well, yes, I appreciate the way you asked the question. I mean, taking a step back for a moment, our longer term view on our balance sheet is to position it for strength, make sure that we are able to execute on our growth opportunities over a cycle and we have prudently managed our balance sheet over this time I’d say look at the last 5 years, we’ve taken leverage down quite a bit that’s led to increase in ratings it is just a reflection of that leverage coming down but during the same time, we’ve been committed to returning capital to shareholders, and we’ve returned $1 billion since the beginning of 2017 as far as capacity, let me walk you through that we did just extend our revolver new 5 year revolver in January, extended our term loan as well so we are well positioned today with leverage in a good place and also enough capacity on our revolver, nearly $1 billion on our revolver to execute on our new investment pipeline I think when you look at the capital model over time continuing to limit leverage and reduce that we think we can do that, while also returning capital to shareholders and we have repurchased shares in each of the last 8 quarters with $76 million being repurchased in this past quarter and maybe I’ll just address that a bit further we met pretty volatile markets in December and so we did a bit less than we had initially expected to do in the fourth quarter really because of the extreme volatility in the last 2 to 3 weeks of the year and looking ahead, this year, we expect to continue to repurchase we mentioned in the prepared remarks $100 million to $300 million in the first half of the year as you also saw, we increased our dividend, we increased our share authorization, so that we could repurchase additional shares throughout the year we can give ample capacity under that authorization so taken together, we do think we’re going to continue to reduce leverage, continue to repurchase shares, but the most important use of our capital is new investments we think that’s a continued tremendous opportunity for us over the long term, especially in periods of volatility because after those periods, that tends to be times when executing a new investment is most attractive to shareholders.

Yes. And the only thing I would add to that is, I think the question ultimately becomes especially if you’re going to do something larger, the question becomes when do you have that highest degree of confidence in the opportunities set ahead of you? And I think as Jay said, we’re positioning ourselves to be able to take advantage of the opportunity to deploy capital.

Our next question comes from the line of Michael Carrier with Bank of America/Merrill Lynch.

This is actually Shaun on for Mike. Thanks for taking my question. Given the more challenging industry trends and the increasing need for scale, do you see opportunities to centralize more Affiliate cost to create some synergy and scale benefits?

Yes, so let me start with that. So we’ve talked about on prior calls, there are parts of asset management where scale definitely advantage and there are parts of it where it’s not and I think this is where it’s important to understand the kind of the unique business model that AMG has, which is we are able to manage diverse set of distinctive return streams at effectively enormous scale in this Affiliate model that we have and the place where we have been investing and place where we have been working with our affiliates is how can you more effectively bring that significant scale of diverse distinct return streams to bear, which plays into some macro trends as well, and we talked in our prepared remarks about the consolidation of buyer behavior and centralization so that those are places we’ve been investing and some of that is what we’ll be doing with global distribution but some of it frankly, these things like and we announced, I think, the Nordea relationship today Nordea Asset Management, some of it is our ability to continue to do things like that which is through a single point of contact make it very efficient for large buyers or large intermediaries to understand all of the return streams our affiliates have and then make it really easy for them to get access to the streams they want, which could be a product or could be something new, but get access to the things they want and then get them into their client portfolios in a way that is both better in terms of faster getting the return streams faster and into the client portfolios but also, ultimately done in a way that’s the higher margin for us and for them, as we make it really efficient for them to both understand the return streams and understand the evolution as well and then the final thing I’ll say, there’s a really good virtuous circle to this, which we learn a lot from these relationships as we’ve been going through them, which informs not just our product development, but also informs our new investment activity as well so those are places we’re investing we think there’s a tremendous opportunity, and we’re really just at the early stages of that.

Our next question comes from the line of Chris Shutler with William Blair. Please proceed with your question.

Hi good morning. So, on new investments, I know you missed out on some deals because of just being prudent around valuation but given the scarcity of strong growing asset management firms, I guess, curious to know how you are thinking about valuation in this environment? I know you have historically paid a 10x-ish EBITDA and more broadly, why are you convinced this business model is still the right one and are you contemplating any kind of changes or moves into adjacencies?

