4 Real

'Tis the Season for Rated Funds

• Dechert LLP • Episode 29

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In our final episode for 2025, Dechert 4 Real hosts Jon Gaynor and Sam Gilbert are joined by corporate partner Ross MacConnell for an inside look on rated funds and their intersection with commercial real estate. Plus, we get into the 411 on the New York LLC Transparency Act and share our favorite holiday movies.

Jon Gaynor:

John, Hello and welcome back to the Dechert 4 Real podcast, where we discuss current issues and trends in commercial real estate finance. We aim to bring market commentary about developments, updates you can use, and maybe a little bit of banter along the way. I'm Jon Gaynor, a partner based in Dechert's Philadelphia office.

Sam Gilbert:

And I'm Sam Gilbert, a partner based in Dechert's Boston office.

Jon Gaynor:

In this episode, we are joined in our Philadelphia office by Dechert partner Ross MacConnell to talk about rated funds and their intersection with commercial real estate finance.

Sam Gilbert:

And today's 411 segment will discuss what you need to know about the New York LLC Transparency Act. Think state- level Corporate Transparency Act.

Jon Gaynor:

But first, let's get 4 Real with the hosts. It's December, and we're in the middle of the holiday season. Sam, do you have any favorite movies this time of year that you watch with your family?

Sam Gilbert:

I do. I've got to go with "A Christmas Story."

Jon Gaynor:

"A Christmas Story, yeah, it's a classic." You'll put your eye out.

Sam Gilbert:

Yep, it's very quotable.

Jon Gaynor:

Yeah, totally.

Sam Gilbert:

And it's one of those movies where you can turn it on halfway through, three-quarters of the way through, and just watch it for six hours straight on repeat on Thanksgiving. So

Jon Gaynor:

For me, when I was growing up, I definitely liked the old claymation "Rudolph, the Red-Nosed Reindeer." I think that's a classic. Lately, my kids are way more into, especially my younger son, he loves "The Great Christmas Light Fight." I have not yet told him that there's a new season coming out, but like he's gonna be like, we have to, we have to cut him off in January, like, no more. We can't watch any more"Christmas Light Fight," because it's all he wants to watch. It's so soothing. All right, I think that counts as getting 4 Real with the hosts. OK, on to our 411 segment. The New York LLC Transparency Act, a state law analog to the Corporate Transparency Act, passed the New York Senate, and as of this recording, is waiting for Governor Hochul's signature. Once signed, this bill would take effect January 1, 2026, and would impose beneficial ownership reporting requirements on both LLCs formed in New York and formed LLCs authorized to do business in the state. For existing LLCs, the compliance deadline is December 31, 2026 while newly formed or registered LLCs after January 1, 2026 have just 30 days to file. New York is one of several states, including California, Massachusetts and Maryland, to have their own version of corporate transparency-style legislation. The New York law originally incorporated definitions from the Federal Corporate Transparency Act, but as listeners to the podcast will recall, FinCEN's March 2025, interim final rule exempted all U.S.- formed entities from CTA reporting. New York moved then to decouple its statute from the CTA. The pending law would establish independent New York definitions for reporting companies, beneficial owners and exempt companies. Unlike the now-suspended CTA, the New York law requires even exempt companies to file annual attestations claiming the exemption. There are no self-executing exemptions. The statute also requires disclosures of applicants, those who filed formation documents, even for LLCs that existed before the effective date and provides no FinCEN ID equivalent. Non- exempt LLCs must report identifying information for beneficial owners, that is people who control 25% or more of ownership interests or exercise substantial control, including their full name, date of birth, residential or business address and a government-issued ID number. Substantial control includes serving as a senior officer, having authority over appointments or removals or directing important company decisions. So, the key exemptions that we were used to from the CTA do still apply, including publicly-traded companies, banks, registered broker dealers, insurance companies, investment advisors, large operating companies - that is 20 or more full time employees, more than $5 million in revenue, a physical office in New York State. But there's uncertainty about whether subsidiaries of pooled investment vehicles, or SPEs, would qualify or meet any other requirements. The penalties are pretty severe. LLCs face a $250 fine for initial non compliance, and $500 a day for each day they remain past due or delinquent, and then after 30 days of being more than past due, they get a mark in the Department of State Records, and then after two years, they're marked delinquent. So, as of now, the New York Department of State has not issued filing forms, hasn't established the online database or issued guidance on implementation. You should monitor this if you are registered to do business out of the state of New York, because now you know you thought the CTA didn't apply to you, and you have the state law version in New York State to apply.

