Michael Cyprys: Great. Thanks for all the color there. And just a follow-up question on the European style funds and the performance fees that you expect. So we hear you on the $100 million and $175 million in 2023 and 2024. So I guess, what’s required in order for those fees to come through? I imagine most of these are credit funds, so it’s just the loans maturing in the portfolio and then those performance fees get crystallized upon maturity of the loans as opposed to selling an asset like a PE fund. Maybe you could just remind us on that? And then just, how do you think about the potential for variability either upside or downside to that guidance? The macro environment say is more challenging in every recession or off to the races in its new cycle? Thank you.
Jarrod Phillips: Sure. When you thinking about €“ think the portfolio you’re thinking about exactly right that, the credit funds that are within there are much less episodic in nature. They are based on the duration of the underlying assets. Generally, those assets don’t make it to the end of their life before they are refinanced. So that’s what drives a lot of the payments within that balance and that’s what makes it a lot more predictable. As those loans today yield above the hurdle rates, you’re consistently building those amounts that you have on accrual. And as interest rates rise, as it’s predominantly a floating rate portfolio, you do see the benefit of that. Now, there is a difference between the amount you’ll actually realize in what’s currently accrued today, what’s currently accrued today does have some of the variability related to unrealized gain loss, which as you know as these loans mature they will mature at par and that full yield will come in.
So there’s a slight benefit that you get from that aspect of it. There’s also a benefit that you’ll get in future years that’s not modeled into an accrued balance today of that increase in interest rate. So that’s why you couldn’t have a difference between what we’ve accrued on our books, and what we believe that we will recognize over that several year time period. We do believe that these balances are more predictable because of their credit nature. Now that being said, there are some private equity style funds in there that are from our Special Opportunities group and from our real estate group their European style, and are still more episodic as they get to the end of their life. But we generally know that those are later in their lives and we’re starting to see monetizations come through on those already.
So €“ but you’re exactly right to think of it in terms of being credit-driven and therefore being more predictable in nature as well as there are benefits that we see in that portfolio from rising interest rates.
Michael Cyprys: Great. Very helpful. Thank you.
Operator: Thank you. The next question today comes from the line of Gerry O’Hara from Jefferies. Please go ahead. Your line is now open.
Gerry O’Hara: Thanks and good afternoon. Just thematically, I think renewables and energy transition are a couple of topics that we’re kind of increasingly hearing about and I guess cited as high-growth opportunities. So Mike, would be interested to kind of get your thoughts on how Ares is thinking about these end markets perhaps what you’re hearing from client demand or sort of positioning from a portfolio or solution set.
