Michael Sacks: We expect they’ll be higher. MAC has catch-up fees. And as we just talked about, we expect some good closings for MAC this year. The Elevate fund I mentioned earlier started on January 1. And so to the extent you raised money there in Q3, Q4, you kind of have catch-up fees there. And then Lyft will- the labor infrastructure will have a first closing at some point and then going to have a little bit of catch-up fees as well. Those are the three of the five funds in market that have catch-up fees, and we think they will generate catch-up fees this year that will equal or exceed the catch-up fees last year.
Ken Worthington: Okay, great. Thank you.
Operator: Thank you Our next question will come from Adam Beatty with UBS.
Adam Beatty: Thank you and good morning. A couple of questions on Elevate and Sponsor Solutions more broadly. First, just in terms of mechanics, wondering how either the fund or the firm more broadly, expects to balance the eventual need for return of LP Capital from the fund with the perhaps need for longer term, maybe even permanent financing on the part of the issuers in question, seems salient given Grosvenor’s own history. And then more broadly, just wondering about what you’re seeing in the issuer market there are – in terms of capital formation, are small firms being formed at the same rate as before or a little bit less given some of the environment and the challenges? Thank you.
Jonathan Levin: Sure. Adam, this is John. Happy to take that one. I think you can think of these investments out of the Elevate strategy as being kind of multifaceted partnerships with the sponsor talent. And the way that can look is they won’t all be equal, but you could have investments in the funds themselves. You could have co-investment relationships with those managers. It’s possible you could have a financing for the management company or the GP itself. And then in return, part of that economic package would also be minority interest, whether those are revenue shares or equity interest and the managers themselves. I think for the bulk of the capital, right, whether that’s the investment in the fund, the co-investment or financing at the management company or GP level, that capital would be coming back over the course of the duration of a private equity life in due course.
And so the LPs of our fund would have their capital back and the remaining interest would be a cash flowing interest in the form of revenue share or equity participation that, to your point, could last for a long duration. But at that point, it is cash flow and capital coming back after having had all your invested capital back. So we think that’s a good profile for investors in this type of strategy. I think on the second part of your question, there is certainly some cyclicality that exists always in the form of new fund launches, and that has some relation to general capital markets environment in general, correlation to denominator effect things of that nature. But the reality is we have a huge sourcing network, a huge investment funnel.
And if we’re thinking about doing 8 to 10, 8 to 12 deals over 3 to 4 years, that’s plenty of time and a small enough number that we feel like we can be highly, highly selective and partner with the right firms in their launches.
Adam Beatty: Perfect. Thank you, Jon. I appreciate the detail. And then maybe just a quick one on the fee AUM backlog, particularly the portion of that that’s charged on deployed or invested capital, I think it’s $4.7 billion. Just either historically or in your budgeting or what have you, how long do you think, given the fund set up right now, how long do you think it would take to deploy that? Is that like a 1 year, 2-year kind of time frame? Or what are you thinking there? Thank you.