Sam Gilbert:

Now, on ro today's guest, Ross MacConnell is a partner here at Dechert who focuses his practice on strategic transactions, ranging from capital markets deals, including rated note structures, to mergers and acquisitions, joint ventures, minority investments and stakes transactions with an emphasis on the asset management industry. Ross, we're happy to have you today on the 4 Real podcast. Welcome.

Ross MacConnell:

Thanks. Happy to be here, guys.

Jon Gaynor:

All right. Well, so, Ross and I have a long history together. We were summer associates in Dechert, way too many years ago to mention. So, Ross, before we get into the substance we like to get 4 Real with the guests, too. So, what's on your family's watch list during the holiday season?

Ross MacConnell:

"The Grinch" on repeat. Yeah.

Jon Gaynor:

So like, which one? Because there's, like, the original "How the Grinch Stole Christmas" with that song that gets stuck in your head all the time.

Ross MacConnell:

Yeah. I think they're all on the watch list. The most-watched version is an actual DVD of the new animated version subsequent to the Jim Carrey version, which is my favorite.

Jon Gaynor:

Got it. So your favorite's the Jim Carrey one?

Ross MacConnell:

Yeah, my favorite's the Jim Carrey one. On Christmas Eve, will watch the original "Grinch" as a one-time-a-season. But we have a van, as many people do, and the vans have a DVD player. So any time we're in the car or at home, it's that other "Grinch," whether it's on the DVD player or on the streaming services. So, it's good. I like it too.

Jon Gaynor:

It's a lot of fun.

Sam Gilbert:

I had "The Grinch" on last night, the Jim Carrey version. We watched it, so I'm with you. That's the best one. Creepy, but it's the best one.

Ross MacConnell:

That's what my wife says,

Sam Gilbert:

Yeah. All right. Well, Ross, to kick things off, maybe just start by briefly describing kind of what a rated fund structure is, you know, for simple real estate lawyers like myself, and maybe what triggered the push for these sorts of structures and why folks who play in commercial real estate finance should be paying attention to them.

Ross MacConnell:

Yeah. So I think when you look at this market segment, it originally started as a capital-raising strategy for commingled funds oftentimes, but not always, in the credit space, looking to bring insurance capital into the fund products, just in terms of private fundraising. And the insurance company investors were interested in making LP investments, but couldn't do LP investments in those fund structures without taking a very large capital charge, needing to hold a lot of capital on their books relative to that LP interest. And in respect of credit funds, for example, or secondaries funds or maybe commercial real estate funds, that didn't really make a lot of sense, because the underlying investment strategies were credit strategies. So, you know, what evolved in the market was a way to enable insurance company investors to participate in fundraising through feeder funds. And in those feeder funds, they typically were to get a vertical strip of a couple classes of debt notes. The first class would be investment-graded debt, which had the lowest capital charge on it, maybe a mezz debt, as well, which could be notes or loans, and then an equity tranche. And they would hold that whole vertical strip. And because they were holding that vertical strip, and only a small portion was a limited partnership interest or a subordinated note that was treated as equity for tax, they had a preferential capital charge treatment in terms of their investment into those structures. So that was kind of the origin of how these came to be. Over time, you know, over the last several years, you've seen a lot of evolution in that market. In particular, it's become more common to do these deals horizontally, where you have different investors buying different classes of securities or loans from the capital stack. And in those transactions, you still have insurance company investors buying the senior-most debt, which has the best capital charge associated with it, but you also have others coming in to buy more of the junior capital in the structure, including people just looking for a regular-way levered return in respect of the equity. What started as sort of a solution to get around a problem - specifically, how do you allow insurance companies to invest at a capital charge that was more or less commensurate with what they were investing in - evolved into kind of a bespoke structuring area where that's still obviously a big part of it but, you know, you can treat these as structured transactions more broadly now, where you're you're looking at each class independently.

