Good morning, ladies and gentlemen, and welcome to the presentation of Ninety One's interim results for the six months ended September 30, 2021. This is our first results presentation with a physical audience since listing in March 2020, and it's great to see some of you here in our London office. Thank you for joining us wherever you may be, in the room or virtually. I will start the presentation with an update on the business, then Kim McFarland, our Finance Director, will present the financial review. I will then cover the outlook before we move to questions and answers. Those of you participating through the webcast can submit questions during the presentation via the link on the right-hand side of your screen. Before I move into the first half performance, I want to remind you of the key characteristics of our business model.
At Ninety One, clients come first. We build long-standing relationships with our professionally intermediated client base, and we serve them locally through our offices across the world. Over time, we have invested our own after-tax money alongside your capital and built a meaningful level of employee ownership. This aligns us with our stakeholders and encourages a long-term approach to business and, of course, leadership stability. I don't mean to remind you of our emerging market heritage because you know about it. Since our inception in 1991 in South Africa, we have developed into a global business offering a diversified range of specialist active strategies. We are committed to a people-centric and capital-light business model. Ours is a business where talent and committed people trump capital. All of this is underpinned by our purpose of investing for a better tomorrow.
We do this by always striving to build a better firm, committing to better investing, and contributing to a better world. Here is a familiar slide which most of you have seen before. It's a good representation of what Ninety One is about. Our business has been built organically and sustainably over more than three decades, and our track record demonstrates the resilience of this firm. Let's start with the key messages. It has been a record first half in terms of earnings and assets under management with positive business momentum. As I mentioned back in May, our investment performance improved towards the end of the last financial year, which positioned us for growth. Six months later, our investment performance remains competitive. We are pleased to see demand for active strategies converting into flows across asset classes and regions.
This proves the resilience of our business and the soundness of our strategy. We remain firmly focused on execution. This is about offering relevant, competitive, specialist strategies and exceptional service to our clients. It's been a busy period with sustainability efforts intensifying across our business. We have participated in numerous events and advocacy efforts over the last six months. Finally, we maintained our focus on our people and our culture. We're enjoying in-person interactions where possible, with our offices acting as the organizational centers of gravity for our firm. Importantly, we continued to increase the staff shareholding in Ninety One, which now stands at 24.5%. Moving on to the figures for the first half.
Assets under management increased by 7% in the 6 months to GBP 140 billion, driven by positive net inflows of GBP 3.9 billion and of course, portfolio growth. Average assets under management increased by 20% versus the same period last year. Our investment performance remains competitive, with 3-year firm-wide outperformance at 77%. Our adjusted operating profit, which excludes the proceeds from the sale of Silica, increased by 20%. The interim dividend of 6.9p is up by 17% on the prior period. Kim will cover this in more detail. Market conditions since the start of the year have been supportive and helped drive our assets under management growth. As I mentioned earlier, this has been a period of increased client activity and improved sentiment.
This translated into demand for active strategies and converted into positive net flows for us. Fee pressure remains a feature of our industry, but let me remind you that we do not compete on price. Finally, the last point on this slide remains a very important one. Getting sustainability right is now integral to future business success. The ability to demonstrate progress and implementing the right sustainability strategies is crucial. Before I move to the detailed analysis of our recent flows, I want to share an overview of the last four and a half years. This shows our ability to navigate different market regimes and generate net inflows over a cycle. It also shows how conditions can change in a relatively short period.
Two years ago, we achieved strong inflows. Markets were hit by the onset of the COVID-19 pandemic, and our overall assets under management dropped substantially in March 2020. Asset levels rebounded strongly in the following year, but we reported small net outflows. The first half of 2022 of the financial year has been more balanced. We benefited from both positive net inflows as well as positive markets, leading to a 20% increase in average assets under management. Our assets under management remain well-diversified across asset class, client, region, and client type. Indeed, this chart shows how we are consistently investing for a world of change. Moving on to flow analysis by asset class. We are pleased to report net inflows across the asset class spectrum with only multi-asset seeing net outflows in the period. The flows were largely driven by equities and fixed income.
In fixed income, we saw good inflows into emerging markets, including Asia, corporate and sovereign strategies. Equities saw GBP 1.9 billion of net inflows, largely from global and thematic strategies. We continued to build on a momentum in our sustainability and credit offerings. Alternatives, while still relatively small, are focused on credit strategies, and this category also achieved net inflows in the period. Multi-asset net outflows of GBP 290 million were driven by redemptions from diversified growth strategies related to past rather than current performance challenges. This offset the net inflows from our multi-asset income strategies, which are growing nicely. I'm pleased to report that all regions delivered positive net inflows for the first half. The Asia- Pac client group saw the biggest net inflow for the period driven by global equities.
