Ken Worthington: Hi, good morning and thanks for taking the questions. So I wanted to dig into the fundraising environment for the private markets business sort of as we transition from 4Q to 2023. So have you seen a change in the environment as we sort of transition? And I think in the last call, you expressed confidence that fundraising would be higher in ’23 than ’22. In the comments today, you sort of added the qualifier bigger or equal to 2022 levels. So are you feeling a little less confident? And I guess the kicker here is on CIS III and MAC III, which have their final closes this year. I think fundraising needs to accelerate for you to reach your prior targets for those funds. Is that something you feel confident in? Or if not, can fundraising be extended to sort of reach your prior targets?
Michael Sacks: Yes. So thanks for the question, Ken. I think that specifically, just first to just clarify what we said in the call was that our FRE goal of mid-teens FRE growth for ’23, we can achieve with even less fundraising than we had last year. That was really to provide context for all of you in terms of what we need to do to make that mid-teens number. That was not in any way intended to be an indication of what we think will happen. And in fact, we do think we’ll have more fundraising in ’23 than we had in ’22. And I think that’s very important that you hear that. That was in no way an effort to tell you what we think is going to happen. It was more an effort to kind of give you an appreciation for what’s needed for us to make our mid-teens FRE growth.
And our own view is that demand for alts has remained strong. Nobody is moving away from the strategies. Nobody’s changing kind of – lowering where they want to see alts in their overall balance sheet allocation, you have had – you had a slowdown last year, and it was really related entirely to kind of the macro capital markets environment and importantly, to both the dual factors of denominator on significantly reduced long stock long bond portfolios, and it was related to the reduced transaction levels, which means that cash flows are coming back – from the portfolio are down. So people kind of slowed down a little bit in terms of making new commitments. And our view is that as transaction levels increase, you’ll see everything loosen up, and you’ll see commitments to new funds and to new programs increase as well.
And that’s our outlook. As far as MAC and diversified infrastructure, that fundraising does need to accelerate. We do have the pipeline to do that. I think it’s a natural expectation in a slower environment where people want to wait a little bit to sign their subscription documents that you’ll see bigger closes towards the end of the period, and we do have nice solid pipeline across the firm in all the verticals and for those specific efforts as well. And so we do expect to have some productive fund closings for both of those funds this year.
Ken Worthington: Okay. Excellent. That was super helpful. Okay, catch-up fees. How should we think about catch-up fees this year versus last year, if all goes according to plan? So fundraising a bit back-end loaded. It sort of suggests that these catch-up fees will be more robust in the second half of the year to help us sort of level set how should we think about ’23 versus ’22 just on catch-up fees?