Jon Gaynor:

So, that's all interesting. I think building a structured investment product that allows different kinds of folks to access different risk verticals with respect to, you know, the funds that they're investing in. I'm curious, for our listeners, if we can get into some of the structure here, like how these work, how people get the ratings set up, because that seems to be, at least for some of the constituencies, a really important element, maybe not completely, because you could use this structure even without a rating., it sounds like.

Ross MacConnell:

Yeah, I think you are going to want ratings in virtually all of the structures, because it'll increase demand for the most senior debt and insurance companies need the rating - need the investment grade rating. That's what their capital charge ties to. But sure, theoretically, you could issue tranche transaction structures for any number of reasons, and people could buy them depending on their interest in the demand. So, just in terms of how it works, the first thing you need to think about here is that when you're structuring these transactions, the notes need to actually be notes, which means they need to have a maturity date, right? And you need to think about how the structure is going to work, whether this is a feeder fund that's investing into a main fund and has limited partnership interests, or whether it's going to be something different. Maybe it'll be a standalone structure that will invest side by side with a main fund, right? So it's holding the underlying security instruments or assets directly, but investing with the main fund. Or maybe it will be something that's really on its own. Maybe it'll be a standalone vehicle that will have some sort of investment strategy that's prescribed in the constituent documents, whether that's a partnership agreement or an IMA with a manager, and that will be holding those assets. So the first thing to do, I think, is to try to get comfort on what the underlying assets are and how they're going to support the payment of the notes. So oftentimes, what our clients do in the first instance is they have those initial conversations, which we can help with or provide market intel on, about the underlying sort of asset class. So you know, we know that what started primarily in the credit space has sort of expanded, right? We see rated note structures in credit, we see them in secondaries, we see them in real estate, we see them in multi-strat, right? And at the end of the day, what the rating agencies are looking at is whether those underlying assets can support based on their unique attributes - payment on the debt, right? And then from there, once you you're able to, like, get a sense of,"OK, the underlying collateral pool here will work." The next thing you do is you start adjusting and trying to figure out a proposed structure, right? So, the rating agencies aren't going to work with you as a structuring agent and tell you how to set up the deal. But if you work with counsel, or you can work with one of the agents that we very commonly work with in this space, to help you set up a contemplated structure, oftentimes in, like, a very, very, very summary term sheet or deck, which would be presented to the rating agencies, which would be used to get kind of indicative ratings. And from there, you would go out and you build that out as you try to build your book. Sometimes, you know, an insurance company investor would come to a client and say, "Hey, we want to invest in your fund. So just give us the solution, and you can work backwards." Other times, it's a little bit more complicated, where the client is trying to figure out a way to raise capital, not from one source or any particular source, maybe they've identified an anchor who's interested in buying, I don't know, a particular type or multiple types of the capital stack, but during that next page, once you've had the initial foray with the rating agency, you develop sort of a long-form term sheet. You'd bounce that back and forth with the rating agency to make sure that the structural elements that you're proposing work, don't impact sort of the Indicative rating potential adversely. And you keep them apprised throughout the process and as you move to long-form documents, etc. And I think that, you know, we have, and others in this space have, you know, good relationships and consistent dialog with each of the primary rating agencies in this area. So, that's a relatively seamless process these days, though. It's obviously important, because assuming that you are trying to get rated notes that you can sell as investment-grade notes to your anchor investors, you need to have that process in place. And you also are going to need to do annual rating refreshes, etc., which the insurance companies are required to submit on their end in order to sort of maintain their ratings.

