Earnings Call: H1 2025

Nov 22, 2024

Summary

AUM reached a record £106bn, while H1 management fees fell 3% amid a major mandate restructure. Over €1bn of infrastructure fund commitments and ongoing investment advance the strategy; H2 fees and expenses are expected to track H1 run rates.

Good afternoon, ladies and gentlemen, and welcome to the Record plc Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that is just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and will publish those responses where it is appropriate to do so. Before we begin, as usual, we would just like to submit the following poll, and if you could give that your kind attention, I am sure the company would be most grateful. I would now like to hand you over to the executive management team from Record plc. Jan, good afternoon, sir. Good afternoon, and welcome to our results presentation for the six months ending 30th September 2024. I am Jan Witte, CEO of Record Financial Group, and with me is our CFO, Richard Heading. I am pleased to report on our first half of good performance and strategic progress. Assets under management continues to grow, reaching a new record high of GBP 106 billion, 3.7% up since the year-end, and an impressive 25% up since this time a year ago. Operating margin is down a little compared to last year, reflecting lower management fees and higher costs as we invest in new initiatives. However, earnings per share attributable to Record shareholders have increased as we are sharing startup losses on our German subsidiary with minority shareholders. We have continued to grow our management fee from currency management products, and we have earned performance fees in line with last year's. On the asset management side, we have seen a decrease in AUM and management fees, largely due to the termination of what was a tactical interest rate swap portfolio, which we ran for a client during the period. But it is on the asset management side where I am particularly excited and where we have made large specific progress. We are very pleased to announce the launch of our Infrastructure Equity Fund. We have commitments of over EUR 1 billion, which will be deployed into European and U.S. infrastructure assets. We now have a team at Record Asset Management that bring a wealth of origination and structuring expertise and which will allow us to expand our offering from here. We have maintained the interim dividend at 2.15 pence, and we continue to target a progressive full-year dividend. At the full year, I laid out three strategic objectives. Organic growth, improved quality of earnings, and operational excellence. We have made good progress with each of these. Starting with organic growth. Although our headline revenue number is down from last year due to the previously announced restructure of a large client mandate, the fundamentals that will drive organic growth remain positive, increasing AUM and new business wins from higher margin products. Quality of earnings at Record means long-term stable earnings from a set of products where we can deliver best-in-class solutions to large institutional investors. To that end, when I took over as CEO, we reorganized the business to focus on six core products, each with clearly defined responsibilities to deliver. The launch of the Infrastructure Equity Fund was funds committed for 15 years as a new long-term revenue stream as well as a proven new capability which enhances our quality of earnings as well. Our third strategic objective is operational excellence. At the end of last year, we took a difficult but necessary decision to change our approach to IT development. We have since brought our IT development capability in-house and have completed the rollout of a technology roadmap that aligns with our operational priorities. This has been achieved at a cost run rate slightly below that of the second half of last year. We have also recently signed the lease of a new office space in London, the fit-out for which is currently underway. This is an important investment to ensure we continue to attract and retain the best talent and provide a state-of-the-art, collaborative modern working environment in which our employees can thrive. It will also be a fantastic space into which to welcome our clients. I am confident that the objectives which we have set are the right strategic priorities for Record. We will not be distracted, and we will continue to provide regular updates on our progress. Moving on to look at how the business has performed during the period. Our offering comprises a range of products where we can offer unique value proposition to our clients and where we can be best in class. Across all our products, assets under management have increased by a further 4 billion during the period and have increased by 21.5 billion since this time last year, which is an increase of 25%. Currency management products account for almost all of our assets under management. While AUM and assets under management is still smaller, with the launch of the Infrastructure Equity Fund, we start to add new higher quality assets that will generate higher management fees. The first half of FY 2025 presented challenging conditions for some of our currency strategies. We have had only few strong trends due to reduced divergence in monetary policy globally, while additional geopolitical uncertainty, particularly surrounding tensions in the Middle East and numerous elections worldwide, provided headwinds in emerging markets. Following the outcome of the recent U.S. election, we once again anticipate political and economic uncertainty globally, which