Animal Spirits Podcast - Talk Your Book: Investing in Infrastructure

Episode Date: February 5, 2024

On today's show, Ben Carlson and Michael Batnick are joined again by Bob Long, CEO of StepStone to discuss: - What investments StepStone is making within Infrastructure - How liquidity works with infrastructure investments - The inner workings of interval funds, StepStones fees, and much more! Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Past performance is not indicative of future results. The material discussed has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Stepstone Private Wealth. Go to Stepstone Group.com to learn more about how you can invest in their infrastructure fund. That's Stepstone Group.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Redholz wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. On today's show, we spoke about something incredibly important, under-discuss, underrepresented, at least on this show. We've never spoke, I don't think, about infrastructure, things like toll roads bridges how do they get funded who invested them airports it's a huge asset class in australia okay but not so much in the u.s we actually had an australian fund manager back in my endowment days that invested in infrastructure asset and they owned the chicago toll road and you could see it become because it used to be you'd drive there and they had this basket and you'd throw the change in there back

but when you could just pay with change and now it's dollar bills and credit cards and stuff. And when they came in as a buyer of the toll road, you could see that the technology get better, right? The swiping of the card or putting the touching the card to it and that sort of thing. You know what railroad I used to own? Pennsylvania.

Love that game. You know what I mean? Hot take. Monopoly's overrated. Nope. How many games have you ever finished in your life? Dozens. I feel like it's a game you play and literally never finish.

Nope. Because someone always gets too much money and then everyone throws up and I'm out of I'm done. Infrastructure was the play. Overrated. Actually, real talk, nobody won monopoly getting the railroad to the utilities. But be that as it may, you and I actually did, we had an infrastructure, an infrastructure experience when you were in New York last week.

Going through the turnstiles, boom, tap the phone. That is kind of cool. That makes it so much easier in having to go to the machine and enter all this information in. And it is the kind of thing where you can't say anything is specifically recession proof, but people are going to continue to use stuff and cash flowers are coming in. So in that way, it's, it's unlike a lot of different asset classes. Well, you would have said subways are recession proof until pandemic. True. So anyway, interesting conversation about

an asset class that is not very familiar to a lot of investors. It has equity like characteristics, fixed income like characteristics. So here's our talk with Bob Long from Stepstone Private Wealth. We are rejoined on the show today by Bob Long. Bob is the partner and CEO at Stepstone, Private Wealth. Bob, welcome back to the show. Thank you. We've talked to you in the past about investing in different private assets and private funds. Today we're talking about a new one that we've actually never had on Talk Your Book before, infrastructure funds. I've had a little experience in this space, and it can mean, I guess it can mean different things, different people depend on what you're investing,

and how do you think about the infrastructure space? Yeah, that's a really good question. And it is an asset class on the private side, in particular, that's emerged since the financial crisis. So, you know, around 2010, about 170 billion a year was raised, and now we're over a trillion a year raised for private infrastructure. And it spans the gamut, but there are certain essential characteristics. First of all, primarily infrastructure investments are essential services that are resilient to an economic cycle, at least designed to be, produce relatively predictable cash flows, typically from contracted, often regulated revenue streams.

that revenue often has a built-in inflation protection, and then from a legal or practical perspective, there's really limited competition, they're high barriers to entry. Think toll road or airport. Toll Road is the one that I've heard before. Yeah, I thought maybe you could give some other examples for people who haven't invested in the space before. As you said, it can span a infrastructure term can span a very wide range. What we think about, particularly for individual investors, is staying with three food groups. So power, data, transportation. So within that power would be energy transmission and distribution, energy storage, which is pretty interesting, the infrastructure for electric vehicles, data, fiber, cell towers,

data centers, transportation, what you'd expect, airports, toll roads, mass transit, et cetera. So input can be really broad. What we think about for individual investors is those three food groups. Could you talk, this is so foreign to me. I'm curious, the investing, what are you actually investing? in? Or is it the projects? Is it the companies? Is it the contracts? Is it secondary mark? How does all of this work? Really good question. And part of the reason this asset class as a profit asset class and for individual investors is emerging and new. So we're investing in both projects

