Tom Wojcik: Yes. Brian, thanks for your question. So, maybe what I’ll do is I’ll just walk through sort of how you would bridge our first quarter guidance through to the full year conceptually. And obviously, there are a number of assumptions that you’ll want to make as you do that. But before I do that, I know in our fourth quarter numbers, there were a fair amount of moving parts, in particular, around the Baring gain as well as the gain on the EQT shares that we monetized both the mark-to-market as well as the realized gains. I did state this in my prepared remarks, but just to reiterate, none of those gains are included in our EBITDA or our economic earnings per share. We’ve excluded all of that. So, just to be clear, those are clean numbers, excluding the sizable gains on both Baring as well as the EQT shares.
So, to address your question, if you use our first quarter adjusted EBITDA guidance range of $215 million dollars to $220 million as a starting point, and then that guidance includes $20 million to $25 million of performance fee earnings for the fourth quarter — first quarter that really gets you to a run rate number for management fee EBITDA, which is a pretty good starting point in terms of thinking about the year based on the run rate of where the business stands today. Then, you can factor in the impact of Peppertree starting in the second quarter and contributing something in the range of 2% to EBITDA on an annualized basis. And then, of course, you’ll make your own assumptions about beta and flows and that will get you to a full year management fee EBITDA estimate.
And then, we gave you guidance on the performance fee earnings range for the full year of $125 million to $175 million and Jay talked about some of the general conservatism baked into that at this early stage of the year. So, you can add that to get to sort of a full year number or a range for a full year number. But importantly, as I mentioned in a previous question and as Jay mentioned as well, that number only partially reflects the full earnings power of the business, given it excludes an incremental $400 million or so of capital that we have today to deploy toward growth investments. And that excludes any incremental leverage or tapping our revolver. That’s really just upside to our numbers in terms of earnings power. And if we aren’t able to allocate that capital toward growth over time, you should expect us to return more of that excess capital to shareholders through repurchases.
But I think regardless of how you think about that $400 million in terms of where it goes, you do want to think about the run rate earnings power of the business, depending on how and when that capital is ultimately put to work and you should factor that into the earnings power of the business over time.
Jay Horgen: Yes. And I appreciated your opening statement that we do think were differentiated relative to our peers, in part because of the discretionary cash flow nature of our business that we ultimately have a strategy to invest that cash flow into growth. But if not, we have a capital allocation framework to return that to shareholders. That’s what’s been driving our earnings in a positive direction relative to our peers and we expect that to continue in 2023.
Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I’ll turn the floor back to Mr. Horgen for any final comments.
Jay Horgen: Thank you all for joining us this morning. As you heard, AMG achieved outstanding results in 2022. And through the execution of our growth strategy and our disciplined capital allocation framework, we are confident in our ability to create significant shareholder value going forward. We look forward to speaking with you next quarter.
Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.
