Greetings, and welcome to the DigitalBridge Group Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Severin White. Please go ahead.

Good morning, everyone, and welcome to DigitalBridge's third quarter 2023 earnings conference call. Speaking on the call today from the Company is Marc Ganzi, our CEO; and Jacky Wu, our CFO. I'll quickly cover the safe harbor, and then we can get started. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking and such statements involve a number of risks and uncertainties that could cause actual results to differ materially. All information discussed on the call is as of today, November 1, 2023, and DigitalBridge does not intend and undertakes no duty to update it for future events or circumstances. For more information, please refer to the risk factors discussed in our most recent Form 10-K filed with the SEC for the year ending December 31, 2022, and our Form 10-Q to be filed with the SEC for the quarter ending September 30, 2023. Great. Let's get started with Marc providing an update on our key objectives for 2023. Jacky will outline our financial results and turn it back over to Marc to talk about the opportunities we are capitalizing on DigitalBridge Credit. With that, I’ll turn the call over to Marc Ganzi, our CEO. Marc?

Thanks, Severin. I'm pleased to share our results for 3Q 2023 as we posted some very strong financial performance that was a function of both the steady progress we've made building a predictable fee income earning stream and the one-time benefits we realized from our simplification initiatives. So first, let's start by covering our top 3 priorities for 2023, beginning with fundraising. In Q3 we generated strong year-over-year growth in our investment management platform, with fee income up 57% and segment level FRE up 36%, both slightly higher than last quarter's already strong growth, powered by higher FEEUM from core, credit and co-investment along with our second full quarter of contribution from InfraBridge. New capital formation came in at 2 billion with our flagship DigitalBridge Partners Series leading the way and the balance from new strategies including credit, which I'll cover in Section 3 today. LP interest in digital infrastructure is robust. On the back of AI-driven demand, I'm pleased to confirm we are on track to achieve our fundraising goals for the year. On the simplification front, we completed the DataBank recap in September, which resulted in another $50 million back to you, DigitalBridge shareholders, bringing our total proceeds to $471 million and generating a 32% internal rate of return to DigitalBridge shareholders. Our balance sheet also got a lot simpler, with $2.3 billion of debt deconsolidated in connection with the DataBank closing as we brought our ownership in that asset under 10%. We're also advancing our simplification objective by rolling out additional disclosures on fund performance, consistent with our alternative asset management peers. Investors have consistently asked for this and we're delivering. On that point, portfolio performance, our third key priority. We demonstrated strong results, particularly in the datacenter vertical with monthly recurring revenue up 20% and the…

Thank you, Marc, and good morning, everyone. As a reminder, in addition to the release of our third quarter earnings, we filed a supplemental financial report this morning, which is available within the Shareholders section of our website. Starting on Page 15, all of our quarterly key operating and financial metrics increased significantly year-over-year driven by our robust fundraising efforts and acquisition of InfraBridge platform. We anticipate the strong momentum to continue as we progress in the fourth quarter. Turning to Page 16. Total company distributable earnings was $35 million or $0.20 per share including $28 million of carried interest realized from the final closing of DataBank recapitalization. Assets under management increased to $75 billion in the third quarter, which grew by 48% from the same period last year and fee earning equity under management increased to $30 billion, a 46% increase from the same period last year. AUM and FEEUM growth were primarily driven by the InfraBridge acquisition and capital raised in our new strategies and fee paying co-investments. Our fundraising pipeline remains robust and we look forward to closing out the year with a strong fourth quarter, principally from commitments to our latest flagship fund DigitalBridge Partners III or DBP III. I would also like to highlight that effective today, we will begin generating management fees coinciding with the first closing in DBP III. Moving to Page 17, the company achieved healthy year-over-year growth propelled by the expansion of the investment management business and further enhanced by our streamlined corporate structure. For the third quarter, consolidated revenues were $477 million which represents an 11% increase from the same period last year. As a reminder, consolidated revenues include realized and unrealized carried interest. Total company adjusted EBITDA was $34 million, up 15% from the same period last year. This…

