Sculptor Capital Management, Inc. (SCU) CEO Robert Shafir on Q3 2020 Results – Earnings Call Transcript

Sculptor Capital Management, Inc. (NYSE:SCU) Q3 2020 Earnings Conference Call November 9, 2020 8:30 AM ET

Company Participants

Elise King – Head, Shareholder Services

Robert Shafir – Chief Executive Officer

Thomas Sipp – Chief Financial Officer

Conference Call Participants

William Katz – Citigroup

Craig Siegenthaler – Credit Suisse

Patrick Davitt – Autonomous Research

Gerry O’Hara – Jefferies


Good morning, everyone, and welcome to Sculptor Capital’s Third Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to introduce your host for today’s conference, Elise King, Head of Shareholders Services at Sculptor Capital.

Elise King

Thanks, Devon. Good morning, everyone, and welcome to our call. Joining me are Robert Shafir, our Chief Executive Officer; and Tom Sipp, our Chief Financial Officer. Today’s call contains forward-looking statements, many of which are inherently uncertain and outside of our control.

Before we get started, I need to remind you that Sculptor Capital’s actual results may differ, possibly materially from those indicated in these forward-looking statements. Please refer to our most recent SEC filings for a description of the risk factors that could affect our financial results, our business, and other matters related to these statements. The company does not undertake any obligation to publicly update any forward-looking statements.

During today’s call, we will be referring to economic income, distributable earnings, and other financial measures that are not prepared in accordance with U.S. GAAP. Information about and reconciliation of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, which is posted on our website. No statements made during this call should be construed as an offer to purchase shares of the company or any interest in any of our funds or other entities. Our earnings press release from this morning also included an earnings presentation.

We will be referring to this report during the call. If you have joined through the conference call and would like to follow along, you can find the presentation on the Investor Relations page of at the 3Q Earnings Release link. If you joined through the webcast, you can navigate through the presentation on the webcast screen.

Earlier this morning, we reported third quarter 2020 GAAP net income of $8 million or $0.35 per basic and $0.25 per diluted Class A share. As always, you can find a full review of our GAAP results in our earnings release.

On an economic income basis, we reported third quarter 2020 distributable earnings of $29 million or $0.52 per fully diluted share. In the third quarter, we recorded a legal provision of $2 million in addition to the previous $136 million provisions taken between the last quarter and the third quarter of 2019. Third quarter adjusted distributable earnings, which excludes the legal provision and related legal fees were $32 million.

If you have any questions about the information provided in our press release or on our call this morning, please feel free to follow up with me.

With that, let me turn the call over to Rob.

Robert Shafir

Thanks, Elise, and good morning, everyone. The firm continues to operate effectively with the majority of employees working remotely due to COVID-19. We are monitoring CDC guidelines and we’ll slowly move towards a more normalized operating environment and we determined that is safe for our employees.

I am pleased to report that the Africo matter has been resolved with approval of $138 million settlement. Now that the Africo matter is concluded, we expect the deferred prosecution agreement will be terminated in the near future. With resolution of Africo and anticipated termination of the DTA, we have put all of the legal issues stemming from legacy dealings in Africa behind us. This cleans up the last of any material legal matters.

Now an update on performance. Sculptor Master Fund returned 6.0% net in the third quarter bringing year-to-date, net performance to 12.4% through September 30, which compares favorably to the MSCI world index is 1.4% increase over the same period. The Master Fund was down 1.0% net in October, bringing year-to-date through October to up 11.3% net.

In a year that has been characterized by extreme moves in both directions, we are particularly pleased that the Master Fund was able to protect capital during the worst of the market draw down and participate meaningfully in its recovery. We believe our year-to-date outperformance continues our history of generating strong risk-adjusted returns, irrespective of the market cycles.

The Master Fund generated positive contributions across nearly all strategies in the third quarter lifted by a broad rebound in risk assets and a strong earnings season for equities. Our active repositioning and capital deployment through the depths of the crisis in the spring were instrumental in realizing global equity upside with only a fraction of the global equity beta in the quarter.

All of our strategies now have generated positive performance year-to-date. Fundamental equities was a significant positive contributor to performance in the third quarter as we saw promising economic data, an incredibly strong earnings season, and the introduction of a dovish Fed framework.

Our portfolio positioning established during the COVID equity market draw down was rewarded in the third quarter driven by secular growth companies and in particular, a handful of our core positions in the software and internet sectors, which posted solid earnings during the quarter.

