Jon Cheigh: I would only just add one thing. You see in the Wall Street Journal today, there’s an article on is the 60-40 dead concerns on that. I think in 2022, people got worried about inflation. And then in the first half of 2023, people thought, Oh, that was just a bad year. I think with what’s happening now, there’s a greater appreciation of maybe investors need to get their act together for the next five years, seven years, eight years. And so, I think we’re going to see more of these — in these cases were slightly customized strategies in two different markets. But I think the amount of real asset solutions that we’re going to be able to provide to different clients in different jurisdictions is only going to increase because there’s a greater appreciation that this is a regime change, not a 2022 was a bad year for 60-40 and the need for inflation protection or sensitivity.
John Dunn: Right. And then on infrastructure, you talked about people potentially moving some of the private allocations into public. So maybe that’s one. But what do you think the factors are going to be where that infrastructure can move to being a bigger contributor to — and more consistently for flows?
Joe Harvey: Well, let me start, and then John can add on. Infrastructure is well understood as being an area that’s been underinvested in globally. And then you have other things like the evolution of energy. And so, there are huge capital investment needs. Investors have recognized that and there’s been a lot of investment in infrastructure, mostly on the private side. But we have this view, and you’ve heard it from us that investing in an asset like real estate or infrastructure can be enhanced if you use both the listed and the private markets. So, we talked earlier about the listed market in real estate is foreshadowing what’s happening in the private market. The prices have already gone down. So right now, the place to put your money is in listed real estate, not in private real estate, and that’s to come.
But the same thing will evolve, we believe, in infrastructure. There’s a very attractive universe of listed companies that can complement private allocations and the same dynamic of lead lag and listed versus private will continue to develop there. The same types of conversation for private infrastructure is taking place as in real estate, where changes in interest rates are changing asset prices. And so, allocations are — the money being put to work in private infrastructure has slowed, so that creates an opportunity for investors to allocate to the listed markets. So, we just think the infrastructure asset class will evolve the same way real estate has in terms of investors using both listed and private to make the best portfolios.
John Dunn: Got you. And last one for me. But I do want to give a big congratulations to Matt and say thank you from everybody on the side of the phone. But Joe, my ears perked up when you said in your remarks, you saw some opportunities from passive to active. Anything you could share with us on that?
Joe Harvey: I’d say maybe over the past year, we’ve had six situations where institutions have changed a passive mandate to an active mandate and hired us. And I think the rationale is pretty simple, right? When you can generate 200 basis points to 300 basis points of excess returns and compound that over a long period of time, it’s very substantial. So, it’s just very interesting to see investor behavior act like in a rational way, which is you should look at the excess returns net of fees. And if — in our asset classes where we’ve proven that we can consistently outperform and there’s a reason for that. It may be a little bit different than core style box asset classes where active managers don’t have a great batting average of outperforming. So maybe a little unique to us. I’d say it’s more prevalent in the institutional advisory channel than wealth, which is more dominated by the overall total fee structure. So — but we’re happy to see it happen in institutional.
