Good morning and welcome to Apollo Global Management 2016 First Quarter Earnings Conference Call. During today's presentation, all callers will be in a listen-only mode. And following Management's prepared remarks, the conference call will be opened for questions. This conference call is being recorded. I would now like to turn the call over to Gary Stein, Head of Corporate Communications. Sir?

Thanks operator and welcome everyone. Joining me today from Apollo are Josh Harris, Co-Founder and Senior Managing Director and Martin Kelly, Chief Financial Officer. Earlier this morning, we reported a non-GAAP, economic net loss of $0.18 per-share for the first quarter ended March 31, 2016. Apollo also reported distributable earnings to common and equivalent holders of $0.25 per-share for the first quarter, all of which was declared payable for the quarter's distribution. Before I hand the call over to Josh I wanted to remind you that today’s conference call may include forward -looking statements and projections, which do not guarantee future events or performance. Please refer to our most recent SEC filings for risk factors related to these statements. We'll also be discussing certain non-GAAP measures on this call, which are reconciled to GAAP figures in our first quarter 2016 earnings presentation. As usual, if you have questions about any information in the earning release presentation on this call please feel free to call Noah Gun and myself. With that, I’d like to turn the cal over to Josh Harris, Co-Founder and Senior Managing Director of Apollo Global Management.

Thanks, Gary and good morning everyone. Amid a volatile backdrop during the first quarter where equity markets pulled back meaningfully and then rebounded, spreads widening and then tightened, an appetite within the financing markets moderated and then returned. Apollo had one of its busiest capital deployment quarters ever. The funds we manage together with co-investment partners, deployed or committed nearly $8 billion in aggregate across a range of investments by leveraging the firms integrated platform our ability to embrace complexity and choppy markets like those we experienced in the first quarter, create the type of environment where Apollo tends to thrive capitalizing on dislocation while others are often sidelined by it. Due to the long term nature of our capital and ample dry powder across the platform, we were well positioned to put our skill set and contrarian approach to work for our investors. In credit, we deployed capital on a variety of debt securities at attractive prices, but have since traded up in many cases. In private equity, we're very active during the quarter, contrary to what some may think when traditional sources of capital in the financing markets seize up, this can actually work to our advantage. While it may be more difficult to get transactions over the finish line, it can lead to more attractive outcomes. Notable transactions announced during the first quarter include ADT, The Fresh Market and Regional Care's acquisition of Capella Healthcare. Each of these deals is emblematic of Apollo’s differentiated investment capability and I would like to elaborate further on a few specifically. In the case of ADT, which we just closed on Monday, the funds we managed, we’re able to invest in the leading provider of home security and automation services, combining Protection 1 and existing Fund 8 portfolio company with ADT.…

Thanks, Josh and good morning again everyone. Starting with our cash distribution, the $0.25 we declared today, was driven by the relative cash flow stability of the management business as Josh has highlighted and reflects our commitment to distribute substantially all of the cash flow generated in each quarter except for what may be deemed necessary or appropriate to run and grow the business. For comparability purposes, I’ll speak to the quarter’s economic earnings excluding the impact of last quarter’s legal reserve. We earned $82 million of economic income in our Management business during the first quarter down from $96 million in the fourth quarter as adjusted. The decrease was driven by lower management business revenues largely transaction fees and sequentially higher expenses, largely compensation, which normalized from a relatively low level in the fourth quarter and reflected the impact of headcount growth year-over-year. Turning to the Incentive business, the economic loss during the quarter was largely the result of an unrealized decrease in evaluation of Athene, which was driven by the depreciation of publicly traded comparable companies in the life insurance sector. Recall that as Athene approaches its goal of becoming a public company, its quarterly evaluation will reflect market changes and key evaluations, absent any other company-specific drivers. The 11% reduction in Athene's valuation quarter-over-quarter resulted in a $67 million unrealized loss within other income, as well as a $56 million unrealized net carried interest loss from AAA and related accounts, resulting in an aggregate drag on the first quarter P&I of approximately $0.30 per share. It’s worth nothing that we're seeing an upward trend in the public comps quarters a day with mid-single digit average appreciation. In Private Equity, our core funds appreciated during the first quarter due to 2% appreciation in private holdings and positive marks…

Thank you. The floor is now opened for questions [Operator Instructions] Our first question comes from the line of Mike Carrier of Bank of America.

