Earnings Call: H1 2021

May 27, 2021

Morning, everyone. Welcome to this analyst presentation for the interim results for Impax Asset Management Group Plc. I'm Paul French, Director of Communications, and we're joined today by Chief Executive and Founder, Ian Stimm, and, Charlie Ridge, the Chief Financial Officer. Please make sure you are on mute. This presentation is being recorded. There will be a Q and A at the end. And if you'd like to ask a question, Please use the raise hand functionality. And without further ado, I'll hand it over to Iain. Thank you and hello everybody. So I think this is our 2nd video analyst presentation. So look forward to getting some feedback as to how we're doing. So Paul is going to kindly drive the slides. And on the next slide, you can see the headlines For the Impax Asset Management results from the 1st 6 months of our financial year ending 31st March 2021. Just pause and wait for the slide to come up the next one please. Maybe there's a little bit of delay. Okay. I'll keep going. So, assets under management rose during the first half Of the year to a record £30,000,000,000 That's actually slightly more than double what it was 12 months previously at the end of March 2020. The increase over the first half was fueled in particular by very strong, about record net Inflows, so we had £6,800,000,000 of net inflows over the period, and markets were, of course, positive. During the period, we did finalize the acquisition of Pax World Management, the final financial reconciliation, if you like, which we'll describe as we go further on. And looking to the future, we do believe we've got a very solid platform for further expansion. I'm hoping the slides are going to change because I can't See on my screen a change yet. So do jump in ball if there's a problem with the slides. Can I check with everyone else? So can you see the highlights slide, the H1? I'm seeing slide 3 highlights. Okay. Okay. I think we're good, Ian. So if you keep going down manually, Kevin? Yes. So, yes, on Page 4, then the financial performance in summary, and Charlie will go through this in a bit more detail later. So revenue up very strongly, nearly 50% increase in revenue to just over £60,000,000 for the first half, adjusted operating profit, Profit before tax and diluted earnings per share all up strongly as well as well shareholders' equity. And we've announced a Doubling of the interim dividend to 3.6p per share, which will be payable shortly. On the next Slide 5, then The market backdrop here for Impax continues to be very strong. The transition to a more sustainable economy, which of course is The summary of our investment backdrop landscape is increasingly strengthening both in Fundamental terms as more money gets allocated to infrastructure, for example, with the Biden administration plans in the United States, China's new 5 year plan, etcetera, But also increasing concern about environmental problems, particularly climate change, leading to long term policy targets, for example, to improve That will raise the share of clean energy in the economy in OECD nations and also move towards 0 emissions. Transportation is two examples. So of course, at the same time, oil and gas companies are under a lot of pressure to stop investing further in fossil fuel exploration. And that's leading to change of cost of capital for them in favor of their new businesses in renewable energy, for example. Invest opportunities are expanding very broadly, and we're also seeing a lot more asset owners around the world allocating to the Sustainable Economy. So that's been a rising trend over the last 5 years, but it's certainly accelerating from our vantage point. So against that backdrop, Impax is really well positioned. We have been investing in this area for over 20 years. We're seen as authentic By clients and prospective clients because we have been doing nothing else for 2 decades and we've had to make this area Successful if we were to survive, which of course we've done and we've profited and expanded quite nicely. And the model that we are following, a business model, is to scale up our small number of Carefully selected investment strategies on the basis of a relatively fixed set of costs and with plenty of capacity and headroom Still to go and a broad distribution model, then we do believe we can carry on expanding the business and margins accordingly. Over on the next slide, then the recent period has brought further success For distribution, so in the UK, we launched a second mandate with St. James's Place and achieved a record level Of AUM for our Irish uses platform, which is sold now, particularly in the UK and Ireland, but also now in certain countries in Continental Europe. Continental European Distribution was again very strong, Scandinavia being a highlight. In the Asia Pacific region, we announced a new partnership with Vedante, part of the Challenger Insurance Group to cover the Australia and New Zealand market, and that came on the back of more client wins For us with Australian institutional investors, so confident about more expansion there and the continuation of our mandate in Japan, which indirectly is from Nomura, has brought further strong flows in the period. And then finally, in North America, we've seen further expansion of our Paxful funds range through a whole host of intermediary Clients and