Adam Spector: Yes. I think we’re not going to give, again, sorry to not give too much detail on that but it’s a multi-stage project with them, where we’re going to be managing assets that we take on over a period of quarters. There’s something that we’ve announced that came out quite recently and I think it’s indicative of the way that we are able to work with insurance companies in general, to build things where they are able to more actively and efficiently hedge what’s in their portfolio. So it was a customized solution that we built with them. And it’s the type of approach we’re talking to some other insurance companies about right now.
Operator: And your next question comes from Brian Bedell from Deutsche Bank.
Brian Bedell: Great. Just one clarification on the Putnam operating income guidance. Does that include the $25 million investment from Great-West, in that guidance? I guess, is that investment had [indiscernible].
Matt Nicholls: Brian, the answer is no. [Indiscernible] $25 billion is incremental. We guided the $25 billion in terms of fee rate in mid-teens because a large portion of that is insurance general account related from [indiscernible]. We expect that to be incremented by about 50%, [ph].
Brian Bedell: And then, I can follow-up. Can you hear me better now?
Jennifer Johnson: Yes, it may be our audio that’s having an issue. Brian, did you hear the response?
Brian Bedell: No, it kind of got garbled up.
Jennifer Johnson: Matt, why don’t you try again?
Matt Nicholls: Let’s try again. This is better?
Brian Bedell: Much better. Yes.
Matt Nicholls: Okay. Great. So no, the guidance did not include the fees associated with the $25 billion allocation. That’s largely from Great-West Life. So the fee rate is around the mid-teens, on the $25 billion, if you calculate the revenue on that. In terms of implementation time line, we expect about half of that to come in the first calendar quarter next year. Well, let’s call it the first quarter after we close and then the second half to come in over a period of a year — one year. We’ll obviously keep you updated on that, Brian.
Brian Bedell: Yes, that’s great. And then just the last question, just on private credit versus public credit. So you’ve got a ton of different solutions across your specialist managers, including alternatives. Maybe just to zero in on the wealth channel. What are your thoughts about the timing of this reallocation toward fixed income when that picks up? And then, maybe just thinking about it with your private credit offerings versus the public side, do you think one will sort of went out over the — not went out over the other but one will be larger than the other? And is that cadence, if you have to think about it over the next 2 or 3 quarters, is that sort of an equal cadence, do you think? Or do you think there’ll be much larger swing into the public fixed income funds given just your scale there?
Jennifer Johnson: I think this is — well, first of all, we know in talking to our large distribution partners, if there’s just a massive amount. One of them commented that their most profitable area right now is their, basically the money market fund because of the massive amount of money sitting in cash on the sidelines. So the wealth channel is no different than the institutional channel in that. The institutional channel is likely to move first and then the wealth channel. The challenge, I think, between traditional fixed income and private credit is that banks just aren’t lending like they used to. And so you’re not even generating as much of the traditional fixed income as you used to. And so in order to have the investable universe, you’re going to probably see the wealth channel starting to move more into private credit anyway.
But the reality is, it is illiquid. And I think this is where we are on the product development side, thinking through creative solutions where you actually have products that combine private credit and traditional fixed income. So you have a component of liquidity with the excess returns that are generated in the private markets because of their illiquidity premium. So it’s just as any alternative is in the wealth channel, it’s complicated because you have the suitability and the DOL rule that was asked is, it’s going to mean that the bar is even higher. You can’t make mistakes. But from a responsible asset manager trying to figure out how to provide these excess returns in that channel, it’s an area of great focus for us. So again, the banks are going to lend the way they used to lend the capital requirements have made it tougher and tougher.
You see it in the numbers. And we think that private credit is going to continue to grow.
Operator: This concludes today’s Q&A session. I would now like to turn the call back over to Jenny Johnson, Franklin’s President and CEO, for final comments.
Jennifer Johnson: Well, I just want to thank everybody for participating in today’s call. And once again, we’d like to thank our employees for their hard work and dedication. It’s also — I’d also like to add that we look forward to welcoming the impressive team at Putnam to Franklin Templeton when the transaction closes. And we look forward to speaking with you all again next quarter. Thank you.
Operator: Thank you. This concludes today’s conference call. You may now disconnect.
