Operator: Your next question comes from the line of Kenneth Worthington of JPMorgan. Please go ahead.
Kenneth Worthington: Hi. Good morning and thanks for taking the questions. Maybe first, we hear from a number of market participants about the credit environment and that in the US, we’re sort of in the golden age of all credit. On the fund side, as Erik, I think, you highlighted, the credit assets continue to grow nicely. What I’m curious about is to what extent are you seeing outsized client interest in the credit separate account operation. And here, is interest in credit actually growing the pie? Are you basically seeing investors come to Hamilton Lane with additional capital to try to take advantage of your all credit capabilities? Or are you seeing more of a change in allocation, maybe from private equity to private credit, which doesn’t necessarily grow your overall wallet share? So sort of what are you seeing in private credit on the separate account side?
Erik Hirsch: Sure, Ken. It’s Erik. I think it’s probably an and. So I don’t think it’s a question of people’s allocation shifting simply from equity to credit. I think it’s probably a little bit more sort of multi-factored. So if we sort of start at the beginning, interest in credit, particularly in this kind of a market where rates are higher and there’s a bunch of banking dislocation is causing the interest in credit to rise. So you’re seeing that here in the US as well as outside the US. I think the notion of this is the golden period, we would be a little bit more tempered than that. I think it’s relatively early. I think what’s happening across the banking sector is very early. And I think you have a lot of players who are trying to sort through things.
And I think from a cycle standpoint, also relatively early and I think what we’re going to be experiencing over the next few years. But that means interest is rising. In some cases, credit is much more transactionally oriented more akin to equity co-investing or secondary. And so part of the mix shift that we’re seeing is the clients are moving some additional monies away from primary fund commitments into more transactionally oriented investments, credit being a part of that. So while that may not increase wallet share that certainly does increase relative profitability because they do more transaction work. That is simply a higher margin and higher revenue portion than simply doing primary fund work.
Kenneth Worthington: Okay. Great. Thank you. And then, Erik, in some conversations you and I have had, you mentioned that clients are getting more cost conscious given sort of maybe more challenging market conditions. Can you talk about how cost consciousness is manifesting itself in your business? Maybe talk a little bit about fee rates on the separate account side and maybe the advisory business and how you’re approaching that given cost consciousness.
Erik Hirsch: Sure, Ken. It’s Eric. So I don’t think our industry is unique. I think across all industries today, the customer is wanting more for less. We all individually want more for less. Whether that’s dining retail, it doesn’t really matter. I think the client is looking for more value for their money. I think when you’re in this kind of an economic environment, that desire more or less gets heightened. So I don’t think there’s anything surprising there. I think the onus is then on management to make sure that you are pursuing the right strategic mix of business. Our industry is vast. Our industry is continuing to grow. Our industry has a variety of players and competitors and there’s all kinds of business out there. I think what we would say is not all business is equally attractive.