Corporate credit generated a positive return in the quarter as further market retracement aided performance. Noteworthy contributors came from spread-based investments that we added during the months following the market draw down, along with our larger process-driven distressed positions which have continued their recovery.

In structured credit, we saw markets tightening across collateral types and continue healing after being severely oversold in March. Our meaningful deployment of capital in this strategy in March continues to drive performance as structured credits is the largest contributor to year-to-date returns.

Robust returns generated in our convertible and derivative arbitrage strategy rounded out the Master Fund’s strong performance for the quarter as the strategy saw widespread gains across a diverse range of positions and benefited from continued improvements in valuations, flows and strong support in the volatility environment.

Our global opportunistic credit fund, Sculptor Credit Opportunities Fund returned 4.5% net for the third quarter of 2020 bringing year-to-date net performance to down 7.5% through September 30. The fund has generated an 8.9% annualized net to life-to-date return through September 30, which has outperformed the BAML Global high-yield index by 2.8%. The fund was down 0.2% net in October, bringing year-to-date performance to down 7.7% net.

Performance in the quarter stemmed from both structured and corporate credit where a broad rebound in risk assets help to deliver strong returns in the majority of positions we added at the depths of the COVID-19 crisis and in the month that followed.

With many high quality spreads in corporate and structured credit retracing our draw downs, we have been harvesting gains and reducing exposure by monetizing positions that we believe have limited upside as we pivot to sourcing opportunities elsewhere. Beyond the positive performance achieved in the third quarter, we believe there remains embedded upsides still to come from the majority of the assets that we had owned prior to the COVID crisis, as well as those that we have added to the portfolio in the near to medium-term.

Our real estate funds continued to deploy capital and generate strong returns with an 18.4% net annualized net return through September 30 in our third opportunistic fund. Our $2.6 billion Fund IV which held its final close in June is currently taking advantage of recent dislocations in public equities, distressed public debt and motivated forced sellers in private real estate.

Turning to flows, as you can see on Page 7, as of September 30, our assets under management were $36.0 billion with net inflows in the third quarter of $44 million, performance-related appreciation of $940 million and distributions and other reductions of $418 million. As of November 1, our assets under management were $35.6 billion, which was driven by an estimated $143 million of performance-related depreciation $236 million of net inflows and $9 million of distributions in October.

Turning to Page 8, multi-strategy funds had assets of $10 billion as of September 30, which included $54 million of net outflows and $605 million of performance-related appreciation in the third quarter. From September 30 to November 1, multi-strategy had net outflows of approximately $115 million and depreciation of $108 million.

Opportunistic credit had $6 million of assets as of September 30, which included $93 million of net inflows in the third quarter, $246 million of performance-related appreciation and $177 million of distributions and other reductions.

In addition, we saw net inflows of $75 million and depreciation of $6 million in opportunistic credit from September 30th to November 1st. Through October 1st of this year, we have seen almost $1 billion of gross inflows across multi-strategy and opportunistic credit funds, the most since 2015. We have been encouraged by the increased interest in the past few months due to a pull-forward of demand from the market dislocation.

We also believe that the Africo matter will aid in our ability to raise capital as all legacy issues have been put to rest. In total, clients see the value of investments in funds such as ours that hedge and have the ability to shift capital among strategies.

All that said, while we have been pleased with the flows to-date and are excited by our long-term prospects, COVID has in some ways made it harder for institutions to allocate as due diligence is taking longer than normal. We remain cautious overall in predicting a near-term turnaround in the net flow picture as it will take time for the pipeline to materialize.

Real estate had total assets under management of $4.7 billion as of September 30th the decrease in the quarter was driven by $46 million of distributions and other reductions. Institutional credit strategies had total assets of $15.3 billion as of September 30, with distributions and other reductions of $195 million in the third quarter.

We are seeing some early signs of stabilization in the aircraft ABS business driven mainly by the overall tightening and spreads across credit sectors. However, we do not expect to return to normalcy until beginning of next year at the earliest. The pace of normalization will be driven by the path of the virus, passenger comfort with air travel and the ability of airlines to return to profitability.

Last month, we refinanced a fixed tranche in one of our U.S. CLOs. The U.S. CLO equity market remains challenging with elevated return requirements and the stubbornly wide funding spreads lagging tightening asset spreads. We continue to elevate the U.S. market – sorry – to evaluate the U.S. market; I believe we are well positioned to participate when conditions improve.

