We are profitable in those areas. And I also think that we’ve built ahead. So those are areas where we can get some very meaningful leverage off of the existing investments that we’ve made in distribution, as well as the global investment platform that we’ve developed.
Operator: Thank you. One moment for our next question please. Our next question comes from the line of Brennan Hawken with UBS. Your line is now open.
Brennan Hawken: Good morning. Thanks for taking my question. Jennifer, I know you said that the fee rate ex the performance fee would be flat quarter-over-quarter. But is it possible to quantify that impact in dollars? And is it right that those performance fees come from SMAs within OHA and should we think about that just happening in the fourth quarter from time to time?
Jen Dardis: So I think the number I’ve given in the commentary. Thanks, Brennan, for the question, was $25 million was the amount for Q4. And as you know, OHA has a number of performance-based fees. These are the ones specifically that crystallize in year. And yes, that’s typically the kind of accounts it would be. And yes, most of those happened during the fourth quarter, but they can happen through the year.
Operator: Thank you. One moment for our next question please. And our next question comes from the line of Alexander Blostein with Goldman Sachs. Your line is now open.
Alexander Blostein: Hi. Good morning, everybody. Thanks for the question. I was hoping you could expand on your buyback commentary, seeing a bit of a pickup, I guess, in the fourth quarter, and I think you alluded to remaining active on share repurchases so far in the first quarter. Given T. Rowe’s robust balance sheet and obviously strong cash flow generation, can you just kind of help us frame what the buyback opportunity is for 2024? Thanks.
Robert Sharps: Sure. Our priorities with regard to capital allocation haven’t changed. We want to first and foremost, invest in the company; second, protect and raise the regular dividend and put ourselves in a position to have the flexibility to make appropriate acquisitions as the opportunities present themselves. But we also kind of generate a lot of cash flow and historically have been opportunistic with regard to our share repurchase. I’d say what has changed at the margin last year was that the buyback was more muted given lower free cash flow after the dividend. I think if you think about the order of magnitude for potential over the course of 2024 based on our planning, it’s not going to go back to the $1 billion a year or the levels that you saw in years before 2023.
But I think we will be opportunistic and we’ll take advantage of opportunities in the marketplace to repurchase shares. And over time, I have an objective of taking the share count lower. So I think you could think about the levels of 2023 as a base case, but there are a lot of contingencies and Alex, there could be quite a bit of variability around that. And as you know, we do have a strong balance sheet and kind of given the right opportunity, we certainly would have the potential to outspend cash flow, but that’s on our base case.
Operator: Thank you. One moment for our next question please. Our next question comes from the line of Michael Cyprus with Morgan Stanley. Your line is now open.
Michael Cyprys: Great. Thanks so much for taking the question. Just wanted to come back to your commentary on the Retiree Inc. acquisition. I was hoping you could maybe elaborate a bit on the strategic rationale? The opportunity set you see there? How you see this helping enhance the growth profile of T. Rowe? And then more broadly, if you could just comment on how you’re thinking about M&A at this point where it could be most additive to T. Rowe. Thank you.
Robert Sharps: Yes. Specifically, as it relates to Retiree, they have a set of proprietary algorithms that help retirement investors make the transition from accumulation to decumulation and look at optimizing social security elections, as well as which assets to liquidate first and when to take withdrawals from your tax deferred retirement investments. We showed a slide in the supplement with regard to the portion of our AUM that are in defined contribution plans as well as retirement-related overall. And if you think about our individual investor business, one of our strategic initiatives is retirement advisory services. So for our advisory capabilities to be able to incorporate differentiated guidance with regard to how to most tax efficiently support your lifestyle and cash flow needs in retirement, that’s value add.
And that’s really where we’ve rolled it out initially. Longer term, we see a tremendous amount of opportunity to incorporate it into, for instance, our record-keeping offerings to differentiate the offering for plan sponsors and participants. But also, I think we have a meaningful potential to partner with people in the wealth channel with our intermediary partners. So I think it’s very early days for us exploring kind of what the potential is. In terms of our approach to M&A, it’s still the same. We’re looking for things that add capabilities that make us more important to our clients and that fits strategically and culturally and make financial sense.
Operator: Thank you. I’m currently showing no further questions at this time. I’d like to hand the conference back over to Mr. Sharp for closing remarks.
Robert Sharps: All right. Very good. Thank you. Well, thank you all for joining us today and for your interest in T. Rowe Price. As I said at the outset, 2023 was a challenging year for us, but we also made a lot of progress, better investment performance, a lot of advancement with regard to our strategic work to position us for future growth, and that’s beginning to translate into results that give us some confidence that we do see better days ahead and have the potential to continue to deliver great value for clients, associates and shareholders. So again, thank you, and good day.
Operator: This concludes today’s conference call. You may now disconnect. Thank you for your participation. Everyone, have a wonderful day.