One of the strongest regions in this area was Australia. Europe, the U.K., and Americas showed a strong turnaround compared to the previous first half. Our Europe client group had solid net inflows, principally driven by fixed income strategies, and a large part of this was driven by our German clients. The U.K. Client group achieved net inflows driven by global, including thematic equities. In the Americas client group, the turnaround was driven by North America. Africa client group continued to see net inflows from various South African multi-asset strategies, as well as in the South African fund platform. We achieved strong inflows in both the institutional and advisor channels. The advisor channel saw particularly strong net inflows from the Africa and U.K. client groups. Flows in the institutional channel were driven by the Europe and Asia-Pacific client groups into fixed income and equity strategies.
Again, we have also seen good traction in the North American institutional channel, including Canada. This explanation brings the diversified nature of our business to life. Moving on to investment performance. Our firm-wide investment, aggregate asset-weighted performance remains competitive, with 77% of our strategies outperforming benchmarks over a three-year period. Over 5 and 10 years, our outperformance as at the end of September stood at 82% and 90% respectively, which leaves us well-positioned for the future. Given the stability and consistency of our investment teams, these long-term numbers create a solid base for future business production. Over 1 year, our first- and second-quartile position in the mutual funds reduced marginally but improved significantly over the medium- and longer-term periods. We believe our performance remains competitive, but as I mentioned in May, these numbers are less important as an indicator of future net flows.
For example, we are seeing good demand for our quality equity strategies, which are currently in the lower quartiles of peer relative performance but are delivering the results that our investors expect in the current market regime. Our focus, as ever, remains on delivering competitive long-term performance for our clients. We have made good progress on the sustainability front. Invest, advocate, and inhabit are the three pillars of our approach. Invest covers the approach to investing on behalf of our clients. In this area, we have been busy embedding sustainability into the investment processes and decisions, and our investment professionals have received tailored sustainability education from Imperial College London. Our risk processes are cognizant of ESG factors which are embedded in investment decision-making. We also continue to engage with our investee companies to encourage positive change, especially in relation to climate.
In addition, we have been busy classifying our investment strategies into the categories in line with regulations, such as the Sustainable Finance Disclosure Regulation, or SFDR, in Europe. Advocate relates, of course, to the initiatives we get involved in. Our membership of GFANZ or the Glasgow Financial Alliance for Net Zero, the Sustainable Markets Initiative or SMI, Climate Action 100+, and the Impact Investing Institute evidences this effort. We have contributed to the discourse and specifically argued for a focus on transition rather than carbon intensity. It is in our clients' interest to see an inclusive and pragmatic energy transition. We continue to argue for a just energy transition in which the emerging markets are active participants. No one should be left behind in this transition.
Through this, we contribute to a better world, but we also pursue the interests of those who have entrusted us with their capital. We are concerned that clients and regulators remain too focused on reported carbon intensity instead of inclusive transition to net zero. You'll hear more about this in future. Impact cover covers our own sustainability impact as an organization. We have promoted employee initiatives to enable our people to better understand their impact and make steps to reduce their own carbon footprint. Earlier this year, we carefully articulated our position on what the approach to net zero means for us, namely sustainability with substance. As an organization, we continue to develop our own thinking on the impact we make on the environment and as part of that are busy developing a transition plan for Ninety One.
We will publish this after the financial year end. Finally, I want to remind you that Ninety One is a people business, and the results we present today are a testimony to the commitment and determination of our people. We welcome the ability to engage with our people in person again and are pleased to see our offices buzzing with people. Over the last six months, we have run various employee initiatives and events focusing on re-energizing our people and further embedding our culture. This functions as the glue that binds us together. We remain focused on talent and on building a diverse intergenerational business. Our owner culture underpins our long-term success. I will now hand over to Kim McFarland, who will take you through the financial performance. Thank you very much.
Thank you, Hendrik, and good morning to you all. We've completed a further six months as a listed company in more normal circumstances, and I'm pleased to present another set of strong financial results for Ninety One, which are as follows. Adjusted operating revenue increased by 14% to GBP 328.4 million. Adjusted operating expenses increased by a lesser figure of 10% to GBP 212.8 million. This has resulted in an adjusted operating profit of GBP 115.6 million, an increase of 20%, a positive in widening jaws. The adjusted operating profit margin increased from 33.3% at September 2020, 34.2% at March 2021, to now 35.2%.
