We benefit from some of that on the GA side in terms of what they’re doing in fixed income, but we benefit from it greatly on the servicing side, because we’re very, very — not to overuse the word, active in the active ETF servicing space. And we believe you’ll see a lot more growth there as core funds and core offerings of well known asset managers either get converted to ETFs or launched as ETFs. So we’re really pleased on the GA side. In terms of what drove it, I think it was the next part of your question. I mean, part of it was much more focused and resources dedicated to the various intermediary channels. I mean our roots are in the institutional channels, but the lots of the growth is in the intermediary channel. So that’s part of it.
And then as we talked about, I believe, last quarter, we took a hard look at pricing, particularly in the so called low cost ETFs and recognizing their durability, felt that it was worth the investment to reprice them to continue to gain market share because they tend to be very, very sticky.
Glenn Schorr: I’ll go quickly on the follow-up. It’s the same question just different on the servicing front, happy with the wins you noted. Maybe we could just drill down. I know it’s not huge yet, but the private markets piece of the servicing wins. I’m curious if you want to tell us how much it was, but more importantly, what it is and how — is it one client or is it multiple clients? I’m curious on how that private market servicing space is developing?
Ron O’Hanley: No, no, it’s both. To answer the last part of it first, Glenn, it’s certainly not one client. I mean, this is a space that we’ve invested in and we’re well known in. And we see a secular trend here where it’s — so many of these operations are held inside firms are highly bespoke often sitting in very expensive locations. And as the product sets have become more complicated, I mean, it’s following a path that the active long only industry followed 10, 15 years ago. It was fine to do all this stuff inside when it was just a couple of products that are fairly straightforward, that’s not what’s happening now, products are more complicated. As you start to think about the structures that enable high net worth individuals to participate in it, you’ve got that added complexity.
And then oftentimes, there’s side investments that are permitted, et cetera. So it’s very complicated. It lends itself to outsourcing. It’s still very much an in-sourced business. So we see lots of potential growth in it. Its fee characteristics are different, positive in the sense that the fees are higher, but also the fees get fully recognized when the fund is fully invested. So part that we pay a lot of attention to is what’s the expected actual, one, money raised and then draw down and how do we do our best to match our expenses to that. But we’re very excited about the business. Much of the new investment, product investments that Eric talked about in the 2024 guide includes further strengthening of our position there. There’s innovation in there and our goal is to continue to set moats around us so we can continue to excel at it.
Eric Aboaf: I’d just add privates has been a real strong area of growth for us. We’ve described it as up 10%, 15% in different quarters. So it’s a big part of our growth agenda as we — this past year. And then this coming year, as we take our sales, goals up, the $350 million to $400 million at least a quarter of that plus is going to be around private, and that’s what’s going to help us continue to drive privates growth. We think in the 15% plus range in terms of year-on-year revenues. So it’s an area that I think we’ve actually broadly with both large and small and midsize, it’s actually well distributed and it’s got a good mix of US, Europe and Asia sales coming through as well.
Ron O’Hanley: Yes, as well as, Glenn, it’s not just private equity, it’s private equity — private credit is booming. And for every bank that complaints about what’s going to happen with regulation and the fact that it’s pushing activity out of the banking system that’s going right into the private credit area, and we should be the beneficiary of that growth.
Operator: Your next question comes from Gerard Cassidy with RBC.
Gerard Cassidy: Eric, can you share with us — I know you and Ron were in the State Street 10 years ago, but your comments about the net interest income outlook and just how volatile it is due to what’s going on in the bond market with the Federal Reserve and their balance sheet. Are there any indicators you’re monitoring that we could look at that might be able to give us a better insight to when net interest income for State Street might be more predictable on a go forward basis?
Eric Aboaf: I take a sigh when I think about this question. I think the predictability is partly around Fed actions, right? This is the highest rate level that we’ve seen in 22 years. And also if I go back a couple of years, the lowest rate level we’ve probably seen in two decades as well, right? So we’ve kind of — we’re at these wide bookends relative to really since the — I want to say, the turn of the century, right, and that’s really created this volatility. Can we manage that and mitigate? Well, we do try to sustain on a regular basis, match off deposit, deposit tenor, rate characteristics with the asset side of the portfolio and we do that with duration. The challenge is if you take too little duration, you have even more volatility.
