DigitalBridge Group, Inc. (NYSE: DBRG), in its First Quarter 2024 Earnings Call, highlighted a robust year-over-year growth in fee revenues and an increased focus on power solutions for data centers. CEO Marc Ganzi detailed the company's strategic initiatives, including a 17% increase in fee-earning equity under management (FEEUM) to $32.5 billion, driven by DigitalBridge Partners III and multi-strategy offerings. The company's commitment to renewable energy and the expansion in data center infrastructure was also emphasized, with over 2 gigawatts under construction and a pipeline exceeding 5 gigawatts.
Key Takeaways
- DigitalBridge's FEEUM grew by 17% year-over-year to $32.5 billion.
- Fee revenues increased by 21% to $72.8 million in Q1 2024.
- Over $20 billion in new data center CapEx commitments, with more than 2 gigawatts under construction.
- Company's portfolio companies are budgeted to invest over $11 billion in data center CapEx globally in 2024.
- DigitalBridge is focusing on power solutions, aiming to bring power generation and data centers closer, with a significant lease recently signed for a 100+ megawatt project.
- The company is actively involved in the renewable energy sector through InfraBridge and other initiatives.
- DigitalBridge confirmed its full-year FEEUM guidance and discussed capital formation strategy, including a co-investment with Silver Lake.
- The company sees opportunities for growth and margin expansion in the data center, power solutions, and fiber sectors.
Company Outlook
- DigitalBridge is confident in its position as an alternative asset manager and anticipates fee revenue growth throughout 2024.
- The company is simplifying its financial reporting and focusing on reducing interest expense and expanding operating margins.
- DigitalBridge expressed excitement for the upcoming Investor Day, where it will provide more insights on its strategies.
Bearish Highlights
- The company noted the complexity of delivering power density at scale for their rapidly growing pipeline.
- Assets in the market for potential acquisitions, particularly in Europe, were found to be too expensive.
Bullish Highlights
- DigitalBridge is optimistic about the long-term implications for tower investments in key markets such as the US, Latin America, Europe, and Asia.
- The company sees significant value and opportunities for consolidation in the residential fiber sector.
- There's a backlog of over 5 gigawatts in execution, which could lead to substantial data center and renewable energy spending.
Misses
- There was no mention of any specific misses or underperformances during the call.
Q&A Highlights
- The company discussed its return of capital and co-investment strategies.
- Executives highlighted the potential for margin expansion as new revenue streams are introduced.
- The focus on renewable energy and investment in the fiber space was reiterated as areas of growth.
DigitalBridge Group, Inc. (NYSE: DBRG) has showcased significant progress in its Q1 2024, with a strong emphasis on enhancing its data center infrastructure and integrating renewable energy solutions. With a solid financial performance and a strategic focus on powering the future of data centers, DigitalBridge is positioning itself to capitalize on the growing demand for digital infrastructure. The company's upcoming Investor Day is highly anticipated, as it promises to provide deeper insights into DigitalBridge's strategies to shape the digital economy and infrastructure for the coming years.
InvestingPro Insights
DigitalBridge Group, Inc. (NYSE: DBRG) has demonstrated impressive growth in its Q1 2024 earnings, with particular strength in its data center and renewable energy initiatives. To provide additional context to the company's performance and outlook, here are some key insights based on real-time data and InvestingPro Tips:
- The company's Market Cap stands at approximately $3.06 billion, reflecting investor confidence in its business model and growth prospects.
- DigitalBridge is currently trading at a low earnings multiple with a P/E Ratio (Adjusted) for the last twelve months as of Q4 2023 at -1.55, which may indicate an undervaluation of the company's earnings potential.
- Revenue for the last twelve months as of Q4 2023 reached $810.98 million, with a notable revenue growth of 17.46%, underscoring the company's ability to expand its financial base in a competitive market.
InvestingPro Tips suggest that DigitalBridge is trading at low EBIT, EBITDA, and revenue valuation multiples, which could be of interest to value investors seeking opportunities. Additionally, the company is expected to be profitable this year, as indicated by analysts' predictions. These insights, coupled with the company's robust growth in fee revenues and strategic focus on data centers and renewable energy, paint a promising picture for potential investors.
For those looking to delve deeper into DigitalBridge's financials and future prospects, InvestingPro offers an array of additional tips. Currently, there are 12 more InvestingPro Tips available for DBRG, which can be found at https://www.investing.com/pro/DBRG. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing comprehensive analysis and expert insights to inform their investment decisions.
Full transcript - Northstar At Mgt (DBRG) Q1 2024:
Operator: Good day and welcome to DigitalBridge Group, Inc.'s First Quarter 2024 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I would now like to turn the conference over to Severin White. You may begin, sir.
Severin White: Good morning, everyone, and welcome to DigitalBridge’s first quarter 2024 earnings conference call. Speaking on the call today from the company is Marc Ganzi, our CEO, and Tom Mayrhofer, our CFO. I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. And such statements involve a number of risks and uncertainties that could cause actual results to differ materially. All information discussed on this call is as of today, April 30th, 2024, and Digital Bridge does not intend and undertakes no duty to update it for future events or circumstances. For more information, please refer to the risk factors discussed in our most recent Form 10-K filed with the SEC for the year ending December 31, 2023, and our Form 10-Q to be filed with the SEC for the quarter ending March 31, 2024. Great. So, it's the new year and in connection with the completion of our business transformation, we've advanced and further simplified the format of our earnings presentation. Going forward, we'll start with Marc providing a business update, highlighting key takeaways from the quarter, and covering thematics that would have historically been incorporated in our third section, executing the digital playbook. Tom will cover the financial highlights in the second section, followed by Q&A. Another advance that you'll notice is we've condensed our earnings presentation and supplemental financial report into one document. The goal here is to make it easier for investors to access a single doc that captures the highlights as well as some of the important detail behind the numbers. We look forward to your feedback on this new format. I also want to highlight our second Investor Day coming in a couple of weeks on Monday, May 13th at the New York Stock Exchange. Some of you will be joining us in person, others on the webcast. Either way, we're looking forward to outlining our simplified business profile, discussing the state of private markets, digital infrastructure and AI, and how we continue scaling our highly differentiated platform. In addition to our senior management, we'll be joined by some of our operating partners as we give you color on what's happening on the ground in digital infrastructure. With that, let's get started and I'll turn the call over to Marc Ganzi, our CEO. Marc?