Sam Gilbert:

So that's interesting, that rating agency process, right? In my world, the more traditional CMBS, you've got a 40- or 50- page document there, each rating agency has their own criteria that's published, and you can sort of go line by line and make sure you're complying with things.

Ross MacConnell:

Yeah.

Sam Gilbert:

Does that sort of thing exist in in this structure?

Ross MacConnell:

It doesn't, per se, but all the rating agencies have ratings methodologies which they publicize and teach about, and depending on the structure, you're able to sort of present what you're presenting to the rating agency in a manner that complies with their their rating methodology for, you know, the underlying asset class. And, you know, the rating agencies will give different weight to different things, and the structure will vary depending on agency. So for example, you take something that's kind of like an extra, like track record, right? It might be really, really important for a manager seeking to build a new fund, right? It's going to be a new fund, new fundrais, so you don't really have a book of assets yet. You have kind of loan tapes or illustrative assets they're going to be going into the vehicle to do this. Then it might in an example where you already have an existing fund with a track record, right? And you're not at the final closing yet, so you're just creating another feeder sleeve that's going to invest in the underlying assets. Many times, the underlying assets are already rated, so that would provide some additional support, sort of right away with the rating agency. But in general, the analytics teams that most of the agencies will work with you on their methodology as you go through it, and it's one of the things that, as you know, clients are working on trying to figure out the way that they should approach things with the rating agencies, depending on the agency, we can help you sort of hone in on that methodology and the published criteria with respect to that methodology, but it's less granular, like a checkbox, than it might be in some other spaces.

Sam Gilbert:

Yeah, it's sort of an art instead of a science, at least sounds like.

Ross MacConnell:

Yeah, that's right.

Jon Gaynor:

And really cross disciplinary, because you've got to know how the rating agency thinks about different asset classes and different types of things, and try and make a convincing argument by analogy or whatever to the current state.

Ross MacConnell:

Yeah, that's right. And like, there are certain features, structural features, like concentration tests and limits and other sort of underlying asset limits that help them sort of get their hands around what the underlying vehicle will actually be doing across different spaces. So, the more open ended it is, obviously, the harder it is to kind of present in a package.

Jon Gaynor:

Yeah, so the rating agency is one element of making these structures work, the rating being critical to the economics for some of the investors. But then you've also got to deal with the investor demands, particularly insurance companies, and, you know, the kinds of things that they have to qualify for in order for the investments to count. Now we're not insurance regulatory counsel, but we're very frequently building structures around these debt features to distinguish them from equity. So what are kind of, like, the debt-like features in that tranche of the vehicle and, like, how do those structures work? What's the view in the market right now on these? Yeah, so look, I think that's more to, like, I think many people have heard that the NAIC, which is the regulatory body, it's the collection of state insurance regulatory agencies, has moved to a principles-based approach about what is a bond, and the focus there is less on needing to persuade the NAIC, for example, that something is a bond, but you need the actual security to look like a bond. In general, you can't have a maturity date that you can keep on punting, and you need to have amortization at some point, and the principal needs to get paid down. And maybe you can defer interest, but like up to a point, right? So you have to be able to toggle around the features to make sure that the debt instruments are actually debt instruments. And in these horizontal deals, hatt is something that sort of happens organically too, because people who are investing in the senior part of the capital stack want to ensure that they're senior, they have structural protections relative to the more junior classes of securities. So, I think that that sort of works itself out. There are other things that particular clients have that limit, you know, what they can invest in, aside from this. So, like, you know, we were on a call last week where, due to specific things that were applicable, actually real estate, they needed to have, you know, X percent of their investment in certain types of real estate products. So, you know, we've been going back and forth about sort of modifying investment guidelines for that client, or potentially duping out the structure several times with different types of assets so that the insurance companies can manage that. There's sometimes other things as well. Like, you know, insurance companies in certain jurisdictions can't invest more than 3% of their investable assets in any particular issuer, which is something that we've come across before in these structures, and you need to find solutions to allow them to do that, not to invest 3% plus of their assets to any particular issuer, but to do deals that they can otherwise do subject to some structuring. And that's something that we come across from time to time, too. As I think lots of people know, many managers now have captive insurance companies. Most of the large managers have an insurance company affiliate, and this is something that an insurance company affiliate of the manager may have an interest in when you're marketing, and that that creates just kind of an interesting element. Not all deals have that feature, but plenty of deals have the affiliated insurance company, or maybe it's not affiliated, but the owned insurance company, depending on how they do their affiliation rules, buying the debt as well. Now, will you see these large sponsors have the debt portion of these funds bought by the insurance company and the equity portion owned by, like, you know, a different tranche, maybe a non-insurance vehicle, or do they not split it so finely?

