Chris Souther: Okay. Maybe just last one, how should kind of ROE evolve with, some of these capital line activities thicken up potentially for next year and then I’ll hop in the queue.
Jeff Lipson: So the long-term big picture answer to that question is these are enormously ROE accretive initiatives because they use very little of our own capital. When you add the modifier impact next year, I would go back to my comment around pacing that some of these things we’re working on will take some time and I don’t want to over promise exactly in ’24 what the impact will be, but long-term the ROEs will benefit from these type of off balance sheet activities.
Operator: Our next question is from Ben Kallo with Baird. Please go ahead.
Ben Kallo: Hey, thank you guys. Good evening. Congrats on the results. Jeff, just a question about just as we see the yields tick up, are you taking on more risk and if you could just address, how that is, especially as you shift your asset class. Go ahead and follow up.
Jeff Lipson: Yeah, thanks for the question, Ben and we do get that question a lot as well. I think the natural inclination of folks that hear higher yield is to assume it’s at higher risk and so we need to keep reminding folks over and over again, in our case, it’s not higher risk. It’s really where the projects have gone given base rates, given the capital dynamics in the market right now. These are in many cases the exact same investment in things like grid connected solar, resi solar that we’ve done historically at significantly higher yields than we were doing, call it 18 months to 24 months ago. And then some of our new asset classes, as you referenced, we’re underwriting them with the exact same criteria. We’re seeking the exact same attributes in terms of client relationships, monetizing contractual cash flows, such that they’re identical risks to what we’ve done historically.
So this is higher yield at same risk and thank you for asking. So we want that to be very clear.
Ben Kallo: And just following up, when we think about the guidance here, and I think this is what I asked before, but ’24 and then onward, how do you think about the ability to grow without accessing capital markets beyond ’24?
Jeff Lipson: So I think it’s about having multiple levers and we’ve historically had this securitization platform, access capital markets for the balance sheet and we’re working on balance sheet rotation and some of these additional levers that we’re calling capital late and I think, we have a vision that eventually capital markets will come back as well and will be active there, but until they do, we want to make sure we continue to utilize and develop new levers so that we can take advantage of this investment opportunity. As it relates specifically to the impact of all this on ’25, again, as we’ve said before, we expect to talk about that more and more in February, but not on this call.
Ben Kallo: And would you, thank you, last question. When you talked about the benefits of not being a REIT, we’ve heard about the IRA getting tax equity transfers and how do you play into all this evolving market? Does it not being a REIT structure help you? What’s the disadvantage of that?
Jeff Lipson: So the way to think about that is migrating away from REIT status, removes the constraint that would have occurred a few years down the line, since we remain primarily active non-REIT qualifying investments, the REIT test would have become a constraint. They haven’t been a constraint historically or not a constraint this year, but would have in the future. So for that and some other reasons that we articulated on last quarter’s call, it makes perfect sense for us to seek an alternative tax election at this point.
Operator: Our next question is from Julien Dumoulin-Smith with Bank of America. Please go ahead.
Julien Dumoulin-Smith: Hey, team, thank you. Good afternoon. Appreciate the time. Actually, just, I was going to kick off here, but just since Ben was asking, tax equity and the dislocation here, is there an opportunity where you step into obligations given the situation where we could see some rules change and some tax commitments in ’24 prove to be less attractive, if you will? Is that a tactical opportunity for you as you look ahead here given some of the capital changes with Basel?