This positive trend is as a result of increasing management fees, fixed cost discipline, as well as the continuing impact of COVID-related cost savings. I'll go into more detail on these figures over the next few slides. Taking into account adjusted net interest income, Ninety One profit before tax and exceptional item increased by 20% to GBP 117.2 million. As per prior results presentations, we report adjusted operating profit by removing the impact of Silica third-party revenue expenses for the prior year only, as well as the contra impact, the revaluation of the deferred employee benefit schemes in both reported years. To note, we've continued to recognize the interest expense on our lease liabilities for office premises of GBP 1.9 million for the half year 2022 in adjusted operating expenses.
For the half year 2021, this figure was at GBP 1.8 million. Continuing from there, at the beginning of this financial year, we completed the sale of the Silica business to FNZ. This disposal resulted in a one-off pre-tax profit of GBP 14.9 million, which is the only figure being reflected as an exceptional item. We've maintained our outsourcing relationship with Silica, which is now under FNZ. The prior year figure of GBP 2.9 million was the final expense resulting from the de-merger and rebranding of Ninety One. As such, all expenses are now reflected as ordinary business expenses in the financial year 2022. The effective tax rate for the six months to September 30, 2021 was 23.2%, marginally down from March 2021, which was at 23.3%.
This is against a headline U.K. corporate tax rate of 19% and a headline South African corporate tax rate of 28%. The above factors result in a profit after tax increasing by 39% to GBP 101.9 million. A basic EPS of 11.2 pence, but more importantly, a 21% increase in adjusted earnings per share to 9.7 pence, which reflects the operating strength of this business. This slide provides further details on the adjusted operating revenue. Management fees were increased by 16% to GBP 314.8 million.
Predominantly driven by a 20% increase in the average assets under management from GBP 114.2 billion to GBP 137.5 billion, offset by the decline in the average fee rate, which fell 1.5 bps to 45.7 bps. We've analyzed this fee reduction, and it can be broadly explained by the following points. A number of large new client wins into fees below the average fee rate. Increase in assets under management of a few large clients and fixed income strategies, which are also below the average fee rate. And the move to performance fees on a number of U.S. mandates, which will reduce the base fee. As we've said before, the fee rate reduction reflects the change in the mix of strategies owned by our clients with flows to lower fee rate portfolios.
It is not as a result of repricing the book or material fee discounting. As noted on the prior slide, and as previously flagged, there's been an expected decrease in performance fees to GBP 13.6 million for the year. Performance fees were a gain as a result of outperformance in a selection of strategies, and in particular, SA equities. The small foreign exchange loss of GBP 0.3 million was mainly due to U.S. dollar asset translation, where the pound sterling strengthened against the U.S. dollar. The period end exchange rate moved from 1.38 at the end of March 2021 to 1.34 at the end of September 2021. Other income of GBP 0.3 million arose due to decrease in the mark-to-market revaluations of seed capital.
My next slide shows the main items impacting the adjusted operating expenses year-on-year and the analysis of the 10% increase to GBP 212.8 million. As you can see, our main expense is employee-related. 69% of our total expense for H1 2022 relates to employee remuneration, and as in the past, over 50% of this is variable. No surprise that our main operating expense increase was employee remuneration of GBP 17.6 million, a 14% increase. This was primarily driven by the increase in variable remuneration in line with the increase in adjusted operating profit. The average headcount increased by only 1% to 1,182. This, along with inflation and market-related adjustments, had a lesser impact on the overall expense increase.
Absolute headcount grew by 2% compared to the comparable period to 1,186 people. Client and retail fund administration expenses increased in line with higher assets, average assets under management, increased activity, and the impact of the stronger South African rand on our South African cost base. There was no material change in systems and other similar business expenses. Accommodation costs are lower following the completion of office moves and the prior year periods of having double rentals. The accommodation costs are now normalized. All in all, we believe our cost discipline has been maintained with a core investment going into our people. As reflected in the pie graphs, business expenses, which are largely our fixed cost base, increased by 4% from GBP 6.4 million- GBP 67 million.
There were largely immaterial shifts in the rest of our cost base year-on-year, and we've continued to benefit from COVID-related savings or rather non-spend, and specifically the areas of travel. For this period, no expenses were regarded as exceptional, and hence a slight increase in promotional spend in the business expenses from 9%-10%. We are, however, cognizant of the fact that travel expenses will start to increase in the next six months and into the future, and this will have a direct impact on our operating margin. To be clear, though, with almost 70% of the cost base being employee remuneration, there would need to be a notable increase in business expenses to materially adjust the operating margin.