Good morning, guys. Josh, maybe just first on -- just first on the deployment that you guys you did in the quarter and then the outlook and maybe separating it and maybe the private equity side versus some of the distress that you saw on credit, I just wanted to get your take, when you look at the private equity side, you mentioned ADT and then your first market. You mentioned that the six times, type of the multiple across Fund 8, just wanted to get sense that you're still able to put capital to work at those levels. And then on the distress side I know was a short period of time in the quarter, but you guys were pretty active, in terms of deploying capital, just what’s the outlook and maybe the fundamentals that drive some of these stress situations, because obviously some markets have rebounded pretty quickly but just wanted to get your take on the fundamentals that were driving some of those these opportunities?

Yeah. Good question. So first of all, we’re continuing to put money to work and six times cash flow like it’s actually I look at it and quite I guess impressed with the team -- our team like they continue to find stuff, you can do math on APO as public company. Actually we merged it with our company, but that would be under six. But on average we’re in that six times and look everyone here knows what Apollo deal is. It's something that where we trade complexity and aggregation for rate of return for purchase price. So we roll up our slaves and can certainly be merging two companies together. Can certainly be a buildup. Can certainly be a corporate carve out. It could certainly be a distress for control situation. So we’re really bucking the market trends where the average multiple now is over 11 times if you look at the last quarter and we've deployed, we're ahead of pace and I don’t think we’re buying for companies. ADT is a huge franchise business, fresh markets is a great -- great supermarket retailer. We announced -- I think we announced another deal in the industrial space on Monday two crane companies. So they're about the companies. So I think, I’m feeling very good about our ability to be highly differentiated in private equity and the gross returns are starting to go up in Fund 8 and obviously, it takes you a little while, because of the J Curve to getting to carry, but we're heading there very quickly. And it’s exciting to be able to do it in this environment, which is amongst a tougher environments or maybe even the roughest I've ever lived in, in terms of private equity. So the team is doing quite well…

Okay. Thanks and then just quick follow-up just on the Athene relationship in the growth outlook there just given the Department of Labor the fiduciary rule, just wanted to get your guys sense on maybe the growth outlook and how you see that business proceeding forward just given some of the constraints with the role?

Sure, thanks for the question. We know the Department of Labor rule is a big topic on investor’s minds across financial services. I would say at this point like other companies in the space Athene is accessing the potential impact to the rule and they haven’t really said anything publicly about it yet. From our standpoint we think it wouldn’t be appropriate for us to comment on how the rule may impact them. We think we better wait for them to comment. So I would say stay tuned for their next public investor update call where I am sure they’ll discuss this topic. But I would say broadly speaking we still remain very excited about Athene given a lot of interesting things across a number of different sectors and exploring a lot of different opportunities. So I think we still see meaningful growth opportunity there.

Okay. Thanks a lot.

Our next question comes from the line of Devin Ryan of JMP Securities.

Thanks, good morning. Just wanted to get an update on the health of the financing market today relative to the start of the year. I know you guys have noted that it was effectively shut down. So I am just curious how it is today and how that’s influencing your backlog of opportunities and also just on the backlog, the size of the ADT deal as you guys highlighted, is that an abortion or could we see some other large deals like that in terms of what you guys are looking at?

Yes, so just taking them in order, the financial markets are back. They're back in all their glory. Literally again things were relatively shut down for a few months and now we concluded a number of transactions based on having a rough expectation or an expectation of relatively rough financing market and pricing that in. And then sometime having a little luck is good because the deals we're priced for market we've priced ADT obviously we're still -- we still have a pipeline of deals to go into the market, but all the deals are getting done ahead of our expectation. When we did the deals and so the financing markets, the high yield markets was down to five and now it's up six. It was down five last year, it’s been up six or so in the first four months. So there is still a bit of bifurcation, but really even triple Cs arrived. So things are -- the good times are rolling again at least for this month, but you can’t really predict what will happen given the relatively muted financial fundamentals of the economy, but very aggressive monitory technical out there in the world. And there is sort of a battle between fundaments and technical and one month fundaments win and then another month technical win and you just have to be really on your toes to navigate what's a very challenging environment. In terms of what was your second question, do you mind repeating that

Just the kind of the size of backlog and just within that is ADT kind of abortion in terms of the absolute size of that deal?

