Jennifer Johnson: So I think it’s — there’s a little bit of noise in the alts numbers. If you just look in calendar year 2022 and 2023, we talked last time about how we raised $40 billion in the private markets. But the reality in our alternatives business, we raised $55 billion, and 80% of it was private markets. But the net change in AUM, you saw $40 billion added to the private markets AUM net, net of realizations, distributions, market, everything. But $16 billion negative in the liquid alts portfolio, which represents about 6% of our alts portfolio now. So that’s where you’re shifting from much — the good news is it’s the higher fee private markets that have had — that had solid inflows in that window, but it was a little bit masked by the lower fee liquid alts.
Now fast forward to this — I’ll go this fiscal year. So the first 2 quarters, first of all, we said that we would be raising between $10 billion and $15 billion. That’s our goal for the year. We’re on track for that. We’ve raised about $7.3 billion in the private markets and another just under $2 billion in the liquid alts.
But if you net out distributions, realizations, FX and market, and to be honest, market — the only negative market was real estate with Clarion and the others were all positive. We’d say it nets to flat. So again, kind of a gross number there. But if you take away the distributions, realizations and FX, FX was actually pretty significant. Matt could probably give you more details on this, but we netted flat so far in the — in this fiscal year.
Matthew Nicholls: Yes. Craig, just for perspective, I’d say, for the last quarter that we’re just reporting on, realizations and distributions was $2.6 billion, for example, and we had negative FX of another $1 billion. But we do — we get these questions, and I think we’re going to try and improve our disclosure on this to try and help the question around this. Now we’ve got the bulk of our alternative assets together. Remembering in previous quarters, we’ve always said, when we were much smaller, we’ve always said, look, realizations and distributions just not — they’re just not significant enough to report and break down the explanation of AUM, but they’re now getting to the point where we’re going to start providing that level of detail. But just for information, the last quarter, again, the one we’re reporting almost $2.6 billion of realizations and distributions and $1 billion negative FX.
Adam Spector: And Craig, the only thing I would add is that the other thing we’ve been able to do really is to work more closely with our distribution partners on the wealth management side over the last few quarters and we’re able to secure calendar spots further into the future than we ever thought was possible. And I think that speaks well to our future fundraising as well.
Operator: Next question will be from Glenn Schorr at Evercore.
Glenn Schorr: So I wanted to talk about fixed income a little bit. So I see pension-funded status is much, much better and rates are higher. I like the $8.3 billion in flows in the quarter, but I don’t know how much of that came from Great-West or something else? So maybe you could talk about that. And then bigger picture, is this — do you feel this is the beginning of a broader trend, the long-awaited fixed income flows, maybe you can give us a little bit of insight from whether it be RFPs, client combos or the consultants on — if we’re at the [indiscernible] of some larger flows into fixed income?
Jennifer Johnson: Yes. Thanks, Glenn. So interestingly, let’s face it. As long as people believe rates have peaked and potentially will come down, they’re going to go longer duration, right? So the only thing is you’re now starting to hear the noise for the first time where actually people think rates may be longer — higher for longer and somebody was even talking about a potential rate increases. So that could slow things. But let me give you what we’re seeing.
So we obviously had positive flows, but just looking at the pipeline, and the pipeline doesn’t include any Great-West Life. If you add — well, about 70-plus percent of the growth in the pipeline, is fixed income, and that crosses Western, Franklin and Brandywine. If you actually add BSP because I always think private credit really should be thought of in the fixed income because the decisions around that are often how you’re thinking about your fixed income portfolio. The growth in the pipeline, 97% of it comes from fixed income.
So 6 of our top 10 gross selling funds in the last — this past quarter were in fixed income, corporate bond, core bond, multi-sector, munis, highly customized [indiscernible]. So definitely demand in the last quarter. But if you actually look at the pipeline going forward, the institutional pipeline, you see very strong demand for fixed income.
Adam Spector: And I would say that it’s also pretty broad-based. If you take a look at that funding pipeline, it’s really across all 4 of the fixed income firms we have, which all have very significant pipelines right now. And if you take a look at the products we’re offering, we’re positive in core in high yield and munis was our best-selling segment. So really broad-based fixed income appeal, not just one product.
Matthew Nicholls: Yes. And they’re also — last thing I’d say on that is they’re also positioned differently in terms of their view on where rates are going. So that means where we’ve had some performance weaknesses. It’s being offset not always fully but being partially offset by strength in other parts of the franchise.
Adam Spector: And on the institutional business that you asked about is strong, we’re also positive in ETF and SMAs, muni ladders, to lots of different fixed income vehicles doing well for us.