Looking back over the past 10 years, our operating margin has fluctuated around 33%, while assets under management have grown from GBP 61.6 billion at the end of March 2012 to GBP 140 billion as at the end of September 2021, more than doubled. There is therefore a point of both consistency here and scale challenges. At this point, there are no material movements anticipated looking ahead. To summarize here, this is a graphical representation of the absolute movement in our profit before tax for the half year 2021 to the half year 2022. Our profit before tax and exceptional items for the half year 2021 was GBP 97.7 million. Management fees increased by GBP 44.4 million. Performance fees decreased by GBP 4.4 million. Employee-related expenses increased by GBP 17.6 million.
Business expenses increased by only GBP 2.6 million. Adjusting for other items such as FX losses, prior Silica profit, adjusted net interest income of GBP 0.4 million. The profit before tax and exceptional items was GBP 117.2 million. Adding the exceptional item of GBP 14.9 million resulted in the half year profits before tax 2022 of GBP 132.1 million, as reflected in the earlier slide. My final slide summarizes the Ninety One balance sheet and the capital position at 31 September 2021. The board has considered the resilience of the balance sheet and noted the qualifying capital of GBP 274.5 million, an increase of 14% from March 2021.
This was driven by the strong operating results for the six months and the exceptional profit arising from the sale of Silica. In line with our stated dividend policy, the board has declared an interim dividend of 6.9 pence per share. This comprises 4.9 pence per share, which represents 50% of profit after tax prior to the recognition of non-operating items, sale of Silica, and a further 2 pence per share. This represents after-tax earnings available after ensuring there is sufficient capital to meet current or expected changes in the regulatory capital requirements and investment needs. The estimated regulatory capital will increase to GBP 104.6 million, and this provides Ninety One with an expected capital surplus of 106.2%.
GBP 2 million, which is a buffer of just over 100% of Ninety One's estimated regulatory requirements. This is consistent with our commitment to a capitalized balance sheet while building a buffer. No shares were issued in the period, and there are no plans to do so, nor encumber the group balance sheet with debt. To summarize, adjusted earnings per share grew 21% to 9.7 pence, broadly consistent with the growth in adjusted operating profit and more reflective of the core operating performance of Ninety One. The dividend per share increased from 5.9 pence to 6.9 pence, a 17% increase. Thank you. I hand back to you, Hendrik.
Thank you, Kim. Ninety One is well positioned and confident about the future. This is a diversified global business with an owner culture, stable and experienced leadership. Our strategy is clear, and our focus remains on disciplined execution. The big issue of our time is sustainability, and Ninety One is fully committed to playing its part to make the transition to a net zero world inclusive, fair and successful. It is appropriate to note that the market conditions we experience now may not remain the same. We are not complacent. Irrespective of prevailing market conditions, we will invest in and build this business to become even better for our stakeholders. The strategic clarity of Ninety One allows us to focus our energy on execution and to think long term, as has been the case throughout our history. Thank you for your support.
We can now move to questions and answers. Hubert Lam from Bank of America.
Good morning. It's Hubert Lam from Bank of America. I'd first like to congratulate on your 30th anniversary to you and the team. Congrats. Three questions. Firstly, can you discuss the investor appetite for emerging market assets near term, just given uncertainty in China, potential for Fed rate hikes, particularly just given that you have more exposure to emerging markets than other players out there?
Okay.
So-
Hubert, can I deal with one question at a time?
Yep, sure.
We expected a bit more, but we've seen some good appetite for emerging market assets, particularly from yield-seeking investors. I think on the equity front, the reassertion of technology dominance in the second quarter. Remember first quarter, it was kind of back to value and spreading assets around the world. The second quarter has slowed that down. We'll see where that goes from here. The market is finally poised. Long-term investors have continued to hold their positions. I think the one part that if you were to talk to. If we were here three years ago, I would've said expected a substantial reallocation towards China. That has obviously slowed down because of the geopolitical and other issues.
Structurally, we believe that will resume at some point in time because there's no doubt that Asia will in the next decades become or remain the growth center of the world. We can't predict that. I would say good demand, but not overly exuberant demand for emerging markets would probably be the right way to describe it.
The second question is on the dividend. I've noticed the payout ratio has fallen from 74%- 71%. Should we look at 71% as the new guidance going forward? Any particular reason why it's fallen for, you know, potential changes in capital or other reasons?