Yes, so let me start with a lot of pieces to that question. So first, we think there remains a very significant opportunity with the sort of fundamental approach we have, which is how do you partner permanent institutional partner, how do you partner with these outstanding manufacturing businesses that opportunity is, we think, still there we also think there’s an opportunity to be a much better partner to these firms and this goes to some of the kinds of things I was talking about in the prior answer to the prior question, which is, we didn’t we’ve been building capabilities, which make us a better partner to those kinds of firms so we think that opportunity is really significant first you are right, we’ve been disciplined but it’s not just around pricing, we’ve been disciplined around a lot of different dimensions so we’ve disciplined about the quality of the organizations and I think we talked on earlier call about what we mean by high-quality firms and what are the kinds of firms we think are going to succeed in this environment so we’ve been disciplined about quality we have been disciplined about alignment, making sure that we really get good long-term alignment in a way that can ultimately be multigenerational with the management team, which we think is important for our model, which we’re which has a permanent component we talked about so we’ve been disciplined about the quality of the firms we have disciplined about the alignment we get with them and absolutely, we’ve been disciplined about pricing but I’ll say that’s really just an issue in a subset of the opportunity set in front of us it is an issue in our subset, but it’s really just an issue in our subset of the opportunity in front of us in terms of adjacencies, we have looked and we continue to look at ways that we can extend what we do but we think there’s such a big opportunity just in collecting these affiliates, which have these fantastic return streams, these distinctive return streams collecting those as part of AMG and on our platform and then helping them go into client portfolios in a more effective way. We think that opportunity is a really significant and differentiated rich opportunity we don’t think there is anybody else out there who’s able to prosecute that same opportunity.

Our next question comes from the line of Alex Blostein with Goldman Sachs. Please proceed with your question.

Thanks. Hi. I was hoping just to get a cleanup question and I guess as we are thinking about the baseline kind of management fee EPS for the guys to start off the first quarter, obviously, lots of moving pieces given the painful end of the year and nice rebound here, but also it sounds like you guys are making various kind of corporate investments so I heard you kind of $0.10 to $0.20 in performances fees, but maybe help us with the baseline management fee run rate?

Yes. So Alex, it’s Jay. Maybe I will make a couple of comments here the first just to put the framing out there, we give guidance in a number of areas, and I think you know this: first is just helping you estimate the run rate AUM and EBITDA, second is just the framework for modeling future growth and the third is performance fees on the first, the run rate, AUM and EBITDA, which is directly to your question, we started the year with $736 billion in AUM our January markets are up, and we’ve have had good flows as well in the retail channel, a reversal from the fourth quarter so when you take that together, our market blend is up about 4%, maybe a little over at this point and so that gives you a sense for where AUM is and as I mentioned in my prepared remarks, we’re in a range of take the midpoint of that range 11.5 of EBITDA to average AUM and you can get pretty close to what we think is a reasonable EBITDA run rate for the first quarter another way to look at it is we gave you what our EBITDA would have been before onetime items in the fourth quarter of $221 million we are off a little bit because the carryover effect of the fourth quarter being offset by the market and flows in the first quarter so far, we’re down a couple of percent, call it so I think, $215-ish million on a run-rate basis so that’s another way to get to the same number obviously, we go through all the other items to help you translate EBITDA down to EPS in the guidance as it relates to the framework for modeling future growth, I think we see consensus in The Street developing a good framework to track that as you know, here, we’ve historically guided people 2% per quarter, but that’s really up to you and I think almost everyone knows how to track that and then on the third item, we talked about performance fees, given you guidance in the first quarter that in that range of EBITDA to average AUM, we do expect $0.10 to $0.20 so at that 11.5, call midpoint of $0.15 for the first quarter second and third quarters, we typically don’t have a lot of contracts that crystallize so a step down in those quarters and then for the full year, as you heard me say, we expect a range of $0.75 to $1.75 and I’ll just comment that, again, given the uplift in markets, new calendar year, we’ve really improved on our high watermarks from last year’s performance and so we feel pretty good about that performance fee opportunity.

Thank you. Our next question comes from the line of Brian Bedell with Deutsche Bank. Please proceed with your question.