In Europe, we are encouraged by the CLO market recovery and recently priced a $370 million CLO, which will close in the fourth quarter.

Before I turn it over to Tom, I’d like to highlight the deal Sculptor signed with Delaware Life in September. Having reached resolution in Africo, we plan to close in the near future and as early as today. We are very excited about the opportunities that will stem from closing this deal including lowering our outstanding obligations, capturing available discounts, and working closely with Delaware Life in the future. I will let Tom go into the specifics of the deal in a moment.

With that, let me turn the call over to Tom to go through the financials.

Thomas Sipp

Thanks, Rob, and good morning, everyone. As Elise mentioned at the beginning of the call, and as you can see on Page 9, we reported a third quarter 2020 distributable earnings of $29 million and adjusted distributable earnings of $32 million. We did not declare a dividend this quarter.

Revenues were $107 million for the third quarter, up 15% from the third quarter of 2019, and up 11% from the previous quarter. Management fees were $64 million in the third quarter, up 7% from the third quarter of 2019 and up 6% from the previous quarter. Increase in management fees quarter-over-quarter was due to higher hedge fund assets, and lower CLO fee deferrals.

We expect to see continued recovery in our CLOs in the fourth quarter, and currently only three of our CLOs are in full deferral.

Incentive income was $42 million in the third quarter, up 35% compared to the third quarter of 2019 and up 9% from the previous quarter due to an increase in annual client crystallizations at quarter end.

As seen on Page 10, as of September 30, 2020, our accrued but unrecognized incentive was $257 million, up $29 million from the prior quarter. The increase was driven by $3 million in positive performance with the majority coming from the customized credit platform offset by $19 million in crystallization. We continue to expect a large portion of the opportunistic credit bureau to crystallize in the fourth quarter of 2020.

Turning back to Page 9, other revenues were $2 million in the third quarter, down 36% versus the third quarter of 2019 and down 4% from the previous quarter. The decrease year-over-year was due to lower interest income stemming from lower interest rates.

For the third quarter of 2020, total expenses were $65 million. Total adjusted expenses were $63 million, down 9% from the third quarter of 2019, and relatively flat from the previous quarter. In the third quarter of 2020, compensation and benefits expense was $41 million, down 10% from the third quarter of 2019 and up 1% from the previous quarter.

Bonus expense was $23 million for the third quarter, down 15% from the third quarter of 2019 and up 6% from the previous quarter.

We expect full year bonus accrual to be between $75 million and $85 million. Salaries and benefits were $19 million for the third quarter, down 4% from the third quarter of 2019 and down 4% from the previous quarter. The decrease quarter-over-quarter was due to lower headcount. We expect full year salaries and benefits to be between $75 million and $80 million.

In the third quarter, general and administrative expenses were $20 million. Adjusted general and administrative expenses were $18 million, down 14% from the third quarter of 2019, and down 4% from the previous quarter.

The lower adjusted G&A year-over-year was primarily due to lower professional services, and employees working from home and travel restrictions. We expect full year adjusted G&A to be between $75 million and $80 million.

Interest expense for the third quarter of 2020 was $4 million, up 76% from the third quarter of 2019, driven primarily by the interest accrual for our debt securities. We expect full year 2020 interest expense to be between $16 million and $18 million.

Please note that our preferred units started accruing dividends in February and will not impact economic income. However, it will be treated as a reduction to distributable earnings.

Our guidance for the full year 2020 tax receivable agreement and other payables as a corporation is 11% to 15%. As a reminder, tax estimates are subject to many variables including year-end performance that won’t be finalized into the fourth quarter of the year and therefore could vary materially from the estimates provided.

As mentioned earlier, in the third quarter we took an additional $2 million reserve in relation to the Africo matter. This is in addition to the $136 million previously taken for a total payment of $138 million. As Rob mentioned, the judge has accepted the settlement agreement between Of Africo and Africo and the settlement payment was made from our cash reserve associated with the matter.

Now, an update on our balance sheet. Turning to Page 11, as of September 30, 2020, total cash, cash equivalents, and long-term treasuries were $442 million. The outstanding balances of our obligations included $9 million of term loan, $207 million of preferred units and $200 million of debt securities.

