Operator: [Call starts abruptly] Please note that today's webcast is being recorded. [Operator Instructions] It is now my pleasure to turn today's program over to Ryan Leggio. Ryan, the floor is yours.
Ryan Leggio: Thanks so much. Good afternoon, and thank you, everyone, for joining us today. We would like to welcome you to FPA Crescent's first quarter webcast. My name is Ryan Leggio, and I'm a partner here at FPA and Lead Client Relations. The slides, audio, visual replay and transcript of today's webcast will be made available on our website, fpa.com in the coming week or so. Momentarily, you'll hear from Steven Romik, Brian Salmon, Mark Landecker, the portfolio managers of our Contrarian Value Strategy, which includes the FPA Crescent Fund. Steven has managed the FPCs fund since its inception in 1993, with Brian Mark joining Steve and his portfolio managers in June of 2013. Before I turn it over to the portfolio managers, I wanted to note 2 things; first, Steven was in Chicago last week to give a keynote address at the Morningstar Investment Conference, and that transcript of his speech is now available on the homepage of our website and on the FPA crescent portion of our website. In his speech, Steven reflects on how his evolution as an investor has enabled to fund Metis objective since its inception. And speaking of inception, later this quarter, Crescent will celebrate its 30th anniversary. Please stay tuned for us in the coming weeks. We are planning to have an event in the late summer or early fall to celebrate Crescent's anniversary -- we include longer-term performance here for disclosure purposes. Before I turn it over to Steven, I want to remind everyone that this is a Q&A webcast, we'll first go through the pre-submitted questions and then go through the live questions as time permits. Steven, over to you.
Steven Romick: Thank you, Ryan. Thanks for taking the time today to join our Q&A session. Brian, Mark and I will address your previously submitted questions and the additional questions that are currently flowing in. Per usual, we won't discuss any names which we are presently transacting or if a transaction is imminent. We hope to use your time wisely discussing what we understand and not what we do not understand. Therefore, we will not be proper in opinions in areas where we have little scale, including calling the direction or magnitude of interest rate move or the timing and depth of recession to name a couple. First question that what's been submitted was IV funds before the tragic death of Fund Manager, Charles DeVeau, in the past on 5% to 10% in gold. Would you consider an allocation to gold in the future? And the second part of that question was, are there any other managers that you pay attention to now. You've mentioned IDAmanagers in the past. One should never say never, but we have not on gold in the past, and that's unlikely that we would. Our preference leans towards owning businesses that can grow cash flow over time and either reinvest or distributed appropriately. If we are successful in that, then we'd be as good as a goal. We have respect for a lot of managers and some managed mutual funds while others operate partnerships. Dave Samra, Portfolio Manager of the Artis International Value Fund exemplifies the former. And Seth CormanBelpost represents the latter question is geopolitical risk like macro risk too difficult to account for. Since we can't handicap macro risk, which includes geopolitical, we focus our efforts on understanding the micro. We don't ignore the macro, but we try to build into our models what might happen in a downside scenario and recognizing that more things could happen and will happen. It's a backdrop only though not a guiding factor. Since macro issues often impact businesses only temporarily, we prefer to look out 5-plus years as we consider how a company might perform -- another question, details for any current or anticipated debt positions. We prefer higher-yielding credit, high-yield bonds, distressed debt, busted converts and the occasional private loan. We don't have much by way of any of them today. In the aggregate, total higher-yielding credit was a bit over 5% at quarter end. The biggest challenge in buying public credit has been yields that have been way too low and covenants that have been way too light. In other words, we haven't been offered an adequate return to justify the exposure. Yields are somewhat higher today, but still low with high-yield spreads just about 5% over the risk-free rate and covenants continue to give too much leeway to the borrower, which explains our low exposure today. But we're ever hopeful and there could be a point in time, and we expect there will be a point in time where these positions will be larger as they've been in the past. Another question. Shiller PE and buffet indicators show broad stock value has not been achieved any comments on valuations stocks are not particularly expensive or inexpensive. U.S. stocks trade on average slightly higher than the 25-year average. And international stocks have been slightly less expensive than their own average over the last quarter century. However, this does need to take into account the difference in business quality and growth rates region to region and also reflects the benefit of unusually low interest rates. So, just you repeat that first line in the stocks or kind of just about typical valuations gives us some places to find opportunity, but not things are not on sale. I'm going to turn it over to Brian to handle some of the questions now.
