Jay Hennick: You never know. You never know if you can — I’ll show you the pipeline, you tell me who’s going to subscribe, who isn’t going to subscribe, when, it’s always we waited [ph]. We have a very detailed process around assessing our potential for fundraising and — but our overall pipeline in every category of certainty of close is up materially. So we think it’s up across the board and should translate into substantial additional fundraising as we go forward.
Operator: Our next question comes from the line of Andrew Rosivach at Wolfe Research.
Andrew Rosivach: I was going to go again with one more asset management question. You guys have kind of hit it a lot in different pieces. If I put some numbers around it, your AUM September 30 was down 1% sequentially, up 14% year-over-year. If we were kind of decompose that between redemptions in marks or maybe even funds that you purchased, is there any way we could kind of break down what’s driving that?
Christian Mayer: Yes. Andrew, that’s a great question. I don’t have year-over-year numbers in front of me but I do have year-to-date numbers which I think are — illustrate the point. So as I mentioned, we’ve raised just around $2 billion of new capital this year. We’ve had modest redemptions that are a small fraction of that, like I’m talking about $500 million or less. And our mark-to-market activity has been around 2% which is about $2 billion as well in the portfolio. So those are really the drivers of it. And as I mentioned, the mark-to-market is on the traditional assets primarily. So — and that has been happening last year and may continue modestly here in the fourth quarter.
Andrew Rosivach: So modestly means you can continue to see increases in the valuation despite kind of the challenges that we’re seeing.
Christian Mayer: I mean, look, we can’t predict the future of the valuations but it’s certainly possible that we will have further mark-to-market negative adjustments in the coming 1 or 2 quarters as interest rate volatility continues. I should point out, though, that most of our portfolio is in closed-end funds which does not get impacted by mark-to-market activity in terms of the management fee revenue. So it’s only 1/3 of our portfolio that has mark-to-market activity and then even in that part only a small amount of traditional real estate assets. So it’s not a big driver of our fee revenue in terms of considering mark-to-market activity.
Jay Hennick: Most of what Christian is talking about is in infrastructure and alternative asset classes which the marks have been modest extremely modest, almost non-existent because they’re wonderful assets and they’re valued over a long period of time. So we don’t really see much there. And we haven’t even felt it over the past 12 months.
Christian Mayer: Yes. The mark-to-market is not something that’s driving our management fee revenue. The driver is fundraising. And we’ve talked about that quite a bit.
Andrew Rosivach: And one other thing just so we get this right, your $3 billion of fundraising this year, would that all be fee paying?
Christian Mayer: Yes, because that’s the equity component of the — yes. That’s right.
Operator: And we currently have one question in the queue. [Operator Instructions] And next question comes from the line of Maxim Sytchev of National Bank Financial.
Maxim Sytchev: Jay, or maybe Christian, wondering if maybe you can comment around the market share dynamics in capital markets and leasing because when we look at how you guys performed during the financial crises, I mean, it was much better versus peers. And even right now, kind of the levels of declines are less. So do you mind maybe if you have some data points that you can point to on that front, that would be helpful.
Chris McLernon: Yes. I think the data we have from RCA has the market down 51% and we’re down 42%. So I think there is some market share gain. That’s the data point that I have handy.
Jay Hennick: Yes. I think if you look across the board at virtually all of the peers that have reported so far, we’re either at or better than every single one of those peers in virtually every category. So I would say in each case, we’re picking up market share all the way along. And a lot of that has to do with what Chris said. Our culture is very strong. Our retention rates are exceptionally strong. We’ve been recruiting nicely over the past number of years. We’ve built significant platforms within our core services business in addition to engineering and design and investment management, we continue one step at a time to invest in our core platform which is getting stronger. It’s global. So there’s global growth opportunities. So we’re feeling very good about our business and its future and we believe that we’re picking up market share virtually everywhere.
Maxim Sytchev: Excellent. And just one follow-up question. I guess, Jay, you spent time with sort capital allocators and everybody is trying to figure out what is kind of the trigger for certain things to start normalizing because when you’re expectation of sort of a rebound during Q2 commentary. I think the long-term rate was around kind of 3.5%. Do you think that’s kind of the level where the 10-year in the U.S. has to go to in order to sort of see catalysts for activity to get going? Or like what is your sense from that perspective. And again, I appreciate it’s a super fluid dynamic obviously.
Jay Hennick: Yes, frankly, I don’t care. I really don’t care like it can be pick your rate. Anybody — everybody’s got an opinion. We just need stability. In our business, we just need stability and we need availability of debt and the market will look after itself, the buyers and sellers will come together and they will make transactions because they either have to or they want to or they’ve got dry powder. So the problem that we’ve all had in this industry and by the way, it’s leaked out into the entire marketplace. It’s — the availability of capital has impacted the ability to make acquisitions. It’s impacted the earnings per share of every company out there that borrows money. So this is a market that is impacting everybody. But I think in real estate, it’s such a massive market. And as soon as there’s stability, you’ll see activity. And that’s all we really focus on.
Operator: And there are no further questions in the queue at this time. So I’ll hand the floor back to Mr. Hennick for the closing comments.
Jay Hennick: Thanks very much, operator. Thanks, everyone, for joining us on this conference call. Let’s see how we do in the fourth quarter and we’ve given you our best information at this point. Hopefully, we’ll be able to do a little bit better than that but we’ll see how things transpire. So looking forward to speaking at the next conference call. Thanks for joining us today.
Operator: Thank you. Ladies and gentlemen, this concludes the conference call. Thank you for your participation and have a nice day.