and companies, but the companies are very close to the project. So you might think about it as an investor, think about it as project risk more than operating company risk. So it's particularly foreign to U.S. investors. If we were in Canada or Australia, this would be more common to you. Again, very good question. How did it get such a big deal in Australia? Because that's, that's what I've always heard, too, is that a lot of the individual retail investors invest in infrastructure there, too. They do. So not to digress too much. But Australia has a more developed, in my opinion, thoughtful approach to defined contribution benefit to your retirement. So they have superannuation plans that are portable as you and

go from job to job. They were early to the private markets. I won't get the figure exactly right, but I think the average individual there is 15 or 20% in his retirement plan in private assets. So for a lot of reasons, Australia is ahead. I think the way to understand this is we're all familiar with the crumbling infrastructure of the United States.

We don't need to go down that path, right? But there's globally, we believe, about a $3.9 to $4 billion per year gap between what's needed and what governments are going to fund. So a smart government official, I saw a quote this week, he said, U.S. Undersecretary for Infra, these transitions need to be private sector led and government enabled. So private capital within a regulated construct, we don't want numerous airports being built, for example, but private capital to facilitate the growth and development of infrastructure of the types we talked about, earning a fair return. Now, a fair return is different when you've got the benefit of what's effectively a monopoly,

like an airport, right? And that's what I think is really interesting about the asset class. So to quote, broad public numbers, not our portfolio, and of course, past is not prologged. Private infrastructure index, you know, these figures are sort of through mid last year, 10, 10% plus over a 10-year period return. with a vall of sort of 4% per quarter. So this is a nature of vegetables asset class to an extent. This is a get, and what I would determine,

an attractive return in exchange for the risk. And it's emerging. It's not well understood. But we think it's very interesting for individual investors to have access to this. It's not as sexy as higher returning as real estate, which tends to be, well, a lot of which tends to be quite levered,

Right? But it's a diversifier. It's an alternative. And the reason you're seeing so much interest in Infra right now, and it's not just us, it's a number of providers, is because people are recognizing Infra can diversify that real assets exposure. It's an adjacency to it and provides you different risk reward characteristics. We'll get into the risk aspect of it. But before we do, I'm curious about how this works, how these projects get funded. So Stepstone is either in the market for these deals or they get approached by a deal and then they say, okay, you have a $10 million allocation, go raise the funds and come back to us in three months. Like, how does all of that part of it work? Really good question. So we have step stone on an allocator. We're one of the

largest allocator to the private markets globally putting out about $80 billion a year, working primarily with and through general partners who we believe to be the best of what they do globally. So we are committing to funds managed by these partners. In our infrastructure business, we do a tremendous amount of co-underwriting co-investment into the project. So as you described, you know, if they bring us a project, we underwrite it, we invest in it. But for an evergreen fund like structure, our evergreen infrastructure fund for individual investors, like all evergreen funds, like we talked about in our prior to conversations, secondary. buying existing assets on the secondary market is critical.

And in fact, we talked maybe two years ago, we touched on Infra and perhaps in our off-the-record pre-year post, we talked about how Infra was not yet ready for an Evergreen Fund because there wasn't enough secondary flow. So now we'll get into this. Structure is an interval fund. It's an Evergreen Fund continuously investing. Two years ago, we didn't believe there was enough secondary flow to, you know, get an evergreen fund to start and stay on the upswing of the jaker but that that's changed like

we talked about earlier the amount of capital raised in infrastructure is up like 8x over a 12 or 15 year period of time and so just like private equity didn't initially have a mature secondary market now there's a mature secondary market therefore we now and it's fairly recently felt comfortable bringing an infrastructure evergreen fund which requires us to invest that capital to to be effective, largely in secondaries. Why is there so much more liquidity in the secondary markets now? Is it just because there's more capital in the space? Yes.

And there's just more trading and more liquidity going on? The industrial logic of much more capital there. Like if you look at the private equity market, which will be a good barometer, right? It's at a market that's ahead of private infrastructure. Three percent or so of what's outstanding will trade in the secondary market in an average year, give or take. So now that the infra, you could call it the basic market or the primary market, now that we're 10, 12 years into a mature market of size, there is enough secondary flow. And that's what allows the secondary market.