Kim?
No, I don't think one should. I think it's an interim dividend. It's our second interim dividend. I think maybe in some ways we're learning how to sort of set these dividends going forward. In discussions with the board, we decided to take a conservative approach at this point, not knowing where we are going forward. You know, our intention has always been to keep the balance sheet light, not to hold a lot of capital on it, and we'll definitely reevaluate this at the end of the year. My answer would be no.
Okay. Thanks. One last question. If you go forward, any particular new strategies you are currently investing in or just looking at your business as a whole now, do you see any missing pieces that you would like to grow more in either organically or inorganically?
I mean, the two new areas we mentioned at the full year end of the previous financial year was an investment into credit and credit-related strategies. That has continued, and we would expect to see, you know, results in the coming years. We're early stage. Some of our competitors are doing extremely well in that area. We feel the strategy is right, we must just get to execution. We've really been in skill building phase outside the emerging markets. The other one is thematic equities, which we believe is an area of growth. We've grown particularly in the sustainability or positive inclusion area.
Our Global Environment strategies have continued to grow and actually have driven some of the equity growth you've seen. We'll see that continue. Again, some of the players in the industry have been there before us earlier. Those are two areas which we continue to invest. I think the third one, which covers both our emerging market capability sets or skill set and our fixed income and credit commitment is, in the long run, there will be an opportunity in transition finance. As the world goes through its most profound change in economic structure since the Industrial Revolution, there will be opportunities to invest both along the credit and the equity parts of the capital structure, and we will be there.
That'll probably be inside our thematic box and inside our credit box, you'll see it. But I think that's a big area for our industry to be active in. I think similarly, banks and insurance companies will be there as well. But there's no fundamental change in our architecture, you know, for us, the architecture's there, the client reach is there, the active track records are there. We need to get them to scale and execute well for our clients to retain them in a very competitive market. Any further questions?
Thanks.
Yeah. Hi, it's Piers Brown from HSBC. Maybe just a couple from me. On the torque ratio, the flows, I mean, that was an impressive number for the first half, 6% annualized. I think thinking back to the full year stage, we were talking about maybe 2%-3% being, you know, the run rate and maybe 5% being a sort of bull case scenario. Should we just think of this period as being a particularly strong one or is there anything which might suggest we're seeing more of a step in terms of the outlook for flows?
Piers, it's a very good question. I think what's important here, just to give you a sense, the torque ratio moved 1 percentage point north because an inflow happened a few days before the end of the six-month period. It's very sensitive to big institutional moves, even though ours was a diversified set of flows, and therefore we're quite confident that that number reflects the current market conditions. Even a few weeks could make a difference to the ratio, whether it's 4% or 6%. All we think, and looking at long-term numbers of our industry, the winners tend to operate at sort of 3%-4%, not at 6%-10%.
If you have a 10+, it's normally driven by one winning strategy that will at some point stop attracting attention. When you build a model which is ultimately discounting a perpetuity, one must be careful to take account of that. I would say where we are now, we feel quite comfortable. I can't tell you whether it's gonna be 4 or 6 or, you know, exactly what it is. We still feel we're in a regime where clients are taking risk, where they're willing to transact and where they're willing to deal with fund firms with good track records. You know, we wouldn't be seeing much of a change.
In fact, last year when we told you it's going to be better, we said it depends on, and we don't forward guidance in the shop, but we said it depends on your performance platform from which you-
Yeah
We were backing off a very sticky wicket in April 2020. That clearly is not the case at the moment, but we live in volatile times. I would say don't get overly exuberant. This is a good space for our industry, but we know our industry is cyclical, and we know clients change their mind. Numbers could be, you know, on a year-end or a last quarter, could look slightly better or slightly worse. I wouldn't, you know, get hung up by a 6% or a 4.5%. I really don't know what it would be. It is a positive environment.
Excellent. That's very clear. Maybe just to follow up on a different topic, sustainability. I wonder if you could just talk to how you see the competitive landscape and when you look at your peer group, your competitors, how close is the industry to being at some sort of homogeneous standard in terms of particularly, I guess, the labeling of sustainability products?
With my chairman in the room, I'm gonna take liberty of just also referring to just maybe what our industry does well and what it doesn't do so well. I am concerned that both regulators and the industry are going for the easy metrics. In my 30-plus years, 34 years in this industry, no regulator has ever come to check what the financial model of a firm looks like that we have valued and decided to buy or sell for a client. They've never told us how to do it. We've obviously done it properly, and that's why results were okay.
