And I think when the reallocation occurs, some of those assets will fall into those asset classes, and we’ll be able to gather some of those assets. So we’re pretty excited about that opportunity.
Adam Beatty: Excellent. Thank you very much.
Operator: Your next question comes from the line of Kenneth Lee of RBC Capital Markets. Your line is open.
Kenneth Lee: Thank you for taking my question. Just to round out the discussion on M&A. What’s your view — do you view the cost of financing as a potential challenge in the environment for potential M&A there? Thanks.
David Brown: I’d start off by saying that when we think of financing, we really think of all the tools that we have, where you have our cash generation, we have the ability to structure. Of course, we can go to the debt markets. And we have, I think, over the past really done a nice job on being creative on how we structure the transactions. The financing costs are up, obviously, over the last 1.5 years. But for us and the way we execute the transactions and the way we look at the transaction, it isn’t a hurdle for us, the cost of financing. As we said, we did accumulate cash this quarter, which is the benefit of having a platform that generates a lot of free excess cash flow. And then we also monetized our hedge. And then as we look forward, we’ll balance out if we do a transaction, how to go about that. But I don’t feel, at least for us, the financing costs are going to be a hurdle to executing the transaction.
Kenneth Lee: Great. Very helpful there. And just one follow-up, if I may. It sounds like New Energy Capital had some positive long-term net flows in the quarter. Wondering if you could just give us an update or your latest outlook in terms of organic — potential organic growth in that franchise going forward? Thanks.
Michael Policarpo: Hey, Ken, yes, we did mention we had positive flows in the third quarter. We also had positive flows in the second quarter. I think our thesis around the acquisition of New Energy Capital continues to hold. We’re bullish about the product set that they have in kind of the private markets with respect to kind of the renewable energy space. Fundraising in the private side in 2023, I think from the industry perspective, has been challenging. However, we’re pleased with the progress that we’ve made to date, and we’re excited about the opportunity as we look out. We think what they do is unique and they have a great opportunity to continue to see growth as we move forward. And that really was a thesis for us as we did the acquisition. So we’re excited about the opportunities that sit in front of us. And as the industry kind of continues to loosen with respect to private asset raising, we’ll participate well there.
Kenneth Lee: Great. Very helpful there. Thanks again.
Operator: Your next question comes from the line of Mike Brown of KBW. Your line is open.
Michael Brown: Great. Thank you for taking my question. So I wanted to ask about WestEnd here. The growth continues to be really strong there. Can you just give us an update how many platforms that franchises on today? And just maybe expand on some of the recent growth trends there and the potential going forward. Do you still see some more room to ramp on the current platforms? And is there potential to get added on more platforms for WestEnd?
David Brown: The platforms that they’re — we’re currently on when we purchased them, we have been able to go deeper on to those platforms. So we’re — today, we’re doing business with a significantly higher number of advisers than they were doing when they were independent. We’ve expanded the number of platforms that they’re on. So not only deepening the relationships with the platforms, but actually expanding the number of platforms. And then we’ve also expanded out the product set. We launched an ETF, the ticker symbol MODL, which now allows the sales people to offer not just the models, but also an ETF managed by WestEnd. And so there is a tremendous amount of growth from an opportunity standpoint for that franchise. If you think about the current environment that we’re in, and we’ve owned that business at the end of this year, it will be coming up on two years.
And to have that platform or that franchise being net flow positive in every time period, and since inception, since we’ve purchased them is really remarkable and just tells you what the opportunity is for that platform. And again, that was the thesis of the transaction was taking a tremendous franchise that has a great culture and great investment performance and really good distribution and just making it better and scaling it. And I think that we’re well positioned, again, when some of these assets move out of cash to really go out and grow. And we also have a desire to expand out the product set there as well, which will only add to the upside opportunity.
Michael Brown: Great. Thanks. And then Michael, maybe just a quick modeling one for me. Following the monetization of the hedge, what is the right jumping off point for that interest expense now with the impact of the gain that will come through?
Michael Policarpo: Yes. I think the simple way to look at it is we really locked in at the kind of Q3 rate. So I think we mentioned about 5.6% is the kind of combined interest rate going forward, based on current rates.
Michael Brown: Okay. Great. That’s it for me. Thank you.
Operator: [Operator Instructions] Our next question comes from the line of Ken Worthington of JPMorgan. Your line is open.
Michael Cho: Hello. Good morning. This is Michael Cho in for Ken. Thanks for taking my question. My first one, I’m just going to go and ask the cash question as well. Just — you talked about M&A and investments. I guess just in the event things don’t come into fruition near term. I guess how long are you comfortable holding in an elevated level of cash?
David Brown: I would say that we are going to look at our cash levels very opportunistically. It will be based on the facts and circumstances. We have pivoted quickly to different strategies. We — at one period in our history, we paid down debt very aggressively and then pivoted to buyback — buying back our shares. And I would imagine going forward, depending on what’s happening at the time, we’ll be very opportunistic. We have the flexibility to do that. We still have over $50 million still off from our authorization from the Board on our buyback program that we can utilize. And then — but we’re going to take it really as we always have with the current fact or circumstances.
Michael Cho: Okay. Perfect. Thank you. And then just switching gears, just on G&A, I think you called out just kind of slightly elevated in the quarter for particular organic investment opportunity. I’m just curious what was that organic opportunity that drove the quarter? And then I think you listed a number of organic investment areas as you do every quarter, but I’m not sure I heard AI before. So just curious what you’re also doing with AI as well? Thank you.
Michael Policarpo: Yes. Thanks, Mike. Yes. There really is no significant — one significant investment that we made in the quarter. I think we’ve always said that timing of the investments that we’re making really will ebb and flow. So the increase in G&A that you saw was really just a timing aspect. Where we are investing in the business is really around kind of our data and analytics, product development, digital marketing. We’re continuing to invest in our direct investor channel. Those are the areas that we continue to invest in and any elevation or changes you see quarter-over-quarter is really just timing with respect to that. And with respect to AI, I think we’ve talked a little bit about some of the investments that we’ve made in data and analytics for our retail and intermediary distribution team.