Brian Selmo: So the question, are you still underweight to the energy sector?
Steven Romick: I'll start by saying that there are a number of different indexes that one might be referring to. So I'm not actually sure what under or overweight would be or me. And I think it's useful for everyone to know that we don't manage any benchmark, and we don't start from a position of looking at weights in a benchmark or index, I actually blissfully have no idea what the weights are in any index. But with that said, our exposure to energy-related businesses, and this is primarily energy services is about 4% of the portfolio. The largest holding is something called FPS, which is wholly owned by the fund group of -- essentially offshore oil vessels, a couple of other oil service vessels. And then, we own primarily credit instruments in a restructured company named McDermott, which, again, primarily services offshore oil industry. And then, we have an equity position in a U.S. gas producer, Gulfport -- the next -- the annual report for the first time that I remember talked about the best performer of 2022 being something called interest rate caps but you never defined what this ashateric investment is, how can you invest in a cap? Please explain the interest rate caps that we bought our options on the 30-year treasury rate in the U.S., and they work like other options, but these will be traded to spoke with dealers. They work with other options in the sense that there is a known and limited quantum of loss or spend, and there is a large and potentially depending on where interest rates go, possibly somewhat uncapped gain. And so we've done a couple of things in the past that look like this. It's kind of deep out of the money puts or some also options on yen in the past. And so I think this is something that we look for from time to time when whether it's a macro type instrument like rates or maybe something more micro just seems kind of very skewed from our perspective, from a risk-reward point of view. And so if you go back when the 10-year was probably 50 to 70 basis points or something like that in COVID, I think we wrote about this fairly extensively in the middle of 2020 that we thought that, that was -- that taking duration and interest rate exposure at that point was a pretty bad idea compared to more equity-weighted portfolio. That would have also been around the time when we would have bought those caps -- we are subsequently exited that position at the gain you saw. So it is no longer in the portfolio. And maybe staying related to that, there's a number of questions around financials. I'm not sure -- I think this is kind of an invitation to comment on the regional banking issues/crisis. And so I'll take this somewhat broadly because we got questions ranging from, is there an opportunity? Is it in larger small-cap banks. You had a small position in I think the question asked as Silvergate, but the company's signature, which is one of the banks that received and to what extent are other banks vulnerable to deposit runs. So, I guess I'll sum this up and say that the banks that have failed now, I think if we were to rewind a year ago and certainly 1.5 years ago, and if you were to ask regional bank analysts on Wall Street. If you had asked them for their list of the 5 best regional banks in the country. I would bet you that every one of the analysts would have had at least 1, if not 2 or 3 of the banks that failed on their list of the best franchises in banking, say, sub the globally, systemically important companies. And so to see them fail so quickly is somewhat disconcerting. And I think it breaths to bear the last question, which is how vulnerable are banks to runs or increases in cost in interest rates. And I think the answer is that they are incredibly vulnerable because to the extent they have a Durasen mismatch, which to some degree, every bank does and short-term rates are significantly higher than deposits. It's really irrational for people to keep any type of deposits at a bank. You want to swap it into a treasury money market. I shouldn't give you any advice. There's a lot of options that one could do to improve their yield and improve the security of their cash holdings that are not deposits at banks. And so given that I think one of the big facilitators of the bank crisis was the ubiquitous digital services that allow bank runs to happen in a day instead of in weeks or months. I think that observation would cause me to have some level of concern on any bank's deposit franchise given the current regulatory environment. The regulatory environment might change. And there are certainly banks that are much, much better positioned than the average or from your generic regional bank in terms of the nature of their deposit franchise and how much of it is sort of operating frictional cash versus something like a savings account. But all of that sort of sums up to. We've not done anything with regional banks. And I'll just put one pin in the question about Signature, which clearly we didn't expect that it would be seized. Cumulatively, we've roughly doubled our money in signature, including accounting for the sort of wipe out in the last 5 to 10 basis points we held when it was seized.
Brian Selmo: Okay. I am now going to switch and throw on to Mark because it must be sick of it hearing me. Mark, how does or will AI impact your investment decision-making process?
