We like the REIT. We want to own literally 9.9% of it. It’s a good — it’s the best of the best. And I think you cannot find a better set of U.S. data center assets in the world. And just the credit quality and the duration of the lease has been greater than 11 years, it’s a really unique set of assets. So as you can imagine, it’s not been for lack of interest. We have multiple parties looking at the position, we’re looking at ultimately who can provide us with the most capital, who can join us in the fundraising of some primary capital as we’re going to grow that sleeve of assets, Ric, I want to be clear about that, Vantage SDC is a growth vehicle. As we continue to develop some of the best public cloud campuses in the U.S., we want Vantage SDC to keep growing.
It’s attracting capital. Obviously, interest rate narrative has been a bit of a headwind, but the counter to that is we’ve got great customers, great leases, and we’ve got a great yield on this portfolio. So, it pays a nice dividend and there’s a lot of interest from various pension fund clients of ours, and we will make a decision this quarter on what to do with it. So that’s about as much granular detail as I can give you. And by the way, Vantage SDC had great results this quarter. Revenue, NOI and EBITDA and same-store sales growth, all 4 metrics beat our budget. So we’re really happy with what’s going on at Vantage SDC and we do anticipate that, that sleeve of assets, Ric will grow next year as we look to go acquire more assets in that vehicle.
Ric Prentiss : Second question, I think your stock buyback program maybe expired as far as the authorization program. Jacky, you alluded to looking at preferred stock, some other items out there. The stock has been under some — the public stock, common stock has been under pressure. Help us understand how you think about as you are monetizing some of these interests. How do you look at taking a look at the preferred, the common stock, et cetera?
Marc Ganzi: Well, look, we’re always looking to buyback our preferreds. I think we’ve made that no secret. We have a formula for how we use our cash. As you know, we’ve got close to $590 million of cash and cash equivalents coming out of this quarter. We’re well-capitalized. We’re putting some money into our third fund that capital won’t be called until reasonably as we do new investments in the third fund until third or fourth quarter next year. But we do see an opportunity. When we do see an opportunity, Ric, we make those purchases. On the stock buybacks, we’ve been in a blackout period. We’re hopeful to end that blackout period soon, so that we can go back to buying some of our stock back when it makes sense. And then certainly, we as the leadership and the team want to buy back our stock too.
So we love our stock, we think it’s a good value. Once that blackout period ends, and we’re unrestricted, we can go back to having that conversation. So, that’s really it. I think in addition to that, Ric, we’ve always cited that there’s four sources of cash, right, share buybacks, debt pay down, and then certainly GP commitments into our new fund products. We really like where credit is going. We’re really looking to build that credit strategy. I think that was really clear from my commentary earlier today. We like credit. We’re growing our credit team. We want to grow credit assets under management and we’re in flight in doing that. So we think that’s a huge opportunity for us in terms of the TAM and our market positioning. The last thing I would say, Ric, is we do see other GPs from time to time that are adjacent to what we do.
Whether it’s adjacencies in digital infrastructure, whether it’s adjacencies in other verticals like infrastructure or private equity or renewable energy, we’re constantly evaluating like we did with AMP over a year ago, whether or not we put our balance sheet to work to acquire other folks of our ilk that are subscale that when you integrate them with us, like we did with AMP, you can see incredible margin enhancement and you can see obviously revenue growth, FEEUM growth and FRE growth. So we’re measuring all of that, Ric, right? It’s a box, right? There’s 4 quadrants to that box and we’re carefully evaluating that literally every day as a management team.
Ric Prentiss : And any update — I know, I think originally Jacky might have been leaving at the end of the calendar year. Any update on all that hard work you’ve been putting in, is there a replacement coming or what’s the process of CFO?
Marc Ganzi: That process is ongoing. We’ve had really good success and some great conversations. I mean, first tell you that, Jacky is in place and he’s extended with us through I think through the second quarter of next year, we’d like him to stay. He’s happy here, he is — I won’t put words in his mouth, I’ll let him tell you if he’s happier or not, we’re having a good time. He’s worked really hard to get this company to where it is. So a lot of the effort and a lot of the success we’re having is a function of Jacky’s hard work. So I, for one, would like to see him stick around a little longer. He’s got personal goals that he wants to achieve that I support fully as does the Board. And I’m not in a rush to hire the wrong CFO.
I’ve got the right CFO in the chair right now. And so, we do feel confident we’re going to announce the right candidate here inside this quarter, hopefully. But in the meantime, I’m very happy with my partnership with Jacky. As does Severin, we work well together. We’re getting the results. We’re delivering for shareholders. And, I think he’s pretty happy to be extended through and needed if we need him through to the end of June next year.
Operator: Our next question comes from Richard Choe with JPMorgan.
Richard Choe: I just wanted to follow-up on the capital formation that’s been strong through the year, but the flow through to FEEUM has been a little bit volatile. How much of the $5.4 billion or target $8 billion, should we expect to hit FEEUM in this year?
Marc Ganzi: Well, as I said, we’re activating $25 million of FEEUM, of fees officially yesterday. So that’s going to flow through into the fourth quarter.
Jacky Wu: All of that $5.4 billion will now flow through because before we did not turn on the DBP III, fees closing.
Marc Ganzi: Yes. And so the other key to that Richard is there’s no expenses associated with that $5.4 billion of fees that we’re turning on. So that is 100% pure profit. And the challenge in our business, Richard, as you know is, you spend 6 months raising the capital, you spend a lot of money, a lot of T&E, you got a lot of people, you got a sales team and you have no revenue to show for that and now we’re through that period and the fundraising has now got good escape velocity. And as I said, we’re having a strong fourth quarter and we anticipate having a very strong first and second quarter next year. So as we go forward, this now starts to move into pure profit. And as we’ve told you, our strategy for a third fund is $8 billion strategy.
We have every clear belief and conviction we will hit that $8 billion and we actually have some conviction that we’re going to push through that, and exceed the $8 billion target for this fund. So that’s what the data suggests, but we’re excited to turn on the $25 million of fees. As I said, 100% profit associated with that. In the fourth quarter, you’ll see a pure flow through on that revenue and we should anticipate the financial results in the fourth quarter to be incredibly strong. Big on revenue, lower on expenses.
