Matthew Nicholls: Yeah. So just to break that down further, sorry to start the call with all these numbers, but just to break this down a little bit further. So, in terms of revenue, obviously, we don’t normally guide revenue, but we want to be useful in terms of — for modeling purposes. For the second quarter again, fiscal second quarter, Putnam revenues standalone would be about $160 million. Of that, $135 million is management fee revenue and $25 million is in the other revenue item. That’s for the TA basically. We would have saved between $85 million and $100 million of expenses in the first nine months, so through our fiscal year, $85 million to $100 million. And by the time we reach the end of 9/30 at the end of our fiscal year, our expense savings for the full 2025 would be at least $150 million.
This translates — to get specific to your question around operating income addition, Alex, this translates into probably between $150 million and $170 million of operating income contribution from the transaction. In terms of how we think this translates into, obviously, there’s a lot of parts below the line, but how this translates into accretion dilution, it’s probably just very slightly accretive maybe one sentence about that in the second fiscal quarter, so the first fiscal quarter that we’d have owned Putnam, it’s accretive right away. And by the time we reach the full year, it’s probably near a high-single digit cents accretion and that translates into about a 3% accretive situation for full year ’24. Remembering that’s only nine months of Putnam, but that’s where we expect things to be, assuming revenue stays where it is today, markets stay where they are today, and so on.
Alexander Blostein: Great. Okay, super helpful. Thanks so much. I’ll hop back in the queue.
Operator: Thank you. The next question comes from Craig Siegenthaler from Bank of America. Please go ahead.
Craig Siegenthaler: Thanks. Good morning, everyone. Hope you’re all doing well. My question is on the alternatives’ net flow trajectory. If we back out the two flagship fund raises at Lexington and Benefit Street, there would have been a large swing in net flows over the last 12 months to 18 months. So I wanted your perspective on the forward trajectory in terms of net flows from alts and are you expecting other funds to step up and fill in that gap?
Jennifer Johnson: Great. Thanks, Craig. So in the last two years, we have had about $40 billion in fundraising to our private markets. That was offset a bit by $12 billion in net outflows in the liquid alternatives, that just gives you a little bit of perspective there. We anticipate this year of fundraising between $10 billion and $15 billion in the private markets. And would expect in this environment to have that translate into alternative asset revenue growth of like the mid-single digits. So far in Q1, you probably have seen that we raised $5 billion in the private markets and that closing of Lexington’s flagship fund and BSP. In the same period, we had about $1.1 billion in net outflows in the liquid alts. Just to kind of look forward for the rest of the year, we can’t talk about specific funds, but the areas that we think there’s strong interest is alternative credit, specifically like direct lending, we see interest both in the US and Europe.
There’s opportunities in the alternative credit in special situations, opportunistic real estate debt as well as CLOs. Just on that real estate debt point, as you see, less and less of the regional banks having retracted in that space, we think there’s both an opportunity to do very well there and strong client interest in that space. With respect to secondaries, just as a reminder, Lexington does a lot more than just their flagship offering. They have offerings in middle market and co-invest offerings. 2023 was the third consecutive year where secondary industry surpassed $100 billion in the fundraise. And we think that there just continues to be strong demand and just again a supply and demand issue that keeps fees very high, where you had $6 trillion deployed in private equity and only say $150 billion deployed in secondaries, and strong demand by the LPs and GPs because of liquidations being down and distributions being down to have a portion of their secondary portfolios picked up.
With respect to real estate, our three largest funds at Clarion are perpetually fundraising, we see opportunities to continue to expand in Europe. And then, we’re incredibly excited about the success that we had in the wealth channel with Lexington, where 20% of the fundraise of Lexington fund came from the wealth Channel. And this has been years of building up our capabilities with the FT alternatives, where we built both a team of specialists, the 30-plus specialists, to help assist our wholesaling team. We’ve leveraged our academy to not only educate our own force, but also to help our distribution partners educate their advisors on how to think about this. And so, it’s a lot of years in the making and we’re really excited to see it come together with this fundraise.
But that same expertise is going to be very helpful in both private credit as well as real estate.