Yes ADT is I would say is abortion. It’s pretty hard, so if think about it, it was $15 million deal, but there is whole bunch of debt that we rolled based on its terms and then we went outside the financing markets and to have turned to Coke industries and large LP, to privately place some of the debt. And so, when you -- and then we had an existing company that had some debt that they have to replace. So when you look at it all like we really only raised, $3 plus billion of debt capital. Obviously brought -- we bought $4 billion to $5 billion of equity capital, and so that’s really the Governor. The Governor is that the bridge market the ability to get committed transactions really taps out, in some months it’s three -- it was very hard to get $3 billion of bridge. So like when you start to put a normal equity cushion under that, you get to like five. And so, unless things change that it gets a little harder to do deals above that levels unless you’re bringing, unless it's a special situation you're bringing lots of equity to the table, your rolling debt, you have to be very creative. It’s not 100% the case, you will see the odd large deal, but I think like -- if you think in terms of $5 billion being aware that the financial market, the capacity to absorb bridge facilities taps out $3 billion, excuse me $3 billion to $4 billion that gives you the size of how big the deals can be.

Got it. Okay. I'll leave it there. Thanks guys.

Our next question comes from the line of Glenn Schorr of Evercore.

Hi. Thanks very much. Curious in private equity performance, if you’ve done any attribution analysis. When you look at last 12 months being down a little bit, it’s bummer, but curious, if you’ve looked at that performance X energy just first to see how the performances has been outside the energy complex?

Yeah. So we’ve done the analysis on that Glenn, its Martin. Energy was a clear headwind and the last half of last year and NTE in the first quarter actually was a very slight tailwind and that was given the construction of the assets we had and so factor specific to them like reserve estimates as well as is where the comps moved. But I’m sorry, I think the non-energy piece has for sure outperformed the energy piece over an LTM period of time. If you then dig into it more, I think it’s not surprising that the privates equity added value as they mature across the Board and then the public are up and down with the markets. I think the good news though is, if you dig into what happened in the quarter in six with six and seven both being down, but eight being up and on the road to getting into carry, there is path forward to getting funded into carrying and producing cash. Now that’s obviously going to depend on the new investments, creating value. So, it will take a bit of time. But, the newer companies in the book across the Board are performing nicely and having some markups.

Yeah. To put in context, six was $10 million fund that we close to double and there is $3 million left. So you’re talking about round numbers 3 out of 20 that's less. Seven was $15 million fund that we more than doubled, so call it 35 or 40 -- between $35 million to $40 million and you're talked about four left. And so really, this is the like the tail of very large dog and you get some idiosyncratic performance so that has nothing to do with -- you’re dealing with the positions that are left. Now the good news is we’ve invested 9 of 18, the investor committed 9 of 18 in 8 and 8 is like really looks really strong relative to the early returns in 8. You can look at the gross. I think we published the gross returns. I don’t want to drill on that and they’re very high in a pretty difficult -- they’re well north of the equity markets, well north. And so, 8 is coming, and yeah we're dealing with what we have left in 6 and 7 and Martin mentioned that Norwegian Cruise Line strays up it strays down, its strays sideways and so we get some volatility. So it is bummer in some sense, but in other sense all that became dividends over the past couple years, so we and hopefully a lot of people on the call reap the benefit of it.

Yeah right. I get that. Just one quick follow-up to Mike's question, I know you can't say much on the Athene I heard you loud and clear. But am I reading it right that the big issue for them is the inclusion of fixed index annuities inside the BIC, because that was part Athene's bread and butter, that's the way I read it and I'm just not sure if it's how that impacts their organic growth.

Yeah I think that's really where they're assessing what the impact is, you're right. It was inclusion of fixed index annuities which really came as a surprise to the industry at late inclusion and so they're just absorbing that and assessing what it all means.

Okay. I appreciate, thank you.