Now, they're coming to say, "Well, I want a quantitative tool, and I wanna see what that tool looks like before you say something is, you know, has a carbon externality or not," when we deal with very soft data, with very high-level data, I would say. To me, if we're gonna turn the sustainability drive into a set of kind of easy-to-report metrics and easy-to-regulate metrics, we're gonna end up in a world where we will clean portfolios of carbon-heavy assets, we will have them in the wrong hands, and we won't have an energy transition in this world driven by the private sector and finance. Ninety One will continue to argue for substance.
We will do what is required by everyone, and we have a very active dialogue at the moment with particularly our institutional and professional and all our clients are professionally intermediated clients or their intermediaries to make sure people understand. Now, where we don't want to go is a world of box ticking because then we're gonna sit here in 10 years' time and talk about the fact that we're heading towards a 4-degree or a 3.5-degree world. I'm very excited by the general drive of finance towards a greener, cleaner world, and I think your organization, the leadership of your organization, has been very clear. They will stick to their clients, help them transition properly rather than just divest from them, and that's very much the Ninety One view.
Given our emerging market footprint, it is the right thing to do.
Thanks, Hendrik.
This debate will be going on and on and on for a long time. Any other questions?
We've got some virtual questions from our virtual attendees. First one is from Linda at IDG Capital. She asks, "Why is there a change in strategies towards fixed income?" I think what she's referring to here is our AUM growth in fixed income from GBP 34 billion-
Yeah
GBP 37 billion.
Linda, that is a function of client demand rather than Ninety One pushing either because we've actually been very constructive and optimistic or positive about the prospects for equities, which we remain in a world of, as long as they're obviously properly valued, but in a world awash with liquidity. This is not a strategy for Ninety One. It's actually client demand, and it's largely driven to an extent by yield-seeking clients who are looking for quality yield and have been willing to take emerging market risks because of the liquidity conditions. That may be affected if U.S. interest rates go up faster or developed market interest rates go up faster than anticipated by markets at this moment.
You know, we have to keep an eye on the dollar, but most of the flows went into dollar-denominated or dollar credit rather than local. But it's not a Ninety One strategy. We look long term, and we think these are good markets and growing markets. If I just think how the emerging market debt, sovereign, and credit markets have grown since we started engaging, I see that as a continued growth opportunity for the firm.
We then have two questions from Rahim at Investec. The first one is, "Can you provide some additional color on the shape of flows during H1 2022 and comment on the first month or so of H2 2022?
Rahim, good effort, but we don't do forward-looking statements at Ninety One, except to say we have not seen a change in regime and therefore we see clients continuing to engage in what we have on offer. Also we don't break down quarterly numbers. I did mention, and Hubert asked me over coffee, and I said I would answer it in public. We have not seen a change in client behavior between the first quarter and the second quarter of the half year we report on. We have seen a consistent set of behaviors, and we see no change post. We're now almost two months or a month and a half post quarter end. Christmas is coming, and that's normally a quiet period.
The second question from Rahim is: You have delivered another improvement in surplus capital. Do you have a target for this, and at what level would you consider a special dividend?
Our Finance Director can answer that question. She holds the purse strings.
I don't think we're considering a special dividend per se. As I said earlier, I think we'll review, you know, our dividend payout ratio for the finals, looking at sort of the strength. We've purposely kept it quite conservative at the interim point right now. You know, we will continue to build up that particular buffer. We will potentially look at one or two seeding opportunities within the business as well. Again, this is all things that are under consideration and in discussion with the board right now.
Yeah. I think, Rahim, we're walking a fine balance between. I was looking at one of the firms reported this morning they've invested a great-
Yeah
Great business, ICG. They've invested GBP 115 million in a new seed.
Seed.
Now, they have a balance sheet. They started with a balance sheet.
We don't.
We're trying to be balance sheet light and people centric, which has a cost, which has a discipline in terms of growth, but will hopefully in the long run secure a certain quality of earnings and a certain relationship with our client base.
Mm.
It does definitely slow us down, and that's why we're conservative at the interim stage because we may have to back some of our initiatives. We'll report in full at the year end.
Mm.
I stand with Kim's comment.
We have no further questions.
Yeah.
Thank you very much. I really appreciate you all joining us physically and virtually. If there are any further questions, please contact our IR team. All you should know is that the strategy remains consistent, the focus is execution, and we'll try and do our best, whatever the markets bring us. Thank you very much.
Thank you.
Thank you.