Thanks Jacky. So, this quarter in Section 3 where we always talk about executing the digital playbook, I want to talk about the DigitalBridge Credit and how we've extended our platform organically into the private credit asset class. Let's start with some context, for the strong growth the asset class is experiencing, before I walk you through a case study that highlights how we're bringing skilled capital to the game here. It's clear to most of you that private credit is a growing force in global capital markets. Since 2010, over $1.8 trillion in capital has been formed by alternative asset managers to fill a growing demand for credit that traditional lenders hampered by tightening restrictions and regulations have not been able to keep up with. On the right, you can see in just the last 5 years that private credit is taking share, filling the gap led by traditional lenders, to meet growing demand from borrowers that need liquidity and growth capital. At the same time, institutional LPs are increasingly being drawn to the sector, attracted by better risk-adjusted returns on the back of higher interest rates and the reliability of credit products in an uncertain macro. Next slide please. As you can see here, credit's attractive risk-adjusted profile is driving increasing institutional interest in private credit. On the right side, over $1 trillion has been raised in private credit in the past 5 years alone. This is doubling AUM over that time period. The average fund size continues to increase and it's expected that 2023 will generate another $200 billion-plus of capital formation, the fourth year in a row exceeding that level. As you can see, this is not just a fad, it's sustainable. The best part is as you can see on the left, DigitalBridge is at…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Michael Elias with Cowen & Company.

To start, with the boom in data center leasing that we've seen, it also appears that there's been a boom in demand for debt capital to build new data centers. Marc, I'm just curious if you could share any observations related to the depth of the debt capital markets for data centers relative to the demand for debt? And as part of that, any observations around where spreads are going for data center debt? And then I have a follow-up.

So we think that the data center marketplace over the next, call it, next 7 years is somewhere around 35 gigawatts of new leasing capacity that needs to be delivered. As you know, Michael, most of that will be greenfield. So when we contextualize that, it's literally hundreds of billions of dollars of new construction activity in the data center industry, it depends on what your metric is on the price per megawatt. And then obviously, you can compute that to your price per gigawatt. So we think that the market is literally shaping up from a CapEx perspective somewhere in the $1.5 billion range just for us just this year in terms of the stuff that we're financing. So If you contextualize that and there's probably $1 trillion of data center spend and you assume a reasonable capital structure of a 50% loan to value, you can assume that there's $500 billion of data center financings coming up here in the next 7 years. We think that most of that as new construction loans will go, will be financed by private credit. Banks obviously given bank regulations are somewhat handtied in terms of financing greenfield construction as you know. And traditional real estate lenders are going through a significant amount of digestion and what to do with office space and other forms of commercial real estate that are under stress. So we are seeing a surge in interest, particularly in our credit side and financing new data center builds. And keep in mind, our credit team finances four portfolio companies that don't belong to us. So there's a huge universe of potential folks that we're working with in terms of developers that we know well, that we don't have the equity in, but certainly have the dead end. So…

And then, just as a follow-up, you're talking of the 35 gigawatt incremental opportunity here. A two-parter question. First is, can you talk about how DigitalBridge is positioning itself to win more than its fair share of that opportunity? And then as part of that, perhaps at the portfolio company level, if you could just talk about the unlevered return targets across the data center platforms as you think about these large scale AI workloads? Thank you, Marc.

Yes, thanks. So we do think we're taking within our market share -- I mean, we've had a tremendous year of leasing and not quite sure where it all lands, but it's measured in the hundreds of megawatts across Switch, Vantage, DataBank and Scala and AIMS and AtlasEdge. So, as you know, we play the sector in multiple different ways. We play it from a private cloud perspective up at Switch. We play it from a public cloud perspective at Vantage Europe and Vantage North America, Vantage Asia and Scala. And then we're playing the Edge compute business at AIMS and DataBank in AtlasEdge. So, we've got multiple platforms to go attack the different verticals and the different workloads. And I think you have to understand that AZ's availability zones which are essentially the search rings of the data center sector, having localized teams from São Paulo to Europe, to North America, to Asia is really helpful. It allows us to obviously think globally with our big customers, but indeed act locally in terms of securing power and the ability to execute and deliver for customers. So I think that, we don't love to give out yields, it's somewhat of a competitive advantage. But here's what I can share with you, Michael. I can tell you that cash on cash yields are up year-over-year significantly, somewhere between 20% and 30% on average in terms of the CAGR growth of the yields. What I can also share with you is that rents are up. Rents are up 21% year-over-year on a global basis. When you distill the 6 portfolio companies that we own and operate and you look at their results year-over-year, we've seen rental rates come up significantly. This is really a function of supply and demand. And there's more demand than there's supply. And so our existing locations where we have land, where we have power, where we have entitlements, those are renting at a premium. So I think, look, the punch line is rents are up, development yields are up. We've got the biggest platform in the world to go attack this. Today, we have just a little under 300 data centers and we have over 1.7 gigawatts of compute power to offer to our customers. So, we do think on a global basis, we are one of the largest, if not the largest operators of edge, cloud, public cloud and private cloud data centers in the world. And just looking at absorption, if we end up leasing somewhere between 770 megawatts and 1.2 gigawatts this year. I think that's going to lead the league in leasing, certainly far bigger than DLR and far bigger than Equinix. So we think we're definitely taking more than our fair share of the market.