Ross MacConnell:

You see both. You see both. Like, we have some deals where a related insurance company has the whole strip in a particular feeder. We have other deals where the insurance company may have some of the senior and some of the junior and none in the middle. But that goes to sort of the evolution of the market, as you see these as sort of structured transactions, where it kind of is, what will the market bear in the context of what the business is trying to achieve? Usually, in this case, it's some version of a capital raise. But like, depending on the nature of that capital raise, how do we achieve those goals with a with a structure that works for the client?

Sam Gilbert:

And so we've talked a lot about insurance companies here, right? Loving this product to get the investment grade rating, and it's good capital treatment for them, but you mentioned the horizontal structure. Other types of investors. What other types of investors do we see coming in here?

Ross MacConnell:

I think there's some traditional credit investors who are coming in in the mezz debt, right? Just as a structured credit investment. The sub-debt is really equity. So the way the waterfall and these work is that once you go through the priority of payments and the debt is paid, the upside goes to the equity, whether that's true limited partnership interest, whether that's in the form of sub-notes, so those folks are just getting a levered return in a horizontal structure. So you have secondary shops, you have some equity shops, you have a variety of places that are looking or, you know, potential sources of demand for that. There are obviously repeat players in the market, but it's not like a universal thing where you're approaching insurance companies only for the mezz and the in the junior debt/slash equity in these deals.

Jon Gaynor:

By levered return here, if a debt fund is targeting, say, for example, a 15% return on a blended basis, you're saying the actual split of that maybe, is where the rated note portion is collecting like a 10 or 12, and then the balance is on the equity portion? Like, is that what you mean by levered return here?

Ross MacConnell:

Yeah, but in this context, when I'm referring to a levered return, I'm thinking about the senior notes as providing that leverage, which is on top of any leverage at the fund level, right? So it creates additional leverage with respect to that equity investment. Typically, there's not additional leverage at these vehicles themselves, right? The rated note feeder won't have leverage on it, because it effectively is its own form of leverage.

Jon Gaynor:

Right. Below it, there could be leverage, right? There has to be. Otherwise, how are you getting to a 15% return at an aggregate level, right?

Ross MacConnell:

Absolutely, and oftentimes you have sub-lines down below as well, and the rated note feeders will generally participate in those sub-lines. Whether or not they get borrowing-based credit depends on whether they get, you know, investor letters from all the investors, etc. But they usually participate in those sub-lines as well.

Jon Gaynor:

So, debt funds operate where they'll have capital commitments from investors, they'll have subscription lines of credit secured by those in order to finance their day to day operations. Below that, they'll have some sort of, like, repurchase facility, or a securitization or something like that, to kind of aggregate and get a levered return at a baseline to hit their return marks. How compatible is the rate of fund structure with all of that? It doesn't seem like it gets in the way at all, as long as you tick the right boxes.

