Jay Horgen: Yes. And that was a really good summary. I don’t have a lot to add. I’ll just remind everyone that we don’t really hear think about our flows as a quarter-to-quarter event. Actually, we try to look beyond that by some amount of years. Really what we think net flows for us will really be an output of successfully executing on our strategy as we continue to shape our business towards areas of secular growth. So it will act different between private markets and liquid alternatives and then obviously differentiated equities. Those will all act differently over time. But as we’re moving towards these secular growth trends, we do see long-term improvement in our flows but also really just long-term growth in the business as we pick up on these trends. Thanks for your question, Craig.
Operator: Our next question comes from the line of Brian Bedell with Deutsche Bank.
Brian Bedell: Maybe just to go back to some of the things you talked about in the original comments on the pipeline of new investment activity and the fact that you’re stressing the — you continue to emphasize the private capital area. Just wanted a 2-part question, if I may. One, just financially, the capital available for new investments. It sounds like you’ve got the $1.25 billion revolver and about, call it, $1 billion in cash flow. And then I know you’re paying down to, I think, a $400 million tranche in February. So I just wanted to sort of get a feel for available capital. And then secondarily, what areas are, do you think in the investment pipeline in terms of private capital asset classes that you would think that you might be adding to would it be more of the same? Or are there different areas that you would want to focus on? Or would you look to potentially just invest more in your current private capital affiliates and help them develop.
Jay Horgen: Great. Thanks, Brian. Let’s see. I’m going to take the new investment pipeline question and what we’re looking for, and then I’ll turn it over to Tom to talk about financial capacity and kind of balance sheet movements. I think those are 2 good questions, and it might take us a minute to go through both of those. So what are we looking for? I will just remind everyone, it’s much broader than private markets. Although private markets were very much focused on. We’re really focused, though, at the higher level on areas that we think are going to grow — receive client allocations over time in our long-term durable trends. So when you look at where we’re spending our time, won’t be surprising to you. We’re looking for specialized high-quality independent firms that operate in these areas.
And we think that they have an edge relative to larger firms just because they’re aligned with their clients and there’s entrepreneurialism in those businesses, and there’s an ownership mindset. So independent partner-owned firms in in areas of secular growth is generally our origination and prospecting efforts on the new investment side. So where do we see growth? Obviously, in private markets, we’ve talked about that. We see it in very specialized areas. Tom talked about it, but we have now 8 affiliates operating in those areas. And each affiliate has a specific orientation for their clients and the ability to kind of add adjacencies to their business. So private market is absolutely an area we’re looking for. And frankly, it’s more constructive to do private market deals today after a period of high valuations, we see valuations moderate in the segment.
And frankly, there’s better structures that share the risk of management forecast between buyer and seller. So I think it’s easier for us to do those investments in private markets. Liquid Alternatives is another area that we are very focused on. We like the absolute return and opportunistic strategies within liquid markets. We think a higher rate, higher inflation, more sideways market really is something that we haven’t seen in a long, long time. And therefore, when we look forward, we think that liquid market alternative firms will fill the need for institutional and wealth investors to generate returns in sideways markets or volatile markets, and we think liquid alternatives is important for portfolios. We talked about these sort of megatrends within the sustainable universe, those generally around health care, data management, energy transition, the carbon economy.
They can come in a liquid manager, but it can also come into private markets manager, and we’re very focused on that. And then last — we continue to look at wealth businesses as well as businesses operating in economies such as Asia, where we do see long-term secular growth. The medium-term prospects are improving for us there. It’s been more difficult in the short term, but we are still looking. And then the last thing I’d say about the new investment environment is it’s very constructive right now because valuations have come down because structures better share risks, I just think the probability that we’ll convert our existing prospecting activity into new pipeline and that pipeline into deals into new investments is improving, increasing.
As you heard me say in my prepared remarks, we’ve advanced several attractive investment opportunities during this past quarter, just like we had in the quarter before and the quarter before that, and we’ve — we’ve announced 2 deals year-to-date. So we continue to believe that we have real good opportunities to invest in growth in new affiliates, but there are also opportunities to invest in growth in existing affiliates as we mentioned. And we’re trying to do both, and we’re trying to pick up on the same trends, both within new affiliate transactions as well as existing affiliates. So maybe now I’ll turn it to Tom to talk about financial capacity.
Thomas Wojcik: Yes. Thanks, Jay. And Brian, thanks for your question. Maybe I’ll start and just talk a little bit about the debt pay down and then go into capital overall. But overall, we feel really good about the way our debt has been implemented over the last several years. We’ve really optimized for 2 core principles. One is we’ve wanted to extend duration to match the long-duration affiliate partnerships that we have. And second, we really want to make sure that we enhance flexibility so that we always have the optionality to execute against our forward opportunity set, which is robust, as Jay just went through. Today, about $1.1 billion of our debt is fixed out in long-duration junior securities, where we have roughly 30 years of average duration at attractive fixed rates.