Mark Landecker: For the record, Brian, I would never get sick of hearing you talk, I'm happy you always want to take all the questions. As for the AI impacting the decision-making process, at the moment, we would say that it's more in terms of potentially making us more productive as we look to extract source material from various places such as 10-Ks, quarterly reports, conference calls, such as that. We are not quants per se. So it's not as though we have some black box that AI is improving. But if anything, it could make us more efficient. The downside is we'll probably make all our peers more efficient as well. So as it stands at the moment with what we've seen and experimented with chat GPT and the like, we don't think it necessarily gives us any advantage, but it might make the investment process more efficient for both us and the investment community at large.
Brian Selmo: Maybe we can both, but would you like to talk about companies passing along price increases this year versus last year? And if you've seen or heard people having more troubles with that?
Mark Landecker: Sure. So generally speaking, you've got 2 types of companies. You have price takers and price makers. So a price taker will often transact in a commodity type business and generally has very little ability to influence price as they are essentially selling an undifferentiated product. So at times Crescent does own such companies, as Brian mentioned earlier, we do have some energy exposure, and we would define such businesses as price takers. We have a greater affinity for price makers that supply a unique product or service, which allows our company to take price and protect margins and profitability when required. Now not obviously, every company is in such a privileged position to do so. But all else equal, those are the evergreen type companies that account for a significant portion of our portfolio. So just as an example, if you got a significant other or perhaps even a recent graduate, whom you were thinking of buying some cardio jewelry to celebrate a special occasion. The time to do it was 3 weeks ago just before the jeweler implemented a global price hike of 5% to 15%. Now in a similar vein, many of our semiconductor companies actually use their quarterly conference calls over the past year to point out that while they are putting through significant price increases in response to rising inputs, they were actually exercising restraint so it to not have customers feel like they were being gouged, even though it was within their power to do so. Now as for a very general statement, what we've observed with first quarter 2023 results is that many companies have benefited from price hikes put in place over the past 12 months to offset inflation. They're now with the lag experiencing the benefits of such hikes as they flow through to current revenue, and they're also seeing the softening at times of input prices such that margins are actually coming in better than what was expected by sell-side estimates, albeit in some cases, volumes might be lighter than what was anticipated. Brian, you talk back to you if you want to take one?
Brian Selmo: Sure. There is a question, what conditions would it take to put your cash to work? It is -- and is all your cash and short-term instruments generating at least some yield. So I'll answer the second part because it's very easy. Yes, they are in short-term instruments, and they are getting a pretty decent yield right now. In terms of putting the cash to work buying or selling things. So everything is done opportunistically. There are sort of some broad categories of opportunity that would be helpful for us for being fully invested. And I think I'll first zoom out and talk about the mandate of the fund, right? The mandated fund is equity-like returns with less risk, and we think about risk as permanent impairments of capital. So there are some businesses that are equities that are very, very safe and have, let's say, as much durability or sustainability or robustness as any sort of credit that one might be interested in. You might think of these as global consumer staples that are geographically diverse, strong balance sheets and probably produce a product that are consumed very regularly that don't maybe have many substitution options and tend to be maybe strongly supported by an industrial position. And so if you could find a lot of businesses like that, you would probably be -- or we would be very comfortable being fully invested in equities and thinking that we were meeting the mandate that I earlier described. And in fact, in the first quarter, we bought one of those Heineken Holdings. And if the world provided us with opportunities to buy more businesses like that at what we think of as reasonable multiples that would support long-term owner returns in the double digits, then that could be a big pocket of increasing the investment posture of the fund. Another category would be something Steven talked about, which would be high-yield in credit. So credit has increased from essentially 0 to what Steven mentioned and essentially 0 from a year ago. And I think that we've got a very decent chance of increasing the credit exposure in the fund over the next 12 months or so. This probably wraps back into some of the discussions around banks. And then lastly, I would say that we have a somewhat unique and diversified portfolio, some businesses, like Mark said, strong franchises, some are more price takers. And they have certain levels of cyclicality that we are comfortable with at the current exposures for the prices on offer. Now if the prices of those businesses or our portfolio holdings were to change materially, meaning like a broad sell-off among those names, then we would also have an opportunity to increase the exposure and still maintain sort of the overall mandate of the fund. I will now just turn on, there's a couple of questions on some real estate or REITs that we've bought or added to in the last quarter. And I think that we -- I'm not going to -- so one person wrote in a very detailed question with their own analysis, and I'm not going to kind of get into what our own sort of NAV is or thinking on a company. But to that person, I would say I don't sort of have any glaring disagreement with your e-mail. Otherwise, we are buying these and hoping to buy more. So my comments will be general. I would say that a number of public REITs trade at prices that allow you to access the underlying real estate at clear discounts to replacement cost. And if one believes that, that real estate will remain relevant over time or regain relevance than you ought to do okay on that basis, and that's largely our thesis. Next question, I will say is let's...