Marc Ganzi: Thanks, Severin. Let's start this call with our progress on FEEUM, which as you all know is our key revenue and earnings driver and the solid growth that we continue to see here. As you can see on the left, FEEUM grew 17% year-over-year to $32.5 billion at the end of the first quarter in 2024. Importantly, FEEUM growth was driven not only by our flagship strategy DigitalBridge Partners III and the corresponding co-invest but also via our expanding multi-strat offerings which include contributions from credit and liquid this quarter. In fact, if we hadn't had a step-down in separately capitalized portcos, as Vantage deadco moved from our latest flagship fund, FEEUM actually would have been up over 20% year-over-year. That transaction which we announced in January is similar to the Vertical Bridge deal we did in DigitalBridge Partners II, which created some short-term FEEUM pressure, but over the long term allows us to maintain exposure to the best growth platforms. In this case, Vantage is one of the best global hyperscale data center platforms, building large campuses at scale with what we think is the best management team in the world, led by our CEO, Sureel Choksi. In partnership with Silver Lake, we're planning on building over 3 gigawatts of capacity to meet the growing demand for cloud and AI infrastructure. And at the same time, DigiBridge shareholders will now earn carry as we create incremental value at that platform versus just a straight historic management fee, which is what investors were getting in the original investment vehicle that we built at Vantage. Bottom line, FEEUM growth year-over-year remain solid. And next quarter, you'll continue to see this metric March higher as we close incremental capital across all of our strategies. Next slide please. Next up is new capital formation. This quarter we closed on $1.1 billion in new capital commitments. That's up 47% over the prior year. So taking a step back, in summation, Q1 was good. And frankly, it could have even been better. We hold back some commitments from some of our clients that are working on a multi-strategy play with us that will play out over the next few months. We're really starting to have these more holistic conversations with our partners and LPs as our fund strategies expand. We'll talk a bit -- a little bit more about that on investor day, but it's great. I would say it's a great strategic development for the firm. We have multiple products in the digital infrastructure space that are meeting our clients' objectives. Whether it's credit, core, liquid securities, late stage venture growth, our flagship funds, co-inventing vehicles, and continuation funds, we're really building out that multi-strategy platform where we take advantage of that digital infrastructure flywheel that we maintain here at DigitalBridge. In Q1, we received continuing commitments of over $600 million to DigitalBridge Partners III. Subsequent to our 4Q 23 report in February, we also brought in commitments to our second credit strategy and had also contributions from liquid and co-investments as well. The key here again is multi-strategy, which will increasingly even out fundraising over time. As you know, we hold periodic closings for our strategies over the course of the year. And I'd say today with Q1 closed and good line of sight on capital formation over the course of the year, we feel very good about our ability to meet or exceed our fundraising targets we laid out for 2024 last quarter. Next slide, please. As Severin mentioned earlier, we've made some changes to the format of the presentation, bringing what used to be the third section up front to address some of the top of mind issues and strategic initiatives that we're executing on to build our business going forward. Today, data centers and AI are front and center, not just in digital infrastructure, but across an increasingly digital global economy. And in this sector, the number one topic today is power. This is why you're seeing tech CEOs like Sam Altman, Mark Zuckerberg, Satya Nadella, all out there publicly talking about how to access power in order to meet the demand coming down from Generative AI workloads. I'd like to bring some perspective from our end as an owner, operator, and manager of some of the largest data center platforms globally to understand the challenge and some of the ways that we're trying to address it as a firm. I'll start by highlighting that it's actually power generation that's not the issue. It's power transmission and distribution that are constrained. Transmission grids are capacity challenged. And imagine, if you think it's hard to get a new cell tower permitted, think about building new transmission towers or substations. There's a lot of friction in the system around this right now. In fact, growing contribution from renewables, which is an important development, introduces additional complexities to the grid, especially as it relates to data centers. Next slide, please. For those of you that know us well, we don't spend much time complaining about problems. We pivot pretty quickly, and our goal as a management team is to figure out solutions. So to solve the bottlenecks the grid is presenting, we're helping our portcos get creative and find ways to execute on a different kind of colo, bringing power generation and data centers closer together. On one side, it's building data centers closer to new or existing power generation. We're doing that at a number of our platforms, whether it's hydro, solar, natural gas, or wind. This actually fits AI training models quite well, since these workloads are less latency sensitive. They can be located further away from enterprises or consumers during the AI model training phase. On the flip side, we're also figuring out how to bring power closer to where you need data centers. You can see we're doing that at our DataBank and Switch (NYSE:SWCH) platforms today. This will be increasingly important as we move to the AI inference phase, where trained AI models are deployed at scale by enterprises and in apps used by consumers. Here, you need compute closer to the end user, not only in hyperscale but also in edge. Frankly, both of these approaches are going to be necessary to meet the demand that we're seeing across the portfolio for new power capacity. We believe it's not going to one technology or one strategy that's going to be the silver bullet to solve the problem. So we're increasingly focused on this today, and you'll hear us talk more about this as the year progresses. Next slide, please. A big piece of the power puzzle centers around renewables. This is an area of intense interest from our portfolio of company customers. Again, it's a customer-driven opportunity and solution who've all have aggressive net-zero targets for their compute and connectivity footprints, and from our institutional LPs as well. They want to see green electrons increasingly power their data center investments, not just through -- directly through PPAs, but actually bringing that power directly behind the meter into the data center. As you can see here, we're making a lot of progress with two of our six data center portfolios already 100% renewable with Switch powered here in the US principally by wind and solar, and Scala which is powered by hydro in Brazil. DataBank and Vantage are making very good progress as well, increasingly building or procuring renewable energy, as you saw in the prior slide. On the last pane here, another component of solving the power challenge is building and operating data centers that operate more efficiently, which is measured by PUE, or power usage effectiveness. This means the ratio of power into facility relative to the amount [used] (ph) to run the servers directly. Here, lower PUE values are desirable because they significantly use less energy, they're more energy efficient. Also here, AI is actually part of the solution. A number of our platforms are experimenting with new technology powered by AI that operates data centers more efficiently. We don't just build in for AI, we're also investing in AI for our infrastructure and for our customers. Next page, please. So let's step back and understand why we're so focused on power and see how that aligns with one of the foundations of the DigitalBridge roadmap, invest. Last quarter, I highlighted our portfolio companies are budgeted to invest over $11 billion in data center CapEx globally in 2024 based on the bookings that came in last year and also in this year. Just yesterday, one of our portfolio companies signed a 100 plus megawatt lease. That'll be roughly another $1 billion in incremental CapEx. Today, with over 2 gigawatts under construction at $10 million a megawatt, that's over $20 billion over the next few years in new CapEx commitments. Those are big blocks and we've already got the power lined up for that 2.2 gigawatts of under-construction capacity. But here's the issue. Looking ahead, looking around corners, our pipeline is over 5 gigawatts today and growing, and I would say growing quite fast. To turn that pipeline into bookings, you've got to be able to deliver the power, power density at scale. This is a key differentiator into the foreseeable future, and while you hear us -- you'll hear from us continuing to cover this topic, including more insights at our Investor Day around data centers and renewable power, and the convergence of those two topics together. So with that, I'll wrap up our business and strategic update and turn it over to Tom to cover the financials.