Our next question comes from Jade Rahmani with KBW.

From your vantage point today, and I understand the lumpiness of fundraising and that these things have long cycle times given the complexity, is there anything today that would give you a read through to 2024 as to whether fundraising is on pace or even could potentially accelerate? The second question would be, if we get past some of the macro uncertainties that are weighing on so many sectors, will that accelerate and provide more tailwinds to your fundraising efforts?

Well, look, let's first start with the quarter, right? I mean, we raised -- we formed $2 billion in new capital in the quarter. Really delighted with the $2.3 billion first close for our third fund. I think as you peer set that against other alternative asset managers, we definitely believe we've outkicked our coverage. We're having a very strong fourth quarter in fundraising. Historically, we've always performed well in the fourth quarter. I think one of the dynamics that's happened here, Jade, is that a lot of LPs have sat on their hands in Q2 and Q3. We got investors motivated and into our new flagship series and that's why we're pretty happy to have the first closing yesterday. And we do have optimism around the fourth quarter and we have even further optimism for next year. Asset allocators have already given us a sense of where they're allocating capital for next year. I just finished a 3-week tour where I saw 80 of our LPs. Someone told me that they thought I went around the world twice. So, I don't think that was exactly true, but definitely within Asia and the Gulf and North America and pulsing all of our key accounts. And look, I think there's 3 takeaways from that trip Jade over last 3 weeks. One, investors want to be with the best of the best. They're generally shrinking their GP list, they want to be with less GPs and they want to be with the best GP in credit, they want to be with the best GPs in private equity and infrastructure. And then most importantly, they want to be allocated to the best manager in digital and renewables. So, we think we sit in a pretty protected place there as we are the largest…

And the follow-up would just be, as it relates to macro, do you believe that that is one of the reasons why fundraising cycle times are a little extended?

Yes, no doubt. I think the macro has forced investors to move with a little more, what I would call, patience and I think investors are being incredibly thoughtful about how to deploy capital. And certainly, certain pension systems want to cover their liabilities. So, it's easier for them not to commit to funds and to make sure that they can cover their liabilities as pensioners take money out of the pension. So these are called outflows and inflows. And so in a market like this where investors get nervous, pensioners get nervous, they may elect to take money out of their pension, Jade. And so on that, you get more outflows than you get inflows, which is taxes and the percentage that gets taken from someone's paycheck that gets put into a pension system, like in places like Canada or places like Europe, and even here in the U.S. where certain U.S. state pensions are definitely watching very carefully and taking a risk-off mentality. That being said, there's pockets of great optimism. We've done incredibly well, in Asia, that's been a really good market for us. We had a brand new fundraising team we put in place last year. We're seeing terrific results out of that region. We've seen very good results out of the GCC region. And Europe has been a little slow, the U.S. has coming on right now, Canada is coming back on. So as I said, the macro certainly makes people slow down a little bit and have some pause. But one thing we are seeing is the pension systems are being very cautious, Jade, just given that outflow, inflow dynamic, and that should stabilize next year is what our belief is. That's what we see and that's what fundraising consultants are telling us as well.

Our next question comes from Ric Prentiss with Raymond James.

A couple of questions. First, timing in life is everything. Obviously you're working on the Vantage to consolidation. Help us understand what are you trying to achieve? How much are you trying to sell down to, how many people are involved in discussions? What's kind of the process as you think about either by next time you report earnings if not soon? I think you said that we could get this one done. So just help us understand the process to get to this next final deconsolidation simplification story?