Mark Landecker: Brian, I can take one of the pre...
Brian Selmo: Sure. Okay. Yes, go ahead.
Mark Landecker: Sure. There's a question, please remind us of your internal hurdle rate for companies to be added to your strategy. It looks like you've been reducing equity trimming exposure back to levels pre-COVID. So we've talked about this on prior calls, but the investment team doesn't have a single hurdle rate for an investment to be added to the strategy. But if we have a guiding rule, it would probably be -- we want to avoid doing anything that might look stupid 12 to 24 months from now. So it doesn't mean we don't make mistakes, but we try not to get sucked into foam or momentum during times of irrational exuberance. As for how we look at investments, again, as discussed in the past, we often employ a scenario-based analysis for many securities, so we will prepare a low-base high scenarios over, say, 3 years, and we're looking to not lose money or hopefully make single digits in our low case, equity type rates of return in our base case and equity plus in our high case. Now of course, this is more art than science. And those that know us would suggest that the inputs in our models and the exit multiples we assume air to the side of conservatism. And in response, we would say, GILTI is charged. Now for other investments, it might be heads we win, tails we don't lose, and the upside is just enough juice to entice us to stop sucking our thumbs and place an order. And so it really depends on the type of securities and what we think the range of outcomes might be. Brian, I'll pass it back to you.
Brian Selmo: Great. There were a couple of questions on specs. And I think one mentioning that the -- I think the general portfolio exposure has gone down significantly in a question about sort of is this largely just converted that investment into T-bills. And the answer is yes. And a quick reminder of the pack. We bought them at a discount to the trust value. The trust was in T bills. If the companies weren't able to get deals done, then you would get essentially your interest in the trust paid out to you; and that's largely what has happened. And so, we still have a small sort of tag end of these that haven't quite reached their maturity date. But when they do, that will -- the remainder of it will convert to cash also. Mark, would you like to take any of the ones on the board?
Mark Landecker: Sure. So maybe try to tie these 2 together. The first one is in terms of the things, what makes Facebook and Amazon worthy of ownership, but not Apple or Microsoft presently? And the second question is, what are your thoughts on Meta's business today and the billions of companies pouring into the Metaverse concept NVR. So we do own Facebook, Google and Amazon at present. We do not own Apple, and we don't own Microsoft, so we did own it for roughly a decade up until 2000 and 20, I believe or so. Apple is one that we've never owned in the fund. Obviously, era of emission because it was talked about at times and we could add it to the other hundreds of names that are errors of omission. As for where it is at present, the valuation is such that we don't think it offers a particularly compelling risk award at the moment unless you're searching for names that maybe do you have some technology risk and offer you a low single-digit free cash flow. In terms of Microsoft, we would be much more positive towards the long-term earnings opportunity. We keep a close eye on it. We regularly read the quarterly conference calls. We appreciate Amy Hood's jokes on them. We think about what's the right price to pay for Microsoft is, and we think they're well positioned going forward. And so if there ever was some sort of macroeconomic event where we woke up and names are generally down by more than you ever thought they could be. I think Microsoft would be at the top of the list is a potential addition. As for Facebook and Google, we think on their current earnings, they're attractively valued despite the fact we have owned several -- both of them, sorry, for many years. Amazon is one that we think you've got to look out a little bit longer for the multiple to come down, albeit that's because there's a significant number of investments taking place at the moment that impair profitability, but you don't need to be that much of a dreamer to see the underlying earnings in Amazon. And on the most recent conference call, management did note that they thought that the margins for the North American retail business, which has suffered over the past 2 years, could get ahead of the mid-single-digit margin they saw pre-COVID. And so when you think about the underlying earnings power of AWS you think about the under-earning businesses in international retail that are still being built out, but should hopefully have a margin potential similar to that of North America. And then, you think about some of the money-losing operations that ultimately could turn profitable or be curtailed. We think actually Amazon trades at a fairly realistic multiple. Maybe we'll go into Amazon more in detail on another call because there was a specific question, which we want to address as well, which I suppose will take a minute or 2. So I'll assume that everyone is familiar with Meta. But just to put the perspective of the company in scale, there are 4 billion Internet users outside of China, of which half are meta DAUs or daily average users and roughly 3/4 are MA user, monthly average users. So you can tie that incredible usage back to the fact that Meta has 4 of the 6 most widely used mobile apps in the world, that being legacy Facebook Blue, Instagram, Messenger and WhatsApp. And then within the apps, you can find features such as Facebook Marketplace, which for example, is utilized by more than 1 billion people annually to exchange Guojin services, which incidentally is more users in eBay, Amazon, Cregan Shopify combined. Now as the number 2 digital advertising competitor worldwide behind Google, Meta's effectively