Operator: And our next question comes from Jeff Schmitt with William Blair.
Jeff Schmitt: Hi, good morning. The infrastructure fundraising was pretty strong in ’22, I think it was around 27% of the total. And then you’ll be in the market this year, you are right now with the diversified infrastructure fund, labor infrastructure is supposed to start up at some point this year. So I’m just thinking about the inflation protected characteristics of those strategies. Are you seeing competitors get more aggressive there and raise additional funds? Or do you think there could be potential upside to your fundraising for those funds this year given demand?
Michael Sacks: We’re enthusiastic about the Lyft fund. We’re enthusiastic about the diversified fund. And importantly, we’re enthusiastic. We remain enthusiastic about our separate account infrastructure vertical, where we’ve raised a lot of money over the last couple of years. And we don’t see any change at all in demand for infrastructure. It remains very strong. And in fact, we don’t see any demand change at all in demand for alts I think it remains very strong. We’ve seen a slowdown a little bit in fundraising just due to the macro environment and as much anything, the decline in traditional assets and the decline in transaction levels. And I think as transaction levels come back, the whole space kind of loosens up and you start to see fundraising pick up.
I think we got so used to infrastructure dominating the fundraising for four quarters or six quarters or whatever it was that over the last couple of quarters where private equity has kind of taken a lead it’s a question, well, what about infrastructure, but that should not be a question. There’s a lot of demand out there, and we have a great team, and we have raised a bunch of money over the last couple of years, and we’re going to continue to do that this year.
Jeff Schmitt: Okay. And then on the adjusted EBITDA margin, it’s fairly flat for the year, which is a pretty good result, I guess, given the drop in revenue. But how should we think about that margin in a more normalized environment just in terms of its run rate? And how much of future expansion is sort of dependent upon revenue growth?
Michael Sacks: Well, so it’s a great question. We feel it’s very hard, as Pam noted, to predict carry levels. They are very much correlated with transaction activity levels and transaction levels were down significantly last year in light of just the general macro and capital markets environment. Our belief is that as rates stabilize and transaction levels resume, and we feel like we’re seeing some green shoots there and that’s kind of starting maybe to pick up a little bit. We’re not making sharp timing predictions. But we believe very – there’s a very real asset there for us, and that asset has maintained its value. And as transaction levels pick up, we’ll start to see more carry come in. And obviously, the difference between FRE and our adjusted EBITDA is a result of our incentive fees, our carry and our performance fees at ARS and we’ve got great earnings power there.
So we – it’s hard for us to predict when that will come, but it will come and the earnings power and the asset underlying the carry is there and its impact and it grew slightly, and we know that, that will return. It’s just a question of when. And when it does, that is a good thing for our growth in EBITDA, growth in net income and for our margins in that regard.
Jeff Schmitt: Okay. That makes sense. Thank you.
Operator: And our next question will come from Ken Worthington with JPMorgan.