Yes, thanks, Ric. So look, we're having good conversations with some of our biggest investors. I can't give you the exact color of who it is for confidentiality reasons, but rest assured, they're long-term core type investors. They are pension systems generally that value these U.S. assets that are 97% investment grade, close to 6% yield and offers investors incredible safety. Even in light of today's interest rate conditions, these are some of the best data centers in the world. I think our process is obviously, we want to sell down $60 million of our position. We've made that perfectly clear to the investors we're talking to. We do have interest and we do have ongoing negotiations with a couple of investors. And the key is also not just to sell down the $60 million, but to also to continue, Ric, to introduce new capital into Vantage SDC, new third-party capital, as Vantage North America now has other data centers that they want to push into this long-term REIT that we own. We like the REIT. We want to own literally 9.9% of it. It's a good -- it's the best of the best. And I think you cannot find a better set of U.S. data center assets in the world. And just the credit quality and the duration of the lease has been greater than 11 years, it's a really unique set of assets. So as you can imagine, it's not been for lack of interest. We have multiple parties looking at the position, we're looking at ultimately who can provide us with the most capital, who can join us in the fundraising of some primary capital as we're going to grow that sleeve of assets, Ric, I want to be clear about that, Vantage SDC is a growth vehicle. As we continue to develop some of the best public cloud campuses in the U.S., we want Vantage SDC to keep growing. It's attracting capital. Obviously, interest rate narrative has been a bit of a headwind, but the counter to that is we've got great customers, great leases, and we've got a great yield on this portfolio. So, it pays a nice dividend and there's a lot of interest from various pension fund clients of ours, and we will make a decision this quarter on what to do with it. So that's about as much granular detail as I can give you. And by the way, Vantage SDC had great results this quarter. Revenue, NOI and EBITDA and same-store sales growth, all 4 metrics beat our budget. So we're really happy with what's going on at Vantage SDC and we do anticipate that, that sleeve of assets, Ric will grow next year as we look to go acquire more assets in that vehicle.

Second question, I think your stock buyback program maybe expired as far as the authorization program. Jacky, you alluded to looking at preferred stock, some other items out there. The stock has been under some -- the public stock, common stock has been under pressure. Help us understand how you think about as you are monetizing some of these interests. How do you look at taking a look at the preferred, the common stock, et cetera?

Well, look, we're always looking to buyback our preferreds. I think we've made that no secret. We have a formula for how we use our cash. As you know, we've got close to $590 million of cash and cash equivalents coming out of this quarter. We're well-capitalized. We're putting some money into our third fund that capital won't be called until reasonably as we do new investments in the third fund until third or fourth quarter next year. But we do see an opportunity. When we do see an opportunity, Ric, we make those purchases. On the stock buybacks, we've been in a blackout period. We're hopeful to end that blackout period soon, so that we can go back to buying some of our stock back when it makes sense. And then certainly, we as the leadership and the team want to buy back our stock too. So we love our stock, we think it's a good value. Once that blackout period ends, and we're unrestricted, we can go back to having that conversation. So, that's really it. I think in addition to that, Ric, we've always cited that there's four sources of cash, right, share buybacks, debt pay down, and then certainly GP commitments into our new fund products. We really like where credit is going. We're really looking to build that credit strategy. I think that was really clear from my commentary earlier today. We like credit. We're growing our credit team. We want to grow credit assets under management and we're in flight in doing that. So we think that's a huge opportunity for us in terms of the TAM and our market positioning. The last thing I would say, Ric, is we do see other GPs from time to time that are adjacent to what we do. Whether it's adjacencies in digital infrastructure, whether it's adjacencies in other verticals like infrastructure or private equity or renewable energy, we're constantly evaluating like we did with AMP over a year ago, whether or not we put our balance sheet to work to acquire other folks of our ilk that are subscale that when you integrate them with us, like we did with AMP, you can see incredible margin enhancement and you can see obviously revenue growth, FEEUM growth and FRE growth. So we're measuring all of that, Ric, right? It's a box, right? There's 4 quadrants to that box and we're carefully evaluating that literally every day as a management team.

And any update -- I know, I think originally Jacky might have been leaving at the end of the calendar year. Any update on all that hard work you've been putting in, is there a replacement coming or what's the process of CFO?

