PJC
#Mike, maybe I would just add one last thing.
The mark that Deb reflected did show up in the quarter, but I would say the performance of the portfolio and the investment is tracking to what we would expect in a year, right.
So not outsized from that perspective.
So when I give you the first some context and maybe Debb wants to add some specifics.
Our performance quarterly is a blend of flow and some P&L, the majority of which is flow.
From a P&L perspective, the thing that's probably going to most impact it is credit spreads widening and tightening and then we've talked about this before, in particular for us, it's going to be municipal speeds.
And if they're expanding rapidly due to market dynamics that's going to reduce our P&, if they're tightening in tightening consistency leave with good new issue volume, we're going to get some good P&L.
Yes, I guess I would add.
Mike, if you look over the last few quarters and you said since GKST gets come on board.
If you go back to the fourth quarter of last year when we fully completed that acquisition, you saw the revenues increased quite substantially, that would primarily driven by adding on all of those additional salespeople with the constructive market from a trading P&L perspective.
As we talked about last quarter on the call, what you saw this significant decline which was really a result of not having the markets that were conducive and not having some of that trading P&L helping some of like the first quarter ended up being a little more of an outlier than what you saw in the fourth and second quarters, if that makes any sense.
And maybe one more final comment, part of this strategy with that team joining us was really threefold, additional distribution from sales, some trading expertise and a couple of asset classes that was superior.
And then, finally, we believed that we could reduce the capital with the increased revenue.
And if you look at our [mark]continues to come down.
We are accomplishing that.
Yes.
Morning, <UNK>.
Morning.
So let me start, <UNK>, and just give you where we ended up the second quarter.
We have $4.4 billion in AUM in our MLP products and $3.7 billion in our value products.
I'll let <UNK>.
Yes, so from a flow perspective <UNK>, I'd call it healing after the precipitous decline, we did have net inflows in MLP is for the each month of last year as a decline.
That did turn to some modest outflows in Q1 as it bottomed out.
And then as we mentioned we've turning now to the modest inflows.
So I think that's fairly indicative.
If this going to stabilize and continue to improve from here, I think we could expect that we're going to start getting flows into the product again.
In particular, some we have a set of products, some are more institutionally or some are more retail oriented, I think particularly for the retail to have that kind of decline really causes a pause.
But when you relook at it now in the endless search for yield, it's pretty attractive, if you had some confidence and thought oil would stabilize, it's attractive.
So could of things.
One I'd start with the context, again, with this environment being as challenging as it has been.
We're experiencing some of that, it's very challenging for others as well and we are seeing product opportunities with some regularity and we're spending some time on it.
We would be much more inclined to active; passive, while it's enjoying and obviously doing very well, I think that's very much a scale business and we would be late and small.
So neither of those is particularly appealing.
Some areas where we would not have overlap would be a global product, maybe some yield and growth and again we would look for niche strategies that could be differentiated.
I do think part of the past passive, this is my view and not the view for the firm.
The passive trend is real obviously and it's been here with ETFs.
I also think it has to some degree a cyclical quality that is reflected in very low interest rates, very low dispersion.
Why don't I just get the most efficient product that I can, if we return to more normalized markets.
You can see alpha from good fundamental work, then we would like to have a broader set of products.
So it has changed and it's definitely improving.
One of the ways I think about it, <UNK>, a little bit is, there is essentially this air pocket as for nine to 12 months oil declined just week after week after week and bottomed in February at $26.
It just created an air pocket, it's sort of impossible to put together buyers and sellers in that environment and as it's stabilized now for let's call it three months, the sentiment is definitely shifted.
Our pipeline is solid and with this stability, our pipeline keeps growing, and we certainly have an improved outlook for the second half of the year.
Good.
So I'd start with saying our fundamental strategy for the firm, again is to lead with the industry expertise and leverage that across the products.
So some of the turnover you saw is optimizing our business against the market opportunity.
So, we did reduce coverage in sectors like insurance, but we're aligning it really around our core franchise which will be depositories and (inaudible).
I'd say from a sales trading research the resources are in place.
We continue, have added a couple this year and will continue to look to selectively add bankers in both getting a full national footprint on the depository and some additional resources over time into FinTech, and expect that really to be our go-forward big franchise.
Hey, I would add specialty finance and those three would really be what I'd anticipate being our focus for the next couple of years, and again I believe we've got to distinguish ourselves in a couple of areas first, and then you can do adjacencies that those three would be absolutely our focus for the coming 12 months, 24 months.
Okay.
So our pipeline there is solid and continues to be from a capital raising, obviously the biotech opportunity moderated very substantially.
I guess you could (inaudible) shut down for a quarter, maybe almost two, but from an M&A perspective, our backlog in healthcare is very solid.
Thank you.
Thank you all for joining us this morning.
We look forward to updating you on the third quarter.
Thank you.