I’d like to elaborate on the refinancing deal that was signed in September and is slated to close as early as today. Delaware Life Insurance has agreed to issue the firm a $320 million term loan and a $25 million revolver. In connection with the new facility, we agreed to issue Delaware Life warrants for $4.3 million Class A shares, struck at $11.93 and provide Delaware Life a seat on our Board.

The revolver can be used for working capital and general corporate purposes. The term loan will be used to refinance our $416 million of existing term loan preferred and debt securities, while capturing $62 million of negotiated discounts available under the preferred and debt securities.

The deal also comes with the opportunity to prepay up to $175 million on or prior to March 31, 2022 at no cost and extends the maturity of our debt for seven years with minimal amortization and attractive covenants.

We are required under the new term loan to sweep 100% of the first $100 million and 25% of the following $50 million in distributable earnings, after public shareholder dividends. On a pro forma basis, we have had a $320 million term loan in cash and cash equivalents of $254 million on September 30.

With that, let me turn it back over to Rob.

Robert Shafir

We are very pleased with all that we’ve accomplished in the third quarter. We had great performance across our funds, which shows our value proposition at work. We were encouraged by the continued low redemptions in our multi-strategy funds, as well as positive inflows into opportunistic credit. Also, we expect to be within our expense guidance as we finish out the year.

In addition, we believe we are generating solid momentum by resolving Africo and closing the Delaware Life transaction. Having put Africo behind us, the last of our legacy issues, we can pivot to forward-looking conversations with clients. The Delaware Life deal will immediately reduce our obligations and set us on a clear path to further improve our balance sheet.

As previously announced, I will be transitioning the CEO role to Jimmy Levin in April 1st, and leaving Sculptor at the end of 2021. My close colleague and good friend on the line Tom Sipp came to Sculptor with me to focus our restructuring of the firm. The majority of this work is complete and the company is very well positioned for the future.

As a result, Tom has decided that now is the right time to move on and transition to a new CFO. We are thankful for Tom’s guidance and leadership over the last few years. We will be announcing a successor in the coming weeks and Tom will be transitioning responsibilities in the first quarter.

With that, let me turn the call back over to the operator.

Question-And-Answer Session


[Operator Instructions] Our first question comes from the line of William Katz with Citi. Please proceed with your question.

William Katz

Okay. Thank you very much. Just a question, Tom, maybe on to the – maybe the free cash flow priorities as you look into the end of the year into next year, a few moving parts still I appreciate that the Delaware Life greatly enhances the flexibility.

But can you speak to, maybe, how much of the receivable will get crystallized by the end of the year? And if the year ended now with the hedge fund is positioned, how do you think about paying down that term loan into the new quarter?

Thomas Sipp

Yes. Bill, this is Tom. The priority – the Delaware Life deal comes with a cash sweep. So the first $100 million of distributable earnings will be swept to pay down the balance and then the next $50 million, 25% will be swept. So at a minimum, the next $150 million of distributable earnings, a good portion will be swept to pay down the term loan.

And then I would say, next, we are still, our guidance on a full year basis is a 20% to 30% payout ratio before the dividend and that will go just to the public shareholders. Beyond that, we will have flexibility based on how we finish out the year and we will continue to evaluate and look for ways to optimize our capital structure.

William Katz

Okay. And then just, stepping back with the Delaware Life transaction, can you speak to the opportunity in terms of net growth opportunities? And then, what was the thinking to give out equity at this price point and/or Board seat?

Thomas Sipp

Let me take – this is Tom. Let me take the first part of it. The Delaware Life deal, they lent money to the firm. We are excited about the opportunity to work with them as our lender. There may be opportunity to work together in the future, but the focus is, clearly on the term loan deal that we are disclosing, most likely today. And then, Rob, I’ll turn the second part of the question over to you.

Robert Shafir

Yes. I mean, I think as Tom said, Bill, clearly, the transaction has given us great financial flexibility in terms of capturing the discounts on our debt, pushing on our amortization schedule. And again, we look at Delaware Life, obviously as a very strong stable, major institutional partner for us that we can explore to do things within the future.

And with all that flexibility, and they are significant kind of into the firm, we felt that a Board seat is appropriate.

William Katz

Okay. And just one final one for me. Thanks for taking the questions this morning. So, appreciate that performance is very good in both the hedge fund and in credit. And yet you continue to have some outflows into the fourth quarter. Just sort of wondering what’s driving that sort of residual attrition at this point in time?