That process is ongoing. We've had really good success and some great conversations. I mean, first tell you that, Jacky is in place and he's extended with us through I think through the second quarter of next year, we'd like him to stay. He's happy here, he is -- I won't put words in his mouth, I'll let him tell you if he's happier or not, we're having a good time. He's worked really hard to get this company to where it is. So a lot of the effort and a lot of the success we're having is a function of Jacky's hard work. So I, for one, would like to see him stick around a little longer. He's got personal goals that he wants to achieve that I support fully as does the Board. And I'm not in a rush to hire the wrong CFO. I've got the right CFO in the chair right now. And so, we do feel confident we're going to announce the right candidate here inside this quarter, hopefully. But in the meantime, I'm very happy with my partnership with Jacky. As does Severin, we work well together. We're getting the results. We're delivering for shareholders. And, I think he's pretty happy to be extended through and needed if we need him through to the end of June next year.

Our next question comes from Richard Choe with JPMorgan.

I just wanted to follow-up on the capital formation that's been strong through the year, but the flow through to FEEUM has been a little bit volatile. How much of the $5.4 billion or target $8 billion, should we expect to hit FEEUM in this year?

Well, as I said, we're activating $25 million of FEEUM, of fees officially yesterday. So that's going to flow through into the fourth quarter.

All of that $5.4 billion will now flow through because before we did not turn on the DBP III, fees closing.

Yes. And so the other key to that Richard is there's no expenses associated with that $5.4 billion of fees that we're turning on. So that is 100% pure profit. And the challenge in our business, Richard, as you know is, you spend 6 months raising the capital, you spend a lot of money, a lot of T&E, you got a lot of people, you got a sales team and you have no revenue to show for that and now we're through that period and the fundraising has now got good escape velocity. And as I said, we're having a strong fourth quarter and we anticipate having a very strong first and second quarter next year. So as we go forward, this now starts to move into pure profit. And as we've told you, our strategy for a third fund is $8 billion strategy. We have every clear belief and conviction we will hit that $8 billion and we actually have some conviction that we're going to push through that, and exceed the $8 billion target for this fund. So that's what the data suggests, but we're excited to turn on the $25 million of fees. As I said, 100% profit associated with that. In the fourth quarter, you'll see a pure flow through on that revenue and we should anticipate the financial results in the fourth quarter to be incredibly strong. Big on revenue, lower on expenses.

And candidly, some of that volatility is associated with just a geography flip between corporate expenses being now allocated to IM. So you'll see almost a dollar for dollar flip between those two segments. But obviously, our digital earnings is way up because that obviously gets neutralized, that geography.

And then thank you for the fund performance reporting slide that is very helpful. The performance has been good so far, but can you give us a sense of how they're tracking, granted there's still a lot of time in the second one, but just overall, how your current projections are panning out?

I'm not sure. Repeat the first part of that question, Richard, sorry.

Sorry. Just tell the gross MOICs tracking for DBP I and DBP II?

Yes. So this is our first quarter of reporting fund level performance, I think is what you're indicating to Richard. But what I would tell you is gross MOICs have been up quarter-over-quarter on Fund I and Fund II. Fund II, as you can tell from the vintage is going through the J curve phase. And so those MOICs will catch up, and we actually think Fund II where it sits today vis-à-vis Fund I, is performing better than Fund I. So we're pretty optimistic. I know other firms, and not that we stand around watching other firms, but we know from Q1 to Q2 and Q2 to Q3 and Q3 to Q4 other financial sponsors, other GPs have had some challenges and there's been markdowns. We've not suffered from that at all. Actually, our marks have moved up through Q1 through Q2 and Q3. We anticipate both Fund I and Fund II at DigitalBridge to continue to perform as the discounted cash flows across all of our portfolios are up quarter-over-quarter and year-over-year. And then I think also with respect to GIF I and GIF II, we've had very good solid performance in the InfraBridge I Fund, as you can see from the table. That's performing at our expectations and we're continuing to deliver DPI. We've made it very clear that we are in the process of unwinding and exiting out of GIF I, some of those assets. We've also had tremendous DPI across our first fund and some of the continuation vehicle. So, returning capital right now is super important to LPs, Richard. If you want to go out and raise money right now, you've got to produce DPI. And we've done a very good job there. We've produced over cumulatively about $4.2 billion of DPI this year in the last 14 months for our LPs. So, returning capital and raising capital, that's the cycle.

Our next question comes from Eric Luebchow with Wells Fargo.