Ross MacConnell:

That's right. But from a rating agency's perspective, that's something that a rating agency is very interested in, right? How much debt do you have down below? Because if you take a feeder, the fund itself is an LP, so the economic payments that it's getting to support the payment of the debt is encumbered by the underlying leverage, right?

Jon Gaynor:

Right.

Ross MacConnell:

Same thing applies if you were to do a standalone structure, which isn't a feeder and it's just some sort of rated note issuer, where you might have underlying finance SPVs that do various things. You may have hedging programs, et cetera, but all of that goes to the assets and the leverage profile support the return characteristics and the ability to actually pay principal when due under the waterfall of the notes.

Jon Gaynor:

So are there hard limits on the ability of, you know, a regular-way debt fund to get leverage? Is it a principal? Like, what's the rationale that applies as a limiting factor here?

Ross MacConnell:

I don't think there's like a hard line, right? It depends on what the assets are. It depends on what the return profile of the assets are. Obviously you would need to present and make a colorable case about why that would support an investment grade rating for senior notes that are investing in that structure, but it would obviously depend on a lot of things, including what those underlying assets do.

Jon Gaynor:

Got it. It makes me wonder if some of the things that have been creeping into repurchase facility structuring have a little bit to do with the kinds of difficulties setting up a rated fund might have. We've seen funds lately express a lot of discomfort around mark to market rights, which could increase or decrease leverage at a given time. Recourse to the fund, obviously, is always uncomfortable, but we've seen a very big uptick on that. Is that the kind of stuff that would ding a rated fund from a rating agency perspective?

Ross MacConnell:

Yeah, I don't know whether ding is the right word, but it's a thing that would be accounted for and considered, right? It's another factor that reduces cash flow availability.

Jon Gaynor:

Yeah.

Sam Gilbert:

So Ross, we've been focused kind of on the U.S., I think, here. But how do these issues play out, maybe, on the international stage? You know, for a global CRE fund sponsor or maybe an investor outside the U.S. Are ther similar trends or structures here?

Ross MacConnell:

Yeah, absolutely. We have lots of our European asset management clients doing these structures. We have a big team in the UK, led by John McGrath, who has helped us with European structuring. In the U.S., we do plenty of rated note deals for European funds, whether those feeder structures or what have you are coming through Cayman, whether we're doing them in the U.S., whether doing them through the UK, we certainly have that. It's a whole separate topic, which I don't think we need to get into here, but there's obviously U.S. and EU risk-retention considerations that need to be sort of taken into account in different types of structures and how you structure in light of those things. So those are there. And I would say that just because you have a European fund, like, obviously, investors are not geographically restricted to investing in things in their jurisdiction. So you can have a rated note structure that is going to invest in, or co-invest with a European fund where almost all of the end investors are U.S. investors, and you could have a vice versa. You could have non-U.S. investors using the rated note structure to invest in a domestic fund. I think that one of the things that's kind of interesting is different investor types have some kind of bespoke preferences about how they want their securities denominated. So like, for example, we've had Korean investors who have insisted on loans rather than notes. So, you would have a standalone credit agreement that kind of sits side by side with the indenture, and you could have Class A loans or Class A notes. They're peri, there's no economic difference between the two, except one is a note- issued pursuant to an indenture and is a security, the other is a loan sold under a credit agreement. And that goes to just the way that the non-U.S. investors are holding those assets and how they prefer to account for them on their books, even if there's no material difference, or really any difference, from the issuer's perspective. So, some of that creeps in when you're dealing with non-U.S. markets, but that's obviously something that's certainly a play. I wouldn't think about this as a U.S. market at all. It's just a market just like our, you know, our private fund manager. They're not operating in the U.S. they're operating global businesses, and this is just another financing tool for them across their global businesses.