And then, why do you think the slowdown with COVID is having sort of an incremental impact at this point in time?

Robert Shafir

Yes. Tom, I’ll take that. I mean, I think, if you look at the flow picture, Bill, you have to start questioning, okay, like what do we achieved year-to-date and where do we go from here? We – as I said in the speech, we’ve raised close to $1 billion in our multi-strategy and opportunistic credit funds or more hedge funds like businesses.

And that is the largest amount of gross inflows we’ve had in those funds since 2015. So we are obviously starting to see the gross inflows side come in. In addition to which, if you look at the outflow side, it’s really come down to basically normal churn rate types of outflows. The numbers are very moderated way, way, way, below last year.

So, that has really normalized. It’s how we characterize the outflows thus far. And as I look forward, there is a few things, I’d say. Number one, I did make a point about COVID and I just think that it generally slows things down a little bit. Some of these – some of our clients would like in a perfect role to do things like onsite due diligence.

Obviously, that’s not going to happen. So I just think in general it slows things down. But I think the big picture really is the following: From a market perspective, we have been able to deliver really excellent performance pretty much across the various parts of the disruptions in the marketplace. We’ve been able to deliver performance. We protect the downside.

And I’ve said this for a while, but I did believe and still do believe that as market conditions change into less of a one direction market into a more of a volatile type of market that these types of strategies with the flexible capital and the ability to protect downside and capture upside, are going to be more attractive products. And I think that is going to be the case and I’d say, early days conversations with clients seem to indicate that that will be the case in the future.

I think in addition to that for us, obviously, putting the Africo situation behind us thus settling all legacy issues, I think is a major thing for us, because as you know, a lot of clients put you on hold over things like that. And basically want to see that resolve in a positive way. So, to have all of our legacy issues, not just the Africo settlement, but everything related to past African matters behind us is very material to us.

And I think it will open up a much broader range of clients who will take us off hold and begin the process. Now, I indicated in the speech that I said, look, let’s not expect it tomorrow morning. There is going to be an avalanche of billions of dollars walking in the door. It will take time and some clients are further along and obviously evaluating us than others.

But the major point here is that it will take us up hold with many of our clients, whether it’s consultants, private banks, or institutions, so that they can begin their process and we think that there over time will be a material pipeline that will materialize out of our ability to deliver that performance that we’ve talked about and the fact that we have no legacy issues. I don’t think it’s a question of if, I think it’s a question of when.

William Katz

Thank you.


Our next question comes from the line of Gerry O’Hara with Jefferies. Please proceed with your question. Gerry, your line is live.

Our next question comes from the line of Craig Siegenthaler with Credit Suisse. Please proceed with your question.

Craig Siegenthaler

Good morning. Hope you are all doing well. I want to follow-up on the last question. Once you receive the termination on the deferred prosecution agreement, and in person meetings restart, how much of a lift could you see to fund-raising, just given how strong the performance has been in the last two years?

Robert Shafir

Craig, it’s Rob. It’s difficult to sort of quantify that. I mean, I’d say that number one, there is a timing factor. And as you know, the asset management process of raising money is a long process going through ODD and IDD, and so forth.

So, I think it will take time and I’d quantify that as being anywhere from broadly speaking anywhere from 12 to 24 months where we would really expect to see sort of the broad range of clients begin to come in to some of these strategies.

That does not mean however, that we are not going to see flows into 2021. It just means that when you look at the universe, I’d characterize it as certain clients that are – that know us and are probably farther along and they are thinking about us, that want o see us get a hold to actually – I think, actually a much broader range of clients who really has had us on hold for years and are just beginning that process again.

And I think that’s the part that is actually even more encouraging longer term, because there is a big universe out there. And as you know, there aren’t that many firms that deliver the kind of performance in these types of strategies that are out there right now.

So, that is encouraging to me as those conversations begin to start up again and they see what they see, which I think is a firm that’s going to have, as said earlier, no legacy issues, great historical performance and a very solid management team across the board.

So, I am very confident over the long-term. I’d say, over the short-term, we’ll have to see what comes in when. But as I said, I think between the market condition changing, I think the need for these types of strategies, I think our performance and not having any things that would hold us back with these clients that would be major impediments.

I like our chances that I think it’s going to take some time. It’s very hard to predict specifically when those assets are going to come in. But as I said earlier, I don’t think – I think it’s a when, not an if. I really do believe it will happen.