with it brings FX volatility. These are conditions where our risk management products are especially valued by our clients, and where we also see good opportunities for outperformance in active hedging and FX return products. On the next two slides, we will take a closer look at the products in our currency management and asset management businesses. In total, AUM and currency management have increased by 25 billion since this time last year to reach a record 103.4 billion. Management fees from currency management are up 14%. Passive hedging has seen strong AUM growth in U.S. dollar terms, although that has been driven by weakening U.S. dollar against the Swiss franc, which is the underlying currency for many of our passive hedging mandates. Stripping out the impact of FX, passive hedging AUM would have decreased by approximately 2 billion from a combination of outflows and lower asset values. Nevertheless, over the course of the period, higher average AUM resulted in further fee growth. In active hedging, AUM growth was modest and underlying growth and asset values were partially offset by outflows. In both hedging for asset managers and FX Alpha, we have seen some good new business wins and have strong pipelines. Although these two new products are the smallest in terms of AUM, the opportunity to win new business and the fee rates on that business make them both attractive. Hedging for asset managers mandates are typically much smaller than our average mandates, but we are able to win them in larger numbers. Furthermore, as our clients grow, we as a service provider grow with them. The launch of the new Infrastructure Equity Fund is an important milestone in the development of our asset management business. Record extended its asset management capabilities in direct response to client demand. With 40 years experience servicing pension funds, insurance companies, and family offices, Record engages deeply with its clients to understand their objectives, develop targeted strategies, and structure solutions that meet those needs. Our can-do mindset, coupled with a strong relationship and result-driven focus, is why clients choose Record. In 2021, we launched the Emerging Market Sustainable Finance Fund, a trailblazing asset-centric approach to EM local debt investing. The strategy targets the same return drivers that investors seek with traditional EM local debt allocations, but it is re-engineered to offer more diversified and flexible return streams. Additionally, better risk management and reduced drawdowns are an attractive feature. We have recently seen a further $500 million inflow into the strategy. We have now introduced an Infrastructure Equity Fund that invests in unlisted global infrastructure equity assets, and which we will talk about in more detail shortly. We have also got an active pipeline of further proposals that we hope to be able to provide more detail on soon. In all cases, we are focusing on our core strengths and on areas where we can be most competitive, responding to client demand and executing at scale. With the exception of EMSF, all of these funds, including the Infrastructure Equity Fund, have been created and launched by Record Asset Management, which we call RAM, our Frankfurt-based German subsidiary. Over the last few years, the creation of RAM has been a collaboration and joint investment with the management team who now own a 59% shareholding. This structure has allowed us to attract a highly talented and motivated team and to align their incentives with those of Record. The team have led the company through its initial startup phase and is now developing a pipeline of new opportunities and adding additional expertise. We are the trusted partner for over 80 clients in FX-related investments, and investors recognize us for our innovative solutions. We specialize in fostering collaboration among institutional investors, and this now extends into comprehensive asset management services as well, including establishing effective governance framework and managing legal structures that support complex private market investment strategies. We are able to create value that few other partners can replicate in this form. The launch of the new Infrastructure Equity Fund is a great example of our collaborative, pioneering approach in action. Our new Infrastructure Equity Fund has received over EUR 1 billion of commitment, which will be deployed over the next three years into direct minority equity stakes in individual infrastructure assets, predominantly in Europe and the U.S. Record will earn management fees on deployed funds at the upper end of the range of what we have historically earned on custom solutions mandates, and the minimum holding period for each investment is expected to be 15 years. The fund benefits from global demand for capital to support the world's mega trends, which amongst other things, includes energy transition and digital transformation. For investors, the large funding gap represents a large opportunity. Within the RAM management team, we have years of experience in infrastructure investments, and as an investment manager, we've managed investments in line with those investment guidelines. We expect to attract additional investors and expect our fund to grow further. Over to Richard for a review of the financial performance. Thanks, Jan. Good afternoon, everybody. Here we go. Management fees for the first half were GBP 19 million, which is 3% lower than the same period last year. That was in line with expectations and reflects the impact of previously announced client mandate switch in the second half of last