Our next question comes from line of Ken Worthington of JPMorgan.

Hi good morning. Just Fund 8 the negative 6% IRR to a positive 4% obviously you're in the J curve, so we would expect big swings, but it was a pretty lousy quarter. Anything you can help us on in terms of the big swing in IRRs which positions maybe happen to be doing quite well or which may not, but really focus on what's working in the fund?

Sure. Ken, it was actually some pretty decent mark-ups across the book including on a particular energy position that we are in that we've marked down a lot in Q4 and had some reserve finds and some come increases during the quarter. So that was a factor, but I would say really across the book the portfolio if you look at the underlying revenues and EBITDAs they're performing well. There's really nothing in that portfolio that we're concerned about. And it was a markup across the book. And the 4% you’ve mentioned is net 18% gross and so we have 5% to get to carry, we have 8% to get through catch up carry as we look forward, obviously adjusted for the recent money that's been put into the fund.

Yeah I hate I don't want to simplify but when you're buying at six and the market is trading at 11 you make a decent amount of money on the buy, you just do. And then when the companies perform it start to impact the valuation.

Okay. Great. And then maybe continuing on performance in credit in the permanent capital vehicles, I think there is $16 billion or so where you disclosed you need about an 19% return to get back to carry, which I don't know feels for like a big assumption, but maybe like walk through what would you think needs to happen to get back that 19% return and maybe why the deficit got so big in the first place? Is it exposure to certain sectors which have hurt or color there be great too. Thanks.

And Ken your question is on capital vehicles, not the draw downs right.

Yeah here let me see if I get to the page, permanent capital vehicles exit being non-sub, no I'm sorry, it’s $16 billion of credit Slide 8.

Okay, so that’s -- that will include a series of draw down funds plus the BEC plus the rates and reflects it's the year-to-year end of the credit spectrum as we define it and reflects -- it reflects the last two or three quarters that we've lived through in terms of March. Some of that has come back in Q1, some of it came back a bit further in April, but it represents the lowest tranche debt pieces that we buy, which got hit pretty hard in Q4 and in early part of Q1. Also within that is about a plan of CLO AUM and that's actually a somewhat mix story, it contains new CLOs that are just seasoning and will take time to get to carry, but it also includes some older CLOs that are running of.

What I would, I heard someone say like there's $23 million in carry right, on the $16 million to data carry, I’d say that energy and natural resources haven't helped that and so we would need a rebound and I think those sectors have been I'd say the bigger drag on that, and we need a bit of a rebound there, but make your own assumptions there is $23 million and there is $16 million that we have some work to do. I think it could happen but there's no question that we have some work to do. And then we're originating lots of new opportunistic accounts. So when we talk about in the press releases whatever the $700 million or $800 million of news managed account like money that's likely to be you're starting at day one and so it's not in carry, but it's right there.

Okay, great. Leon I appreciate the addition color. Thanks.

Thanks Ken.

Our next question comes from Alex Blostein of Goldman Sachs.

Great, hey good morning, everybody. Just one more I guess can you I understand you guys can't really get into the future and how the business roll out, but help us understand I guess how much of their product is in qualified accounts today as well as how much of sales over the last couple of years has come from qualified accounts.

Yeah. Unfortunate I don't want to seem like we're ducking questions here, but it's just not something that they've disclosed publicly. As you know they're on a path towards filing the rest one towards their IPO and you can expect that they'll be discloser included in their filings that I think will help answer some questions you're asking. but again I don't think we should be the ones to disclose before they have a chance to put it in the context of their pull business.

Understand, fair enough. On to Apollo's business I guess when you guys talk about the fund raising opportunities and clearly the pace of deployment is extremely robust this quarter. Does that accelerate any of the fund raising opportunities you see over the next 12 months or so? I know you highlighted the $2.5 billion co-invest that I guess it supposed to come in next quarter or I guess this quarter second quarter. Talk to us a little about the fee rates on the $2.5 billion and also just how we should think about the fund raising out for the next 12 months?

Yeah. So the fee rates, I don't think we really disclosed what we charge co-investors, but it's certainly not going to be a private equity style incentive fees probably I'll leave the specific deal by deal. The fund raising outlook in the next 12 months is good. I think you guys are seeing the phase we're running at. I think we expect to continue to run at that pace.