we've launched new mandates particularly for our global opportunity strategy. The next slide and actually the next couple of slides is just some Background data. So the performance or investment performance, of course, is critical in our sector. I'm pleased to report that the environmental markets funds, which are The majority of the asset management that we're running at the moment continue to perform very strongly against generic benchmarks, for example, the MSCI World All Country World Index or ACWI as it's termed. So this Slide 7 shows that data. And that's not just good short term performance, but also very good performance over the medium term as well. On the next slide, the Area of the business that we launched in 2015, our so called sustainability lens strategies led by Global Opportunities has had a Less successful period than environmental markets, but still very strong medium and long term track record. The short term track record of global opportunities was Held back by its growth tilt, which in the period, the 6 month period, was a slight headwind as investors were looking for value stocks. Actually, we're finding in the start of the second half that's already reversing. The other funds in that area for us have also been performing pretty well. And then on Page 9, you can see the breakdown of our assets under management increase. So as I mentioned at the start, we've more than doubled our AUM Over 12 months to £30,000,000,000 There are outflows from some of the distribution partner led funds that we sub manage. So outflows are not uncommon, but once again, they've been more than offset by very strong inflows. So as you can see from this chart, we had a Strong first half continuation of the strong performance in the second half of the previous financial year. And Also at the end of April, so 1 month into the second half of our new financial half, if you like, the Asset Management had climbed further from GBP 30,000,000,000 to GBP 32,200,000,000 On Slide 10, there's a breakdown of our assets under management. We started showing this chart a couple of Reports ago. So on the top left, you can see the breakdown by investment strategy. So the key message here is that we have a very broad range of Investment products, which are sort of nicely spread, so no single product dependency. The bottom left, we can see The breakdown of our distribution arrangements, so BNP Paribas Asset Management remains the largest source collectively of our assets under management, But we also have very strong representation both in retail oriented and intermediary funds, for example, the Paxful Funds And also in segregated accounts around the world. The top right, you can see that we are still skewed towards European But we are also very confident that North America will grow both in absolute and relative terms, given our strong foundation there and rising client interest. And then the bottom right just shows the scale of our listed equity business relative to the other areas, which we do believe we can expand over the medium term. Over on Page 11, this is the net inflows over the First half H1 compared to the first half of the previous year and broken down into different Channels, so the left hand area is UK and Ireland, where you can see the very strong contribution again from our St. James' Place Distribution partnership, which included the onboarding of a second mandate from St. James Place, as I mentioned. The uses fund range Shown at the top there, growing nicely. BNP Paribas Funds in the middle. So all five strategies had strong inflows And those funds today represent about a third of our run rate revenues. And then on the right, you can see contributions from other parts of the world. Paxful Fund stands as a standout in North America is a big increase on the previous first half, but contributions from all other sectors as well. On Slide 12, the acquisition of Pax World Management, a business based in New Hampshire in the United States, Was closed or cemented in January 2018, and we agreed a 3 year earnout period with the shareholders and management team. So that came to an end in January this year, so during our first half that we're reporting. So we have At that juncture, bought the remaining shares, 16.7 percent of the business held by management, at a pre agreed price, which Net of loans was $3,000,000 And we've also paid a small amount of contingent consideration, which was Due based on a formula linked to the growth of the asset under management. So you can see in the bars on Page 12 that the asset under management had grown quite Steadily from $4,900,000,000 at the closing to today over $7,500,000,000 So that shows very strong trajectory, and we believe that those taxable funds will continue to expand. So the payments of small amounts of contingent consideration really is a Reflection of the success of the acquisition. And I think we're fortunate that the formula was such that the payout was quite small in spite of strong momentum and continued growth after the end of the formulaic period. Page 13, it's really important in this industry that We look after our people that we get the right people in the business to start with. And to that end, we have continued to recruit. We've increased our headcount by 10% during the period. And actually by the end of the year, we would expect to have increased the headcount by