00:00What would be those couple of things that make sense for you?
00:02We've been public about this. I think getting larger in private equity could make sense for us.
00:07We've been in the private equity business for as long as we've been in existence,
00:10but it just hasn't kept pace with the rest of the business in terms of real estate, infra, and credit.
00:16I think there's an argument that someone of our size and global reach should be larger generally in private equity.
00:24I mean, there's a lot of players out there and probably a lot of smaller players who would love to
00:27be part of the Aries platform.
00:28How do you evaluate that when you look for potential managers to buy?
00:32What are the characteristics of a good private equity bolt onto Aries?
00:36I just realized now my phone is going to be ringing all day from every investment banker.
00:39Everyone's going to be pitching you, for sure.
00:43Look, it's all about track record, and this is something that people don't talk about enough,
00:47and so I'm going to answer your question a little bit differently,
00:50because when you get into a world that we're living in now where you're seeing outflows and volatility in stock
00:57prices,
00:57it all comes down to fundamental performance,
01:00and top quartile, top decile performers that can demonstrate that they can deliver outsized return in any environment grow.
01:08So we have a simple saying in Aries that assets follow performance.
01:11If you perform, you grow, and if you do well for your investors, they do well by you.
01:16So particularly in markets like private equity, and frankly, when you get into the equity part of the capital structure,
01:23even in real assets, performance, performance, performance is kind of the top criteria.
01:31And then I think it's about can you really generate alpha, and this is going to be the big shakeout
01:37in PE.
01:38We're coming off of a decade where you had a lot of beta players who, because of the rate environment
01:46that we were in
01:46and because of the nature of supply and demand in the market, were generating what looked to be best-in
01:52-class returns,
01:53and now that arbitrage is gone, and you really have to, you're going to get an opportunity to see which
01:59private equity managers
02:00can really make companies better and transform them, and I think those are the ones that you would want to
02:06own.
02:06Do you think they're far and few between?
02:07I think there are.
02:08I think if you were to actually look at the math, and this is something that we do in our
02:12secondaries business,
02:14when you look at the number of managers globally who can really generate alpha consistently, there just aren't that many.
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