I would imagine that these things don't trade on an exchange. How does, where does the liquidity come from? Is this just boots on the ground? Like, where do these deals come from? Really important question. So they do. definitively don't trade in the He saw market, and in fact, they are highly, highly negotiated transactions. Moreover, the sale of private fund interest is distinct in comparison to anything else I know in the capital markets. If I own an investment in global infrastructure partners, which was in the news recently, right? BlackRock bought them. Exactly. If I'm a limited partner in that fund, I can't sell it without

getting that general partner to approve it. Moreover, there's no requirement that the various bidders for that asset, my limited partnership interest in that fund that I seek to sell because I need liquidity, get equal information. As if you will, there's no prohibition on insider trading and I'm generalizing here. So it's a highly negotiated market. And we believe we bring a competitive edge to it because we're deploying about 14 billion a year, where one of the largest allocation, to the infamarket globally, two leading general partners. So with one of their existing LPs once out, we believe we are a favored buyer, both because we know them really well, because we commit so much capital to their funds.

And then third, we've made tremendous investment in data and analytics that allow us to analyze quickly that interest in a world where there's limited information, on even information on standard information and determine whether it makes sense to buy it on the secondary market. By the way, those secondary market sales are typically at discounts to net asset value. Now, the discounts you'd see in infra

are going to be less than what you'd see in private equity and even less than venture. I was going to ask you that softball question. Because you're bringing liquidity, surely, you must be getting the better end of that transaction. We believe the purchases were making are attractive. discounts and infrastructure have historically been sort of high single digits. Wow.

And last year, we were able to execute a number of transactions in the low, sometimes mid, but let's say low mid, double digits. And those are discounts to net asset value and what we believe to be fair value. Bob, I had a little bit of experience in investing in infrastructure funds when I was in the endowment space and see if this, this. still jives with you with the description of it. So you mentioned there's a private and a public relationship there, right? The government either doesn't want to take care of the roads for the tolls or whatever, or they just want to get it off their hands because they're in trouble.

So the example I always heard was, okay, we're going to give a 50 or 100 year lease to this private company. They can come in. They have to take care of the road for the toll, but they can also jack up the tolls if they want every year for inflation. or upkeep or whatever it is, and they're the ones that have to do it. So it's sort of this private public relationship there where the municipality still owns the asset, but it's leased out to it. Is that kind of how this works still or not really? That's a very common example. And let me refine it a bit. First, those revenue streams typically have, or since they often have, a inflation escalator built into the revenue stream.

now you wouldn't typically get an inflation escalator to then have an unfettered right to raise prices too right there'd typically be some regulatory authority public utility authority at least in the united states which which i know best um you can't have it both ways but what you described is exactly it it is a transfer of a substantial amount of the risk to private capital and for that private capital gets some protections some concession is often the word used in order to generate what the infrastructure manager believes is an attractive return. But as you might imagine, what's really interesting about it, these things are not very correlated to other assets. I would argue, actually, I believe, we believe strongly in the research backs it up. Infrastructure is the asset that is, and I'll limit myself to institutional asset classes, I have no opinion on Bitcoin, et cetera. It is the institutional asset that when you add it to your portfolio, it has the least correlation with what you already have.

So then what does drive the return stream for these asset classes? Quality underwriting, ensuring that the general partners you've invested alongside can add value because there are certainly competition in most cases for these projects. that they can add value. They have the specialized expertise in the markets. And as you might imagine, like compare contrast with private equity. So it's a lot of the same skills, you know, building a company culture, increasing revenue, decreasing cost. But with infra, you also have to have a deep expertise in government regulation, for example.

You have to understand how these work. And so it's the typical private markets playbook, and I would add that element to it. That's what allows you to succeed. Of course, with the return profile, it's also critical to avoid losses, right? Very important to avoid losses. And this is on the continuum of growth versus income, I think it's one of the things you guys want to talk about. You know, Infra sort of sits between and in our fund we're going to do Core Plus.