year. Compared to the second half of last year, management fees were flat. Performance fees earned were GBP 1.6 million, a slight increase on the prior year figure of GBP 1.5 million. As a reminder, we can earn performance fees on a relatively small number of mandates where we're able to exceed performance benchmarks. We also earned GBP 0.5 million of other income, which comprises primarily fund distribution fees. Administrative expenses increased GBP 0.4 million, 2%, which reflects the additional investments in RAM, our German subsidiary. Profit after tax has decreased by GBP 0.4 million. However, EPS attributable to the shareholders of Record has increased as a result of the deal we structured with the management team at RAM. As Jan described, RAM has been built in partnership with the management team and under a profit-sharing arrangement. At the start of this financial year, that was formalized into a shareholding for the management team, which now owns 59% of the economics of RAM, while Record retains control through a majority of voting rights. We therefore consolidate the results of RAM in our income statement and then deduct their share of the post-tax profits and losses incurred in the period to arrive at profit after tax and EPS attributable to Record shareholders. In this particular period, RAM has incurred start-up losses. It's those losses that we're sharing. This slide breaks down our AUM growth over the past year. At the end of FY 2024, we reported AUM of GBP 102.2 billion, following strong inflows and increased valuations of underlying assets. In the first half of this year, AUM growth in US dollar terms has been driven by FX movements as the US dollar weakened against the Swiss franc, in particular, in which a large portion of our AUM is denominated. Net flows were modestly negative due to the discontinuation of a taxable interest rate swap portfolio, which Jan mentioned, while underlying asset values increased modestly. Looking at management fees in more detail. Overall management fees were down 3%. The client mandate restructure that we mentioned previously drove a GBP 2.6 million reduction in management fees from our custom solutions products. However, that was substantially offset by management fee growth across all of our currency management products. Management fees from passive hedging were GBP 5.8 million, up GBP 1.5 million, reflecting higher AUM driven by inflows and positive equity market movements. Active hedging fees increased only very slightly, as the increase in AUM was largely offset by unfavorable foreign exchange movements. New client wins for hedging for asset managers products saw management fees increase by 14% to GBP 1.7 million, and FX Alpha products saw good AUM inflows, resulting in a 29% increase in management fees to GBP 0.8 million. Fees from the EMSF, the Emerging Market Sustainable Finance Fund, are up 3% at GBP 2.5 million. Overall operating costs increased 2% over the prior year period. People costs are up 4%, which reflects primarily general salary inflation as well as the investment in internal IT development capabilities. Overheads and other costs comprise mainly technology, market data costs, premises, and legal and professional fees. The 6% increase compared to last year reflects the investment in Record Asset Management GmbH, mainly higher legal and professional fees relating in part to the launch of the Infrastructure Equity Fund as well as general inflationary impacts. Importantly, operating costs are lower in the first half of this year than in the second half of last year, despite the investments that we've made. That reflects the measures we've taken to bring cost growth under control and to manage it in line with revenue expectations. A more cost-effective approach to managing our technology development has been an important part of that. We also operate a group bonus scheme for all employees based on company profits. The amount accrued for bonuses for the first half is slightly down in line with operating profit. Coming on to the balance sheet. Record is highly cash generative and capital light business with a very strong balance sheet. We think that maintaining a strong balance sheet is an important priority. Firstly, to ensure we have sufficient capital to meet our RegCap requirements and to support new investment opportunities. Balance sheet strength is also an important factor for our clients. Our RegCap requirement has increased a little bit this year due to the growth in RAM. However, we expect that business to soon become profitable and to generate its own capital resources. During the period, we've invested in new technology development capabilities to ensure we maintain market-leading technology, and we've made investments in our asset management expertise with some key hires in our German subsidiary. We're doing all of that while keeping cost growth carefully calibrated to expected revenue. Looking forward, we expect the H1 run rate of management fees and expenses to continue through H2. We don't provide guidance on performance fees since they're very difficult to accurately predict. However, while the year started strongly with performance fees slightly higher in the first half, the second half of last year produced very significant performance fees, and we'd expect them to be lower in the second half of this year. The board has declared an interim dividend of 2.15 pence per share. That maintains the interim dividend at the same level as last year. But in line with our policy, it remains our intention to pay a progressive final dividend. With that, I'll hand back to Jan to wrap