Tom Mayrhofer: Thank you, Marc, and good afternoon, everyone. As a reminder, this earnings presentation is available within the shareholders section of our website, and this quarter, we've combined the previously separate [Technical Difficulty] financial report with the earnings presentation for your convenience. Starting on Page 15, our key operating and financial metrics have seen significant year-over-year growth. Fee revenues, fee-related earnings and distributable earnings have continued to demonstrate positive trends year-over-year, and we expect this growth trajectory to continue as we progress through 2024. In the first quarter, we also generated year-over-year growth in new capital formation as Marc discussed. As the year progresses, we expect momentum to build and full year results to align with our guidance targets. Our fee earning equity under management is $32.5 billion as of March 31st, a 17% increase from the same period last year, driven by organic capital formation in the DBP series, co-investments and credit strategies. This increase was partially offset by an anticipated fee-based reduction as Vantage data centers transitioned from our prior separately capitalized vehicle structure into our latest flagship fund, DigitalBridge Partners III, or DBP III, which extends our exposure to Vantage through its next phase of growth. Moving to Page 16, the company continues to simplify its financial reporting to align with our alternative asset management peers, specifically in our presentation of fee-related earnings and distributable earnings. Beginning in the first quarter, the company introduced fee-related earnings on a company-wide basis, which now incorporates corporate expenses and is not equivalent to the metric reported prior to 2024 investment management fee-related earnings. FRE metrics discussed in this earnings presentation for prior periods have been updated to reflect company-wide fee-related earnings and are suitable for period-over-period comparison. Starting with fee revenues, the company reported $72.8 million in the first quarter, marking a 21% increase from the same period last year. As we progress through 2024, we continue to anticipate additional fee revenue growth, including catch-up fees driven by fundraising for DBP III, which had its initial close on November 1st of last year. Fee-related earnings were $19.6 million in the first quarter, up 28% year-over-year. While cash compensation was up due to the inclusion of a full quarter of the InfraBridge acquisition and continued investments in the platform, general and administrative costs were flat year-over-year, allowing us to improve operating leverage and expand FRE margins. We expect this trend to continue over the course of the year, with growth in revenue exceeding the growth in compensation and G&A expenses. Distributable earnings were $2.2 million in the first quarter, with the progress we were making at the corporate level de-levering on display with continued reduction of interest expense. The LTM figures on the right, I think, give you a good sense of the operating leverage that is starting to materialize in our operating margin, which has expanded from under 20% to just over 30% on an LTM basis. Turning to Page 17, we reported a reversal of $2.7 million in carried interest income for the first quarter. The company accrues carried interest based on quarterly changes in the fair value of our fund investments. The reversal in the first quarter stemmed mainly from net increases in fair value during the quarter, which came in below the preferred return hurdle on certain funds, resulting in a reduction on a mark-to-market basis at a small amount of accrued carried interest. Notably, carried interest compensation expense tracks these changes, and there was a commensurate reversal of a small amount of unrealized carried interest compensation. Principal investment income, which is accrued and/or realized income primarily earned on the company's GP investments in our various funds, was $2.8 million in the quarter, with $2.3 million in realized distributions from our funds. Turning to Page 18, you'll see that the company continues to maintain ample liquidity and has continued to de-lever its balance sheet, including the completion of the full exchange and redemption of its $78 million of 2025 exchangeable notes in April, reducing corporate level debt that will result in approximately $4.5 million of annual interest savings. With that, I'll wrap up the financial results section of our presentation. It's shorter and I hope easier to follow given our simplified business profile. Before handing it over to Marc, I want to express my gratitude to everyone on the finance team and across the firm, especially Jacky Wu for welcoming me to DigitalBridge and helping my transition over the last few months. I'm really excited to be here and look forward to connecting with our shareholders at Investor Day and over the course of the rest of the year. With that, I'll turn it back to Marc for his final remarks.
Marc Ganzi: Thank you, Tom. And again, thank you to Jacky Wu and our entire finance team for making your transition so seamless. Well, look, we're going to wrap it up. I want to thank everyone for their time and attention today. I think we've continued to lay out the foundations for how we're building we believe one of the most powerful alternative asset managers tied to some of the most exciting secular themes on the planet today. We're looking forward to welcoming all of you to our Investor Day. And with that, I'm going to turn it over to the operator for Q&A. Thank you.
Operator: [Operator Instructions] Our first question comes from Michael Elias of Cowen & Company. Please go ahead.
Michael Elias: Great, thanks for taking the questions. Marc, I just want to double click on your comments related to [power, which] (ph) -- I appreciate the framework you laid out. One of the things that you talked about is that data centers in part need to move to where the power is. To that point, I'm seeing a lot of activity in the Midwest of the United States. Curious how you're thinking about or how your view of markets has evolved, particularly, are you looking at places where historically there haven't been data center opportunities? That's my first question. And then second question as part of that is, as I think of the locations where there is power, but there aren't data centers currently, one of the things that I think is missing is network. You've talked about convergence in the past. What I'm curious about is how you think about the interplay between a data center platform like Vantage and Switch, and Zayo, a fiber company, in terms of delivering a holistic solution to the hyperscaler as we look to bring data centers to new markets where there is power? I know that's a lot, but I hope that makes sense.