I guess what I'm trying to get to is that the $0.25 a quarter and measuring key business earnings how much runway does it have call it 12 months? Is it -- should we be expecting like a $0.30 kind of number or is it going to stay in the current run rate?

Yeah I appreciate what you're asking, but we don't really give forward guidance, but I think by talking about it in the script we feel pretty comfortable with that as a minimal.

Got it. Okay, thanks.

Our next question comes from one of Patrick Davitt of Autonomous.

Hey good morning guys, thanks.

Good morning.

This is the first quarter where there was a pretty big disconnect in the broader key portfolio performance and the carry number that you reported and it sounds like part of that is because of how well Fund 8 did relative to the other funds. But also that this triple A mark, was it more the Fund 8 disconnect or the negative mark in the triple A stuff and what exactly is driving that negative mark because I don't remember that being called out as aggressively as needed?

Yes it's related to the Triple A carry, so let me just go through the pieces. So fund 8 is out of carry so it has no impact on our reporter earnings. Fund 6 and 7 were both down 5% and between the two of them after profit share costs it created an A&I loss of about $35 million. So the rest is attributed to AAA. The arrangements -- the carry arrangements we have with AAA complex there are several of them. They have different hurdle rates and participation rates and they don't apply to all of assets in AAA. So it's not a linear relationship with the price that we value with Athene, but collectively during the quarter it had about a $55 million negative impact to the PE carry.

But it is related to the market and not from assets in the portfolio right? Is that what you're saying?

Its related relates exclusively to the mark on Athene. It's just the way that it's derived comes through couple of different structures.

Okay, I got it.

And we thought it would be helpful to give that just sum it all up and simplify and just say that given an 11% decline in the comps that had an essentially approximately $0.30, $0.31 here to our numbers across the PA and credit segments.

Okay. Great. That's very helpful, thanks. And then just a quick follow-up, the Escrow footnote and I apologize if you’ve answered this on past calls, why is it that there's $111 million net profit sharing in Escrow, but you would only get $12.5 million to the GP in the event of liquidation from my reading not incorrect.

I think that is driven by Fund 6. So Fund 6 is Escrow is now below 100%. It's 89% and there is some cash sitting in the Escrow account that was trapped when assets were sold last year. So if everything were sold at the March 31 marks, then a lot of that cash sitting in Escrow would go back the LPs instead of coming back to far.

So if it were over 100.

Yeah. That's right.

Yeah, perfect thank you.

Sure.

The other point just this point keeps coming up, there is and again you guys can do your own projections on Fund 8 like obliviously don't give forward-looking statements, but there's 9 -- there's about, by the time all the stuff closes that we've signed up, there's roughly $9 billion of carry eligible AUM out there one Fund 8 crosses its hurdle and so I don't know presuming things keep going okay, help is on the way.

Makes sense. Thanks.

Our next question comes from line of Brian Bedell of Deutsche Bank.

Hi. Good morning folks.

Good morning.

Josh, a question for you on the credit cycle in terms of -- in terms of the investment strategy in the credit business, obviously we've seen these very wide volatility of spreads. Does it drive you to be more opportunistic in taking advantage of short term movements and then maybe if you can just -- I know it's always hard to predict, but whether the next credit cycle will be more episodic in that nature versus more of a longer term drawdown in the cycle that would need you to deploy for longer term periods.

So just taking the first one first, it does. I think that you have to be really good at your craft to make money. So what we do is we tend to get all of our ducks in a row. We file lots of credits and then when they hit our price targets we buy them. And it's actually even harder from the point of view that the liquidity in the market is actually much lower and so things gap down, but they don't really trade very much other than here and there. It's now become a much more institutional market so things will gap down from a price point of view and it will be hard to buy and then I'll gap back up. But yeah, you have to literally be there and ready for the days once that make it negative and so yeah you have to be alert you have to be more opportunistic. And then the things trade up very crazy you have to be willing this out and so you just have to be managing the volatility a lot more aggressively than in the past. In terms of like the future credit cycle it's just so hard to say. I think that when you look at it, I think there will be, I just think there will be more volatility, in the sense that the traditional people that dampen volatility which were the fact they just have lot less capital upright. So now when things gap its firms like ours that are stepping out. And so we need to get paid for it and so there is more volatility down and then there is probably more volatility back up it presuming that the monetary policy that exists out there it creates this bid for everything at some level because people need to put money on that. But it's hard to know, I think at some point if it were to get more negative yeah then I think there would be at this point 35% of the fixed income market is daily liquidity vehicles, right. So if it were to break to the point where retail started pulling out of those vehicles and people got really negative there would be it could be extended down but it's so hard to predict based on what's going on right.