something like 15% or maybe even close to 20%, depending on when people actually start work. So we have been investing in the team as We've been growing assets under management. During the period, we have also really strengthened and built our office in Dublin, which is our European Union headquarters, so the center point for our EU marketing and for some client management as well. And so our Dublin office is now at strength with a country head starting at the start of June. So very pleased with the progress there. We found some great people in Dublin in what's still a competitive market for the talent. And We're also very pleased with our recent staff survey. So we had a 96% response rate and a 88% engagement score, which I'm sure you know is The term for general level of staff satisfaction. So that puts us right at the top of the tree in terms Of peer comparisons and I think it's testament to the effort that we've put into make sure that we're running a healthy and an attractive Culture within the office, we have strong values and we're looking after our staff both in terms of sort of well-being, but also The alignment of interest through equity ownership and management owns more than 20% of the business at the moment. In terms of Systems and infrastructure, we have during the period, the first half completed the integration of our trading systems onto a global trading desk, Further IT investment into, for example, a broader CRM, client relationship management And of course, operational resilience, particularly in the context of cyber risk is crucial. So we're continuing to invest in that area. In terms of the way ahead, then the business, as I mentioned, is based On the scaling up of a small number of investment strategies. Having said that, we do have a successful track record of product innovation, and we are continuing To look at opportunities to run new products. So the Asian opportunity strategy that we launched at the end of Calendar 2020 is now up and running and building a track record. We don't expect to bring client money into that for a couple of years, but it is We are marching ahead with our private equity business. So the New Energy Fund III investment period is running nicely with a majority of capital committed and good visibility on full Investment over the next 6 to 12 months, potentially by the end of this calendar year. We're actively looking around to raise new capital In that area. So I'll come back at the end and summarize, but we'll now hand over to Charlie to give you the financial update. Great. So I'm now delighted to take you through Impax's interim results, which further demonstrates the strength of the business in numbers. So, first of all, looking at revenue, sorry, before I say that, 2 points to note. First one relates to Iain's description of the Closure of the Impax New Hampshire acquisition. As a result of that finalization of the acquisition and indeed the full integration of the businesses That has been proceeding throughout this period. We no longer regard that business as a standalone segment. So all of the results you now see are fully combined, reflecting the way that the business is now run. Second thing to note is we are talking to some adjusted measures versus IFRS and a reconciliation of these versus IFRS is in Slides 2829. So, yes, talking to the revenue numbers first, the main story is the strong growth of net flows, due to net flows and market performance in the listed equity business. The net flows delivered CHF10.2 million of increase to revenue, which is predominantly due to flows in the period, but also includes a catch up effect Due to flows that landed in the second half of last year where we didn't receive a full period's Income in that period, so we now receive a full period in this half. The revenue margin is stable, you can see on the bottom right. So by asset class, the revenue is very stable due to the growth in the listed equity business relative to the other two businesses. There is a decline in the overall average rate. However, what we focus on is the rate by asset class, and as I say, that is stable. The run rate margin revenue is €139,000,000 So That is considered CHF 129,000,000 so it's considerably above double for the first half reflecting the growth in assets over this period. Next slide, please. Thank you. In terms of the overall operating expenses and result, we see on the left here The cost split into 3 types of costs. Firstly, the non staff cost has edged up due to a variety of smaller effects, example, professional fees, payaways under fee share arrangements and the like. Clearly, at this stage, there is still very little in the way of travel within these numbers, which we would Expect to come back, when the restrictions lift at a modest level. Staff costs have edged up as well. As Iain mentioned, we have brought on Number of people during this period, resulting in that increase and the variable stuff has gone up in line with profitability. So as a reminder, the way that this is determined, it's entirely formulaic. We take 45% of revenue less non staff costs and fixed staff costs To create a pool. That pool is then used to fund all staff variable remuneration, be it cash bonuses, staff Staff equity schemes or National Insurance, Social Security, etcetera. So, that has simply gone up in line with profitability. The overall operating