up. Thank you, Richard. To summarize, our business remains strong with AUM continuing to grow. Our strong balance sheet and robust capital position provides a solid platform for growth. Our management team is focused on the core product strategies that we offer and where a unique value proposition that we have for clients can be best in class. The launch of our Infrastructure Equity Fund showcases our ability to deliver tailormade, best-in-class investment solutions for large institutional investors. We have an active pipeline of further opportunities in this space. I am confident that the strategic objectives that we set when I took over as CEO remain the right priorities, and we will continue to pursue this. We will provide guidance on our medium-term growth plans at the full year. At this point, we will be happy to take questions. Perfect. Jan, Richard, if I may just jump back in now. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that is situated on the right-hand corner of your screen. Just while the team take a few moments to review those questions that were submitted already, I would just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Jan, Richard, as you can see there, we have received a number of questions throughout your presentation this afternoon. Thank you to all of those on the call for taking the time to submit their questions. Richard, Jan, at this point, if I may just hand back to you just to read out those questions and give your responses where it is appropriate to do so. If I pick up from you at the end, that would be great. Thank you. No. Thank you. It's firstly on share buybacks. Yeah. Yes. Thank you very much everyone. Thanks for joining. A couple of questions on share buybacks. One question. Share performance for many years now has been going backwards despite underlying results. Has the company any plans for share buybacks or anything else to have the company true value reflected? I think there's another question on that saying why not share buybacks? I guess, I think we're not actively considering share buybacks right at the moment. I think I agree with the observation in terms of the share price. I think from everything we've outlined, we think there's a lot of value in delivering the strategies we've outlined, and that's our priority. As many of you, I think, know Record and we have a register. We have Record as a significant shareholder and a relatively tightly held register. We've also got surplus capital on the balance sheet as we talked about. Looking at our best approach to best use that surplus capital and how to manage the share register to get the benefit in the share price is something we're looking at, but I think it's too soon to say that we think buybacks is necessarily the approach to do that. I think the key for us, Jan's outlined the strategic focus that we've got at the moment, and the key for us is on delivering that. The other thing that we're spending a lot of time on is investor engagement along these lines. I mean, we're, I guess, at the end of a fairly long week of a lot more meetings, I think, with investors and potential investors than we've done perhaps in the past. Getting the message out there and people understanding, helping people to understand the value that we see in this strategy is a key priority for us at the moment. Two questions or two or three questions here on infrastructure, which I will take now. I think there is one question here to Richard, what made him join Record and how did he come across us? Another question here on guidance and target going forward, and then another question on the U.K. equity market. I will obviously take the two questions on infrastructure equities. The one question is, what is the fee scale? We have answered that in the presentation. I think the question came in before we answered that question. But as we said, it is about the upper end of what we would normally charge for custom solutions. It is a management fee-only model, and we have a combination of transaction fees and management fees. The transaction fees are intended to ensure that since we get paid on deployed assets to ensure that for us as a manager, there is a more stable experience throughout the deployment period. While we deploy the transaction fees lifts the experience there. Then following the 3-year deployment period, we then charge management fees. Just under EUR 1.1 billion would be deployed approximately 10 assets as the target. So we are looking at an average deployment rate here of 3 and a bit assets per year, just in terms of context. Second question was, what is the opportunity that we see there for further inflows into the fund? Again, maybe give a bit of context here too, on the fund structure and also the reason why it took us a bit longer to launch the fund than we had originally anticipated. This fund is designed or has been designed by four large investors to ensure that they can invest together in this fund as a large investor, bringing us one voice through us as a fund manager in making large and long-term infrastructure equity investments. Part of the structure of the fund is such that other like-minded large investors can join and which will have all approvals around their joining are appealing for the investors which have now seeded the fund, which are in the fund and later join us. So there is very much a focus on attracting further investors and the fact that the fund structure and then also the mechanics around it have been co-designed with these seed investors, we believe makes it effective. There is a lower limit of EUR 100 million for further investors for