Great. Thanks very much. Maybe Jay or Nate, if you can go a little bit deeper into some of the alternative outflows in the fourth quarter, and I think, Nate, you mentioned there are delayed funding pipelines, if those are actually turning around now in 1Q? And then just on the one-time in the fourth quarter, if you could – I don’t – sorry, if I missed this, if you could parse out the Mass General versus the other one-time items that you guys took for AMG expenses? And then as you think about expenses going forward, Jay, on the global distribution effort, does it make sense to actually maybe invest more in that given you think you can obviously leverage the good performance across a lot of your strategies going forward?

Maybe I’ll start – I mean, we’ll try – maybe try and do those in – maybe we’ll try to do that one question in reverse order. So, let me start with the spending point because we talked about this a little in our prepared remarks and how we invest in the business. And so if you look, Brian, I think we’re pretty decisive – we and affiliates were pretty decisive in the fourth quarter in terms of – and we’ve been – look, we talked about this on earlier calls. We’ve been looking at this for the last couple of quarters, which is how do we make sure we’re allocating our resources to the right things? And so we’ve reduced spend and we’ve clearly reduced resources allocated to kind of products, packages, channels that are subject to commoditization, all those kinds of things, some of it by us, some of it by affiliates, some of it is just kind of rightsizing resources, some of it is kind of critically examining opportunities. But then at the same time, we’ve been investing and increasing spend against both on the product development side, where the places where we can enhance distinctive return streams exist, and this has been a good environment also to add and invest in building out. Again, this volatility creates opportunity to build out at some affiliates, where there’s opportunity to really accelerate product development. And then as you said, a place we have been investing both people and operational build is how do we make sure we get these return streams into the appropriate client portfolios? Now, some of that is sort of specifically what we would have referred to as global distribution. And I think we talked about last quarter, for example, opening Japan, where we think there is a very large opportunity, very early innings and we continue to see good traction. And some of our affiliates, Pantheon and AQR already have also opened up alongside that. Some of it is also the - building against these kind of what I’ll call kind of channel partnerships or strategic relationships and some of them were complicated mandates we’ve talked about on earlier calls is building those resources so that we can get affiliate return streams efficiently in the field for both. So, we’re absolutely doing that on that part of the question.

Yes. So, I just wanted to add on the expenses to Nate’s. The first thing I would say is, the – as you know, large majority of our affiliates are under revenue share, but where we do have exposure to expenses at AMG and at certain of our equity method affiliates, we and they had reduced expenses pretty decisively in the fourth quarter, gave rise to kind of about $10 million of one-time items in the fourth quarter. We will experience that sort of savings in ‘19. So, if you look at where we’re exposed to expenses, again, at AMG and at certain of our equity method affiliates, we’re going to take expenses down 2% to 3% year-over-year, and so that’s already in place. The other one-time expenses just to kind of keep on that theme, obviously, MGH, so the total of MGH and those one-time expense management actions has brought our EBITDA from kind of $191 million to $221 million, that was in my prepared remarks I mentioned that. We had a couple of other one-time items. Of course, the tax benefits in recovery from Ivory, as well as the re-valuation of Systematica, those were the kind of four one-time items in the quarter if you’re tracking that. They all go through different financial statement line items. So, I’m happy to kind of follow up with you if you like on that. So, I think that’s on expenses. And I believe there – was there one more question? I can’t remember if there was now.

That’s – if that’s turning around –

Oh, yes, on alternative, yes. So, on alternative flows and maybe I’ll take flows, sorry, that was the – I was tracking back in reverse order through your one question. So just the bridge flows for a moment. You did hear me say on the – in the prepared remarks that we did see some seasonality, pretty significant seasonality, which exacerbated – was exacerbated by the December volatility. So, when we took a look at the data – and we do have pretty good visibility into the institutional book, as well as retail seasonality, so the institutional, the expiration of multi-year locks and single-year locks. And we had about $3 billion to $4 billion of seasonality there with another $4 billion to $5 billion in retail that kind of get you to that $7 billion to $9 billion number that I mentioned on the call. The other factor, which is a little harder to assess, but we still, I think that there’s a real number here, the risk aversion, which was causing lower sales given the extreme markets impacted our flows in kind of that $1 billion to $2 billion number that level. So, when you take all that away, there was still some softness in our flows and that really was alternatives in retail, liquid alternatives, but seasonality really did – exacerbated and risk aversion exacerbated. When we look more broadly kind of over the course of the year, we look at first quarter and say in retail, you’ve got positive flows through January, improving performance in U.S. equities, solid illiquid capital raising activity, the trends for us remain intact. Volatility is good for active management. And we do, broadly speaking, have a lot of good performing products across the diverse business that we have. When you add on to it ample capacity, new products starting to gain traction, like the Systematics fixed-income business that Nate mentioned together with our distribution efforts, our evolving partnership with Nordea, we do think that we’re going to be able to take these distinctive products into new channels, new regions, new partnerships and pulling all that together, where our long-term kind of growth outlook at least for – through this year – I should say, the medium-term growth outlook for this year, we do expect to return by the end of 2019 to something like 2% organic growth.

