PitchBook added $4.1 million [of revenue] and $7 million of expenses in the quarter. Do you have a plan to improve profitability at PitchBook? Do you have a margin target you wish to achieve over the next few years? Are there any plans for cost takeout at PitchBook now that it is fully owned by MORN? Or is margin improvement going to be driven primarily by revenue synergies and cross-selling Pitchbook products to MORN’s broader customer set?

We acquired the remaining ownership interest in PitchBook for a few key reasons:

• We share a common goal of bringing transparency to the investment landscape, and the same dedication to operational excellence, customer service, and innovation. Both Morningstar and PitchBook are rooted in investment data and have entrepreneurial cultures.
• PitchBook has a strong market position as a leading data, software, and research provider on private equity, venture capital, and mergers and acquisitions, which are all areas of growing investor interest.
• The company has had an attractive growth trajectory and a proven ability to execute on its operating goals.
• Multi-asset portfolios are becoming the norm, and combining Morningstar’s public company data with PitchBook’s private capital data will give us one of the most comprehensive multi-asset datasets in the industry, helping us better meet the needs of our advisor and asset management clients.

We did not make the acquisition with the goal of taking out costs and expect to maintain PitchBook’s existing employees and operating plans.

The $7.5 million of operating expense added by PitchBook in December 2016 includes about $1.1 million of operating expense incurred by Morningstar in connection with the acquisition and $0.9 million of amortization expense for acquired intangible assets. Going forward, we also expect to incur additional compensation expense for performance share awards for some employees of PitchBook, with target annual grants of approximately $7.5 million in 2017, $7.5 million in 2018, and $15.0 million in 2019.

Excluding these noncash charges, we believe PitchBook’s underlying earnings power is more positive and should improve over time. Like the rest of Morningstar, PitchBook should benefit from scale and leverage, and we plan to continue investing in the business as long as it’s able to generate high enough returns to offset the cost of customer acquisition. Because PitchBook’s business model is very similar to Morningstar’s, it’s reasonable to expect long-term operating margins to be more in line with our consolidated margin.