Marc Ganzi: No, you always make sense. And I think you're skating to where the puck is going, not to where the puck is. I want to sort of break your question down into two pieces, Michael. One is just to talk about the direction of travel on power. And then the second, I do want to talk about connectivity because you've nailed it, right? Connectivity is really critical. The capillaries that connect, obviously, interconnection to data centers, and then how this correlates to AI and where are those big language-based models being built and ultimately when we move from you know from training into inference, those locations become more latency sensitive, so we can we can explore that for a second. And I’ll be mindful that there's other people in the queue that have questions. This is a topic you and I could talk a lot about. Remember, data centers have sort of, there's kind of two screens to this. The first is, do our customers trust us to build their data centers and to continue to lease capacity from us? And what kind of workloads are they leasing from us? Coming out of this quarter, we had contributions from all six of our major data center platforms globally. So we spent a lot of time this last week aggregating that data and understanding what our customers are doing. And so what's really interesting to me is that there's such segmentation now between cloud and AI in those workloads and ultimately workloads that are latency sensitive and workloads that actually are very location sensitive from an AZ perspective. And so private cloud, public cloud, edge workloads, enterprise workloads, all of those workloads, Michael, are evolving in real time. And data centers are evolving too. And so I think that some of these locations that are less latency sensitive are some of these locations that can be 200, 400, 800 megawatts. And those are those training models in AI. And provided you have good fiber connectivity, those locations can be a little less, shall we say, latency sensitive. Then there are, as you move in a Generative AI and you get into active workloads and active applications, it starts to follow the same model that the cloud followed, which is, you and I both know we're in the 11th to 12th year of the cloud. And so we're seeing a lot of those locations in those AZs are now really important in places like Goodyear, Arizona, in Atlanta, Georgia, in Columbus, Ohio. And certainly like Reno, Nevada is an alternative to Santa Clara. And so there's this whole next generation of cloud workloads that are showing up big in its scale, but they're not traditionally in Virginia, they're not traditionally in Santa Clara. And you see that the customers are navigating to different places. And then obviously you see what's happening at DataBank on the edge side. DataBank had a fantastic quarter, one of the best quarters in history, and that company continues to deliver what we call hyper-edge workloads, that half megawatt to 10 megawatt workloads, where the cloud is obviously moving to secondary and tertiary markets. We see AI following a similar footprint, but the challenge against how you build AI is very much correlated to where you can get power. And then of course, there's the self-perform where our customers are going to perform their own work, and ultimately the work that we're going to perform. This is a very complex matrix, because it's a decision tree at the end of the day, Michael, the way I think about it. And the first decision is, are customers going to trust us to build the workload, are they going to self-perform? Check. Second screen is, is this really for their cloud products, or is this for their AI product? And then of course the engineering standards, and ultimately the GPU standards, and the design standards, and the cooling standards change and deviate a little bit. And then ultimately do people really value sort of having a Tier 5 experience where those workloads need to be highly secure and perhaps even in private cloud, aka what Switch is doing. Switch has had a phenomenal first quarter and the second quarter is even lining up to be better. The good news is, in our world, we don't have to choose. When we own powerful platforms like Vantage, AtlasEdge, DataBank, Scala in Brazil, which had a great quarter, we're seeing all of these workloads manifest itself all across the globe. As you saw in our slide, you see photographs of data centers from all around the world. I don't see that the customer is the constraining factor, Michael. I see that power is really the constraining factor. And that's going to become more evident to you and to the rest of the investor community over the next two years. It's not obviously, from my perspective, Michael, it's not new news. We started talking about this over two years ago at the Berlin Infrastructure Conference when I told the investor world, we're running out of power in five years. Well, I was wrong about that. We're kind of running out of power in the next 18 to 24 months. So we started two years ago working on this power problem. So it's not new information to us. And as I said on our call today, the 2 point plus gigawatts that we're building today, shovels in the ground, all of those commitments with our customers have power. Power in place will serve letters. Those aren't hope data centers. Those are actually data centers that are committed, being constructed, and customers are moving into it. I do look around the corner and I look at that next 5 plus gigawatts of opportunity and we're going to have to get more creative. And the way we get more creative is one, we try to locate certain of those big AI data centers and locations that maybe are less latency sensitive. We try to co-locate those opportunities closer to renewable energy and we try to create energy independence or grid independence. And those are the things that we're thinking about. So the next generation of data centers are perhaps going to be in different locations. Now, how do we create that customer experience? We create those customer experiences with low latency, big, big, big pipes in terms of the dark fiber that we're bringing to those data centers. And I'm not talking about four pairs, 12 pairs. We're talking about hundreds of pairs of fiber with redundant routes. And this is where, as you've highlighted, Zayo comes into the mix, and what gives us a lot of confidence to sit with some of our key customers and say, look, we'll deliver you the data center. We can deliver the fiber, and then the next sort of key is can we deliver the power. Now if I can wrap that all up in one bow, we actually have InfraBridge, which as you know is an infrastructure provider. We actually engage in renewable energy already as a firm. And so our opportunity set is fusing the hard work that we did at InfraBridge, some of the hard work that we've done at Zayo, the hard work we've done across all of our hyperscale and private cloud data center operators to bring a holistic solution to customers. And now that's finally manifesting itself. Now, the real key is at the asset manager level, we got to make that manifest itself in the capital we form, the fees that we generate and the carried interest that comes commiserate with creating these great ideas and bringing it all together. I am very happy with what's going on at Zayo. We've seen a significant uptick in the bookings there, particularly with the hyperscalers and some of the web scale routes. There's great opportunity there, and they're going to need us. And it's not just for Zayo, it's the whole fiber industry in general is going to need more new routes, low latency routes, and of course heavy strand count. And that's the way you bridge the gap in terms of creating low latency environments for AI workloads. So it's a combination of a lot of things. This is -- this situation Michael, and I'm sorry this is a long-winded answer but you asked a complicated question and we're going to dig into this in our Investor Day. It's more complicated to build a data center today than it was two, three years ago and it's going to get increasingly more complicated. And I've been saying that for the last couple of years, but now finally everyone's paying attention. And it won't get easier. I can share with you that it'll get harder. But I like it when things get harder. When it was harder to build towers 20 years ago, we were up for that challenge. When it was harder to build small cells 15 years ago, we were up for that challenge. When it was harder to build small cells, you know, 15 years ago we were up for that challenge. So we got a management team that understands how to work through challenges and the key was identifying those challenges over two years ago, which we did. So stay tuned and I think we've got a great story on how we solve problems for our customers.
Michael Elias: Awesome, really appreciate that color. We can talk about this forever, but I'll pass it on to the next person.