Just wanted to touch on kind of the M&A landscape across the different digital infrastructure verticals you operate in. Are you seeing any traction on higher interest rates recently moving down multiples for private infrastructure? Or are they kind of still remaining in pretty elevated ranges? And does that shift at all your desire to just accelerate greenfield development versus M&A as you look at ways to deploy capital going forward?

Yes, it's super interesting you should ask that question, because I'm actually giving a speech later today where I'm going to talk exactly about this. So fiber has come down significantly, Eric. We've seen private market multiples move from the mid-20s into the low-teens. We even think there's further compression in fiber multiples, particularly in residential fiber, where the investor is exposed exactly to the household, where the cash flows are month to month, 30 days. And then certain aspects of fiber, enterprise fiber, wholesale transport fiber, down a little bit but not quite as heavily hit as fiber to the home. Data centers actually you could make the argument, Eric, that multiples have gone up in the good assets. And you know what the good assets are. Those are the hyperscale, public cloud focused campuses, where there's a lot of growth and there's a lot of opportunity and you've got a wallet that's growing. On the enterprise side, you've seen on the flip of that coin, which is older legacy data centers that are 20-plus years old, like 6-year suffered and really don't have a growth story, so there's really not even a bid for those kinds of data centers. They're just so impaired. So, whether it's enterprise and then you've got DataBank, which is doing edge and they're performing really well and there's been no degradation in the valuation of that equity. So data centers are tricky. I always tell investors that there's 6 different ways that you can invest, Eric, in data centers. There's 6 different sub-industries in the data center sector. Where are evaluations holding? They're holding in hyperscale and they're holding in edge. Where are they going down? Managed services, hybrid cloud, enterprise, those are the areas that are suffering. And then I would say…

And just to follow-up, your comments on residential fiber, fiber to the home. There's obviously been some speculation about a big consolidation wave coming in that market. You kind of touched on this a little bit, but I guess given where cost of capital have gone for a lot of those over builders, is that an area that -- traditionally I know you've shied away from, but if we see an appropriate discount in evaluations here, is that an area if we could see you potentially play in further going forward?

I think, look, right now, we're very focused from a credit perspective and we're providing credit to some of those companies. So certainly, up at the investment committee level, we're very supportive of residential fiber and there's certain management teams who really like and we're backing them and we're giving them in the form of credit. And the equity investment committees were not constructive on residential fiber right now. We haven't been and I think we've been pretty vocal about that. We've had our reasons. Now that the valuations are moving in line, if we do find the right geography, the right management team and the right set of competitive dynamics, we're happy to write an equity check behind a great management team in the residential fiber space. I mean, we're doing that now in Europe with Netomnia. We're rolling out the Tier 2, Tier 3 markets in the UK. With a lot of success, we got a great management team. He's building it 20% to 30% cheaper than his competitors, and his penetration is 20% to 30% higher and his ARPU is about the same. So that's the situation where we saw a very specific set of skills and a management team that had comparative advantage. And they weren't just chasing homes in London. They were focused on the Tier 2 and Tier 3 markets where there's less competition. So the investment thesis stood up. Same thing in Chile, we have a wholesale residential fiber business, but we also have a business that same business also sells directly to home, where we've seen under-penetrated homes, a lot of streets, where we're going down the street and we're the only fiber carrier. And so we will play in residential fiber, Eric. We're just doing it through Mundo and through Netomnia and doing it very carefully and very surgically. I think there's probably a little more pain left in residential fiber in Europe and the U.S. And we're going to watch it carefully, and we'll play. I mean, Beanfield is our Canadian residential and enterprise fiber place, mostly focused on Toronto, Montreal, and it's done really well. We sold a third of that to OMERS for an incredible multiple. They've been a great partner and they're providing a ton of primary capital. And we're going into Toronto and Montreal, and we're facing Rogers and Bell who are very formidable and we're taking market share. But it's hard, it's a tougher business, Eric. It's not like signing a 15-year lease with Microsoft or a 25 or 30 year lease with Deutsche Telekom. You got to wake up every day, get in the trenches, you got to fight. And that's the fight we're up for, but it's got to be priced correctly. The equity has to be priced correctly.

Our next question comes from Jon Atkin with RBC.

Wanted to ask you about the comments you made about small cells and the scripts, and maybe focusing on outdoor small cells. You sounded a little bit more positive than you have in the past. What's driving that in terms of U.S. demand and how capital intensive is that for ExteNet and maybe any of your other platforms? In other words, are you seeing sort of same-store lease up on existing plans or are you having to kind of build to meet the demand?