Jon Gaynor:

OK, so we talked about cross-border stuff. Tax structure. These are structured primarily as pass throughs, so they just sit above whatever tax structure you're going to use for the investments to begin with?

Ross MacConnell:

Yeah, that's right. They're partnerships for tax, the senior notes are treated as debt in those partnerships. Sub notes are treated as equity. They generally sit as pass throughs. Sometimes you have them invest through blocker structure, just like you would for any other feeder fund. Sometimes you have more structured solutions, such as investing through profit-participating notes that invest into underlying funds. But in general, they're pass throughs as a default partnership.

Jon Gaynor:

Cool.

Sam Gilbert:

Well, Ross, this conversation has been great. I'll ask you an open-ended question to finish, what do you think is next for these rated funds?

Ross MacConnell:

I think that the big thing that like, if you just hear the questions that we get from our clients all the time, one is, "how can we use it in these new areas?" So some of it's kind of bespoke, like, oh, we have a business that does some sort of royalties, right? And maybe we do it this way. Maybe we do it that way. You know, we've had a lot of success in our credit and our secondaries business with these rated note structures. Is there a way that we can use that here, right? We see that sometimes on the real estate side, we don't need to get into particular strategies, like, how can we use it for some new types of strategies? I think we hear about the same thing with respect to, like, business development companies or registered investment companies, which is like, OK, how can we use this technology there above the fund or below the fund, or through JV or whatever the case may be, to just increase the available capital for these products, right? So, it's really expanding the scope of what the technology can be used to do in respect of underlying assets, and then looking at a broader set of fund types that you can utilize this structure as something that's supplemental to rather than right, we started off with private funds, now we're in a variety of registered and unregistered U.S. and non-U.S. investment products commingled.

Jon Gaynor:

Well, Ross, thanks very much for joining us. It sounds like this is a really interesting technology that folks in the CRE space should be looking at, especially as they're trying to raise funds from different folks, including insurance companies. We really enjoyed having you on the podcast. Thanks.

Ross MacConnell:

Thanks for having me on, guys.

Sam Gilbert:

Yeah, it was great.

Jon Gaynor:

All right. And thank you for joining us for another episode of Dechert's 4 Real podcast. If you have any thoughts, please share them with us at our email inbox, realpodcast@dechert.com. Also, if you like what you heard, give us a five-star rating on whatever platform that you found this on. This episode was hosted by Sam Gilbert and me, Jon Gaynor. Stewart, McQueen, Kate Mylod and Matt Armstrong produced it. Production support is by Kara Ray, Mallory Gorham, Alyssa Norton, Peggy Heffner, James Wortman and Jacob Kimmel. Our editor is Andy Robbins of AudioFile Solutions. Thanks for listening, and we'll see you next time on the Dechert 4 Real podcast. OK, dad joke time.

Sam Gilbert:

Well, I can get the ball rolling on this one, Jon.

Jon Gaynor:

All right.

Sam Gilbert:

Why don't crabs give gifts at Christmas?

Jon Gaynor:

Why not?

Sam Gilbert:

Because they are shellfish.

Jon Gaynor:

Oh, that's horrible.

Sam Gilbert:

Thank you.

Jon Gaynor:

All right, so Ross, you've gotta to do one too. I'll give you a little more time to think of one, unless you're ready right now. How much does Santa have to pay to park his sleigh?

Ross MacConnell:

How much does he have to pay?

Jon Gaynor:

Nothing, it's on the house.

Ross MacConnell:

Fair enough.

Jon Gaynor:

Parking has been through the roof lately.

Ross MacConnell:

So, what about this one? What's The Grinch's least-favorite band?

Jon Gaynor:

I don't know. What is it?

Ross MacConnell:

The Who.

Jon Gaynor:

Gosh, that is good.

Sam Gilbert:

That was a layup. Jon. I should've gotten that one.

Jon Gaynor:

Yeah, I know.

Sam Gilbert:

But I like that he tied it back to The Grinch. So, full circle.