Marc Ganzi: Thank you, Michael, I appreciate it as well.
Operator: Our next question comes from Jade Rahmani of KBW. Please go ahead.
Jade Rahmani: Thank you very much. I appreciate the comment around the carried interest reversal. Do you have any estimate of what distributable earnings would have been excluding that item?
Tom Mayrhofer: The carrier reversal is a mark to market, so that doesn't impact distributed earnings.
Jade Rahmani: Okay. How do you feel about the outlook to achieve full year FEEUM in your prior outlook of $36 billion to $38 billion from the $33 billion at year-end ‘23?
Marc Ganzi: Yeah, I think Tom and I remain completely convicted in the numbers. We have no changes to our guidance at all. We're seeing exactly, we feel like we are where we want to be through the first quarter. And again, want to reiterate, no change to our guidance that Tom and I reiterated in the previous quarterly call. Thanks, Jade.
Jade Rahmani: Thank you.
Operator: Our next question comes from Ric Prentiss of Raymond James. Please go ahead.
Ric Prentiss: Thanks. Good afternoon, everybody. A couple of questions. I want to follow along with Jay's question there, too. So obviously the outlook confirmed on the capital formation, $36 billion to $38 billion for ending TUM. Help us understand the pacing. Obviously, it's still pretty tough out there. And what's kind of like the gross funding versus net funding and the pacing for those returns as well? First. I have a follow-up question.
Tom Mayrhofer: So let me take the first one on capital information. Hi, Ric, how are you? So look, it certainly -- one could extrapolate it's tough out there, but honestly, Q1 in our line of work is always tough, Ric. LPs are defining their allocation strategy for the year. Not a lot of allocations are historically made in the first quarter. This is not germane to DigitalBridge. You look across the alternative, the alt space, and you'll see that fundraising historically is pretty tepid in the first quarter but we outperformed last year we outperformed 2022 and our outlook actually remains optimistic. We are in middle of closing multiple clients across multiple strategies. I think that was something I was trying to infer in our call this quarter is that the multi-strat approach to what we're doing is working, Ric, which is that people understand our proposition, not just in our flagship fund, not only in co-investments, but they understand what we're doing in core, in credit, in liquid, in continuation vehicles. And so we're seeing more repeat activity with LPs than we've ever seen. I think as it relates to our flagship fund, we're certainly where we want to be. We remain unchanged in our guidance around the third flagship fund. And I think it's exciting that we got Credit II launched earlier than we thought. So that strategy is now in flight a little earlier than expected. And certainly some of the co-investment vehicles are having a very strong quarter as well as we form capital around great companies like Switch and like Vantage. And some of our other companies that we're out forming capital for right now as we continue to build into the AI strategy. So we're legging in. Our LPs are legging in. Certainly some of the commitments related to flagship as I inferred on the call are tied to some other investment vehicles. So we slowed them down a little bit and now we're getting them over the goal line. But again, I want to reiterate, no change to our guide. We feel really good about our ability to raise the capital. The clients are happy with what we're doing and we anticipate a strong year. Your second question, Ric, I don't think I fully appreciated it. Can you reframe it for me?
Ric Prentiss: Well, just there's some return of capital involved too, right? I mean, you have the Vantage.
Tom Mayrhofer: Yeah, yeah, so absolutely. You are correct. So in the first quarter, we did return some capital. We had some exits, and we created some DPI, good outcomes for investors. And at the same time, we formed capital. So part of the magic is we do return capital from time to time. And I mean the great news about Vantage is we return capital but we then put capital to work with our friends at Silver Lake. And as I intimated, we have a big co-investment vehicle that's getting ready to close there, which is exciting. And we love the fact that we retain that management team, we retain that asset, and we're deploying new capital that bears economics. So on a net basis we actually think much like Vertical Bridge, our exposure in terms of fees will rise over time, but here's the best part. We're getting US public investors get carry now on Vantage. It now sits in our fund product And so investors now get to participate in the success of what's happening at Vantage with Sureel and the team. And that should be a really good day for public investors. I know Ric, you like Sureel. I know every analyst on the street likes Sureel and likes what Vantage does. So, now our public shareholders get to ride sidecar with us and get to enjoy the profits of that hard work. And Sureel is absolutely doing a great job for us.
Ric Prentiss: Great. And the final question for me is obviously reaffirming the capital formation targets. Tom, you've made some changes in the way you present the financials and report. You mentioned the company-wide fee. How should we think about where you're headed on helping the street understand financial guidance and what are you looking specifically to benchmark against the peer group because obviously this change, I think, sounds like you're trying to line it up so it's much more comparable to the peer group?
Tom Mayrhofer: Yeah, I think, we've tried to make it quite simple to follow. I think our financials are fairly almost self-explanatory. They drive, as Marc talked about, the fee raising, that converts directly into fee revenue and the expense side of the equation is relatively simple and straightforward as well. So, we hope we'll be able to deliver really clear, clean, and kind of results that you can follow and model and predict.
Ric Prentiss: And I think you called out the margin improvement. What was that slide? Let me see, I'm there. Is there a target of where you want to get the FRE margins? And is there important size of scale that you want to try and achieve also? That's one for me as well.
Tom Mayrhofer: Yeah, I think, look, I think the scale is not kind of binary. I think it is kind of gradual. And as we continue to grow, we'll continue to achieve scale. I don't think there's a step function change. I think as we continue to grow, particularly when you have multiple products in a family. So, you get DBP III, DBP II, DBP I, that gives you a lot of scale. So I don't think we're going to set a target on FRE margins, but every new dollar of revenue that we bring in, we feel like improves the margin.
Marc Ganzi: Yeah, and I'll just come behind you on that, Tom. I think we are seeing, as that incremental capital dollar comes in on flagship III and incremental dollars come in on Credit II, we do see the opportunity for margin expansion. I think in the first quarter we had some new FTEs that came on. We did some hiring as we are expanding into some other strategies, which we'll certainly talk about Investor Day. But we've been really good at sort of being able to home grow our own best ideas around products. And as those products scale, we ultimately, they turn the corner and they create efficiencies and we get margin expansion, not margin compression. So I think as the year goes on, Ric, in the second, third, and fourth quarter, as we close capital, again, it's kind of like a wedding cake. That capital comes on with very little to no incremental G&A. And so I think what you'll see is not only the revenue contribution expands on a run rate basis throughout the year, that's where business works, but also you'll see a revenue contribution expansion as well because there's not a lot of incremental heads, Tom, associated with our second credit strategy nor our Fund III. And the co-investment vehicles that we're raising right now, and certainly some of the other products we'll be unveiling this year. So I think in large, we remain very convicted about the guide. And more importantly, we remain convicted about the ability for us to improve revenues and margin as the year goes on, Ric, much similar to what happened last year.
