And so we obviously spent quite a bit of time talking about secondaries in our prepared remarks, that, for example, is an area that I think we’re seeing interest across each of the four asset classes.
Ken Worthington: Great. Thank you.
Operator: Our next question comes from Adam Beatty with UBS. Please proceed with your question.
Adam Beatty: Thank you, and good afternoon. Scott, I appreciate all the detail around the different sectors. I wanted to kind of hone in a little bit on venture capital and just kind of what you’re seeing there, both in terms of €“ I mean, you mentioned some secondary type vintages that might be out there and available at a discount. But just in terms of sort of primary capital formation, is there an acknowledgment, I guess, out in the world of smaller private firms and others that, okay, this €“ as you say, great companies may well be being formed at this time? And is there available capital kind of at the ready, especially in a time where debt may cost more? Thank you.
Scott Hart: Sure. I mean, I think there is probably a few parts to the question there. But within Venture, yes, I think there is that recognition that you just reference. And whether you’re looking at the portfolio company level where you’ve clearly seen a shift from this growth at all cost mentality towards a more sustainable and a need to be able to grow profitably. So you’re seeing at the portfolio company level, you’ve also seen it in the fundraising market. And while €“ if you look at the 2022 figures, they actually stack up fairly well against 2021. But when you look at it quarterly, you can see the trend. And clearly, there has been a slowdown in venture fundraising throughout the course of the year. But I think with that slowdown, one comes opportunities.
So the venture asset class over the last several years has grown to be a much larger one. There is a tremendous amount of NAV in the ground today. There is clearly going to be an extended runway before either the IPO market reopens or some of those companies can be exited. And therefore, we think the secondary market is going to be a likely path for investors to drive liquidity there. So I think that’s certainly one of the opportunities we point to. I think the other one is you see a tremendous number of funds and new managers created over the last number of years. I think there is going to be a bit of a concentration in some of your top managers and really, it’s something you’ve seen in prior dislocations, and we talk about the differential between the haves and have not.
I think this is going to be a market where you really focus in on those top managers.
Adam Beatty: Excellent. That’s really great. Thank you for all the details, Scott. And I just want to ask about €“ I mean, I think Mike mentioned kind of a mix shift among €“ between the different kind of major vehicle types. But as I look at the commingled funds, it looks like there may have been a tick up in the fee rate just within that. And I don’t know if there was something about different asset classes or other aspects of the mix that what might be driving that? Thank you.
Johnny Randel: Yes, this is Johnny. I’ll take that. It is a combination of those new commingled funds getting activated with higher rates than the existing portfolio. But just a combination of new funds coming on that are at the full rate. So it is just a mix among asset classes and between commingled and SMAs for the total fee rate.
Adam Beatty: And it sounds like kind of maturity stage as well in terms of turning on new fees?
Johnny Randel: That’s correct. I mean as we mentioned in the prepared remarks, we did activate a couple of funds during the quarter. So that has an impact. And then no retro fees, so a very clean quarter in terms of fee level, right.
