Jennifer Johnson: Yes. So I mean we’re in the market with a few different things. And as Adam mentioned, we are getting on calendars. This stuff is laid out, we’ve probably surprised early on to learn this. I mean sometimes up to 2 years in advance. So the areas that we’re talking — Lexington obviously, has capabilities beyond their traditional Fund 10, where they’ve got middle market and co-invest offerings. In the case of real estate, Clarion’s top 3 biggest funds are all perpetual. So they’re always fundraising, although we definitely see kind of muted demand for real estate. They’ve got terrific performance. They’ve got terrific performance. And so I think when things shift back, Clarion should do very well there because they have very little exposure to office.
In the case of the private credit real estate debt is really interesting, and we’re talking to several clients about that. Obviously, CLOs, structured credit, special situations. And then actually, we’ve been successful. I never know how much I can talk about, but in our — in Venture, our Franklin Venture Group is in the wealth channel right now raising money and first fund raise there, and it’s going very well.
So you just had 2 between BSP and Lexington closed their flagship funds. So then you’re in — that they’re digesting and investing in those cycles. They’re doing more of their niche type strategies, but they’re in markets with those. And they’ll — as soon as those are deployed, I think Lexington’s probably deployed 60% of their LEX 10, they’ll come back into the market for another flagship. But in the meantime, they’ve got their middle market and co-invest.
And I cannot emphasize enough the — in the wealth channel, it’s 50% the right product and 50% where you got the heft on the distribution side. And I think that is often underestimated. Our 350-plus client-facing wholesalers, internal, external specialists included can sell to an adviser’s entire book. If you don’t have the breadth of capability that we have, that’s incredibly expensive because let’s say you’re just an alternatives manager, you’re only selling to 5% to 10% of that adviser’s book. And so it gets really expensive to build the breadth of capability that we have. And the years of investment that we’ve done in the Academy, again, our Academy is global, where we’ve now been able to bring alternatives by FT, which is a website that has tons of training on how advisers should think about alternatives in their portfolios to supplement just that wholesaler being out there in the field, I think, has been really important.
So very much focused on the wealth channel, really excited about it. I think we have a great suite of products to be able to meet the needs in that market and the distribution capability and expertise to be successful there.
Alexander Blostein: I got you. Okay. All makes sense. And then clarification for you guys on the pipeline. It sounds like there’s a bunch of things in the institutional pipeline, as you discussed earlier. Is it — could you guys help us just size the fee rate of the institutional pipeline, excluding Great-West as you described it? And then I guess is it fair to assume that the remaining piece of Great-West that’s going to come in will be coming in at a much high fee rate? So kind of north of that teen-ish basis points, just given that the back end or what’s come through came at a pretty low fee rate?
Jennifer Johnson: And the pipeline is — the fee rate is slightly up from last quarter. But look, any time you want it’s institutional, so that’s lower fee than your traditional EFRs. And then number two, it’s heavily weighted in the fixed income — well, the new stuff is heavily weighted in fixed income, but probably overall pipeline, I don’t know, Adam, a 60-plus percent probably fixed income. So I never know if we give guidance on the actual numbers in the pipeline, but it’s — [indiscernible] Matt, have we given guidance there?
Adam Spector: I would say it’s consistent with our institutional fee rate.
Alexander Blostein: Got it. Okay.
Matthew Nicholls: It’s in the mid- to high 20s, Alex, and then — but it can be — it’s gone from anything from the mid- to high 20s to our overall effective fee rate. depending on the quarter and depending on the type of the — the nature of the pipeline in a particular time. And then the — to answer your second question, yes, the additional flows we expect to come in will be higher on average on the rest of the Great-West Life flow. And that’s expected over the next 12 months. As we’ve said, we’ll, of course, put that detail into our monthly flow. So you can see that, and then we’ll provide detail on the effective fee rate when we have these calls and provide updated information.
Operator: Next question will be from Bill Katz at TD Cowen.
William Katz: Okay. I apologize on London weather. So in terms of if I start with your reported net flows of 6.7 and I back out the 3.1 of dividends reinvested, which the industry doesn’t include, I get down about 3.5. If I back out the initial capital from Great-West, that’s minus $10 billion. If I then back out the $1.4 billion from the 3 alt managers you highlighted, I get to about $11 billion. And then if I back out the Canvas, ETF and the SMA, I think that gets about minus $18 billion for what I would consider to be a long-holding business. A, is that math correct? And B, if it is, what’s the go-to plan here to sort of stabilize that part of the business?
