If you have to take too much duration on the asset side of the portfolio, you’ve got more AOCI risk, and so our tools to stabilize work up to a point and then have some negative implications. So I don’t really see a way to turn what we’d like to have — I don’t see a way to turn this into just a flywheel of metronome that moves at a certain pace, and it’s just a feature of what we do. And part of it is our institutional deposits have somewhat more asset sensitivity or liability sensitivity to rates relative to a very simple regional bank. So we’ll tend to have a little more, but that’s part of the industry, I think we’re in line with peers.
Gerard Cassidy: Ron, in your prepared remarks, you talked about the success and the momentum you’re having with the Alpha product in the servicing business — in the Investment Services business, I should say. Is there any capacity constraints that you’ve got to be careful about if the momentum continues, or is it almost now when you got plenty of bandwidth to handle future growth?
Ron O’Hanley: I would say that the capacity constraint has been particularly with these large complicated client, the really large ones, some of which are — well, most of which are still being onboarded, the capacity strength has been around onboarding. Over past year, in particular, we’ve gotten better at that. You can — if you just look at that number, we were roughly at about, as I recall, $3.6 trillion in assets to be onboarded and we’re now down to $2.3 trillion. So you can see we’re getting better at that. The real constraint to be specific about it tends to be and how quickly do you onboard the middle office element to that, because that often requires engineering and by that I mean, engineering with the client, because ultimately that’s a client and it’s like any other kind of industrial outsourcing.
A client has an operation, those things in a particular way wants to outsource that element of it to us. We’re not interested in taking somebody’s mess for less. I mean, we need to actually work with them to engineer it in a way where as much of it as possible is standardized and that the customization is limited to the extensive user interfaces or how things are actually applied. And we’ve just gotten better at that over time. So I would say, looking forward, we don’t see that as being a meaningful constraint.
Operator: Your next question comes from Jim Mitchell with Seaport Global.
Jim Mitchell: Just maybe a follow-up on the — outside of sort of the private markets, you’ve ramped up pretty quickly in terms of getting to your $400 million of new servicing fee wins. And maybe if private markets are a quarter, can we talk a little bit about the other three quarters, where you’ve seen success, what’s worked, what hasn’t worked and what kind of opportunity set do you see maybe even get above the $100 million?
Ron O’Hanley: I mean, it’s no one thing, but a lot of really important things across the board to ramp up our execution. Where we’re seeing it, to answer the first part of your question, is the core Investment Managers segment still remains strong and active for us. And as some of those firms are facing the same kind of market that everybody else is, they’re more interested in actually trying to do more with us and do different things with us, a little bit of a resurgence in the asset owner marketplace and in particular, amongst asset owners that aren’t just pure asset allocators, meaning they’re managing some assets themselves or truly actively asset allocating, doing not just listening to a consultant telling them what to do, but either managing money or at a strategic and tactical level, allocating assets, which again requires support.
But in all cases, what we’re doing is we’re really focused on ensuring that the back office part of all this comes with it, and comes with it in a timely fashion, right? Because as I was saying earlier when I was talking to Gerard, the thing that takes a long time or a longer time to onboard would be the middle office, the outsourcing element of it. Onboarding back office is pretty easy, pretty straightforward. And it, in almost all instances, comes down in a pretty healthy incremental margin given the scale activities to it. And then finally, just to talk about regions. We have invested heavily in the capabilities in all of our regions where you see probably the most impact from that over the last couple of years, has been just the very good growth that we’re seeing in Asia Pacific and really, all parts of Asia Pacific from Australia north to Japan and everything in between.
The US, we’ve talked about in the past, we were not pleased with where we were in this past year, particularly the second half of the year. We’re actually reasonably pleased with how we’ve done. Europe has always been strong to us. It was a little softer in 2023, but again, a very strong pipeline. But that regional focus where we’re actually pushing accountability down into the country and regional level and making sure that it’s very clear who is responsible for what, sharing, obviously, not just the technology and the product but the best practices in how you move these things forward, but very much decentralizing the accountability.
Jim Mitchell: And maybe, Eric, just a quick one on the held maturity book still yielding just a little over 2%. Can you kind of walk us through the maturity profile of that, how long we start to see some pickup in — or turnover and reinvestment benefits from that portfolio?
Eric Aboaf: The way I’d describe it is we’ve got a natural roll-off in that portfolio. It’s about $5 billion a year. So it sort of plays out and that’s related to the maturity in the latter, so that will come down over the next couple of years. As that happens, because as you say, it’s at a lower coupon relative to our average, right? Our average portfolio yields are in the 3.5 range. There’s real pickup that comes through that line. At least for the next couple of quarters, I guess, is probably for the next couple of years even, because once rates stabilize, we do think that we’ll also get some steepness in the yield curve and that will help through. So there are some benefits coming that way. It’s also a portfolio that obviously will insulate us from rate moves. I don’t think in the next few years, this is the last down cycle versus up cycle then that we’ll see and so it will serve its purpose then as well.
Operator: Your next question comes from Steven Chubak with Wolfe Research.