And then the only thing I would add to that is, because I think that’s a really good bridge to sort of think about the year, but the only thing I’d add to that is, there’s a couple of just sort of underlying dynamics and Jay touched on one, which is this kind of balance between the development of product that has – we believe is distinctive and has good opportunity with the evolution of the book and, frankly, the roll-off in the book of a product that we think is more sort of commoditized or susceptible of being commoditized. And you did see that over a period of time in some of our U.S. equity book in the institutional phase as an example. So, some of it is just simply that kind of evolution if you look at the mix of our products. We’re feeling really good about the distinctive nature of most – of an increasing percentage of those products. And then the other dynamic I’ll just mention is that the pull back in the fourth quarter and some of the volatility combined, we have a number of products that are – there are fantastic products with very strong long-term track records that have been closed and are reopening or kind of making progress in that way and sort of where they’re starting to sort out how are they going to put some of the capacity they’ve got, both from the fact they’ve been closed and so you can’t have inflows, you have had outflows. But also from the standpoint of – with all these outflows we seeing real opportunities. So, I think that – those are other dynamics that put together, business extends, but these are longer-term trends. I think business extends beyond this year. We think the opportunity ultimately is we can get back to kind of where we were in the first half of the decade.

Thank you. Our next question comes from the line of Dan Fannon with Jefferies. Please proceed with your question.

Thanks. Good morning. Excuse me, so just first one to clarify, Jay, positive flows in January versus I think Nate said breakeven. So just clarify that on the retail or maybe that was all-in? And then in terms of institutional activity, just curious if we see the retail data which obviously is only a subset, but is retail within the liquid alternatives acting different than the institutional client base or you’re seeing kind of broadly institutional kind of demand changing for some of the alternative strategies particularly at AQR?

Yes. So yes, let me – I’ll clarify. Yes. No, we did see about $100 million positive in the publicly visible, so I think Nate characterized that –

I think it’s in that roughly –

Yes, and I characterized that as positive. Clearly, that was a significant reversal from December. And just – I think Nate will probably pick up on the alternative point here and how it’s acting in institutional. But I would just say when you look at the retail flows publicly visible this quarter and that’s not all of retail, Dan. We do have sub-advisory and some non-reporting retail, that’s harder for us to see even given that it is just early February. But just commenting on what trends we’re seeing in the publicly visible, clearly, the sort of value managers, both the U.S. and global, have seen a pretty strong reversal in both investment performance and flows. We’ve had good flows in U.S. equities. And so, one of the themes that I think is emerging here for us is when we – where we’ve had pretty significant outflows for a significant number of years here in U.S. equities. We’ve seen really good things and the decreasing of outflows or maybe even positive flows. Names like Yacktman, Frontier, River Road have top quartile performance over the long term. And we’ve seen our U.S. equity kind of 3-year numbers in aggregate for the first time go above 50% and that’s probably 3 years or 4 years since that happened. So, we’re very positive about that. Among global equities, we have also seen there a really good performance especially in global and international mandate, as well as the regional – sorry, regional – global international and regional products. We’ve been plagued a little bit by EM performance. It’s been a tough go for active in EM. Still have great affiliates positioned well in EM and some of those affiliates are opening products back up. When you look into the underlying data, you’re seeing global mandates international really being driven by that outstanding performance. So those themes really are emerging here in 2019 and then as it relates to alternatives – liquid alternatives and institutional maybe.