You can think of Infra like you might think of real estate. Core, Core Plus, value add, opportunistic on the risk-reward spectrum. our fund is core plus, more income oriented, and value add, which is somewhat more growth oriented. So we sit in that, you know, core would be lower risk, lower return, opportunistic, high risk, high return. We're in the middle. So are these income plays? And if so, where does the income come from? I guess in the case of a toll road or an airport?

Are these like local revenues? I mean, how does all that work? yeah good question they do they organically produce revenue it's not like a private company or most of them do it's not like a private company where you know you're investing particularly a high growth company you're investing the profits back in you know when when that toll road has met its debt covenants it generates a regular stream of income same with it same with the airport so in a core plus asset there's generally income from the beginning or close to the beginning in a value you add asset, there might be a buildup period to get to income. But nonetheless, they are

designed as mature assets to generate a regular cash flow. So I guess just to follow up on that, so like for something, when something like this is getting built, the municipalities issue bonds. You're not investing in the bonds. You're not investing in the equity. You're investing in the funds that are buying these mature assets. Yes. And let's let's break that down a little bit. So I'm here in Charlotte, and there's a toll road within sight of my office behind me. The private company invested most of that capital, and it took six or seven years, it seems like, of traffic jams and whatnot to, you know, to expand, to increase the lanes, to put in toll lanes. Some of that capital was public. Some of it was private.

But then once it was built, you know, they're reaping that revenue and pretty quickly. quickly reaping revenue in excess of their cost. And then that flows up through the fund to us, or if we own as a direct investment, it flows directly to us. So they are assets that are designed to generate cash flow when they're mature and working. So since the asset itself is more liquid,

does that cash flow then translate into distributions for your investors? How does that work? What's the experience like as an investor in a fund like this? So for structure, our interval fund, we do distribute all of our net income and capital gains every year. We expect that in the first year or so, there will be limited distributions. And of course, I can't commit to any particular number here. But over time, yes, the return of this fund will come from about half regular income and about half from capital gains. I'm trying to think about where the appreciation comes from.

So, like, I keep coming back to this as a toll road. It feels like, I don't know if roads are a depreciating asset because the cash flows are constant, but then there's a lot of, like, maintenance involved. So maybe you could, it doesn't be the tall roads. Sure. Where does appreciation come from? And then, like, why would there be, why would there be an exit? First of all, the assets are very long-term hold in general.

But when an asset goes from, say, core plus to core because the risk is declined, then you're able to sell it. Think about it like a cap rate in real estate. You're able to sell it at a lower cap rate and therefore for a higher value than what you have in it. So it's like a bond. It's like a bond. When these assets are mature and cash flowing, the revenue streams are very reliable. So they've been de-risked. They've been de-risked. Moreover, you can often refinance them a couple of times as you own them, as you've down debt, you decreased cost, and so you can get appreciation or a pot. I'm not sure to try to adjust whether that's a capital gain from tax or not. I don't think it's important,

but you can get an event, if you will, as opposed to just a regular stream from a refinancing event and then a sale of that. Or you might sell a piece or apart. You might match an airport. You might offer, you might enter into a long-term lease with a new airline for some gates and get a substantial payment up front. So there are a number of ways to monetize those cash flows, but your question is on point. And it's not like a company where you're going to buy it, you're going to own it for five years, probably not going to take any meaningful capital out until you sell it. These are different. These are illiquid investments, obviously. The structure of the Interval Fund, I'll let you.

explain it in a second. But actually, no, let's just do that. Why don't you explain the structure of how an interval fund for those that are not familiar with how it works? Happy to. So an interval fund is an evergreen fund. It takes in money, ours does, on a daily basis and offers quarterly liquidity in our case for up to 5% of the fund, not of your investment. So daily ends, quarterly outs. It's evergreen. So you come into an existing portfolio of mature assets. It's designed to start and stay on the upswing of the J curve and avoid. the challenges you experience in the typical private fund. Moreover, you put all your capital in up front. You don't have the unpredictable back and forth. Typically minimums are low. You're saying no

capital calls and that sort of thing. No capital calls and the distributions are semi-annual or quarterly and predictable. So these are 1099 vehicles, not K-1 vehicles. So they're more convenient for individual investors. Low minimums, our minimum for structure is $25,000. So they are designed, they walk and talk very much like mutual funds, but with the 5% per quarter liquidity and don't want to stress, that's of the fund, not of your investment. So most of the time, most investors can get out at 100% of net asset value on a quarterly basis with short notice. Unless everyone wants out at the same time, of course. Absolutely. And so the key to that is to manage both the diversity in your investments, but the diversity in your invest stores.