profit really does demonstrate the scalability of the business. This is up 62% to CHF 20.7 £1,000,000 that compares to the revenue, which was up 31%. So very pleased to see that operational gearing coming through. And you'll also note that the operating margin has gone up strongly as well. Indeed by the end of the period, the run rate was running at 35.6% Operating margin. One slight note of caution, however, as Iain mentioned, we are continuing to hire. And as at the end of March, there was around 10 or so open headcount. So we're you to adjust for, assuming those people had actually been hired at the end of March, then that margin would be Just below 35%. Next slide, please. In terms of the trends, what this is telling us is that in terms of staff, which includes our most important cost, On an average basis, the staff has increased by 10%. And again, I come back to the revenue increase of 30%. And also the type of staff we're hiring, you can see on the bottom left, the average of fixed cost is edged downwards in spite of annual pay rounds, etcetera, Demonstrating that we've been hiring at the for the most part at the mid and junior levels, which we've always said will be primarily the case. On the right, you can see the efficiency of the investment team. The investment team has increased, but by a smaller rate than the rest of the firm, We need to continue to invest in things like client service, IT and compliance faster than the rate of growth in the investment teams, resulting in the amount of assets per investment team member growing by 39% per staff member, as you can see on the bottom right. So very scalable business is the key message there. We move on to the next slide. Thank you. So in terms of what this all means for earnings, we can see that the operating profit has risen significantly since H2 2020 due to the rise in operating profit after tax. You'll note on here one item, foreign exchange losses, just a comment on that. This is not really a true loss. It reflects the intercompany structure we have whereby we are required to take Revaluation of that structure through the profit and loss account, but there is an offsetting amount for this within directly within equities. It's quite hard to spot because there are other effects within the equity statement, but it is basically a non economic loss. In terms of dividend, the Board, as Iain mentioned, has decided to double the Interim from 1.8 to 3.6p reflecting the progress of the business and the optimism for how we are positioned. This is 3 times covered That means that we're very well positioned for a strong full year dividend when we get to that point. Just reminding that our policy is to pay between 55% 80% Adjusted profit after tax, which we introduced last year. We can move on, please. Coming out of the balance sheet, the balance sheet is straightforward. There's no debt and basically comprises cash, working capital And then intangibles related to our acquisition. So the cash being the most interesting, we focus on that here. And you can see that Cash has actually dipped over the period and this is completely standard for Impax. We have a cyclical pattern whereby We reach a high at the end of September. And then in the next 6 months, we pay out year end bonuses that have been accrued over the year. And then as you can see here, The dividends, which is the final dividend that was paid, in the period as well. Nonetheless, the cash generation is very strong, And after paying dividend and the ceding of a new internal capability of CHF 2,000,000 we have CHF 35,000,000 of cash left, Cash in the balance, in the bank account as it were. On the right is an illustration of how we regard that CHF 35,000,000. We need to take a risk buffer. We are a financial services industry. Also, we need to take a risk buffer in case of something going wrong as required by the rules. And after that, we then earmark things we're aware of that are coming up in the near term. So in this case, the interim dividend, Leaving something like £10,000,000 unallocated to do things such as further seeding or business development, etcetera. So it's a comfortable balance. We move on. Thank you. So the last slide looks at the shareholder register. Couple of points to note. We did issue a couple of 1,000,000 shares in the period. This related to primarily Issuing shares to our employee benefit trust in respect of staff equity awards. These are equity awards that I've already explained are being expensed through the profit and loss account The deduction from the bonus pool, but we needed to issue some shares to be able to make those awards. More generally, in terms of how we're managing these staff share awards, we clearly have the ability to issue shares that I just described, but we also have an ongoing Purchase program, where from time to time we may make purchases into the EBT in the open market depending upon other uses of cash and Availability of shares and pricing. The graph on the left, therefore, seeks to demystify the shareholder register and shows The net shares in issue at the top, which is 132,000,000 and then it shows the progress to date in terms of net purchases. And on the flip side, the open unexercised and unvested awards of CHF 6,000,000 So what the way to interpret this graph is that there would be a slight dilutive effect were we to issue shares immediately to