Great. It sounds like you can certainly be more opportunistic anywhere in prior cycles potentially given the lack of liquidity in the markets?

Yes.

And then just maybe switching gears, just maybe talk a little bit deeper about midcap and the long term strategy. You're up to $6 billion now the performance is tracking well. Do you have a long term view of how large that could be and the capacity for them to deploy capital?

We haven't really thrown out like a number, but it could be quite large. This in the sweet spot. This is middle market lending to corporate America in multiple segments. So certainly we've seen GE and all the big banks get out of that sector. The likes of CIT and Heller and others are now no longer either they're gone or they're not as significant. And there's just a huge opportunities as companies need capital. And so make you able to get much larger than it is today and you're able to look at how quickly grown at $6 billion. And we're going to hope to continue to move it along, but we haven't thrown out a specific size of it, but it's a very large market.

Did to keep the pace up that the pace of going from zero to six or is that's too tough to say right now for you?

I think the benefit of the GE transaction is diversified the industry's, the make-ups lending to and so the organic, organic origination volumes are now broader across -- healthcare is now less than -- healthcare broadly defines now less than half of their broadly -- will continue to shrink. They've also done a couple of capital raises which allow him to take bigger positions and then syndicate it down. So we have net growth ambitions, which are quite accretive over time considering -- even considering syndications and run off of the book.

Yeah then the reason it's hard to answer the question, there is also chunky stuff out thereby, but look I think the organic growth, I think we should be able to keep to change organic growth consistently with what you’ve seen and then we're going to keep trying to find the GE type transaction to do.

Okay. That's great color. I appreciate it, thank you.

Thanks.

Our next question comes from one of Chris Harris of Wells Fargo.

Thanks, hey guys. Another one on Athene, can you guys, let us know where you have that position marked maybe on a price to book basis and how that mark compares to some of the comps you guys look at?

Sure, Chris so we go through a process of looking at public comps that span both large cap and small midcap companies that operate in the same space and then we fit Athene's ROI to the comp set and derive a multiple and then given that its private and there will be lock up post IPO we apply a discount to the public comps. When you do all of that you get to a book value multiple, a GAAP book value multiple, which is just slightly more than one time, it's 1.02 times and at March 31.

That was down from 1.18 times quarter before, so again it's really just reflecting the fact that the comps were down so sharply before the quarter.

Got you, okay, and another follow-up on the outlook for the Management business. It sounds like you guys are pretty optimistic on the fee outlook, really just wanting to know how we should be thinking about expense growth for this year, whether we should be expecting a decent amount of operating leverage as you guys perhaps grow the management fee line.

Yes, we do expect leverage to improve. I think on the non-comp side the numbers have come down in the last year or two. I think what you're seeing now is as best we can tell long term, with one exception being placement fees which are lumpier and more difficult to predict. On the comp side last year our headcount grew by about 12% and that was a build-out across our investment teams and infrastructure to support all that. We have much more modest headcount growth plans this year given that we're significantly done with the build on. So, I would expect comp, we’re only one quarter into a year. Lots can play out, but I would expect comp from here to be flat to where it was in Q1, which coincidently was where it was in the middle part of last year as well.

Helpful, thanks guys.

Thanks, yes strategically we’re looking hard at equating comp and revenue growth at a maximum and trying to get some operating leverage. Obviously if there is special situation in terms of what you need and people that you really want, you don't want to -- you have to be flexible, but we're now much more focused on keeping these things in mind and generating some operating leverage.

