Alex Bolstein: Yes. Okay. Excellent. And then just for a quick follow-up on the transaction and deal side of things. So based on your strategic comment, sounds like it’ll be on the larger side. Can you just help us and remind what the leverage capacities on the balance sheet, how high you guys feel comfortable going in terms of debt to EBITDA?
Michael Policarpo: Good morning. Yes, I think we’ve never really set an exact level that we would commit to. I think we’re very prudent in how we think about leverage and have been pretty fortunate in thinking about the ability to generate cash. We’ve also used a bunch of different tools as we’ve thought about M&A. The revenue sharing component for investment professionals, earn out components. Clearly we’ve used debt in the past as a marker for supporting the growth from an organic perspective. But at 2.0 times and the significant amount of cash that we do generate, we’re comfortable with where we are and we’re comfortable to expand that for the right deal. And so I think if you look backwards when we did the USA transaction, we were 2.6 times, 2.7 times.
That’s just the historical data point that I’d throw out there. I’m not suggesting that that’s a cap. I’m not suggesting that that’s a comfort level. But we have brought the leverage down in 2023 with the expansion of really both the earnings power as well as the cash accumulation to provide us flexibility. So I think we’ll be prudent, but I think each deal is pretty specific and the facts and circumstances will kind of drive us from a structuring perspective, as well as kind of thoughts on leverage.
Alex Bolstein: Okay, thank you.
Operator: Your next question comes from the line of Adam Beatty from UBS. Please go ahead.
Adam Beatty: Thank you, and good morning. Just wanted to follow-up on some of the discussion around the CIT vehicle and maybe get some more details on your efforts in the retirement channel, how dialogues are going with either plan sponsors or other intermediaries and how much growth you see there. Thank you.
Michael Policarpo: Good morning. Yes, as Dave mentioned earlier, we have a pretty full suite of CIT offerings and have actually really going back to the MBO, so since 2013. As we’ve always said, we’re pretty vehicle agnostic with respect to offering out our investment product through our different franchises. We think CITs are a great opportunity to penetrate the retirement platform network and have had success there really over the last several years as that more and more of an increasing opportunity from a vehicle perspective. Additionally, we also see it useful in institutional mandates. Some lower-end institutional clients can use CITs and we found that to be extremely beneficial to have that out there. We have a number of CITs out there across really more than a handful of our franchises.
And getting placed on platforms with our CITs, getting placed on platforms with the various mutual fund share classes that we have as well as our ETF offerings really provides us a tremendous opportunity across different investor bases to capture assets, to capture the opportunities set from different financial advisors and retirement platforms. So it’s been a staple for us and something that we think as macro environments have changed over time, will continue to be a growth engine for us moving forward, both in retirement as well as institutional.
David Brown: Yes. And Mike, I would add two things on that. I think one is, we do have a dedicated retirement sales group, and we’ve had that in place for years. And their sole focus is getting access on platforms and then servicing the platforms. And that sales cycle is quite long, but those are very sticky assets as those clients typically stay in your product over long periods of time. We also view that part of the market as an area that continues to grow and it’s very predictable and we like that part of the market. So I think as we think about — as Mike said, as we think about what product or what franchises we will launch in the retirement side, really I think it’s really what the client demand will be.
Adam Beatty: Got it. Thanks, Dave. And as we head into the first quarter, which can sometimes be seasonally positive for retirement, would you expect an uplift [indiscernible] there?
David Brown: It’s only through a month and a few days, so I’m not going to comment on what we’re seeing or what we’re not seeing. I would just say the retirement market is very predictable, even in times like this, where most investors are sitting on the sideline in cash.
Adam Beatty: Okay, makes sense. Thanks very much. Appreciate it.
Operator: Your next question comes from the line of Kenneth Lee from RBC Capital Markets. Please go ahead.
Kenneth Lee: Hey, good morning. Thanks for taking my question. Just broadly speaking, as you look further out this year, I wonder if you could just highlight any particular areas or strategies where you could see some potential organic growth opportunities, or like the best areas of potential organic growth opportunities out there. Thanks.
David Brown: Sure. So — and in no specific or priority order, we think the WestEnd Advisors franchise and their model delivery business is — has a lot of momentum and so we expect that part of our business to grow. RS Global has excellent investment performance and has made some headway in the institutional channel. That’s another area. At some point in 2024, we think that our fixed income, franchise Victory income investors will see growth given some of the macro trends with assets moving parts of our ETF business as well. And that includes some of our fixed income ETFs we anticipate to grow. And then we have, I would say, a few capacity constrained asset classes where we have great investment performance with integrity in US small cap, RS Value in US small cap, and we think that those will be areas that will see some growth as well.