Craig Siegenthaler

And then, just as my follow-up, we’ve seen a pickup in M&A and M&A interest across asset management. Do you think Sculptor could benefit from more scale and I am especially thinking about whole distribution?

Robert Shafir

Yes, look, from my perspective, as a firm, what we’ve really tried to focus on here over the last few years is, not only restructuring the firm, but essentially, putting it in a position to really move forward. And whether that was dealing with some of the legacy issues, getting a better ownership structure to retain and grow with the active partners in the firm, whether it was putting ourselves in a position to really get our balance sheet a lot stronger which we’ve done through.

Obviously, our earnings, and which is now been enhanced by the refinancing of the debt, I sort of look at the firm, and you sort of put yourself in a much better position as a firm to operate independently. So, I believe that certainly as a standalone business, we have the ability to within the products we have of real estate credit and multi strat grow our business quite materially over time, for the reasons that I’ve stated just a couple of minutes ago.

In terms of other things strategically that can enhance the firm, I mean, I think those things are always interesting conversations to have, but I don’t think that we are a firm that is going to require that could be able to grow materially over time.

Craig Siegenthaler

Thanks for taking my questions.

Robert Shafir



Our next question comes from the line of Patrick Davitt with Autonomous Research. Please proceed with your question.

Patrick Davitt

Hey. Good morning guys. Just a quick follow-up on the cash flow dynamics. I just want to make sure I understood correctly. Should we assume then that you’ll payout 20% to 30% of the cash flow after the cash sweep. Is that the right way to be thinking about the fourth quarter?

Thomas Sipp

No, think about it 20% to 30% of full year distributable earnings.

Patrick Davitt

After the cash sweep or before the cash sweep?

Thomas Sipp

Before the cash sweep.

Patrick Davitt

Before the cash sweep. Perfect. Thank you. Yes. That’s all.

Robert Shafir

Thanks, Patrick.


Our final question comes from the line of Gerry O’Hara with Jefferies. Please proceed with your question.

Gerry O’Hara

Great. Thanks. Sorry about that from earlier. Rob, perhaps picking up on a comment you made earlier with respect to the Delaware Life partnership and potential for additional sort of products or kind of strategic pursuits, I was hoping you might be able to flush that out, maybe give some examples of how you think that partnership might evolve down the road?

Robert Shafir

Yes. I think it’s a little bit early, Gerry, to sort of talk about specific product ideas or anything like that. The way I would characterize it is, as I said earlier, Delaware Life has obviously become a very material – the material financing partner for the firm in terms of the fact that they have essentially allowed us to refinance basically all of our debt in our capital structure here.

That has allowed us to, as I said earlier, capture all the discounts, push out our amortization schedule and give us the ability to pay down so much of our debt without any kind of friction caused whatsoever. So that gives us a tremendous amount of flexibility to optimize our capital structure as Tom said, which I think is, one of the key objectives for the firm right now.

And given our performance and everything else that’s out there, I think we are in a pretty good position to be able to do that. So I think that’s sort of the core piece of this thing and I think for that being as materially capital provider for us, having them on our Board, we think is also an appropriate thing to do. Now that being said, as we think about them as I said, they are a major financial institution with a very solid capital base.

We are a major financial institution and there is certainly areas, particularly I would think in some of the financing areas and possibly other things over time that we’ll be able to explore together. It’s difficult to sort of say it’s this specific product, but think of it as two institutions that have a major interest in one another from a financing standpoint that will try to explore synergies that makes sense for both the firms going forward.

Gerry O’Hara

Great. Thanks. And perhaps one for, Tom, as well. I think, we know the majority of the accrued incentive for opportunistic credit is set to crystallize in the fourth quarter. Can you give us some sense of how much AUM is tied to that accrued incentives just for modeling purposes? Thank you.

Thomas Sipp

It’s about $3 billion of total assets.

Gerry O’Hara

Okay. Great. Thanks for taking my questions this morning.


I am not showing any further questions and I would now like to turn the call back over to Ms. King.

Elise King

Thanks, Devon. Thank you, everyone for joining us today and for your interest in Sculptor Capital. If you have any questions, please don’t hesitate to contact me at 212-719-7381. Media inquiries should be directed to Jonathan Gasthalter at 212-257-4170.

Thank you. Have a great day.


And with that, this concludes today’s teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.

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