cover the unexercised option awards. These will have a number of years until they vest and indeed expire. So there's no rush to do that. Final point in terms of the share ownership, we regard the register as nicely balanced with BNP holding 14%, Management 21% and then 65% of free float. With that, I'll hand back to Iain. So on the final slide, the outlook remains very strong. So in the context of our investment philosophy, the Transition to a more sustainable economy leading to great investment opportunities strengthening, then we do believe that Impax's Track record, our authentic brand, our loyal, stable team, which is well aligned with shareholders, Our successful investment track record and scalable investment strategies coupled with a broadly diversified global distribution capability Does put us in a really strong place for further growth. The capacity of the products that we have today should allow us considerable expansion from Where we are in terms of asset management and also profitability. So I would say The potential for Impax to scale further is very good. The summer months do tend to be a slower period for inflows. So we're certainly not guiding that the second half will be as strong in terms of flows as the first half was. But if market conditions remain neutral to broadly positive, there's no reason why net flows can't stay positive for the next Period. So I think with that, I will hand back to Paul and ask him just to coordinate some questions. Brilliant. Thank you, Ian. And so just to as a reminder, if you've got a question, please use the raise hand functionality. If you're on the phone, we'll go to those questions at the end because I realize you won't be able to raise your hand. Okay, starting with Jonathan at Berenberg, please. Good morning. Thank you. Three quick questions for me, if I can. Firstly, could you talk a little bit more about the U. S. Opportunity now that the PACS World has been completely integrated into the business. And just give us a little bit of color on the sort of new distribution Angles that you were talking about regarding sort of Merrill Lynch and some other key intermediary players. Second question, Global distribution looked very diverse in the period. Could you give us a bit of an indication on the lead time it took from some of those wins to come through and is there any market difference between, you know, second, or sorry, existing clients mandates, I. E. St. James' Plays versus the new, CBUS Australian mandate. And then lastly, could you just give us a little bit, of a flavor of how You see Asia sort of rightsizing itself within the mix of your overall global distribution platform. Thank you. Yes, sure. Thanks, Jonathan. So, look, in the U. S, I think we were well placed in both institutional and intermediary channels? So since 2012, we've had institutional distribution, which is focused on consultant relations and Foundations, endowments, family offices and public pension plans. While the intermediary channel, we've in particular enjoyed the benefits Paxwalt acquisition and the promotion of the so called Fortia mutual fund range, which is the open ended investment company equivalent, if you like, in the U. S, Distributed through the likes of registered investment advisers, broker dealers, wirehouse, etcetera. So in that context, A plan for the future involves more of the same. So consultant relations really well established And strengthening particularly as we introduced global opportunities. And in the context of a new presidential administration, More focus on climate change, infrastructure, the clean economy and sort of more interest in, let's call it, responsible investing That I think institutions are increasingly likely to seek out impacts. And meanwhile, the intermediary platform, then of course, our funds are Of great interest to the likes of Bank of America, Merrill Lynch, Morgan Stanley and the other, if you like, Private wealth managers, JPMorgan, we've got a great relationship with. And as their underlying clients are looking for more exposure to Sustainable Development then Impacts is a strong candidate for growth. So to realize that we're putting in place or adding more people, More systems and more sort of strategic focus. So very much taking a medium to long term view For asset or for value creation there. In terms of the time it takes to convert New clients, I have to say, it's quite unpredictable, quite varied. So with some clients in Australia, for example, it has taken 5 years plus to turn a relationship into a mandate. That's in particular because of Just the relatively low interest, I think, at sort of decision maker level in the Australian market until recently in Thematic investing around the environment, I would have to say that given the environmental issues in Australia, now particularly around drought And high temperatures, then that situation has changed very much for the better in terms of prospects for our flows. In other cases, we've been able to convert Some new relationships into mandates within 12 months. I think FERRIQ is a good case in point in Canada, a new mandate. So as far as I'm aware, We only met them in 2020. And within 12 months, they'd hired us. And then more broadly in The context of our Asia Pacific strategy, I think we do believe that this is best built on third party relationships. So we're working very