Ric Prentiss: Okay. Thanks, guys.
Marc Ganzi: Thanks, Ric. Appreciate it.
Operator: Our next question comes from Richard Choe of JPMorgan. Please go ahead.
Richard Choe: Hi, thank you. I just wanted to follow up on Ric's questions a little bit. With the FEEUM guidance being reiterated, is the fee revenue guidance also being reiterated and how much of that is coming from catch-up fees? And then following on with that is the FRE guidance, I guess now that it's a consolidated number, not digital, I am related, is that $150 million to $165 million still a good number for the year?
Tom Mayrhofer: Hey, Richard, how are you? First of all, thank you. One, I think I would just go yes, yes, yes, if we just want to be quick about your questions. Let me give you a little more color behind it. I think on the fundraising piece, there will be inevitably be catch-up fees, right? That always happens. There'll be catch-up fees in Q2, Q3, and Q4. And the timing of that always is a little bit tricky. So some quarters may have a little more catch-up fees than others. I don't think we're exactly going to handicap how much catch-up fees we're going to have over the three quarters at this point in time, but suffice to say your assumption is correct. And the assumption remains accurate as we bring on that $7 billion to $8 billion of incremental capital this year. You can anticipate that all three quarters coming will have catch-up fees and flagship and certainly to a lesser extent, credit. Obviously, continuation funds and co-investments, we get the fees immediately. So we do anticipate there being some velocity in that, it'll pick up as we go throughout the year. I think the other two answers to your questions were yes and yes. We're not changing the guidance. And obviously now that everything's all rolled up in a one consolidated number, hopefully it's easy for you guys to all digest, and if it isn't, we're always available to talk about it and give you any more granular information you need.
Marc Ganzi: The guidance was created on a company-wide basis. So it's not a -- does not change.
Tom Mayrhofer: It's not an IM versus operating, it's all just one company now.
Richard Choe: Great, just wanted to clarify that. And then going back to the strategy presentation earlier, do you expect to just benefit from kind of the data center growth, or can there be, I guess, incremental returns being generated from, I guess, the transmission and power solutions that you come up with? And how big could that be? And would that require, I think you've talked about in the past, kind of different maybe teams or funds or can this all be captured in the existing, I guess, with the existing infrastructure?
Marc Ganzi: Yeah, it's a great question. I'm going to break the answer down into three components. One, applied learnings over the last 36 months have been really happening at our portfolio companies. And so the good news about having a global footprint and having six powerful platforms is we do business literally with every power provider on the planet. So we have great insights into what's happening in Campinas and Tambore, what's happening in Kuala Lumpur, what's happening in Tokyo, what happens in places like certainly like Berlin or Cardiff or London and then of course here in the US and Canada. So it's been great to have these great management teams that have been out executing some of these renewable solutions like at Switch and Scala which are a hundred percent renewable already. It's really exciting what we've done at Scala that's all hydro, we lease transmission infrastructure, we have our own substation, we've created our own grid in Campinas. We sell power, obviously, to ourselves. We certainly could sell power to other data center operators. We don't. But that was a great learning experience for us, Richard, over the last three years. Really exciting what we've been able to do at Switch. Certainly, the Reno campus is a model for the future, given the amount of exposure to solar there and hydro. Our partnership with the Nevada Power and Light and a few other utility companies has taught us a few things. And the best way to really drive this stuff, Richard, is to drive it at the portfolio company level and drive those experiences with customers. And that's what we've been doing. And so having exposure to great management teams, great customers, creating great solutions has been what it does. And that stuff percolates back up to us here at the asset manager level. Now, no accident that we bought AMP (OTC:AMLTF) Capital, no accident that we renamed it InfraBridge, and that we decided to put a team focused on renewable energy. We've done that. We have a dedicated group of folks that are working on that. And we believe there is a really big, big opportunity not only to deliver power at scale for our data centers, but even to some of our friends that are in the business. And so we're working on a bunch of ideas and solutions. Those ideas and solutions will manifest themselves quite soon. What I can tell you is we've never shied away from developing new strategies at DigitalBridge. We've gone out and hired, we think, the best team to go prosecute these ideas. We've been working on it for two years. This has been a lot of hard work. And I think what you're seeing is, again, at the portfolio company level, we're creating these ideas and creating these solutions. Is there something to do that's bigger? Of course there is, right? If you think about how much power remains on the US grid and on the European grid, we're down to less than 7 gigawatts on the US grid, we're probably down to less than 2.8 to 3 gigawatts in Europe. And as I said earlier in the call today, we think we run out of transmission infrastructure for power dedicated to data centers in 24 months. And so to go to the next place is we've got to be proactive. We've got to work hard down the portfolio company. We've got to work with other utility providers that are our friends, that we've worked with in the past, and we have to create those good outcomes. So it's a little bit of foreshadowing, but that's what we're doing. And we do think it's a huge opportunity. Given our backlog, we're executing on 2 gigawatts and our backlog is over 5 gigawatts. If we were to execute 5 gigawatts of leasing, that's $50 billion in AUM in terms of data center spend. Talk about $0.50 on the dollar in creating new renewable power, that's another $25 billion of AUM that we could produce in renewable energy if we chose to go that path. So we have a lot of alternatives. We have a big backlog. We've got great customers. We've got great CEOs. And we've got great partners in the power industry. So I would just tell you there's a lot to be done there. And we absolutely anticipate being a part of the narrative.
Richard Choe: Great. Look forward to the Investor Day where we can go over this stuff in more detail. Thank you.
Marc Ganzi: Looking forward as well. Thanks, Richard. See you up in New York.
Operator: The next question comes from Eric Luebchow of Wells Fargo. Please go ahead.
Eric Luebchow: Great. Thanks for taking the question. So, Marc, maybe I just wanted to get the latest pulse on the M&A market where you're finding maybe some relative value today. It seems like data centers and kind of developed market towers are still priced pretty aggressively. So are you finding any better value in Fiber, whether it's residential or enterprise?
