The area that you would imagine we take extreme sort of I think vigilance on right now is our office portfolio. We have about a 100 loans for about $3.5 billion in our office portfolio. But even there, as we do our sort of bottom up and our top down analysis, our office portfolio has a 52% loan-to-value debt service coverage about 2.7 times. It’s 90% occupied. That continues to hold up quite well. But as you can imagine, we’re doing again, a lot of bottom up on scenario analysis on tenant rollover, lease maturities, how much some of the properties are giving back space to the markets. And that will continue to be a very strong vigilance for us as we go into 2023, but we’re not seeing any sort of major problems surface yet in terms of our overall portfolio or in that office part of our portfolio Ryan.
Dan Houston: Thanks, Pat.
Ryan Krueger: Thank you.
Dan Houston: Thank you, Ryan. Appreciate the question.
Operator: Our next question comes from Josh Shanker with Bank of America. Please proceed with your question.
Josh Shanker: Yes, thank you very much. Just following up a little bit on Jimmy’s question, I understand that a lot of the assets in the portfolio are institutional and not rated by Morningstar, but you’ve probably done a lot of work on the retail side. Can you talk about how quickly from the moment you get great Morningstar results, you see funds flow in and to the extent when the results aren’t as strong retail funds flow out?
Dan Houston: I wish it were easier than it is, because as mentioned Josh, we actually have some third quartile performance that’s seeing large net cash flow and new sales a lot of attention. So the correlation sometimes, is very difficult. You’d think they’d be highly correlated, but the reality is, they’re not necessarily correlated and a lot has to do with its what’s in favor at any given time. But Pat, you can clean that up for me.
Pat Halter: Yes, Josh clearly, Morningstar benchmarking is utilized to inform advisors, gatekeepers, individuals in terms of how well our capabilities and our strategies are doing relative to other investment managers. But it’s more complicated to that because decision makers, gatekeepers are really looking at not just the one year performance; they’re looking at three year, five year since and session performance. They’re also looking at, things such as the investor style, the approach they take in terms of their actual investment portfolio, pricing in the portfolios. In terms of portfolio construction, there’s a lot of other things that multi-strategy solution providers look at outside of performance in terms of diversification to their overall mix of performance.
So it’s much more nuanced in terms of just performance relative to the movement of capital toward a capability away from a capability. And as Dan mentioned, there really is no sort of direct correlation between a timeframe as to when a Morningstar rating is X versus Y in terms of an net cash flow. It’s informative for us to have that because it’s very important in the eyes of advisors to continue to evaluate our sort of capabilities, but it doesn’t have a direct correlation as you suggest.
Dan Houston: Quick follow-up, Josh?