investment. Again, just to give you an indication of the size of investors that are expected. On the pipeline. On your question on guidance, and Leslie's targets over the last two or three years, again, as we said in the presentation, we will give some further guidance at the year-end. But just to address the points on opportunities and how have we now repositioned the business or how have we really prioritized. I think, again, this chart explains that relatively well. I think a couple of years ago, when the business went through a phase of really deciding what to do in addition to the currency management business, which we see on the left-hand side here. There was a period where we evaluated a larger number of opportunities. The structure that we've now settled on, which we look at here, which is the currency management business on the left-hand side, which with the exception of FX Alpha is a service and an operational business, which gives us a very stable base there to grow from, has now been expanded on the right-hand side by targeted and very deliberately chosen opportunities. What we're very conscious of is, as I said, on the left-hand side, what we do well. We try to capture that in a single sentence when we say what makes Record unique. We say we're a specialist asset manager hooked on best-in-class solutions for large institutional investors. That's what we've been, and that's what's made us successful. That's also what has allowed us to grow in the last couple of years from when we look at 2019, just under GBP 60 billion in AUM to now GBP 106 billion in AUM. A lot of that growth has come from the established products, which are on the left-hand side of this chart. Just conscious of the large opportunities and the large mandates that we can attract in our established product lines. We're very aware that anything new that we do, which is the blue-coloured things on the right-hand side, needs to be of a sufficient size really to compete with the existing business or to be equal or larger in opportunity for us. Otherwise, for a business like us, it risks to be a distraction from the focus that we would like to see. We put a reasonably high bar to ourselves on the right-hand side to doing something new. When we look at the EM Local Debt Fund, that was launched with $750 million in June 2021, and then grew relatively quickly to an AUM over $1 billion, which we still have. Now the Infrastructure Equity Fund again demonstrates that philosophy nicely, and that it's a new domain for us, but we were able to see that seeded with over EUR 1 billion again, which is a unique achievement, which we're proud of. It also indicates that when we do new things, we do them at large scale. In that sense, just circling back to the question, there is now a reduced number of new initiatives compared to what we've seen when we ran asset management. Some of them are still consistent, but we've reduced the number of initiatives and are very much focused on not being distracted from what we see here in this chart. We'll also provide further detail on guidance a little later. Can we take his question? Which one? The next one to me. Oh, yeah. Absolutely. You take the question. The question for me is of Richard, you are joining from a much larger company. What made you join Record? How did you come across the opportunity, and what have you found since joining? You might not be surprised to learn I did not know that much about the ins and outs of the passive and active FX hedging mandates. I got a call about Record, and I spent some time with Jan, also with David Morrison and our Chairman, and really liked what I heard. As Jan has been describing, with Jan taking over as CEO, I joined as a point of change for the company. What I liked about it was the focus on strategic opportunities where we could win and focusing specifically on those, and where really our skill set is what we are playing to. That focus I felt was really important as well as some of the other stuff that was being done and we have continued to do around looking internally within the company and setting ourselves up for future success in terms of the technology and operational platform, making that robust and stable and modern and so on. I think also just in terms of the business that we are doing, clearly, I think again, with this chart on the screen in front of us, this range of products which ranges from those extremely large, very sticky clients on the left-hand side, taking that risk management product, which is fantastic core business to the moving across and building on that skill set into those higher value FX products and then into the asset management piece is really exciting. I think the asset management piece on the right-hand side, which of course is new, and I think we have a few questions about why Record in that space, but I think the connection to some of our existing clients in terms of with assets to deploy, as well as the way we have gone about building the team and now launching that Infrastructure Equity Fund and setting ourselves up well for future fund launches in that area has been, is really compelling. Then in terms of what I have found since I have been here really, Record is an incredibly client-focused business. When you get into the detail of what it is we deliver to clients in terms of how we structure these mandates, how we actively work with clients in terms of how they want us and how we manage those with them. Incredibly client-focused, which you see in our client tenure, which is very, very good. You see across the business and, of course, it is a small company, so the great thing