Marc Ganzi: So yeah, I would say look, the value proposition on Fiber is, you are correct, is initially starting in residential. Resi fiber has got some really interesting Platforms that you know we think some sponsors perhaps paid too much, put too much leverage on them and so there's an opportunity to play either through our credit fund or play through our third flagship fund. I think we have got a significant amount of new pipeline of ideas. We're prosecuting over 20 new ideas in our third flagship fund. A couple of those ideas are in the fiber space where we are seeing significant value. I think the deals that were once priced in the 18 to 25 times EBITDA range are now pricing in the, call it, 10 to 14 times range and we're even seeing some interesting opportunities in other verticals of residential fiber where we think those could price down into the single digits. So I think there's value to be found, but you have to be careful, right? There's pitfalls with that. The entry price is just one part of the proposition when you're an investment committee. There's follow-on CapEx. You've got to continue to invest in these networks. And some of these businesses in the residential fiber space are under-invested because they're competing against well-capitalized cable companies or [R Box] (ph). So we've looked at a lot of stuff, we've said no to a lot of stuff, we've green lit one deal already in the fiber space. We're looking at another one in our third flagship fund, but again, there's a lot to do out there. It's not just in the fiber space, not in the resi fiber space, But we also see opportunities certainly in the enterprise fiber space. And then most importantly, we really like the data center connectivity space. So that's really long haul, metro rings and data center connectivity or AI connectivity where we're integrating that with a data center solution and a power solution to a customer. There's a lot happening in connectivity right now. But one thing is for certain, as we said on the call today, fiber is critical. Fiber is critical to AI, fiber is critical to ultimately connecting the edge, and fiber is critical to bringing ultimately low latency, high speed solutions to IoT networks, small cells, everything we're doing and everything we're touching does involve that connectivity in the fiber. So we don't see the vertical going away. We do see value. But I actually think some of that value will be more pronounced next year. There's close to $80 billion of LBO debt that's rolling in the next 36 months. Some of that is in the fiber space. And so we're looking forward to taking a look at some of those opportunities and being a helpful partner to companies that need capital.
Eric Luebchow: I appreciate that Marc. And just a follow up, I know it's touched on data centers a lot, but maybe you can just give us an update on what you're seeing in terms of where kind of market rents have gone in data centers. We talked a lot about the supply demand imbalance. Have they continued to move higher this year? And kind of where does that take unlevered returns today, just given where cost of construction and lean times are? And I guess, is there a breaking point at which we're going to see pricing growth start to slow down, or a point at which the hyperscalers might try to bring more in-house if the industry keeps raising pricing? Thanks.
Marc Ganzi: That's a dangerous question, right? Certainly, I don't love to talk about pricing on our calls, but what I would tell you is broadly speaking, we continue to believe that there is a really good opportunity to continue to work with our partners and get paid for the risks that we take. And what I mean by that is that obviously there is a big opportunity and look, if our customers could self-perform, they would. And we never tell a customer that they can't self-perform. I'd be the last person in the world to tell any of the hyperscalers that they cannot build their own data centers and can't self-perform. I think the challenge today, if you're looking and taking a step back, is there is that constraint of power. And there is that constraint of resources, of land and building permits. And just it's a question of focus at the end of the day. What is the best use of Microsoft (NASDAQ:MSFT)'s time or Amazon (NASDAQ:AMZN)'s time or Meta (NASDAQ:META)'s time or Google (NASDAQ:GOOGL)'s time? We think they will self-perform some of their workloads, 30% to 40%. And we continue to believe 70% to 60% percent of the time they're going to work with folks like us that have the inventory, that have the land, that have the permits, and have the will-serve letters. So, as I said before, we're lighting up 2 gigawatts right now. So we're pretty busy. That's on top of the, 1.8 gigawatts to 1.9 gigawatts we already have online today. So we think on an aggregate basis across all of our platforms, we're one of the largest, we think, the largest data center operator in the world in terms of certainly power online, square footage, number of data centers, and certainly the ability to service private cloud, public cloud and edge, which is something quite unique to the DigitalBridge platform. I would say that, without being specific or announced on pricing, we've had two really good years, right? The uptick from ‘21 to ‘22 is strong, rents were up over 21%, the uptick from ‘22 to ‘23, depending on which market you rent, sort of 13% to 16%. And so far through the first quarter, we are seeing that pricing power remains with the landlord. I never believe we have pricing power. And by the way, our CEOs that run our data center companies, they subscribe to my view and my logic, which is we need to work with customers. We don't want to be the price setter. We want to have partnerships. And that comes from my 31 years of doing this and building towers and building fiber and small cells and data centers, is if you take every bit of flesh out of a customer, they don't come back. And so I think we've been very careful about how we price. We're very focused on the return nature and the repeat nature of our customer relationships. And so we're very sensitive to making sure that we create the right value for our customers. What I can tell you is, our leasing backlog has never been bigger across all of our data center companies. It's the largest pipeline of opportunity we've ever seen. And so we got to balance that with pricing it correctly and also making sure, as you said, we get the right returns. Construction is expensive. We got to make sure we get the right anchor build, return on invested capital on a cash on cash basis. And remember, most of the things that we are building are campuses. So we are looking to bring that second, third or fourth customer into a campus setting from where we build a new facility. There's a lot going on. I think Severin said it earlier, we look forward to welcoming everyone to Investor Day. I think we'll do a little bit of a deeper dive on this and certainly dive deeper into edge and private cloud and public cloud and what's happening across those three customer sets and where we see workloads going and where we see yields going and ultimately how we see RTM and AUM growing over the next five to 10 years.
Eric Luebchow: All right, great. Look forward to it. Thanks, Marc.
Operator: Our next question comes from Jon Atkin of RBC Capital Markets. Please go ahead.
Jon Atkin: Thanks. I was interested in maybe drilling down on towers, thinking about US and maybe LatAm and opportunities that you might see for consolidation to increase your presence in that sector. And then I've got a follow-up.
Marc Ganzi: So your first question is just around tower M&A?
Jon Atkin: Yeah.