successfully with BNP Paribas in Japan. And that's been the conduit for our Nomura relationship, which has been a contributor significant contributor in H1. I mentioned the Ferdante relationship in Australia, which we're very excited about. And then given our research office in Hong Kong, we are also able to build our brand in the Sophisticated sort of family office and foundation world, not just in Hong Kong, but also in Singapore and I think in time In Taiwan as well. And we're keeping a close eye on Mainland China. So yes, lots to look forward to in Asia. I think we're cautious about how rapid that, that will grow. We don't want to be putting a lot of sort of P and L into building a big distribution presence, but we're certainly We have a brand in many corners of Asia. We've had a team there since 2007 doing investment work. We run Asia only funds, And we've got some great clients, the likes of Nomura, etcetera. So I think lots to look forward to. Brilliant. Paul Bryant at Equity Development. Hi, morning. Thanks, gents. Ian, could you give us a bit more detail on plans for Private Equity and Fixed Income, with the growth of listed equities kind of dominating now, but just to see where you see Those elements of the business going? Yes, of course. So with our private equity Division, then the investment strategy really is well placed for further growth. So what we're doing is we're backing the developers of Renewable energy and related infrastructure assets, at the moment, particularly around Europe, to help them get their assets fully developed and then built. And then once they're built, selling them to Insurance companies, pension funds, infrastructure funds or utilities. And the demand for Successfully built operating assets in this area is enormous and growing. So that strategy is well placed for further expansion. Since 2005, we've been raising and running a sequence of 10 year limited partnerships, so called NEF funds, new energy funds. And NEF III is the most recent of those, and as I mentioned, is now in a sort of well advanced stage of investment. The rules around private equity marketing are quite restrictive. So we're not able to say anything concrete about The plans for new fundraising, except to say that we are looking to raise more capital. And I think we'll be confident of having A 4th fund in due course, the with a similar strategy. So watch this space. And beyond that, I think we are ambitious to build out That business in private markets, essentially look at other types of industry, But taking a sort of medium to long term view and not rushing. In fixed income, then I do think there is a strategic opportunity for Impax over time To expand our capabilities in certain fixed income areas, particularly those where the skill And value add comes from understanding company dynamics and company risk and resilience. And so It's too early to really to lay out our strategy in that area, but we would certainly expect to come back to shareholders over the next 12 months or so with more detail about our plans for fixed income. But certainly, the potential there is quite significant, and that could give us quite a big platform for further growth. Fantastic. Thank you. Great. I'm not seeing any more hands up, so I'll just take it to the phones. And if you've got a question, feel free to take your opportunity now. And please say who you are. Good morning. It's Bjorn Zitzman from KBW. If I may ask a question. Firstly, congratulations on a fantastic set of results. I just have two questions, if I may. One is around capacity issues. You've seen phenomenal growth in assets under management. And I just wonder, Are there any sort of issues in terms of deployment of AUM? And is the investment pipeline able to handle The sort of inflow? And then also are there any capacity issues on the back end? I know you have said that you are I'm hiring quite aggressively, but in the near term, do you have any sort of capacity limitations? And then just a follow-up question, if I may. The €32,000,000,000 of AUM, could you give an indication of what percentage is flows and market performance for the month of April? Yes, sure. Thanks, Bjorn. So in terms of the capacity of the investment strategies, then We measure capacity based on a couple of things. So first of all, underlying liquidity of the stocks we want to buy Across the portfolio. And then secondly, we don't want to own more than a certain percentage of individual stocks. So because market liquidity is quite volatile, then the capacity numbers do sort of move around. If you take a step back and sort of look at Those numbers smooth over time, taking sort of averages over 6, 12 months. Then and then you look forward, we do believe that we can double the size of the business To something north of $80,000,000,000 under management without any material contribution Flows into products that we don't have up and running. So today's strategies can scale to give us double the AUM in simple terms. In terms of fulfilling on our delivery to clients, so yes, I think the rate Of onboarding staff, as Charlie hinted, has lagged somewhat the growth of assets. So we are Hiring rapidly, but we wanted to make sure that we're not hiring the wrong people and that the people that we are hiring are properly integrated. So a little bit of a lag effect on Hiring, but we have a fantastic HR