about joining a small company is you get to know people and the business very quickly, and all of those conversations are really focused around Record’s product, and Record’s success, which is fantastic. It is quite hard work at a small company. You do not have sometimes some of the just extra people around to do things that you would sometimes have at larger companies. I knew that was going to be the case. By the same token, you do not have to wade through the bureaucracy that tends to accumulate in large companies either. In terms of getting to the point and getting things done, it is really easy. It has been great so far. It's nearly 6 months, I think. It's flown by. Very good. Question on staff number and how it was last year, it's more or less stable. We don't foresee an increase in staff. We've had a few people join in. Yeah. We're 97 people. It's pretty much flat. But yeah, it is pretty much flat compared to last year. Then another question here. Have you added any new initiatives to last year's plan or has it just been a reduction? Before becoming CEO, I was group head of sales. I was very involved in a lot of the initiatives which we now see here and which we have sort of started before my tenure as CEO. I think that the main difference, as most people will know, is that early in the year we stopped all activity in the crypto space. We've decided that that is not for us. That's probably the main differentiator, and other than that, we've been quite consistent in what opportunities to pursue and are now proud to now get to a point where these start to deliver. A question, do you anticipate the time when the right-hand side has the same, if that's AUM, I imagine that's AUM after that. I think that's unlikely in AUM terms, and also as a business we do ultimately focus on profits. Again, the right-hand side being higher margin business, we don't expect that to compete with the left-hand side just in terms of AUM. But as we move forward, it is quite possible that it becomes a business very much of the same order of magnitude as the left-hand side. Given the state of government balance sheets for most of the Western developed world, further financial repression appears to be the likely resolution. Is it a tailwind or a headwind for Record? Generally, I think it's important to say that for everything we do here on the left-hand side, risk management solutions and passive active hedging solutions. Uncertainty in the world and also divergence of policy is beneficial for us as a business in that it creates specific opinions or differing opinions across a client base. It also creates different circumstances across the large global investors, which means that there are less standardized solutions that allow large investors to get exactly the exposure or the positioning or the risk that they seek in the world, which in general makes it more likely for them to come to us for a solution that's just that little bit customized and addresses exactly what they want. In that sense, as we look forward, the state of the balance sheets of many developed countries, the reduction of globalization, the now incoming U.S. presidency, which simply in language we expect to create a degree of volatility and some turnarounds, as well as global tensions from a professional perspective, for us as a business that creates a setup where we're well-positioned to develop solutions, offer solutions that are exactly tailored to what people would like to see in their portfolios. In that sense, we see that as positive circumstances for us as a business. Richard, do you want to take the one on UK small cap? Yeah. There's another question asking, are we considering buybacks to enable institutional redemptions given that UK small cap managers are suffering relentless redemptions. I think I answered it before. I understand the question and the thought process. I think for us at the moment, we're not considering buybacks. We think that the surplus we've got and the focus and the opportunity we've got in terms of delivering value through delivering strategy is our current focus. A question from Joseph to me, saying, "Jan, how will you measure success during your tenure? Is it outperformance versus stock market, or is it EPS growth metrics? And what competitors do we look at?" Maybe a quick word on competitors. The way the business is now positioned, there are few companies that we see as direct competitors across this range of products. Of course, we do face competition in each of the products that we look at. In the targets, the strategic objectives set out earlier in the year, the current focus is on quality of earnings and really creating a strong basis for further growth. We are moving in that direction very deliberately and are content with the progress that we have made. If we look at now the differences in, say, geography that we have on the left-hand side, where passive hedging is predominant European business for us, active hedging continues to be predominantly a U.S.