taken revenue up by 4x between 2016 and where we are today. I should add, during this period, the company also increased their headcount significantly. And what's really gone on at Meta over the past, call it, 6 months as Mark Zuckerberg has entered into the year of efficiency is realizing that Meta could be run with less people than it had on staff in 2022 and also with the smaller logistical footprint as that relates to real estate configuring servers, data centers and the like. And so, if you think about the economics of the business, the margins for the family of apps, which encompasses Facebook Blue and Instagram were almost 50% on a GAAP EBIT basis 5 years ago. We don't see a reason why the margins could not get back to that level going forward as the business benefits from efficiency measures currently underway. And we think that leaves Meta trading at a very attractive multiple. Even if you deduct for the roughly $15 billion currently being spent on the Reality Labs or a metaverse initiative. Now the good part of Meta is we have an owner operator at the helm, who brought us Instagram, WhatsApp, scaled the business in an impressive manner. Unfortunately, he also has an obsession with virtual reality in the form of the Reality Lab segment. Now to cut to the chase, if we were in Zuck seats, we wouldn't be making the Reality Labs investment, but there's also a reason the 3 of us aren't sitting in Zuckseat as our technological capabilities are largely limited to booting up our computer each day. But the spend on RAYALDEE Labs is so large that our working thesis is that either Zuck starts to see success in a couple of years or it gets tired of seeing failure and materially dies back the investment. The benefit is that we think Meta is currently trading at a reasonable valuation at the moment, even impairing results for Realty Lab. And the reality lab losses, we would hope will be in a different place 2 to 3 years from now, as mentioned, either because spend has been curtailed or the investment proves to be successful despite our comments earlier. I think that covers Meta. Brian, did you want to jump in for any I can take?
Brian Selmo: Sure. Well, there's a question -- this is not -- I don't know how valuable our views are, but any thoughts on capital availability due to the banking situation. I think this is a pretty consensus view, but it's hard to imagine that it won't tighten conditions in the U.S., particularly for real estate.
Steven Romick: I mean, I'm not really sure to talk about capital availability and in the way the question was posed if it's relating to capital available to mail out the banks or capital in general across the countries. But so Brian answered the question in the context of what it might mean for availability of credit or how that might be impactful to the economy, at least as it relates to the banks, I mean, the BTT program as a tractor program that gets a bank's ability to borrow with their held-to-maturity portfolio at par, which is a very attractive tool for the banks to give them a lot of liquidity.
Brian Selmo: And Mark, I don't know if you want to talk about IFS?
Mark Landecker: I mean, the question is, can you discuss how much of the problems are self-inflicted and fixable? And how much is market changed? So IFF is one of the world's leading flavor and fragrance companies. I don't think we've talked about it in depth in prior calls. But flavor and fragrance is an industry that we collectively have been following now for several decades. We think it's one of the better industries in the world because essentially what you were doing is providing the input for a flavor or a fragrance to, for example, large MNC that maybe wants to make their fabric softener smell like vanilla or they might want to have a low-sugar solution for their mint chocolate chip ice cream with nice mouth feel, for example. And so the cost of providing the input to these FMCG -- typically FMCG companies usually accounts for perhaps 1% to 2% of the overall cost of the product, but it is of paramount importance in terms of a product being successful. So, if we think about things that we purchase, whether it be shampoos, body washes, the like, we often go back to those because there is a smell that triggers a response of familiarity that we are looking for when we open the product when we use it. And then similarly, for taste, Obviously, we buy products that we find appealing to our pallet and also whether it be [indiscernible] if they don't taste like Crit [ph] or dirt despite the fact they might have been engineered to be low salt, low sugar, et cetera. And those are the type of solutions that IFF provides declines across the world on a global basis. Now rather than getting into too much details, IFF had been an acquisitive company under prior management. New management has recently come in. We've seen the majority of senior management change over under the new CEO. And we take a positive view based on some background research we did with the help of Scott Syndroski, our investigative journalist that we think Frank Kleiber and the new CEO, is the right person for the job because as far as we can tell, his skills effectively are blocking and tackling, putting the right people in the right place and putting the right measures in place such that you get effective outcomes by measuring what should be measured. And so with respect to IFF, the company continues to be a market leader in a very good business. They've had some own goals due to integration falls over the past few years, as mentioned under prior management. But going forward, we think on a multiyear basis, it has the potential to be a wonderful company, earning tremendous free cash flow, and we would expect that as in the past, that free cash flow will largely be returned to shareholders in the form of dividends, buybacks once the balance sheet improves and possibly further bolt-on M&A because there really aren't that many large targets left. Brian, I'm not sure if you want to add anything.