Yes. So maybe I’ll make a couple of comments there. So, I think – look I think – so 2018 was an extraordinary year. I mean, it was a really extraordinary year in terms of the breadth of the negative returns across asset classes, I mean, sort of historic. So that was an extraordinary year. But the underlying thesis around why people are trying to get these alternative return streams into their portfolios, they’re all remain intact. And I think you’d even see – even we talked about this in our prepared remarks, even with that, that extraordinary breadth of negative returns across asset classes, it really did serve a diversifying effect now, that didn’t serve a fact that they were up and so therefore, we would realize performance fees and we talked about that, but they do serve a diversifying effect. And so look I think the fundamental thesis about why people are using return streams remain fully intact. And we look at the decision-making around the – in the institutional channel around alternatives and we see – we continue to see very strong sales activity across a wide range of products, both liquid and illiquid, but certainly in liquids. So, it’s not a challenge of pipeline and sales, an opportunity to develop new products on the rise, so that all remains intact. I will say there is one other point, which is – and Jay touched on this before, which is in the retail channel, part of what happened was really just the combination of the performance plus the seasonality as people went through, whether it was selling ahead of distributions or tax loss selling, that was part of what we experienced as well. And then even in the institutional channel and I think Jay mentioned this, there was seasonality in institutional, there’s just typically is as you get to the expiration of kind of single and multi-year locks right at the end of the year. So we think that demand trend – the underlying trends are intact. We think there is really good activity in the pipeline. And so we do think it should be – it’s not acting the same as retail, if that’s kind of part of the question and we think that – again those underlying trends should continue. All that said, of course, it’s ultimately the return streams have to be distinctive and performing.

Yes, one last thing. I didn’t want to leave these underlying trends without also mentioning just the PE fundraising and illiquids. We had a solid quarter. We had a solid year off of 2 years. We look forward and we see continued growth in illiquids, both kind of new products and the partnerships with large pools of capital. We do see this as an enduring growth opportunity for us as kind of the other major trend this year.

Yes. And a place where there’s really good product development going on.

Thank you. Our next question comes from the line of Robert Lee with KBW. Please proceed with your question.

Great, and thanks for taking my follow-up. Would it be possible to – if we think of the – maybe the flows in the quarter kind of characterize that in terms of its EBITDA impact, if organically it was maybe on just the asset base to stand just under 2%. Would the EBITDA impact be kind of similar? Was there some mix issue that will make it greater or lower? And if we think, Jay, kind of thinking that you can get back to the 2% organic growth maybe by the end of ‘19. I guess, similar question given how you’re looking at the mix going forward from what you can see, would that be indicative of kind of the EBITDA contribution?

Yes. So, let’s take the EBITDA contribution first. Yes, the asset-weighted EBITDA contribution, it’s a little hard to see in the underlying data because performance fees had such an impact on our results in the fourth quarter. But one of the things you can see, as I mentioned, if you kind of track EBITDA from third to fourth to first quarter and I mentioned the $221 million before one-time items in the fourth quarter EBITDA going to something it looks like $215 million, that’s just a couple of percent down. And the way you can also see that, that’s tracking, that was consistent with your inference, that’s tracking to when you look at average EBITDA to average AUM, it’s actually going back up. So, what that suggest is that the assets that were lost had an average weighting that was consistent with our overall business and the mix shift for us is actually going back the other way after several quarters, 6 quarters, 7 quarters rather than going the reverse direction, we see it actually improving on profitability. So, our EBITDA to average AUM is improving as we go. So I would say that I think that’s partly because of where we’re growing and it’s also partly based upon the ownership mix of our business.

Thank you. Ladies and gentlemen, that concludes our time for questions. I’ll turn the floor back to Mr. Dalton for any final comments.

Thank you all again for joining us this morning. As you’ve heard, we are confident in our prospects for significant long-term growth. We’ve built a diverse business, which includes some of the highest quality boutique firms in the industry with established long-term track records of outperformance across a wide range of investment strategies. And as Jay said, all of this is within a business model that has low operating leverage and a flexible capital structure, which positions us to execute on our business strategy and create long-term value for our shareholders. And we look forward to speaking with you next quarter.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.