So, we think we have very strong flow opportunities with the credit franchise. And if you look at that credit franchise and translate it to the M-Sites team, we see a bit more capacity in the emerging market debt given the breadth of securities, both the emerging market debt opportunities and the emerging market local opportunities provide more capacity in those strategies than what we see in the high yield or high income strategy, as well as it gives us very strong growth into the alternative space with the global unconstrained and in the global macro space for alternatives. And that franchise will help us heavily in non-U.S. with higher allocations of emerging market debt, mainly out of Europe and the Middle East. And in the U.S., it provides us a really good opportunity again into the alternative space and the wealth space with the global unconstrained.
So really amplified growth opportunity with both fixed income teams.
Alex Blostein: Got it. Thank you. That’s helpful. C.J., one just kind of cleanup question for you, you provided a little bit of guidance on part of the expense base, but maybe talk about expenses holistically as you sort of think about the rest of the year on both the comp and more importantly non-comp side of things.
C.J. Daley: Yeah. You know, this quarter, we obviously had our seasonal expenses as we do every year. So, expenses were a bit elevated because of that, as well as the addition of the retirement clause. So combined, you know, we had about $8 million more than we did the previous quarter in comp. And then non-comp had some seasonal expenses of about a million related to our annual fees for our directors. So, you know, moving forward, our comp rate was a little elevated this quarter. We think that, you know, that should normalize to around 53%, you know, depending on, what our variable expenses do. It’ll go down as revenues go up and it’ll increase slightly as revenues, you know, go down because of the variable nature of, you know, most of our expenses. You know, there’s no real change from the guidance that we provided, you know, last quarter, other than, you know, the seasonal expenses and the addition of the retirement clause.
Operator: And our next question comes from John Dunn from Evercore ISI. Please go ahead with your question.
John Dunn: Thank you. Maybe could you just take us through some of the puts and takes in the institutional channel in one cue and then maybe over the next few quarters?
Eric Colson: Yeah, John, it’s Eric. The institutional channel was fairly strong in the first quarter. We-you see that in the funding of the fixed income allocations and in the alternative space, we have good fundings in global unconstrained. So, I believe the institutional channel and both U.S. and non-U.S. are picking up for us. We’re having quite a bit of dialogue in, as I mentioned, in the fixed income, as well as there is some disruption occurring in the emerging markets equity space as well. So-but both have been positive. And I think the-look forward is, you know, quite a bit of dialogue in with institutional buyers.
John Dunn: Got it. And then maybe just to go back to the kind of shift in distribution strategy from, you know, product being bought to sold in the wealth management channel, maybe you could just talk about some of the-first of all, how you think your progress is coming along and maybe some of the proof points we could watch to see and maybe just some specific things that you’re doing to kind of bring it to life.
Eric Colson: Yes, certainly, John. We have a hybrid distribution model, which means that we have dedicated distribution people inside of each of the autonomous investment teams, as well as distribution teams inside the central part of the firm that focus on the wealth channel, broker-dealer channel, and non-U.S. And these teams work together. And over the last couple of years, we’ve been pushing more emphasis of sales inside the central teams and a bit more of the servicing aspect into the autonomous investment teams, the dedicated distribution people in those teams. The activity has created more meetings and more opportunities. So, we see a higher volume and meeting rate across the organization. And we think that this adjustment will bear fruit going forward.
And really, the logic behind the change was the number of strategies that we offer today versus a few years ago, as well as the complexity of the strategies required us to make this adjustment. And we’re tracking the progress and still feel we’re in the early to mid-innings of the transition and think it will be solidified in the next year.
Operator: And the final question today comes from Kenneth Lee from RBC Capital Markets. Please go ahead with your question.
Kenneth Lee: Hey, thanks for taking my question. In terms of the new alternative credit strategies that you’re introducing and have recently introduced, I’m wondering, in terms of the demand and traction with new clients, is it going to depend upon the macro environment, the rate environment, or is that not really an important consideration at this point? Just wanted to get your thoughts around that. Thanks.