Brian Selmo: No. I think we've at least heard a couple of positive things around changes in the organization structure and compensation schemes down through to the sales staff that would again suggest that Frank has a decent probability of being the right guy.
Mark Landecker: Okay. There is a question, thoughts on China Baba. Our overall exposure to China is significantly less than where it would have been 1 to 2 years ago. It's a conscious decision. Frankly speaking, we found it more difficult to invest in China due to regulatory changes, competitive intensity and economic cyclicality than we appreciated at the time of our original investments -- so at the moment, we do continue to still have exposure to names that we think are very attractively valued that we think are currently acting as exemplary stewards of capital. And so if you look at the names, we currently have Swire Pacific, Alibaba and Naspers, all of which are undertaking very significant share repurchase programs at present and all of which we think are very attractively valued. However, we say that due to the aforementioned factors, perhaps we think now these are more commercial-type opportunities than they are necessarily long-term compounders. The businesses still have the characteristics that would be -- we'd be looking for in compounders, but they're operating in an environment that perhaps is not as compounder friendly as other jurisdictions in the world [ph].
Ryan Leggio: Great. Thanks, Steve, Mark and Brian. To any of our listeners, if we miss your question or if you have additional questions, feel free to reach out to your FPA relationship representative or e-mail us at crm@fpa.com. At this time, I would like to turn it back over to the system operator. Thanks, everyone, and have a great day.
Operator: Thank you for your participation in today's webcast. We invite you, your colleagues and shareholders to listen to the playback of this recording and view the presentation slides that will be available on our website within a few weeks at fpa.com. We urge you to visit the website for additional information about the funds, such as complete portfolio holdings, historical returns and after-tax returns. Following today's webcast, you will have the opportunity to provide your feedback and submit any comments or suggestions. We encourage you to complete this portion of the webcast. We know your time is valuable, and we do appreciate and review all of your comments. Please visit fpa.com for future webcast information, including replays. We post the date and time of upcoming webcast towards the end of each current quarter, and webcasts are typically held 3 to 4 weeks following each quarter end. If you did not receive an invitation via e-mail for today's webcast and would like to receive them, please e-mail us at crm@fpa.com. We hope that our quarterly commentaries, webcasts and special commentaries will keep you appropriately informed on the strategies discussed today. We do want to make sure you understand that the views expressed on this call are as of today and are subject to change without any notice based on market and other conditions. These views may differ from other portfolio managers and analysts at the firm as a whole and are not intended to be a forecast of future events, a guarantee of future results or investment advice. Past performance is no guarantee nor is it indicative of future results. Any mention of individual securities or sectors should not be construed as a recommendation to purchase or sell such securities or invest in such sectors, and any information provided is not a sufficient basis upon which to make an investment decision. It should not be assumed that future investments will be profitable or will equal the performance of the securities or sector examples discussed. Any statistics or market data mentioned during this webcast have been obtained from sources believed to be reliable, but the accuracy and completeness cannot be guaranteed. You should consider the Fund's investment objectives, risks charges and expenses carefully before you invest. The prospectus details the fund's investment objective and policies, risks, charges and other matters of interest to a prospective investor. Please read the prospectus carefully before investing. The prospectus may be obtained by visiting the website at fpa.com, by e-mail at crm@fpa.com, toll-free calling 1-800-982-4372 or by contacting the fund in writing. FPA funds are distributed by UMB Distribution Services, LLC. This concludes today's call. Thank you, and enjoy the rest of your day.