And I should point out that if you invest in an infrastructure fund through your local private bank, some sort of feeder fund, you have essentially no liquidity in that fund. And while the liquidity in this fund is 5% or quarter, and you're absolutely right, there are situations. It's not, we've not experienced it, but it does happen and it can happen where investors are prorated. You do get out your pro rate apart. So imagine 10% one out in a given order. You get half out.

and so these are these are hybrids i like to be really upfront about this an interval fund sits between your daily traded exposure to something like a re or a bdc which invests in private credit a public bdc between your daily traded exposure and your 15 year lockup to a private fund it sits between in the case of an interval fund you can't sell it every day but when you do you will like the price you'll get out at a hundred 100% of net asset value. So that's the way we think about it. Can you explain to us how does net asset value get said every day in something that doesn't trade every day? Where does that price come from? In general, we use our proprietary analytics to predict the values or estimate

the values of these assets on a daily basis. And we're able to do that based on the massive amount of data we've gathered in the investment we've made in these analytics. And as you might imagine we backtest that on a regular basis. There are, of course, estimates, but they are our best estimate of the value of those assets on a daily basis. How about the fee structure? How does the fee structure work for a fund like this? So in structure, our interval fund, we charge 1.6% management fee and there's no carried interest or promote. That is our full fee. And I should point out, while that is slightly more than we would charge institutional investors for the same assets, the same investment strategy, it's really just modestly more. And that's a really

important point, I think. Stepstone, of which Stepstone private wealth is merely a small part, we are primarily an institutional asset manager. We're investing in infrastructure, private equity, private credit, and real estate for the world's largest institutions. What you get in structure, the Internal Fund, is the very same assets. We're just another client of Stepstone getting our pro-rout a part of the same investment stepstones doing for those large institutions. All right. So, Bob, your management fee is exclusive of any of the underlying fees and carry that might be charged at the fund level? It is. So we charged a 1.6% management fee, no carried interest or performance fee, no acquisition distribution fees. It's a 1.6% fee.

Yes, we do have fees that are charged when we invest in another fund. Now, we offset much of that, by buying funds at a discount. And those underlying fund fees, we estimate at about 75 basis points per year in terms of management fees, underlying carried interest when they occur. Those are harder to estimate. And typically the co-investments, when we go directly into a company as opposed to a fund, we get those with low or reduced management fees or carried interest in comparison to a typical fund. Bob, remind us how the partnership with Stepstone works. Are you getting retail investment just coming directly to you, you're going straight through the RAA channel. We work through financial advisors, primarily RAs, but also through the wirehouses and

independent broker dealers all across the country. We have over 200 platforms that are investing into our funds today. So when we started the show, there was a lot of questions that I had just to bring us up to speak because this is so foreign to what we do. I would imagine that there's a big educational component between stepstone of the advisors and the clients? There is. It's really critical to what we do. In fact, when we set up this business five years ago, we built it around the three pillars of trying to be the most convenient, efficient, and transparent firm in the marketplace. And to do that, you have to excel at education.

We put a substantial amount of information on our website. We hold regular update calls, and we provide fun commentaries. I was working on ours last night where we go into, example, not just what was our return for the quarter or the year, but the components of that. So in a fund like this, for example, in an evergreen fund investing in private assets, there are three components of your return in general. The first are realized gains. The second are unrealized markups or markdowns. Some periods we have markups, some periods we have markdowns. And then the third is a subset of unrealized gains, but we think important to break out because all of our strategies are focused on investing in secondaries. And we disclose what part of our

gain came from secondary market discounts so that you understand how we got to are returned for a given quarter. So that's one example of the education that we seek to do for financial advisors who are really our day-to-day client. And then we equip them with what they need to talk to their clients about private market assets and everybody funds in specific. it's probably semantics, but how do advisors usually position this in a portfolio? Is this there, it's somewhere in between fixed income and equity? Is it an alt bucket? Where does it go in the portfolio for most advisors? So for infrastructure, it does span the gamut. Man, that's a really good question. I think most advisors today are taking it out of the real asset bucket if they