director and a really excellent HR team. So they're doing a fantastic job In addressing that. In terms of sort of systems, I mentioned the kind of investments we've been making. We've been planning for growth now for a long time. So The systems are keeping up and we certainly have no concerns at the board level about sort of rising risk Beyond what everyone's worried about, which of course is cyber risk. So yes, touch wood, I think the back end can Keep up. In terms of April numbers, I don't have those to hand, But I believe slightly more than half came from net inflows. So the was it GBP 2,200,000,000? Yes, it's about half and half. Okay, Charlie. Yes, so we had a strong another strong month in terms of net inflows, but markets were also positive. Brilliant. Thank you. Very clear. Thank you. Any other questions on the phones? And I'm not seeing any more hands up, so I think Yes. Good morning. It's Stuart from Guggenheim. Go for it, Stuart. Hello? Hi, Stuart. Yes, sir. Please go ahead. Good morning. It's Stuart from Peel Hunt. I've got 2 questions, if that's okay. The first one is, you sort of made the point a couple of times in the presentation about accelerating allocations by asset owners. Is there any sort of data you have to sort of give us a sort of picture of the market and how much has been allocated to sustainable type strategies versus more general strategies? And then the second question was on Nomura. And I think we've seen some other asset managers that occasionally Japanese investors tend to rush into an And then rush out again in relatively short order. Is there any sort of elevated risk there that that sort of client leaves And the longevity is not quite as what you'd expect with some of the other mandates. Thanks. Yes. Thanks, Stuart. So on the first point, I don't have any data to hand. And I have to say that the definitions in this space do tend to be a bit fuzzy. So ESG, sustainable strategies, climate change strategies, they're all defined slightly differently by Different providers. I think Morningstar generally puts out some quite good data for both the U. S. And Europe. So we We could look into that if that was helpful. I think it's sort of pretty obvious from statements by other managers And as well as ourselves that the transition to more sustainable economy as we term it or ESG or responsible investing is Very much an area of strong allocation. I think we have seen the downside of some of those allocations Play out recently, which is the reversing of some of the exuberance into renewable energy only listed equity funds, Which I think have seen quite a strong sort of pullback as valuations have come back from just really eye watering levels. Impax Has stayed away from large portfolios of renewable energy and sort of tech stocks, for example, in the hydrogen economy because Of our valuation discipline, we had similar experience of bubbles in some of those areas in 2,007 and again in 2000, 2,001. So plenty of experience of what can go wrong in pure renewable energy or tech areas. So yes, there is A real need to run kind of gap or growth at a reasonable price discipline when you're investing in this area. But in summary, the flows continue to be very strong. I think just based on just this combination Of strong market growth that I was touching on at the start, plus this sentiment around the world now from Man and Woman in the Street that they would like their money run-in a more responsible fashion, which does tend to sort of tilt allocations in favor of managers Like Impax? Now I've forgotten your second question, I'm afraid. Nomura, Japanese. Nomura. Thank you very much. So yes, sorry. Japanese investors are more flighty there. Yes. So I think when we first started marketing in Japan around sort of 10, 12 years ago, that was definitely an issue. And there were new retail fund launches by the big brokers, including Nomura, almost sort of 1 a week across the market. And it was quite A notorious market for money coming in and money coming out very rapidly. My understanding is that the Japanese regulator has Clamped down on that 3 or 4 years ago. And the regulations and market guidance are such that, that is no longer acceptable. And therefore, the number of product launches has dropped dramatically because the brokers, the distributors like Nomura are really Now trying to keep clients in existing funds. So The fact that I believe over the 6 months post our launch Nomura, I'm not Sure. They even launched any new strategies over that 6 months post launch of our the environment fund that is directed into Impax as a sub manager Means that they're very concentrated on looking after existing clients. So I think the concern that you're Referring to no longer really applies in general in the market. We've certainly seen no sign that our Japanese clients, it's not just Nomura, but Japanese clients taking money out. Thanks, Stuart. And just That's very helpful. Last call on any other questions. Okay. Iain, we'll hand it back to you for final comments. Yes, great. Thanks, Paul. So look, thank you very much for joining. Really appreciate your interest and support for the company. Do come back to us with any further questions, comments or feedback on this presentation. And as usual, we're always open for bilateral conversations if you'd like to discuss any details. So thanks again, and enjoy your day.