Marc Ganzi: I think, look, we continue to be very acquisitive on the tower front Jonathan. The four theaters that we operate in Asia, Europe, North America and Latin America all certainly active from an M&A perspective and we've been looking at tower transactions in all four theaters inside this quarter interestingly enough. The one theater that that I think did resonate the most in this quarter was the US. We continue to be really bullish about the US tower market. Maybe perhaps you can tell from the way the stocks traded today, maybe public investors weren't, but I wouldn't bet against the tower industry. So we did an acquisition at Vertical Bridge. We did a tuck-in, Shentel. We like that tower footprint. We like where the Shentel assets are. Really difficult to zone towers and carry our own portfolio that now we've turned and we're going to migrate onto our platform which creates a lot of good opportunity and a lot of good lease-up. We've continued to look at tuck-ins in Europe across our three different European platforms. We have FreshWave, we have Belgian Tower Partners, and we have GD Towers in our partnership with Deutsche Telekom (OTC:DTEGY). Again, there we've been very acquisitive. We've been looking at everything. But ultimately, in this quarter, the stuff that we saw trade in the quarter was too expensive for us. Ireland being a great comp, we just couldn't get to a mid-20s multiple for towers that were fairly mature in Ireland. And also, when a sophisticated seller like Cellnex sells, we obviously, our antenna is up. We really respect Marco. He's a good friend of mine, and Cellnex is a great company. So when they're selling assets, we tend to be pretty careful about where those assets are selling and at what price. At that price point, we were not a buyer. But that doesn't prohibit us from keep looking. We own a lot of different tower platforms around the world. We remain excited about what we're doing in Southeast Asia. EdgePoint has a lot of really good opportunity. We're looking at other opportunities in the Asia theater. Some things are coming through investment committee right now. So towers remain top of mind, why? We think towers ultimately are the delivery mechanism for Generative edge -- AI. And so ultimately as those applications Jonathan moved to mobile edge and they moved to the device. You're going to see absolutely more data consumed at the cell site level. You're going to see more pressure on the handset, and you're going to see these applications migrate from the enterprise, from the office, to the edge, to IoT networks, to mobility, to cars, and all things related to logistics and transports. The only way that you can make Generative AI work in a mobile framework is through towers. And so, whilst that's maybe two, three years down the road, we're very optimistic about the long-term implications for what that means for not only towers here in the US, but inevitably LatAm, Europe and Asia are the theaters that we're focused on. So maybe this is the part of the call where I'm the cheerleader for the tower industry, but 31 years of doing this. There's a whole another investment cycle that's going to have to happen, Jonathan, in towers, and you just literally cannot avoid data gravity. The data ends up on the handset, and ultimately those applications reside on the handset. And the ability to pull the enterprise to the edge and to consumer relies on the handset. We've seen this play out from 2G to 3G, 3G to 4G, 4G to 5G. Jonathan, you and I have known each other over 20 years. At every technology migration path, you know this happens. We know this happens. So I would not be shorting the tower sector. And again we're very bullish in this third fund around towers and you'll see us invest in towers and that's part of our strategy.
Jon Atkin: Well, appreciate those comments And then maybe just turning to fiber and small cells. I know you talked about it earlier on the call, but any ways in which you could see maybe augmenting the ExteNet activities and then Zayo domestically, any kind of capital opportunities, whether it's M&A or just increasing your development capital, how do you view those opportunities?
Marc Ganzi: Well, look, we have three small cell operators. FreshWave in the UK continues to deliver workloads for our customers indoors and outdoors. Boingo does a great job on the Wi-Fi side and indoor networks. ExteNet, largest private provider of outdoor small cell infrastructure. And look, we're busy, right? We're building, we're taking on bookings. We are seeing momentum as obviously the overlay in 5G starts to move to densification. And we think that densification for 5G really exists kind of in ‘25, ‘26, ‘27, and ‘28. That follows a similar migration path to ultimately the 3G and what we did in LTE and LTE plus. Our customers are telling us they still need small cell infrastructure. They still need an outsourced solution. And so again, we remain long term bullish about the fact that ultimately a lot of this infrastructure needs to support Generative AI, it needs to support those workloads. Macros get a lot of it done, but ultimately the proliferation to true Generative edge AI fits down at the handset. And so we really talk about data gravity a lot, Jonathan, and those workloads start in those learning models. They're moving into training, they're moving into inference, Then they move into really resonant in the public cloud. Then they move to edge. Then we move to mobile edge. And then we move to near edge, which is the handset. This is the direction of travel of data. This is how the cloud was built. Ultimately, AI will follow a similar architecture over the next, let's call it the next three to 10 years. So we're excited about it and investors have to be a little patient, but we do believe in the long term nature of small cell infrastructure, Wi-Fi 6, private 5G networks and the opportunity to offload those networks.
Jon Atkin: Thanks very much.
Marc Ganzi: Thanks, Jonathan.
Operator: Thank you. Ladies and gentlemen, we have reached the end of our question-and-answer session. I will now hand back over to Marc Ganzi for closing remarks.
Marc Ganzi: Well, look, thank you, everyone, for tuning in to our Q1 call. We've laid out four simple tenets for you to think about as an owner of DigitalBridge or a prospective owner of DigitalBridge. There are four things that we're focused on this year. One, we're forming capital behind our best ideas. I think we've laid that case out today what our best ideas are and that we remain convicted in our ability to form that capital and then to deploy that capital. Second, we're investing. We're investing in the best secular ideas today that exist on the planet. Generative AI, mobile infrastructure, and ultimately the ecosystem and the power that supports that are all the key tenets and the foundation of our economy today. So investing in these tailwinds and investing in these secular thematics are critical and necessary. Number three, we're focused on scaling our platform. Scaling means either acquiring existing platforms like we did with A&P Capital or building out new products like we did with Core, our late-stage venture growth fund, our liquid strategies, and other alternative asset management strategies that we've been very good and skilled in terms of building those capabilities in-house. And then ultimately, we've got to asset manage. We've got to continue to perform at the portfolio company level. We've laid out some anecdotal cases for that, how some of our portfolio companies are delivering for customers and are delivering the future of networks for those customers. We appreciate your support. We're looking forward to hosting all of you May 13th in New York at our Investor Day. We're going to talk about these strategies in greater detail and how we plan to change the digital economy through some of the strategies and certainly through some of the investments that we're making to forge a new digital path and new digital infrastructure of the future. It's an important moment for us. We hope you'll join us. Again, thank you for your support and interest in DigitalBridge. We look forward to seeing you soon. Have a great day.
Operator: Thank you, sir. Ladies and gentlemen, that concludes today's event. Thank you for attending. And you may now disconnect your lines.
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