-based business. Hedging passive managers really is in between those two, where this is really often large U.S. asset managers now moving to Europe to see clients in Europe, and in that context need to offer hedged share classes in EUR or GBP. Again, these are very different groups of clients for us that give us improvement in quality of earnings there. We have now started to really supplement that by fee structures that offer us longer periods of certainty in terms of fees. Again, citing the Infrastructure Equity Fund as an example, these are long-term investments over a 15-year plus horizon, which while it is on the return-seeking side of this chart and return-seeking product, we would expect there to be a little bit more of an effect of, say, performance on our ability to retain clients. It quite nicely combines then with the left-hand side as a service and operationally focused business, which again allows us a very regular, long periods where clients are happy with us and are happy to keep us. In that sense, we are happy with where we are. There is a little bit of work to do internally to continue to structure the business around these product categories, again, as said in the presentation, to achieve exactly the accountability and responsibility that we expect from the teams that run these products, and that is a necessary change that we now have to make given the growth we have experienced. At this point, we look forward confidently based on an increased stability here and a greater spectrum of areas where we can succeed. What that will mean in numbers, again, we will come back to at a later point. Okay. Although it is likely that 2025 will have lots of risk, it also feels like it is a U.S.-only world. Does the global bias towards the U.S. currency bonds and equity impact you? Will it be a U.S.-only world? It is a good question. It'll be dominated by a lot of noise coming from the U.S. How does that affect us? Again, if we think through the client groups we just referred to, initially for our passive hedging clients, a lot of the risk that we hedge is risk that they have in their base currency in Europe because they have a large amount of U.S. investment. Again, there's no reason why that would change. I struggle to see that change radically also if the U.S. was going the other way. But given that I think everyone agrees that it is going to be a period of U.S. strength, if anything, that would increase the investment that these European clients make in the U.S. Separately, active hedging for U.S. clients. Well, again, dollar movement and dollar strength is something that is positive for the performance of the hedging product that we offer in the U.S. So again, if one was to point in a direction, again, that's beneficial. Hedging passive managers is a little bit like passive hedging, as described earlier. This is predominantly large, already very successful U.S. asset managers now attracting more investment from Europe. But again, we don't see that stopping with more and more European monies deployed in the U.S. So broadly, I think really there is a question what the U.S. development might mean for emerging markets, and that is less to do with the U.S.-centric world, but of course U.S. interest rates have an effect on the attractiveness of EM debt. In that sense, there's a bit of a question whether interest rates in the U.S. will now increase or decrease. The latest language is we trust that they'll decrease a little bit, which relatively makes EM debt more attractive. It makes it easier for emerging frontier countries to raise money. Yeah, I think the Infrastructure Equity Fund, as described earlier, these are very long-term investments where it's interesting, I think they're independent to an extent from the U.S. discussion, but it just means that given the increased uncertainty, just makes investment which have a long investment horizon, are more challenging for small investors and increases the risk premium for large investors. So I think there's just an enormous funding gap in infrastructure almost everywhere. But it's really something that where there's a shortage of capital to address these, that just means that the large investors that have the size of a balance sheet and the horizon to make these investments would expect to be remunerated for that in a way on their investments that is proportionally higher. So it makes it more attractive for large investors to be the ones to fund these investments. So again, we do think it's an attractive asset mix, and we're happy with the product range that we've been able to establish up until this point. Then again, we hope to now soon add a private credit fund to that and then complete the product range for now. Are there more questions? There's a lot of questions there this far, yeah. Perfect. Absolutely, Jan Richard Zwijsen, thank you very much indeed for being so generous with your time there and addressing all of those questions that came in this afternoon. But Jan, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that would be great. Yeah. I think there were a couple of closing comments earlier, but I think I summarized it just now answering the last question. I think we want a practice business to invest in. There is a generous, progressive dividend. We have a strong balance sheet, and we have now steadily but deliberately moved into a position that creates an ever stronger basis to grow on now. At this point, it continues to be a little bit challenging for us to give a clear projection in terms of further opportunities, and that is largely to do with a lot of the things that we do being of a large scale. So when they materialize, they are substantive and substantial. But again, we hope to become more specific in terms of the projections in the near-term future. Perfect. That is great. Jan Richard, thank you once again for updating investors this afternoon. Thank you. Could I please ask Thank you very much, everybody. Thank you. Thank you. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I am sure will be greatly valued by the company. On behalf of the management team of Record plc, we would like to thank you for attending today's presentation. That now concludes today's session, so good afternoon to you all.