Well, look, I think the reason we see optimism is because we're watching our pipelines at Boingo and ExteNet and FreshWave. And also our Latin tower businesses like Highline and ATP, EdgePoint in Asia, all these businesses have small cell divisions. And we're not only seeing green shoots, we're seeing bookings. And we've seen a turn in the bookings at ExteNet. We've seen a really big turn in bookings in Boingo. Look, there's close to -- as you know, Jonathan, there's a little under 0.5 million small cell stay in the U.S. depends on whose numbers you believe. And Jonathan, what do you count as a node or what's not a node, right? What I can tell you is, we believe the reforecast on small cell growth between now and 2030 is about 1.1 million to 1.2 million nodes. So we think there's about another 600,000 to 700,000 nodes that will be built and we're talking to our customers and look, yes, some of it will be self-perform, but even now in this market where the cost of capital has gone up, our conversations with all four of the U.S. carriers have picked up significantly. I know at ExteNet, for example, they just signed a new MLA with DISH and DISH now has capital and they're going to put some money to work in small cells. But all three of the major carriers are also putting money into small cells. Now, while CapEx has been curtailed, if we can come in and provide a good solution, the carriers are willing to listen provided they don't fund the CapEx. So we're seeing more opportunity, we've seen our pipelines grow. I think you saw a little bit of that color from Crown. I think there was a competitor research paper out today.…

And then maybe just pivoting briefly, but anything you could elaborate on in terms of updating us on your venture strategy and things you're looking at?

Well, look, I mean, now that we've announced the closing of the third fund, the first closing, it's -- we can start to pull back the curtain on what we're doing. What I would tell you is we built a really good diversified Fund I and diversified Fund II, we did 10 investments, 13 investments. In this fund, same thing, we're targeting, 12 to 16 investments, probably check size is a little smaller is what I would tell you. We're very constructive on Asia. We're a little less constructive on Europe. We're certainly constructive on the U.S. and Canada and Latin America. So, what I would tell you is our strategy is much of the same. But if we're thinking about that strategy, we're seeing a lot of positive things in Asia. We're seeing a lot of positive things here in our home market in North America. And there's a couple of interesting things in Latin America and Europe is just going to be a tough road out, those guys have a much tougher road. So as we're thinking strategically about where to deploy capital, Europe is probably third or fourth on my list right now. The U.S. and Asia stand to be one and two. And then in terms of sectors, we like -- of course, we like data centers that face AI. We do like wholesale fiber that again faces AI. We do like private 5G networking. We do like small cells, that's a thematic that we like in our new strategy. And then, if there's a right tower opportunity, if it's EM or if it's in the primary world, we'll look at towers. We think we've got some great companies, but there's always room to further invest. And then the last thing I would say is we…

There are no further questions at this time. I would like to turn the floor back over to Marc Ganzi for closing comments. Please go ahead.

Yes, thank you, operator. Well, first, I want to thank everyone for showing up on the call today. As I think you hear in my tone and my tenor, we're very optimistic. This was exciting to get to the first close of our new strategy. And we're again reaffirming our guide for fundraising this year. It's been a tough market out there, but we seem to be defying gravity in terms of fundraising. We've done a great job returning capital to LPs. We've done a very good job managing our assets in our portfolio companies. And the state of DigitalBridge is quite strong as we sit here today. As we move into the fourth quarter, you can expect more of the same. As I said before, we're pretty excited about the fact that now we convert into fees on our new strategy, you'll see a strong financial performance here in the fourth quarter and that will persist into next year. We remain incredibly optimistic around the fundraising environment and exactly where we are in terms of our key accounts and where our fundraising is. And then in terms of capital deployment, as I said just a few moments ago, we are sitting on a $33 billion pipeline of new opportunity in terms of where to invest capital and we will start deploying that capital in short order. So to sum it up, it's really about hitting the marks on capital formation, maintaining our portfolio, maintaining our competitive advantage, and of course, raising more capital and deploying that capital in what we think are some of the best strategies in the world in digital infrastructure. It's a privilege to represent your capital. We appreciate your support and we look forward to talking to most of you soon. Thank you. Have a great weekend and have a great rest of your week. Take care.

This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation and have a great day.