have such a specific bucket, and if not, out of the income-oriented bucket. Bob, all- That's just what I did it. Everything is relatively less attractive when the risk for rate is 5%. Talk to us about how investors are thinking about the asset class, and also does the cost of financing impact these projects as well? Is it like a double whammy? So you're right that interest rates, of course, affect all asset classes, all institutional asset classes in a variety of ways. what we've seen is a substantial amount of interest in infrastructure and even though rates are

higher look at what's going on in private credit and the massive massive amount of demand whereas private real estate investing or capital raising based on the best source we could we could source was down about 70% last year private credit fundraising was down about 10% and we believe that doesn't capture all the actual demand. So individual investors are rotating away from real estate, in many cases, toward private credit and toward infrastructure. In terms of the individual projects, yes, the rate of return or the cost of debt matters, but we're typically able to increase or adjust the rate of return on the project for that cost of the debt. And then your inflation escalator built into your revenues is also very helpful.

It's not perfect, but it's also very helpful in maintaining your return or forecasting your return on a go-forward basis for new projects. So real quick, since you brought it up, the private credit thing, that is the hot, hot space, right? How would you compare and contrast? Would you say the infrastructure is more like a private credit fund than a real estate fund? Good question. I would say, I can't give you a good answer to that. I would say it sits between and it is less correlated to the other assets in your. in your mix than either of those two. It is somewhat less correlated. And it's interesting to individuals

because for all the reasons we've talked about, it's not been an asset class they've had access to. It's newer in the United States. Minimums are high. Holding periods are long to achieve a diversified portfolio through perhaps, say, a series of feeder funds has been difficult. And that's why we thought it was a good time to bring a diversified secondaries focused infrastructure. fund. Is there any leverage involved either at the interval fund level or at the underlying fund level? We're not putting leverage on this fund today. Yes, some of the projects do have leverage. The core plus would have more leverage and the value add would have less. Last question for me. What we spoke about risk and award and we understand now where some of the

income and returns are coming from. What's what would a, what's a bad case scenario? Can these could these infrastructure projects go bust? Like, what would a bad experience for an investor be like? Yes, infrastructure projects can go bust. Loth ratios have been generally low with the best general partners and lower than you would see, for example, in private equity. But yes, the projects can go bad. I think the more realistic scenario in a highly diverse spot portfolio.

So your point really goes to why you need to be diversified both by a type of project, geography, our fund is global, size of project, but also about manager. This is the point we haven't really talked about, right? So we thought it was timely to bring a diversified multi-manager open architecture infrastructure fund. There are a number of single managers, and they're very good managers, single-manager funds out there that are similar hours, but there are very few that are diversified at the manager level, which helps mitigate your risk of a deep down-of-side case. Bob, where do we send advisors if you want to learn more?

Stepstone Private Wealth or StepstonepW.com is the best place to learn about us. You'll find a substantial amount of information. Of course, before you invest, you should review the prospectus and the risk factors that consider all the things you would in any investment as you evaluate. All right, Bob. You mentioned before we got on the show that you had a personal investment, that was the best thing you've done. What do you got for us? Sure. So in the United States, there are hundreds of thousands of kids in foster care waiting

to be adopted. And it turns out there are hundreds, thousands of families who are qualified. They've been vetted and ready to adopt. It costs $25,000 to adopt a child. Wow. And so countless families, ready will and enable, and they lacked the last model, the last $5,000. and I'm pleased to be a part of an organization called Gift of Adoption. And at Gift of Adoption, we make grants for that last mile. So the way I think about it, that typical grants $5,000. When I invest $5,000 in gift of adoption, you make a family.

And that's a permanent investment with an infinite IRA. Beautiful. That's awesome. Really awesome stuff. Thank you, Bob. Becky. Okay, thanks again to Bob for coming back on the show. Remember, check out step up.

Stone Group.com to learn more. Email us, Animal Spirits. Wait, what is it? I always forget it. Animal Spirits at thecompannews.com. There it is.