But here I would say it demonstrated our financial discipline. So, when we look at 2024, our pipeline is strong, maybe stronger than it was this time last year. We continue to see opportunities in these areas of secular growth. And what we need to do from here is to make sure that these transactions fit within our new investment parameters and in keeping with our disciplined approach. So we’re looking forward this year to making new investments and we are very constructive on our pipeline. So now let me turn it over to Tom to talk about liquid alts.
Thomas Wojcik: Thanks, Jay, and thanks for your question, Bill. I’ll be brief. I think Jay, actually touched on a number of the drivers when he talked about the new investment opportunities we are seeing on the liquid alt side. But, Bill, maybe to break your question into two parts, the first sort of what’s happening in real-time and the second, what that means for our expectations around liquid alternatives for the future? What’s happening now is excellent performance and performance that’s really delivering on the value proposition that clients are looking for when they invest in liquid alternative strategies. As I talked about in my prepared remarks, we delivered $160 million in performance fee earnings this year, $600 million over the last three years, and more than $1.2 billion over the last 10 years, primarily driven by liquid alternative strategies across a really diverse group.
And we use that cash to invest in our growth strategy and to drive some of the new investment opportunities that Jay just went through. If you think about the strategies that are at play here, we have relative value strategies at firms like Garda and Capula that are performing extremely well on both a relative and absolute basis in delivering high sharp ratios across market cycles. We have trend-following strategies at firms like Winton, AQR, and Systematica that have extremely strong long-term track records and it performed very well over the volatile period we’ve seen over the last several years. We see really strong absolute return performance at firms like AQR. So all of that is contributing to a combination of strong performance for clients, strong performance fee earnings, and importantly also growing AUM to continue to contribute to the performance fee earnings opportunity over time.
In terms of the future, and I think the core of your question, what does this mean for client demand? I think it’s a combination of both, one, we’ve seen cycles over time where clients sort of move in and out of liquid alternative products and there are lot of things that are well set up in the environment today as we look to the next 10 years. In terms of expectations for the volatility picture that played very well into the value proposition for liquid alternatives. We are seeing lots of really strong client conversations in terms of that opportunity and populating, and in some cases repopulating portfolios with the types of strategies that can really deliver strong risk-adjusted returns and stability and diversification in more volatile times.
So we’re excited about the liquid alts opportunity both in terms of the Affiliates we have today and to Jay’s point, those that may join us in the future.
Operator: Thank you. Our next question comes from the line of Alex Blostein with Goldman Sachs. Please proceed with your question.
Alex Blostein: Hi, good morning, everybody. Thanks for taking the questions. Well, so, Jay, you guys have been pivoting the business towards alts for a couple of years now. And you highlighted a number of times that over 50% of EBITDA now comes from alternatives. Can you talk a little bit about the expectations for EBITDA growth over the next couple of years for both the private side and the liquid alt side as we’re thinking about continued improvement in flows for both of these categories? Thanks.
Jay Horgen: Thanks. Yes, thanks, Alex. Good morning to you. Maybe, Tom and I will each give you some perspective on this. From a top-down perspective, I would say that we just do fundraising alone on the private market side this year. If you look at – we didn’t own Ara and Forbion, the whole year, but if you look at all of their fundraising activity through the course of the year, it was $16 billion on a base of about $100 billion. So, it gives you a sense of fundraising capabilities. And look, I think when we look out in the next couple of years, we think that the – in some cases, they’re ahead of it. I mean, we have a number of infrastructure-related managers including Pantheon, which has a very sizable infrastructure business, but we also have Peppertree, which is an infrastructure.
We have EIG, which is an infrastructure and we have Ara Partners, which is an infrastructure. So, I think we’re sort of ahead of these trends we think. And so, we actually expect, you know that these trends will continue. Maybe even accelerate the other area, where I would say, we’re still seeing extraordinary growth. I don’t know how to otherwise characterize it is on the direct lending side with Comvest. And as you heard, Pantheon has created a secondary credit strategy where we think that’s going to be meaningful as the secondaries business really develops around the primaries direct lending area. So we’re very excited about some of these trends. We think we’re ahead of them. So in addition to what we saw a strong this year, we see it potentially increasing.
On the liquid alts side, I would say that we have seen here at AMG very clearly the benefits of these businesses in choppy times. So 2022, we had a terrific year in liquid alts, and I think clients have noticed. And as Tom said there repopulating with these strategies, I do think that if you’re looking out several years, it is our expectation that clients will turn to these liquid alternatives to supplement what they’re doing in their portfolios. The first thing that’s important to note is they are liquid. And then the second thing to note is that there are, generally speaking, either absolute returns or lower or no correlation to markets, and we think that’s very important, especially as we are headed for a different kind of period than what we’ve had in the past.