Our next question comes from the line of Gerald O’Hara of Jefferies. Gerald O’Hara: Great, thanks. Just another on fundraising. It sounds like the environment has been relatively good or the outlook is relatively strong. You mentioned a Special Situations Fund that you are taking to market and I was curious if you perhaps could provide a little color on the sizing or scale where you think you might be able to take that fund?

Yes, clearly there are opportunities that are private equity like, but may be are longer data than a private equity fund maybe their assets, maybe they're buying a softer liability at a discount along with that assets and may be the minority investment. So in terms of sizing I think it's -- I don’t think it's going to be, I don’t think we’re expecting this to be a massive number in Fund 1, but we’re exciting to have on the right spend it quickly and then go back for more. And so, I don’t know that’s the way I would leave it. Gerald O’Hara: Fair enough. One more on -- it's been a little while. Maybe if you could give us an update on where the retail offering stand? It's still probably pretty early stages and whatnot, but maybe just early demand or interest or growth prospects within that platform? Thank you.

Yes, I’d say that we continue to focus on retail and we're building kind of we’re committed as a firm to making investments and expanding our coverage of retail, our sales people, we’ve been spending a lot of time on it. And it does represent 12-ish percent of our investor AUM and you’ve seen some of the work we’ve done with some of the sub-advised accounts and so but its early days. We’re just hiring people now and so I expect it to be an impact over time. I can’t say that, I can’t point to large job scenario, obviously we completed the transaction that we walked away from would have been a significant move forward, but now we’re just building it organically and it's going to take some time. Gerald O’Hara: Okay, great. Thank you.

Okay, thanks.

Our next question comes from the line of Michael Cyprys of Morgan Stanley.

Hi. Good morning. Thanks for taking the question. Just following up on Fund VIII, currently 50% committed or deployed, just seems like the pace of deployment here has really accelerated. I think you mentioned some other investors wanted to get in as well on the co-invest. Just curious how you're thinking about the time frame for a successor fund raise, a Fund IX, and if next year would be a reasonable timeframe in what you're thinking about in terms of size?

Yes so next like the way I would answer that is it’s difficult to predict, but if you just look at it, we’ve done just trending yourself right and we’ve done 50% in 2.5 years right. So that's 20% a year. Generally -- as general matter you can hit the road when you’re greater than 70% deployed or committed. That would put us a year out-ish, but it’s hard to predict. And so next year -- end of next year seems like a way to think about it. In terms of size like because of our track record which is 500 to 1,000 basis points higher than everyone else in the large cap space, pretty consistently we typically have been able to raise the amount of capital that we can deploy and so we’re deploying the Fund 8, right. It’s working fine and so I will leave at that. I don’t know how to really answer. We tend to take that amount of capital that we can spend wisely and so we look at our pace and investors look at our pace and we’ve done this fund in and fund out and so they tend to support what we’re doing and so we will have to make that evaluation at that time, but that should give you a sense at least.

Great. Thanks. And just to follow-up on the management business, it sounded like you may have been increasing your guidance there, but I just wanted to make sure I heard you right. I think in the past you quoted about $0.25 a quarter from the management business on a pretax basis in terms of what you think you could do, but I thought I heard you say earlier now in terms of what you're expecting that the $0.25 is now after tax, if you could help me with that?

Yes first of all we don’t give guidance. We’re certainly not increasing our guidance, but to be very clever with that, look in my opening remarks said $0.25 after-tax. So like that is in the script.

And so that's what we should think about going forward, in terms of what you should be able to hit from here?

Yes.

I think in the past you had spoken about that on a pretax basis. Just thinking between the two comments, to me I would take that as an increase.

I’m just reading at this, we can generate approximately $0.25 or more of after-tax cash flow per share on a quarterly basis.

Got it. Okay. Thanks. Just wanted to make sure I heard you right.

Great.

And thank you. That concludes the Q&A portion of today’s call. I will now return the floor over to Gary Stein for any additional or closing remarks.

Great, thanks operator. Thanks everyone for taking the time to join us on the call today. As we said, please feel free to follow up with Noah or myself with any questions.

Thank you, ladies and gentlemen. This does conclude today’s call. You may now disconnect.